My Greater Predecessors

1000 Sub Special! Malt Liquidity 143

The hardest thing to do is walk away. If you know, you know — you are aware that you’re leaving the greatest thing that ever happened to you, but you’re going to do it anyway. For Alain Delon, five score and seven years after he left Romy Schneider, he mentioned that he thought of her as the love of his life. My love affair was with pushing wood, rather than the touch of a woman, and decidedly less picturesque, but it’s hard to not think about the time lost to chess as the best time of my life. In the moment, I wasn’t even sure I actually enjoyed the game — a decade after it passed me by, I know that I created the scorned lover feeling myself.

The last great move I ever played was as Black, in 2015, coincidentally for the same chess league team as Levy Rozman of GothamChess fame. I was decidedly “retired” at this point, occasionally playing tournaments as a sort of “Brett Favre running it back one last time” endeavor, and clearly just blundered the h-pawn for no reason in the position above. Here’s the thing about great ideas: they just appear, and that’s what makes chess so intoxicating — it’s a board game where a Eureka moment can show up at any point in time. I still remember the exact feeling of delight that came when I saw the only idea in the position that doesn’t result in a terrible, no good, very bad, lost position for Black.

Of course, after finding the equalizing idea, I blew this game anyway and lost — while I left competitive chess at my peak, like Tom Brady could have done after his seventh Super Bowl title to save his marriage, there are a smattering of games I played after that clearly showed I was washed, much like every half-hearted attempt Conor McGregor makes at reclaiming his pre-Khabib glory.

A core property of reality that my writing is pretty much entirely about is that there will always be a gap between theory and execution, which is why I define it as “liquidity”. In a sense, that is universal — the uncompromising forward nature of time means that this friction will always exist as long as the world does. As a result, “liquidity theory” gives us a framework we can use to dynamically interpret any unrealized volatility and act accordingly, a stylized flip-flopping that comes with complete conviction in real time, and puts every politician’s non—answers to shame. It’s a skill issue.

However, when it comes to people and their system of thought, one will always regret taking the Maximal Extractable Value approach. When society consistently decays out any edge, you’re left with the equivalent of the modern day airport lounge — completely bereft of any “true” premium experience, the cool kids lunch table for yuppies who can afford an $800 annual fee. As F. Scott Fitzgerald so neatly outlined, you can’t just buy your way to the cool kids table. Daisy’s just not that into you, bro, she’s more of a Chase Sapphire girl. Consequently, good things cannot exist — airline miles aren’t really worth it, and credit card points are the equivalent of food stamps, simply not enough relative to what we feel we are owed. Payment for order flow is intended to pay a “generosity premium” that simply cannot exist when information travels at the theoretical speed limit.

My thoughts about central banking as a sort of religion led me to think about actual religion, where the “central bank” of human behavior is none other than a church. It doesn’t exactly make sense how reality can be distilled down to one rate by Fed board members any more than it makes sense that the Vatican dictates the moral standard humans must abide by. But, like the dollar, if you kick-start liquidity and get people to believe, the complexities of quantified society develop around it. You could think of various formalized religions as alternate currencies, which is directly followed by the Coasean realization that there will always be a religion that is the reserve currency of the world. Currency is, as its core, liquidity — therefore, even in a moral code of conduct, there is an innate friction between morality and reality. This is what we can call “hypocrisy”.

Systems are only tested at the edge cases — this is the root of “antifragility”. The edge cases of humanity are contradictions. Like currency provides liquidity to bargaining, hypocrisy provides liquidity to justification — the “confession” trope neatly encapsulates the idea that we know our behavior wasn’t necessarily “proper”, we are going to do what we do anyway, but it’s good to be aware of the dissonance and sometimes feel bad about it.

Consequently, I got obsessed with seemingly contradictory image-building. Consider the case of how I started wearing jeans. Jeans, to me, were the textbook signal of normality, and therefore conformity, the clothing equivalent of the New Yorker tote bag. I concluded that if I were to distinguish myself in any way along the historical timeline, I would have to distinguish myself in form as well, ironically donning the khakis-and-vnecks uniform of the SEC quarterback-turned-dealership-owner vein, aping the “stuffed shirt conservative” philosophy that was relentlessly mocked by the Stewart-Colbert bourgeoisie, which I was initially a part of. Here, the contradiction was between not exactly “working” in the traditional employment model while maintaining a psychotic drive to self-improve. I “have no chill”, to use the common parlance, but I am the best person to grab a drink or dinner with and perhaps the optimal wedding guest. I even take white shirts to a level of obsession that Hall & Oates could mine endlessly.

My core hypocrisy, however, as someone who maybe grasps “finance as a philosophy” better than anyone you’d ever run into, is that I don’t really get money beyond the optimal method of interpreting liquidity. I consistently forget to pay parking tickets, get severe anxiety over Venmo-requesting people, and don’t really know how to budget. Without a credit card, I don’t think I’d ever be able to spend money. One week before I turned 27, I decided to buy my first pair of Levi’s 505s, the most normal pair of pants you can possibly own. (As a lifelong Dallas Cowboys fan, I can’t support the Favre-backed Wrangler fit.)

To “have chill” is to be able to forgive. Tom Brady will never think that he made a wrong decision about anything in his career, but he did manage to retire. I won’t ever have a normal viewpoint about what money means to ordinary people, but I can wear a pair of jeans. This is a confession, in a sense — I write half a Harry Potter series on my keyboard a month, but I had to handwrite this essay so it felt “real”. To do this, I had to absolve Adam Neumann in my own head.

Adam Neumann is the quintessential ZIRP-spawn. Pure human vaporware, and the precise reason you cannot imply zero-baseline societal risk. And yet, if you hear him talk, his conviction is what great oration truly is. He’s the highest paid speech-giver of all time. What was his sin here? He truly believed in improving the collective consciousness of the world, and he used the premise of the physical-metaphysical space to pitch a real-estate company in the vein of a disruptive tech company and scaled it to the point of going public. His idea got crushed by liquidity — theoretically, it could have worked, but practically, investors wouldn’t buy it. The most-photographed barn in the world was the real-estate play that we all remember as a tech company. Who lost, at the end of the day? Softbank? Employee equity paper gains? Compared to Elizabeth Holmes or Sam Bankman-Fried, people who will never acknowledge or confess their sins, I feel like Neumann’s sins are similar to mine, but more profitable. Money, and consequently finance, are vehicles to express ideas. (Cue Citizens United.) And if it’s all made up anyway, what stops us from sharing even if we have no basis to do so?

There’s a piece of writing called “Five Prophets” that has resonated with me deeply as of late and given me a clarity of thought I didn’t have prior.

I am convinced that all of history is a message, and this message is addressed specifically to me. The message tells me that this thing I take to be the material universe is actually something else. It is a machine, a contraption, built for an entirely different purpose I cannot possibly understand. Maybe it’s only a toy. Somehow, I’ve become trapped inside this machine, and I’ve confused it for the world, but it is not. I think the message is telling me how to escape.

All of finance is a message to me, and taking profit is the escape. If you don’t want to escape, you preach.

Thanks for helping me hit 1,000 subscribers — I’ll send out individual acknowledgements soon enough. In some way, I can’t help but think that what I am doing is working.

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