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	What's New (as of March 31, 2005) March Update I just returned from a week in Hawaii, playing guitar with the Bunker Band, of course, and also in my first jazz jam. A photo of me with my illustrious friend/instructor Steve Toma can be seen at right. In another first, my illustrious friend/instructor Gayland Baker and his son Christian gave me my first surfing lesson. Eighteen years as a resident and another eighteen as a visitor since, and my first attempt is at this late date... credit the improvement in sun screens, hats and lightweight wetsuits. The waves were sporadic and small, perfect for a beginner, and I half-caught two waves out of about a dozen. Good fun, but hard on your shoulders if you're not used to paddling. An Important Book For anyone who has money invested in the stock market, either directly or through a 401K, I strongly recommend "The (Mis)Behavior of Markets: A Fractal View of Risk, Ruin and Return" by Benoit Mandelbrot and Richard Hudson. Mandelbrot's fame rests on the Mandelbrot Set of fractal geometry, which he applies to the stock market. The fundamental point is that markets do not act "rationally," but are apparently random. The randomness is not quite pure, for he finds fractal patterns in the market's charts. Indeed, a fractally derived chart looks eerily like a "real" historical chart of a stock's activity. Mandelbrot believes "modern portfolio theory," which includes the Black-Scholes method of pricing options and other complex mathematical ways of counterbalancing or offsetting risks, are wholly deficient in one key way: they cannot predict the sudden market collapses which occur with striking regularity. These events are the cause of major wealth destruction, to the tune of trillions of dollars, but the Standard Model cannot account for them. This is indeed a troubling deficiency. The book is light on math, and therefore accessible to any reader with an interest in markets. I cannot help wondering if today's incredibly low VIX (a measure of future options' implied volatility) is not an example of the complacency Mandelbrot says is most dangerous. The VIX is a reading on how much volatility the market perceives 30 days ahead, and so it is not the only measure one should consider. But still, it is saying the market expects little volatility at all in the month ahead. Meanwhile, the market hasn't had a shock since 9/11, a very long time if you consider the Asian Contagion Crash of 1997, the Long-Term Capital Management Crisis of 1998 (in which the Black-Scholes' model led to the collapse of a highly leveraged super-sized hedge fund), and the popping of the Nasdaq Bubble in 2000. Three sharp reversals in four years, and here we are, 3.5 years after 9/11, without a single unexpected "event." According to the theories and evidence laid out in this book, that run of luck will very likely end soon. February's Posting Recent Feature Articles in the S.F. Chronicle If you're interested in things Chinese or Asian, check out my latest feature article in the S.F. Chronicle (published Jan. 8): China Ironies: An American Architect's Home in Suzhou I also had the chance to write about a fence we recently built (published Jan. 29): The Art of Fence Building New Essay: What This Country Needs Is A Good . . . Recession Read my latest essay (January 10) on the sorry state of the U.S. economy: What This Country Needs Is A... Good Recession. It seems to be picking up a number of readers via the Internet. I just added a footnote, dismantling a "there's nothing to worry about" article in the current issue of "Foreign Affairs" Magazine. Shanghai Postcard 2004 Read my short essay on the underbelly of China's changing economy. Is This A Nation At War? Read my short essay on citizen sacrifice and war. A Nation in Denial Read my short essay on the major problems facing the nation which are currently being brushed aside by the leadership and citizenry alike. Recent Feature Articles My article on Japanese apartment design ran on November 20, 2004 in the S.F. Chronicle; it's based on our visit last year to our friend Kaya Takano in Nagano. My article on "transit villages" in the S.F. Chronicle Sunday Magazine made the cover in August (guess it was a slow news cycle).   Photos 2004 (in no particular order) "What's New: January 2005" "What's New: October 2004" "What's New: September 2004" "What's New: August 2004" "What's New: June 2004" "What's New: Feb. 2004" "What's New: Jan. 2004" "What's New: Sept./Oct. 2003" "What's New: July/Aug. 2003" "What's New: June 2003" "What's New: May 2003" "What's New: April 2003" "What's New: March 2003" "What's New: February 2003"