Massachusetts to Other 49: Screw You!

Dear Other 49 States,

Screw You! We've already got universal health care.

Love, the Massholes

PS, we voted for freaking Mitt Romney, of course we went for the naked guy with the truck.

Riffing On Tuna

As this post will reveal, my recipes aren't really recipes at all - I don't follow recipes well, and find the concept of baking to be absolutely petrifying. (What do you mean, I have to use an exact quantity of ingredients?) Rather I work with themes of inter-relating ingredients that play well together, screwing around with them for my own amusement, hopefully in a way that won't result in a trip to McDonalds at the end of the night.

With that in mind, what can you do with Tuna steaks?

• Cook them as little as you can stand. If you can get sushi-grade tuna, not cooking them at all would be perfectly acceptable. If you do have to cook them, coat each side with black pepper and maybe some salt or seseme seeds, then cook each side with a very small amount of peanut oil on a hot stainless steel pan. This is sort of a poor-man's tuna equivalent of pan-searing a steak. Cook time varies by how much you trust the tuna, but we're talking minutes, and a small number of them. If the fish is good, I want pink in the center!

• You can chop up and serve the tuna over vegetables - avocado and cucumber are what I usually go to. Anything that is good in Sushi will do here.

• For rice, you can simply prepare a small amount of rice, or make sushi rice (that is, pre-rinse the starch off short-grain rice and coat it in a rice-vinegar/sugar solution at the end). See also risotto below.

• For sauce, I usually make some spicy mayonnaise, which is just regular mayonnaise mixed with Sriracha hot sauce and a small amount of cayenne pepper. (You don't have Sriracha? We must never speak to each other again.) Here my inability to measure things is going to cripple the recipe. Basically you want to use a tiny amount of cayenne pepper - it adds a ton of heat and will make the sauce unmanageable very quickly. Add the Sriracha to taste - it brings spice but also a nice tomato flavor.

  For sauce you can also reduce rice vinegar and soy sauce (perhaps with some stock) into the pan after cooking the tuna. This doesn't quite work like a traditional fond in that the tuna isn't fatty enough to leave the rich drippings you get off of steak. Still, this can bring a salty flavor to the party that isn't as lethally hot as the spicy mayonnaise.

• I usually serve this mess by doing something silly, like piling the tuna on top of the rice with the vegetables all around, e.g. you can play "New york chef" in the comfort of your own kitchen. The taller you stack it, the more points you get. Duct tape is cheating. The sauce can be poured right on or left on the side or safety. (If I've had a few beers before I start cooking and have been liberal with the cayenne pepper I leave the spicy mayo on the side for safety.)

Sushi Risotto

One of the weirder experiments I have done with this recipe was to make sushi risotto - that is, a risotto flavored with sushi-rice flavors (rice vineger, saki, sugar, although I probably ignored the Saki due to it not being on hand). I'm going to have to make the recipe again to remember what went into it, but the trickiest part is to get the two sets of flavors to play nice together. It can be done. I use Alton Brown's recipe as a starting point for Risotto, but in this case I backed off the white wine a lot (perhaps half a cup at most) to avoid clashing with the sushi-related flavors.

(The recipe was quite dreadful mid-preparation, and I thought we'd be ordering take-out, but as the alcohol cooked off the white wine, the whole thing mellowed.)

Anyway, if you can get a "sushi risotto" going, it can serve as a nice base to the tuna, bringing in some contrary flavors and making the rice more interesting.

Pie in the Sky

There are two other ideas for this recipe that I haven't gotten around to cooking yet:

• Wasabi cream sauce. I'll have to figure out how to engineer this but the idea is to make a light cream sauce with a bit of wasabi flavor to pour over the rice. (This is a continuation of the whole "sush-like flavors" theme.) Probably this can't be done without using real cream.

• Tangy sauce. Hell, I don't even know what this is. Basically at the Elephant Walk over a decade ago I had a raw tuna and vegetable appetizer, with some kind of tangy salty sauce that was just astoundingly good. If I had to speculate, there was fish sauce or oyster sauce in there, but cut with something to make it not lethal.

Bob Vila Needs Shrimp!

Lori and I found a good Chinese restaurant, just in the nick of time for xmas: Red Pepper, on route 9 in Framingham.

Disclaimer: Lori and I have become Chinese food snots - we like food that is more like what you'd have in China, rather than Americanized recipes. With that in mind, Red Pepper totally delivers!

Bob Vila Needs to Make More Than the Mortgage

Lori and I have entered a new phase of owning a home: we have rented it out. Lori began vet school this month, so we needed to relocate to Massachusetts). Rather than sell the home and buy a new one (or not), we rented the house and are renting a condo near school.

We ended up using a property management company. I spent almost two months in DC trying to rent the house myself and eventually gave up. Given the work that the management company did on the house, it is possible that we could have rented it ourselves. But the quality of applicants I screened on my own was...well...it wasn't good. What I've been told (and my experience bears it out) is that financially problematic tenants look for owner-landlords, thinking they won't be strict on financial criteria and/or won't do their homework. I did my homework, and what I saw was not pretty.

This is my game theory rationale for why a management company can pull better tenants. The agency cost is born by the landlord, who pays as much as first months rent in finders fees. The tenant pays nothing. High quality landlords and tenants are trying to find each other (or rather, if you are a high quality landlord, you want a high quality tenant, and vice versa). The agency cost acts as a selection signal - that is, if I am willing to burn my first month's rent on agency costs, I must believe that I will be able to sustain a high quality tenant in the long term, because my house isn't falling apart. High quality tenants know I am serious from this.

Since the finder's fee is real money, it's not a signal that can be faked easily by a landlord with a problematic house. But...why should the landlord pay the fee and not the tenant?

My answer is: asymmetric risk. As a tenant in a blue state, my landlord can't do much to me. His business is heavily regulated, the courts are sympathetic, and best of all, since he's sitting on property, he's a sitting duck for lawsuits. (That is, if he won't pay, I can get a judge to put his lien on his house.) I didn't realize how much leverage tenants had until I read the law as a landlord.

The landlord, however, is not in a great position. Give me a bottle of scotch and let me loose in your bathtub, and I can do damages to your house that will cost a full year's rent to repair. Against damage to an insanely expensive asset, a landlord has a few thousand dollars security deposit. And in terms of practical collections on damages, the tenant can skip town.

So it doesn't surprise me that the landlord pays for agency. It's worth a lot more to me financially as a landlord to have a good tenant than it is for me as a tenant to have a good landlord.

(As a tenant in Boston in 1998 I did use a broker, and it was structured where the tenant paid. Perhaps this is consistent with the brutally tight Boston housing market, where landlords can do pretty much whatever they want?)

So, Did You Make the Mortgage

The most common question I get asked when people here we're renting out our house is: do the rental payments cover your mortgage?

The short answer: yes.
The long answer: it's still definitely the lesser of two crappy housing options.

The problem is that the total cost of renting a house goes well beyond the mortgage. Besides the mortgage (which gives you a deduction against income tax on rental payments), you have property tax (a surprisingly big fixed cost), agency fees (in our case), repair and maintenance costs, and return on equity.

To focus on that last one: if you have positive equity on your home, it is not enough to get $1 more in after-tax rent than you spend per month in mortgage, maintenance, property tax, and any landlord-paid utilities. You are also losing the interest income on the money "tied up" in the house - your equity. If you would get cash out by selling, that cash could be sitting in a bank account returning...um...okay, so it wouldn't be returning squat right now, but in theory there is such a thing as interest.

I don't know what the long term outcome of renting the house will be. I do know that in the very short term, we're still in the red due to one-time costs to get the house ready to rent. (A lot of that stuff is repairs we could have done but put off as owner-occupiers.)

I will describe the trade-offs of selling vs. renting out in a future post.

Bob Vila Would Not Spend This Much Time On Green Bean Casserole

My mother is a very systematic person - she keeps notes on how much food everyone eats during Thanksgiving. So when I called her to find out how many pounds of green beans we needed to serve ten people (1.5 pounds is on the safe side) she had historical data on the Supnik family green bean consumption dating back several years.

My original thought was to file this under "things that makes Mom unique"...that is, until I realized that I do the same thing. The Apple doesn't fall far from the tree.

I started logging my recipes several years ago when I was teaching myself to cook French sauces. The problem with French sauces is that if you make them frequently enough to really get good at them, you'll die of congestive heart failure before you finish your training period. So I started keeping notes on my recipes to avoid going back to square one every time.

So while normally the purpose of blogging is to rant about things I am unqualified to rant about (in an attempt to build a resume for Fox News), I'm going to start archiving my recipes^H^H^H^H^H^H^Hexperiments here for next year.

Green Bean Casserole the Hard Way

Lori and I were charged with Green Bean Casserole this Thanksgiving...you can find the "classic" recipe here. We made this recipe with two changes:

1. We used fresh green beans. We microwaved them for, um, a while, to soften them, as they won't cook fully in the casserole.
2. We made the condensed mushroom soup from scratch. It seemed like a good idea at the time.

(I did give serious thought to frying my own onions, but Thanksgiving involves cooking food, taking it in a car, having it sit, then it gets reheated. I'm not convinced home-fried food would be terribly appealing after such a long wait.)

So about the condensed cream of mushroom soup. Basically we used this recipe, but without any of the chicken stock. We started without the corn starch and water, but when it became clear that we needed thickening power, we added it. We also added some cheese to the casserole because, well, we could.

The results were reasonable I think. The main change I would consider for next time is making the soup even thicker, which could reduce casserole cooking time, either via longer cooking, more corn starch, or both.

Essence of Mushroomy Goodness

As a side note, the creamed mushrooms (that is, mushrooms sauteed with shallots in cream) is astoundingly tasty, and not unrelated to a number of other mushroom, wine and cream potions. I have a strange compulsion to make ice cubes out of anything that is concentrated and tasty, e.g. home made chicken stock, pesto, leftover pizza (you do have to put it in the blender first) and concentrated creamed mushrooms falls in that category.

Poking at the recipe:

• Don't be lazy about the shallots - they bring a lot of flavor to the party.
• If making a sauce, you might be able to get away with less cream - judge by consistency. I am definitely of a mind-set that while "mouth feel" can be luxurious and delicious, it's useful to know what recipes are using extra fat for feel and not for flavor. This is one of them.
• You can probably deglaze in white wine, also a mix of white wine and vinegar (preferably a white wine vinegar - if you only have distilled, be careful) would be good.
• Extra credit if you use tarragon with the shallots - it plays well with mushrooms.

If you have left-over tarragon and shallots, you can reduce a saute of tarragon and shallots in vinegar and white wine, then combine it with (a relatively unflavored/unspiced ) hollandaise sauce and you end up with Béarnaise sauce, which is absurdly good and can be dumped on, well, pretty much anything. (Allegedly you need chervil to make a Béarnaise correctly, but I have used up leftover tarragon and shallots and it's still very good.)

Innovation and Commodification

There are fights going on in the banking industry right now that I want to rant^H^H^H^H call attention to. They are issues that most people probably don't know or care about, and yet they will affect our collective quality of life directly.

What do credit cards, mortgages, and over-the-counter (OTC) derivatives have in common? They are all products that are non-uniform - that is, each bank gets to make each product individually.

Defenders of deregulation would argue that the freedom to innovate in any way the banks can imagine is good for all of us, because the innovation leads to efficiency.

Despite having been raised by liberal socialists, I am sympathetic to this argument. I work in a highly deregulated industry (IT/computer tech) and would be at best grumpy if anyone told me how I could go about writing X-Plane.

But is that really the right analogy? I submit that banks don't fear the end of innovation - they fear the beginning of commodification, and we have a perfect analogy in the PC industry.

The computer hardware industry is, to put it bluntly, brutally competitive. It's not an easy part of the industry to make money in. Every year a PC sells for less money, but does more. Poor companies like Dell and HP are caught in the middle of that.

Okay - who are we kidding? No one is crying a river for HP or Dell, but being able to buy a laptop for under $500 is pretty awesome. There is no question that, from a price performance standpoint, whatever economic force is holding HP and Dell (and all of the other manufacturers) feet to the fire is yielding real dividends to consumers.

I believe that the force driving the price of PC hardware down is: commodification. Simply put, all PC hardware is like all other PC hardware. For any given product category, the ways a manufacturer can "innovate" is limited by the implicit rules of the PC ecosystem.

• RAM & Hard Drive: you can increase capacity, decrease latency. But you can't go changing around how the part fits onto the motherboard.
• CPU: you can increase the number of cores, you can increase speed. But you can't change what types of computer programs it runs.
• Graphics card: you can increase how many triangles you can draw. You can increase how much detail you can draw per pixel. But you have to do this via a standard interface.

When the specifications of a product become limited, it can be commodified - produced the same way by multiple manufacturers. Purchasers can easily change between suppliers, which puts intense competitive pressure on manufacturers to compete on the "commodified" axes (that is, the official ways commodities are measured).*

So let's take this back to banking. Look at things the banking lobby hates:

• "Plain vanilla" pre-approved consumer products. This would be direct commodification of anything in the consumer market. When the only thing banks can compete on is interest rate, interest rates are going to get driven down about as low as they can go. (The loss will come out of the banks margin on the product.) It's understandable why they don't like that.

• OTC vs. Exchange Traded Derivatives. This is complicated enough to warrant another blog post, but basically a derivative sold on an exchange is a standardized, commodified derivative, and the companies "manufacturing" the derivatives for trade make only the thinnest margin on large volume.

  By comparison an OTC derivative (a custom derivative made by a big bank for a company - think of it as getting a car designed from scratch instead of just going out and buying a Honda) is sold by one bank . There aren't any comparable derivatives to even check the price against! Which product do you think is more profitable?

Commodification is appropriate when we can quantify exactly how we want to select our products. Commodified memory works because we can standardize all but two variables: size and price. For a given class of memory, we can then buy the cheapest chips.

Could we do that for financial products? Yes! I reject the claim that exotic mortgages are useful for some class of buyers with special needs. If this were true, they would not have become the standard financing vehicle for several years. I think we know what most people want from a mortgage:

• Low up front costs
• Low monthly payment
• Low interest rate

In other words, when it comes to a mortgage, there is really only one variable: price. If that isn't a product waiting to be commoditized, I don't know what is.

If there is a single idea I want to leave you with, it's this: different kinds of innovation are good for different parties, and commodification channels that innovation into avenues that are good for the purchasers of a product. There is nothing anti-competitive about commodification. In fact, I would argue that it is anti-competitive not to have commodification.

Banks like the current system because they can offer products just different enough, just confusing enough, just opaque enough that consumers can't direct purchasing power toward the competitor who provides the best deal. Commodification would make these products transparent, and would make the market more efficient.

In a commodified world, banks would have to innovate, but they'd have to innovate on how to get us the best price on a mortgage, not on how to hide the fees in the hardest-to-find places.

* I would be remiss if I were to pretend that this always works out well. Five years ago, the commodity for CPUs was clock speed, rather than throughput, and the result was the market producing CPUs that ran very fast, but got very little done as they ran.

Is It My Turn Yet?

NAR wants us all to beg congress for an extension to the first time home-buyer's tax credit. That sounds good to me, but I wanted to punch up the text a little bit. Here's my version of the letter.

Dear ________,
I am writing to express my strong support for Congress to extend the $8,000 first-time homebuyer tax credit through 2010.

Throughout this financial crisis, there has been one consistent, clear, and very American policy: if you did something really stupid in the last decade, whether it involved making non-competitive cars that no one wants or designing financial instruments that would lose most of their value while paying hefty bonuses to bankers, congress will bail you out, and the tax payer will fund it. Should housing be any different?

Reports show that home sales to first-time homebuyers increased by 25% in 2009 and now account for 50% of all sales. In addition, the tax credit is reducing the inventory of foreclosures that are sitting on the market, helping our neighborhoods and communities recover. Like the big banks, us home buyers did some really, really dumb things over the last few years, and this government-provided bail-out is helping us "recover" from our mistakes by making future, similar mistakes cheaper.

While I believe the market has improved, I do not think it has fully corrected itself. In order for that to happen, we will have to reach similar levels of bad lending policies (NINJA anyone?) and delusional optimism that housing prices only go up. While this level of psychotic optimism has been hard to find in today's difficult economy, the best way to assure continued housing activity is to extend and expand the credit and to do that NOW. Nothing says "do whatever you want, we'll pay for your mistakes" quite like a government back-stop on bad investments.

We can't wait until late in the year to see what happens. It might turn out that houses aren't worth as much as we paid for them in 2006.
Sincerely,
_______

Now where's the bail-out for grumpy-coffee-drinking-work-at-home-computer-programmers-whose-pets-are-running-around-the-house-like-animals?

Bob Vila would not eat meat by-products (but your dog should!)

I went to a talk by a veterinary nutritionist yesterday at Tufts Vet for Obesity Awareness Day. Her talk was really educational. For instance, I learned that the body that regulates pet food nutrition, content, etc. is called AAFCO (Association of American Feed Control Officials). They seem to be a lot less stringent than FDA regulating human food. Anybody can make a pet food and put it on the market, regardless of whether it meets your pet’s nutritional needs. Moreover, pet food does NOT have to be tested in feeding trials to go on the market. Why does this matter? Well, our pets generally have only one or two sources of food – whatever we feed them on a daily basis (compared to people, who eat a variety of different foods and obtain different nutrients from each one). Our pets cannot synthesize certain vitamins and amino acids, so it is important that their food provide these.

The label will tell you whether or not it’s been tested. Definitely buy one that has been tested. How will you know? Read the labels. Here is how to interpret:

TESTED wording (example): “Animal feeding tests according to AAFCO procedures substantiate that…”

NON-TESTED wording (example): This food has been formulated to meet AAFCO standards…”

Key point here: “formulated to meet” = “HAS NOT BEEN TESTED”

When buying a pet food you also need to look for the words “complete and balanced” on the label. That means the food meets all your pet’s nutritional needs.

Wording (example): “Animal feeding tests according to AAFCO procedures substantiate that XYZ food provides complete and balanced nutrition…”

If the food is appropriate for puppies/kittens, it will say, “provides nutrition for growth of puppies/kittens,” and for adults it will say, “for maintenance of adult dogs/cats.” Foods can be appropriate for both youth and adult stages. But some foods are only for one or the other.

Wording (example): “Animal feeding tests according to AAFCO procedures substantiate that XYZ food provides complete and balanced nutrition for growth of puppies and maintenance of adult dogs…”

The only marketing claim word that means anything on a pet food label is “natural.” So “organic” is just a marketing term. Which is of course the opposite of people food, where “natural” is meaningless and “organic” has to be backed up.

Don’t worry about buying the fanciest food for Fido. More expensive or prettier packaging does not necessarily equal better nutrition. Just make sure the food has undergone AAFCO feeding trials and provides for all your pet’s nutritional needs: “Complete and balanced” – just like FOX News!