Numbers often fill my head. While waiting for my building’s morose super to free my Jesus bug from the boathouse rafters where it had spent the night, I was looking at the little waves lapping in the big doors and wondering if the Black-Scholes formula could frame their volatility. The canals were like a perpetual physics class’s wave-tank demonstration—backwash interference, the curve of a wave around a right angle, the spread of a wave through a gap, and so on—it was very suggestive as to how liquidity worked in finance as well.
Too much time to give to this question, the super being so sullen and slow. New York parking! One can do nothing but practice patience. Eventually the zoomer was mine to step into, off the boathouse dock and then out the doorway onto the shadowed surface of the Madison Square bacino. Nice day, crisp and clear, sunlight pouring down the building canyons from the east.
As on most weekdays, I hummed the bug east on Twenty-third into the East River. It would have been shorter to burble south through the city canals, but even just past dawn the southward traffic on Park was terrible, and would only get worse at the Union Square bacino. Besides I wanted to fly a little before settling in to work, I wanted to see the river shine.
The East River too was busy with its usual morning traffic, but there was still room in the fast southbound lane to plane up onto the Jesus bug’s curving hydrofoils and fly. As always the lift off the water was exhilarating, a rise like a seaplane taking off, some kind of nautical hard-on, after which the boat flew over its magic carpet of air some six feet off the river, with only the two streamlined composite foils shearing through the water below, flexing constantly to maximize lift and stability. A genius of a boat, zooming downriver in the autobahn lane, ripping through the sun-battered wakes of the slowpokes, rip rip rip, man on a mission here, out of my way little bargie, got to get to work and make my daily bread.
If the gods allow. I could take losses, could get shaved, get hosed, take a hammering, blow up—so many ways to say it!—although all were unlikely in my case, being well hedged and risk averse as I am, at least compared to many traders out there. But the risks are real, the volatility volatile; in fact it’s the volatility that can’t be factored into the partial differential equations in the Black-Scholes family, even when you shift them around to account for that quality in particular. It’s what people bet on, in the end. Not whether an asset price will go up or down—traders win either way—but just how volatile the price will be.
All too soon my jaunt downriver got me offshore of Pine Canal, and I cut back on the jet and the bug plopped down into ordinary boathood, not like a goose crashing down, as in some hydrofoils, but gracefully, with nary a splash. After that I turned and thwopped across some big barge wakes, then hummed and gurgled into the city, moving at about the pace of the breaststrokers braving the toxicity in their daily suicide salute to the sun. The Pine Canal Seebad was weirdly popular, and they did indeed “see bad,” pods of old breaststrokers in full wetsuits and face masks, hoping the benefits of the aquatic exercise and the flotation itself counteracted the stew of heavy metals they inevitably took on. Got to admire the aqualove of anyone willing to get into the water anywhere in the greater New York harbor region, and yet of course people still did it, because people swim in their ideas. A great attribute of the species when it comes to trading with them.
The hedge fund I work for, WaterPrice, had its New York offices occupying all of the Pine Tower at Water and Pine. The building’s waterbarn was four stories tall, the big old atrium now filled with watercraft of all types, hanging like model boats in a child’s bedroom. A pleasure to see the foils curving under my trimaran’s hulls as it was hoisted into place for the day. A nice perk, boathouse parking, if expensive. Then up the elevator to the thirtieth floor and over to the northwest corner, where I settled into my aerie, looking through a scattering of skybridges midtown, and the superscrapers looming uptown in all their gehryglory.
I started the day as always, with a giant mug of cappuccino and a review of the closing markets in East Asia, and the midday markets in Europe. The global hive mind never sleeps, but it does nap while crossing the width of the Pacific, a half-hour nap between when New York closes and Shanghai opens; this is the pause that puts the day into day trading.
On my screen was displayed all the parts of the global mind most concerned with drowned coastlines, my area of expertise. It wasn’t really possible to understand at a single glance the many graphs, spreadsheets, crawl lines, video boxes, chat lines, sidebars, and marginalia displayed on the screen, much as some of my colleagues would like to pretend that it is. If they tried they would just miss things, and in fact a lot of them do miss things, thinking they are great gestalters. Expert overconfidence, that’s called. No, one can glance at the totality, sure, but then it’s important to slow down and take in the data part by part. That required a lot of shifting of gears these days, because my screen was a veritable anthology of narratives, and in many different genres. I had to shift between haiku and epics, personal essays and mathematical equations, Bildungsroman and G?tterd?mmerung, statistics and gossip, all telling me in their different ways the tragedies and comedies of creative destruction and destructive creation, also the much more common but less remarked-upon creative creation and destructive destruction. The temporalities in these genres ranged from the nanoseconds of high-frequency trading to the geological epochs of sea level rise, chopped into intervals of seconds, hours, days, weeks, months, quarters, and years. It was awesome to dive into such a complicated screen with the actual backdrop of lower Manhattan out the window, and combined with the cappuccino, and the flight down the river, it felt like dropping into a big breaking wave. The economic sublime!