Arbitrage

It boggles my mind to think that I grew up in a country where most private enterpreneurship was a criminal offence, a felony. It was like this: create a business, be scorned by your customers at best, and at worst get caught and go to a labor camp.

There were of course people engaged in small business that escaped persecution. One particular example stuck in my memory: my father once pointed out a disheveled man rooting around in books at our favorite second hand book store. The store accepted books on comission, with the book owner setting the price. The disheveled man, my father explained, did not work anywhere. He made his living from his encyclopedic knowledge of the Soviet book market. He picked underpriced books and relisted them at market prices. I did not know it back then, but this is a very common tactic called “arbitrage”. In the US it is employed by multitudes of people, from library sale scroungers as disheveled as that man, but armed with handheld computers and laser scanners hooked up to Amazon.com, to venture capitalists buying bad software companies from badly run companies and selling them to even worse run software companies at billions in profit.

In the US “Rich Dad, Poort Dad” author is making millions explaining the benefits of enterpreneurship over salaried proffesionalism, and I am in fact workin for not one, but two business magazines: Fast Company and Inc. I spent almost five years here, but it’s almost time for me to go. I did not line up the next job yet, but months ago I told my boss that I was leaving so that he could hire a replacement. My replacement is here, and I’m close to finishing knowledge transfer.

I have a few startup ideas, but what scares me is not the Soviet Militia, but the lack of affordable healthcare and the lack of a trusted technical co-founder. I am mulling taking another corporate job, and luckily Google and its ilk hoovered up web professionals, so the market looks promising.

For months I would tell myself that I would leave when the Freedom Tower would eclipse WTC 7 where I work. I’d say that time is near.

Marzipan

When faced with a lot of stress I employ several coping techniques. There’s collecting pens ala officer Sorenson, watching New York’s pigeons(overweight and disheveled they remind me of myself), meditatively looking at cornucopias of goods in various retail store layouts and fixtures, and then there’s food.

Happiness derived from material things is fleeting, especially in the pursuit of the American Dream. But I grew up in the Soviet Union where the Socialist economy greatly restricted variety and quality of just about everything, and I have a slightly different perspective on materialism.

My friends who visited Cuba told me that people there are much happier than in the US: they have very little to aspire to in material goods, and thus live a life that is much less busy, and as a result much more relaxed and happy.

I frequently quote a paragraph from a letter by Carl Steinway to his brother Theodor in Germany:

“I cannot advise you to come here if you are able, by diligence and thrift, to make a living in Germany. People here have to work harder than abroad, and you get so used to better living that you finally think potato soup tasted better in Germany than the daily roast here.”

Carl and Theodor are two of the “Sons” in Steinway & Sons. Steinway Tunnel is named after the third one.

The variety of food that I had access to growing up was not that great, but I certainly had better fruit and vegetables than the majority of Americans have these days. I’ve asked my younger co-workers, and they are sure that strawberries sold in American supermarkets taste like strawberries. It’s a bit of a Matrix moment there (supermarket strawberries absolutely do not taste like real strawberries).

I had a childhood in which I only experienced hunger when dieting and cold when fishing in bad weather. On the other hand, my grandfather, who went through WWII, remembered the real hunger and the real cold. He was very glad that me and my father never had to experience hunger, and every time I would refuse to eat kasha, he would say – “so, you don’t want to eat kasha that your grandmother made you – what do you expect – marzipan”?

I would ask him what marzipan was, and he’d say – oh, it’s a very tasty French candy. He must have remembered marzipan from NEP times or maybe from his early childhood before the Revolution.

I always though that marzipan was something amazing and heavenly, the tastiest treat possible. I was also pretty sure that I’d never taste it. It was the gastronomic equivalent of the “sea rooster” fish (a very rare fish that I dreamt of catching in the Black Sea).

These days I mutter curse words when I catch “sea roosters” – they are considered a throwback fish in NYC. And marzipan – well, it turned out to be yucky concoction of almond paste and sugar that appears on store shelves around Festivus. I buy it from time to time to remember my grandfather.

marzipan

And when I want to taste a tomato or strawberry that tastes good I have to spend a lot of time and money at farmers markets or take a trip to my hometown.

iphone4 antenna rant

There are two types of people in this world: those who say that crushed bedbugs smell like expensive Cognac, and those who say that Cognac smells like bedbugs.

I really wish the whole Apple antennagate would be over. Because I’m tired of explaining my position on it to everybody who drools over my iphone.

I have 3 points to make:

1) The office where I work has super ridiculously terrible ATT reception despite being in direct line of view from a brutalist style building containing ATT switches. So does an underground subway station where I change trains on the way to work. The rest of NYC has simply terrible ATT reception.

I’ve tried at the office, I’ve tried underground. I’ve tried cupping any which way. I tried moistening my palms. I can’t get to get a reliable bar drop thing. Sometimes, in fact, I got more bars. Oh, and that underground subway station? None of the older iphones ever had reception there.

This is all clearly a a product of me being a “fanboi”, and being under the heavy influence of Steve Job’s reality distortion field. I think they have mobile generators transmitting that.

2) Sometimes getting more bars when cupping iphone4 gives me an idea that now it is possible to make a case that will actually boost iphone reception by possibly attaching a yagi or another type of big directional antenna to the case. Maybe even something gigantic, like the apartment tower antenna or one of those huge homemade antennas that I used to make for crystal radios.

3) Right now I’m vacationing in the Ukraine. Here you can buy a sim card for $1 that gets you a phone number. On every corner there are agents and machines that allow you to refill these sim cards with ridiculously small amounts of money that get you ridiculously cheap minutes and data. There’s no standing in line while ATT employees are chatting / checking their social networks, scratching their asses, etc. There’s no hassle with forms, accounts, etc. You spend a little money, you get your phone to work. Most phones are unlocked. Reception is excellent everywhere. I hear they are working on making iPhone’s mini sims working with iPhones. People are ready to pay just about any price for the 4th iPhone. Apple would do much better with a simple business model: phones for money here first, and then in the US for us, who have to deal with ridiculous contracts and lock-ins. Grandstanding politicians would gain my vote if they did a little trustbusting in the cellular service industry.

And twitter it

I have a very wise friend who lives in in a mcmansion located a stone’s throw from from Henry David Thoreau’s little cabin. Despite this ironic fact, my friend is closer in spirit to the famous engineer, pencil magnate, and philosopher, as he often scoffed at my blogging and social network participation.

As an explanation on why I don’t blog much, here’s what Henry David Thoreau thought about twitter and the rest:

“My life has been the poem I would have writ,
But I could not both live and utter it.”

Don’t Blame Me, I Voted for Kodos

Who controls the British crown?
Who keeps the metric system down?
We do! We do!
Who leaves Atlantis off the maps?
Who keeps the martians under wraps?
We do! We do!
Who holds back the electric car?
Who made Steve Guttenberg a star?
We do! We do!
Who robs the cave fish of their sight?
Who rigs every Oscars night?
We do! We do!

“Treehouse of Horror VII”

Who? Well, it’s the Stonecutters Masons Illuminati Knights Templar Members of the Eulogean Club. In case you haven’t noticed, in the past overlord election both candates were members of Skull and Crossbones. I wonder what it was like to be freshly tapped bonesmen at the time of the election. There must have been no suspense: one way or the other there would be a bonesman president.

In my mind, as far as secret societies go, Skull and Bones is the coolest one. It found exactly the right balance of secrecy/publicity. What fun is it to be in a secret society that is so secret that nobody knows how cool it is? Bones have alway had a double standard: on one hand the members are sworn to absolute secrecy, on the other, the tapping process (invitation of new members) was almost always a very public act. Their meeting place is not a secret underground bunker, but a huge very well known, although mostly windowless clubhouse building, The Tomb. George Bush Presidential Library proudly shows a Bones yearbook photo, complete with a grandfather clock and (supposedly, but not likely) Geronimo’s skull stolen from the grave by Prescott Bush.

Yearbook photos like this show up in the stranges places, like this livejournal community post. I was almost expecting to see Montgomery Burns (who’s known to be a member) in those pictures.

The coolest amenity is not the Tomb or the loads of morally questionable and/or stolen stuff inside (there are reports that they stole and kept things like Elihu Yale’s tombstone and eat off of Hitler’s china). It’s their own fricking private island. It’s not in the most convinient or most secluded location – there are literally thousands of islands in Thousand Islands.

My favorite quote from “Secrets of the Tomb: Skull and Bones, the Ivy League, and the Hidden Paths of Power” is this:

Guests sleep in cots in cabins-granted, some of them are double-bedded cots — if they can slumber through the blare of the tour boat that sometimes circles the island with a guide shouting through a megaphone, “And there is the secret island that belongs to Skull and Bones!”

Yes, being “secret” like this, famously and loudly is probably the Bones’ greatest achievement. That, and the three Bonesman presidents of the United States. And the innumerable CIA directors, senators, judges and other notables.

Anyway, a lot of people own islands, most of which are cheaper than an average Manhattan 2-bedroom apartment. Computer scientist Ed Fredkin has one and so does denim fetishist inventor Dean Kamen. And a lot of societies, secret or otherwise have cool clubhouses (at Harvard, even The Harvard Lampoon has a cool castle). See, you don’t need to belong to free-world-ruling elite to enjoy cool stuff like that.

Fancy societies with awesome amenities seem to be a perogative of those with Ivy League education. I really don’t have that. It’s wasn’t Andover and Yale for me. It was Sheepshead Bay High School (one of the so-called dirty dozen, 13 worst schools in New York) and Brooklyn College.

I don’t agree with those pooh-poohing American educational system, as my experience with it was very positive. In the high school I was able to take many college level classes with many outstanding teachers. And Brooklyn College is not on Princeton Review’s top 10 best value colleges list for nothing.

Entrepreneurship Heros II: Night at the Museum

If the Seal of New York City were designed today, it would not have a sailor and a Native American on it. It would have a cab driver and a food cart vendor.

Cab driving and food vending wood seem like the two of the most democratic enterpreneurial options, the foundation of which is the public streets New York City: you just wheel out your vehicle and try to make some commerce happen. The only thing that you need is a license. The one for cab driving is called a “medallion”, costs $766K, and as an investment vehicle outperformed just about any commodity and stock index. The food cart licesnses are also very expensive. Plus you are hounded by NYPD, Department of Sanitation, and who knows what else. Cab drivers and food cart vendors are some of the hardest working and most prosecuted businesmen in the city, but sometimes they have their own victories, big and small.

You don’t need to go any further than the Metropolitain Museum of Art to see two interesting examples. Right in front of the museum there’s a collection of food carts. They all are very typical carts, none of them are of the fancy variety. There are two types represented – the basic “dirty water hot dog” cars and “street meat” carts. But there’s one important difference – they all have stickers that say “Disabled Veteran”, and there’s usually an actual veteran somewhere nearby.

In the past years the space in front of the museum was either empty or occupied by one or two carts licensed by the Department of Parks. Then one day Dan Rossi, a disabled veteran, discovered a 19th century state law that allows disabled veterans to sell food in areas that are off-limits to others. The location in front of the museum is particularly lucrative because there are no affordable restaurants as far as an overweight tourist can walk. This hack is a small, but significant victory for food vendors. They are still ticketed mercelesly by NYPD, have to work crazy hours, and deal with the need to urinate in some kind of a miraculous way. At least they got an article in the New York Times written about them.

Across the road from the veteran’s carts is a mansion that belongs to billionaire Tamir Sapir, a former cab driver.

Mr. Sapir’s legend starts in Georgia, USSR. He found an interesting niche business: filling out complicated emigration forms for the Soviet Jews. At some point he was persuaded by his mother to give up his excellent life (it was a very lucrative business, from what I understand) and emigrate to Israel himself. He found himself in the middle of the Yom Kippur War, and quickly emigrated to the United States. He worked hard to earn enough money to leave rural Kentucky for New York, and then even harder to buy a cab medallion (which was a lot more affordable in those days). Then he risked everything again by putting up that medallion as collateral for a loan that he needed to open up an electronics store with a partner.

In the 80s there was a bit of a thaw in Sovet-American relations – Perestroyka and whatnot. There was a significant amount of people visiting the US – diplomats, scientists, sailors, and those invited by relatives. These people were allowed to exchange a small sum of rubles into dollars at the official rate – if I remember correctly, 60-something kopeks to a dollar.

What these lucky tourists wanted the most was electronics. In particular – vcrs, doule deck cassette players, and Walkmen. They had the money to buy these things, but here’s a problem: they needed 220 volt round plug devices, and more than that, VCRs needed to support the SECAM standard. You could not just walk into any store and find these: American market was all 110V and NTSC.

Every child in Odessa back then knew all of this, as well as that if you found yourself in New York City with some money, all you needed to do was trudge over to Timur’s (this was before he changed his name) store in Manhattan and find 220V SECAM VCRs.

Mr. Sapir was making a mint, but more importantly he was making connections with the Soviet ministers, diplomats, and future oligarchs. A little later he was invited back to the USSR, and made more connections there. These connections allowed him to play on the Soviet deregulation arbitrage market.

You see, when the Soviet Union was transitioning to the market economy all prices were regulated except those for commidities like metals, oil, and fertilizer. Those with connections could buy these commodities for already devalued rubles and sell them abroad for hard currency, making millions of dollars. All you needed was connections, which Mr. Sapir had.

He made millions, but the game became very dangerous as people tougher than NYC cabbies entered it. Mr. Sapir did not continue his career as a commodity exporter. Instead he invested his millions into New York City skyscrapers. The real estate market bottomed out, and you could buy a whole skyscraper for 10 million dollars or so. He bought a whole bunch of them. The price of Manhattan real estate exploded, and he became a billionare.

He bought a mansion across from the Metropolitain Museum to house his collection of carved ivory (for some reason this was a very popular area of collecting in the Soviet Union), has a yacht that used to be stuffed with a collection of exotic animal taxidermy that could rival Mr. Burn’s wardrobe or Amy’s car from Futurama.

Well, the two lessons here are: 1) you have to take risks and 2) you have to find a niche. The rest is luck.

My Advice to Russian Bride Hunters

I recently received an email from a reader who wanted advice about seeking a Russian bride. I decided to post my snarky, although relatively detailed reply here. After I sent the email, I realized that there’s a book on the subject

that according to one review is “simply ‘excellent’. It is factual without being offensive. It’s helpful without being overbearing. It is instructive without being condescending.” I don’t think I managed any of these feats, but here’s what I wrote:

Ancient Odessa, coin, erotic scene. II-III century BC.

Hey, ….. .

Your potential mailorder bride is most likely a scammer. I am about to give you and those like you some advice, which might turn out useful to some and entertaining to others (I plan on posting my reply on my blog).

Seeking a foreign bride is not a simple, risk free, or casual process. It is not impossible though: one of my female friends married an Australian, another a Briton. These two pairs are extremely happy together.

You claim that you are having problems finding a “normal chick to settle down with.” I think I know what you mean by that, but I am not sure that you do. In my interpretation you blame your inability to find a mate on the quality of the pool of potential dates available to you.

By definition, “normal” means standard, usual, average. Since the majority is never “not normal” (unless you are in a psychiatric institution), there must be another explanation. It’s probably a combination of your high standards in selecting a mate (model looks, high paying job, domestic excellence) and your lack of same qualities. In short you are looking for a girl out of your league.

So here you think: there are these places where the girls are super hot, live in poverty (and thus aren’t spoiled) and will jump at a chance of snagging a knight in shining armor who will whisk them away to America. Your thinking is correct. Being American with some money will let you fish in the deep end of the gene pool in many a foreign land.

Russian and Ukrainian cities are teeming with ultrahotness: Slavic female beauty is world famous. There is no obesity epidemic there due to superior quality of food, so sometimes it looks like city centers are overrun by hordes of supermodels. The ubiquitous blond hair and rare eye colors are a part of the local genetic markup.

Meanwhile, widespread alcoholism in men is far from being an untrue stereotype, and there are many men wearing purses in the street and speedos at the beach. Simply not being an alcoholic and having a modicum of fashion sense are great assets there. Basic hygiene is also not really a default in men there. Boldness and fatness is not as repulsive to women in those parts of the world, and an American citizenship is an outright aphrodisiac.

So, those are all the advantages that you have there. What about disadvantages? A shared background is a cornerstone of a healthy relationship. You and your potential bride grew up speaking different languages, reading different books, eating different food, watching different tv shows. There might be some overlap in music, but the overall experiences that the two you of had were vastly different. That gap has to be bridged somehow, and it seems very likely to me that you will leave this burden to the girl. She will have to suffer the tremendous cultural shock upon arriving in the US (I know I have), she will have to speak English. Based on your spelling and grammar you do not strike me as good with learning languages, and Russian is a difficult one to learn. You also show a good level of ignorance of Russian culture, geography and history. That is a big handicap.

So, yes, there are millions of “normal chicks” there, but you are limited only to English-speaking ones, of which there aren’t too many. Most “normal chicks” find it as hard to learn a second language as you are. So in practice the pool of girls that you are looking mostly consist of girls that have unrealistic expectations of life in the US, scammers (some of which are not actually girls), and those girls who can’t find “normal dudes” because of one issue or another.

Even if you get through all the logistical and bureaucratic nightmares, there are some tough odds to overcome. Imagine yourself in a freshly minted mailorder bride’s place: being a stranger in a strange land, feeling exploited and locked into a marriage, no old friends to lean on, having to speak English 100% of the time, homesickness etc, etc. That is some tough situation. If you are not god’s gift to women where you live, your foreign bride stressed by all the changes will probably not like you much better, but will be locked into staying married to you for a good while. It’d be exploitative of you, wouldn’t it?

The scammers are sometimes crude, sometimes very sophisticated. A friend of mine mentioned a girl that communicates in the way that you described with dozens of men, with the intent of scamming them. “She doesn’t ask me to send money, to go visit, or anything else like that.” That is a good sign, but this usually does not last: a good scammer does not want to set the hook too early. The fact that she does not own a tv or a computer and uses a friend’s computer at work seems suspicious to me. Her story – too smooth. You can’t be too careful in these situations.

Remember I mentioned my two friends who made their relationships work? The guys they married are very good looking, hard working, and have outstanding personalities. One pair met in an online game (true story), another at a university. Both girls spoke near-flawless English (the men did not learn more than a few phrases in Russian, very typically).

So here’s my final bit of advice: if you do want yourself a beauty from the former USSR — learn Russian, at the very least read everything you’ll find in Wikipedia about the places where you’ll be looking, but better thoroughly educate yourself about Russian and Ukrainian history, politics, current affairs. Then do some traveling. Then you might be ready for something like what you are attempting. If you will learn enough Russian and will travel there, you can get laid with impunity without having to go through with the whole marriage thing, unless the “sex tourist” label bothers you.

McCain and Palin Condoms

I do not like the Democratic and Republican candidates, and planning to spend my vote in the only way that it can make a difference in New York: voting for a third party candidate. I haven’t figured out which one – they all seem like losers too…

While tax plans that both Obama and McCain are proposing are not ideal for entrepreneurs, they themselves are lending a helping hand: yesterday in Times Square I’ve seen them help a dude market street meat –

and this enterprising young man was selling $10 McCain-Palin condoms –

Two Elephants

While I visited Odessa, I had dinner at a restaurant called “Captain Morgan”. It had my first taste of absinthe there (at the time you could not buy absinthe in the US), they had wi-fi, and their take on Vietnamese salad was almost passable.

The address of the building where “Captain Morgan” is located now is Resihlyevskaya street 17. Named after Odessa’s first and most beloved governor, Duc de Richelieu, it was always one of the oldest and most prestigious streets, sort of Odessa’s Madison avenue. (Pushkin street is 5th ave, Deribasovskaya – Broadway.) During Soviet times Resihlyevskaya was renamed into Lenin street, now the old name is back.

There were two things for which 17 Lenin street was famous. First of all, it was Isaac Babel’s childhood home. Secondly, it housed a large bookstore unimaginatively called “Technical Book Store.” On the other hand everybody called it “Two Elephants”, which was a bit of a mystery, since there were no elephants to be found there, only a very large selection of technical books and a top-notch stationery section.

The name came from the fact that before a renovation that happened sometime in the 60s, there were two giant life size papier-mache elephants reaching to the top of the ceiling in the store. Before the revolution it was a high end toy store.

I recently learned that it used to belong to my great grandfater, Moses Zayderbit. He had enough sense to voluntarily hand the store over to the Bolsheviks, and even managed to get a job there.

While my other great-grandfather looked a bit like Seth Bullock, great-grandpa Moses looked a little bit like Roger Sterling from Mad Men:

So, last year I was drinking absinthe and checking email in what used to be my great-grandfather’s toy store without knowing it.