To Know Thyself

"There are three things extremely hard: steel, a diamond, and to know one's self. " - Benjamin Franklin

"This above all; to thine own self be true." - William Shakespeare

"Friendship with one’s self is all important, because without it one cannot be friends with anyone else in the world." - Eleanor Roosevelt

"If you do not conquer self, you will be conquered by self." - Napoleon Hill

"Every human has four endowments- self awareness, conscience, independent will and creative imagination. These give us the ultimate human freedom... The power to choose, to respond, to change." - Stephen Covey

What do all these great quotes have in common? They all acknowledge the importance of knowing yourself. I have recognized the importance of knowing myself for a long time, and I am sure that throughout my childhood it was imparted upon me in one way or another. In fact a big reason I started blogging was to truly challenge my beliefs and to reflect upon where I am and more importantly who I am.

The other day I took a Myers-Briggs Test Workshop for Choosing and Changing Careers. The premise of the workshop was to learn more about your personality preferences and to leverage that enhanced knowledge of yourself to find a career you truly love. Although the workshop had a career slant I think going through such a workshop is just as applicable to many other facets of life as well.

Here are a few things I took away from the workshop:

1. I went into the workshop with a fairly good self awareness. That was reassuring. I think the combination of my team sports background, military background, and conscious attempts (blogging, reading, starting a non-profit company etc.) to get to know myself better have paid off. That being said we all are constantly growing and changing so the journey to understand yourself is just that; a journey, not a destination.

2. Your personality is a profile of preferences in the way you respond to outside events. If you are extrovert you can still be introverted in various situations. Being an extrovert simply means that your preference is to respond to different life events as an extrovert does. There is a sliding scale of how strongly you identify with a certain preference.

3. Your personality profile can and does change in different situations. Although my "personal" and "work" self were largely aligned there are some scenarios where my preferences change. For instance, I am more laid back and have a go with the flow attitude in my personal life whereas I appreciate a more solid schedule and organized work environment.

4. Improving your own self awareness allows you to better recognize other peoples personality types and allows you to more effectively interact with different types of people.I couldn't help but analyze where my wife would shake out on the Myers Briggs test. It was pretty enlightening to see that the source of some of our minor disagreements may not be a lack of desire to resolve those disagreements but two differing preferences on how to respond to outside events. A simple example is cleaning the kitchen. My wife notices every crumb where I take more of a holistic view of how the kitchen ties in with the rest of the home's appearance. These are not coincidences. They are living examples of our differing personality profiles. My awareness of this subtle distinction in our preferences will surely make me more sensitive to how she lives her life....and may even improve my counter-wiping ability. Although this is an oversimplified example, it can be applied to relationship management in any scenario.

5. There are a few different facets that would make up my “dream job” that are consistent with my personality profile. I must be in a creative, team environment that is very collaborative in nature. Not surprisingly this ties in very nicely with things I have been passionate about in my life. Whether it was growing up playing hockey, starting Checking For Charity Corporation, or leading a team of contracting professionals in Iraq I have always thrived and enjoyed these types of environments. My future career should be no different.

Book Review: Stones Into Schools

Stones Into Schools by Greg Mortenson: I was finishing up Three Cups of Tea as I headed into Iraq for my six month deployment. I gave the book a very positive review by stating that I think it should be a mandatory read for politicians, the military members, and the children in our school systems. I made that bold statement because I felt I learned more in the book about the region we have been at war with for the past decade than I have anywhere else. More specifically I stated, "I learned more about Islam and the countries of Pakistan and Afghanistan than I did in all my time in the military. The book taught me more about the real issues in that area of the world than any news article I have ever read. I am kind of ashamed to admit that, but it is what it is."

So it is quite fitting that I started Greg Mortenson's second book as I began to transition out of Iraq. A girl that was in my wife's sorority in college happened to come across my review of Three Cups of Tea and she also happens to work for Penguin Publishing who released both works under their name. In a very touching sign of appreciation for what I was contributing to overseas, she sent me the sequel along with a few other Penguin releases. I thought that was pretty cool on her part and the part of her employer.

Mortenson’s best-seller, Three Cups of Tea (2009), introduced his commitment to peace through education and became a book-club phenomenon. He now continues the story of how the Central Asia Institute (CAI) built schools in northern Afghanistan. Descriptions of the harsh geography and more than one near-death experience impress readers as new faces join Mortenson’s loyal “Dirty Dozen” as they carefully plot a course of school-building through the Badakshan province and Wakhan corridor. Mortenson also shares his friendships with U.S. military personnel, including Admiral Mike Mullen, and the warm reception his work has found among the officer corps. The careful line CAI threads between former mujahideen commanders, ex-Taliban and village elders, and the American soldiers stationed in their midst is poetic in its political complexity and compassionate consideration. Using schools not bombs to promote peace is a goal that even the most hard-hearted can admire, but to blandly call this book inspiring would be dismissive of all the hard work that has gone into the mission in Afghanistan as well as the efforts to fund it. Mortenson writes of nothing less than saving the future, and his adventure is light years beyond most attempts. Mortenson did not reach the summit of K2, but oh, the heights he has achieved. --Colleen Mondor of Booklist

Mrs. Mondor's review of the piece is dead on. But what I found particularly intriguing was the progress that was made since the first book was published. Stopping at the accomplishments detailed within Three Cups of Tea would be enough for Greg and his CAI counterparts to feel that have lived a worthy life of positive contribution to this world. However, to see how Three Cups of Tea has inspired people across the world while unifying people with seemingly incompatible views and beliefs is truly inspiring. I think the book speaks volumes in showing that a good idea founded on honorable principles can truly change the world even if it is one small step at a time.

I also really enjoyed the praise that Greg Mortenson gives the US troops. Not just because I am a military member, but because I think the work that our servicemen and women are doing often gets lost beneath the ever-present political banter of the major media outlets. Greg showcases how it was the military that first began embracing the Three Cups of Tea "education not bombs" strategy of eradicating extremism. And it wasn't the high profile Generals either. It was the everyday leaders of our nation's fighting force. A grass roots movement so to speak that has undoubtedly helped shape the strategy of our efforts overseas.

The book optimistically ends detailing that although there is a long way to go in that part of the world immense progress has been made with regard to education opportunities, especially for young girls. During a time where it is difficult to be anything but pessimistic about our politician's assessments of our nation's two wars it is good to see that some tangible gains have been made with regard to human progress. I highly recommend both books and offer my notes from Stones Into Schools below.

Forward by Khaled Hosseini:
- 8 years into war Afghanistan is considered a failing state but there are success stories as well and most meaningful is education
- 1/2 million children attending school and 40% are girls
- "If you educate a boy you educate an individual, but if you educate a girl you educate a community."

Introduction:
- Tells of Masreen, a Pakistani women, and her struggles to pursue education
- "When it comes down to it, I am nothing more than a fellow who took a wrong turn in the mountains and never quite managed to find his way home" - Greg Mortenson
- He has made more than 680 appearances in more than 270 cities in the last three years
- "When you hand this money over to the folks over there on the other side of the world," said one local businessman, who had tears in his eyes as he spoke, "just tell them that it comes from a little town in the mountains of Colorado so that their daughters can go to school."
- 1 year of education in primary school can result in an increase in income of 10-20% for women later in life
- Simply put, young woman are the single biggest potential agents of change in the developing world. A phenomenon that is sometimes referred to as the girl effect.
- In Muslim societies a person who has been manipulated into believing in extremist violence or terrorism often seeks the permission of his mother before he may join a militant jihad, and educated women as a rule tend to withhold their blessing.
- Taliban targets regions for recruitment where female literacy is low
- It is important to be clear about the fact that the aim of the Central Asia Institute is not indoctrination. We have no agenda other than assisting rural women with their two most frequent requests: "We don't want our babies to die, and we want our children to go to school."
- "In the end, the thing I care about, the flame that burns at the center of my work, the heat around which I cup my hands, are their stories." - Greg Mortenson
- "The first cup of tea you share with us, you are a stranger. The second cup, you are a friend. But with the third cup, you become family - and for our families we are willing to do anything, even die." - Haji Ali

Part I: The Premise:
Prologue:
- "The education and empowerment of women throughout the world cannot fail to result in more caring, tolerant, just and peaceful life for all." - Aung San Suu Kyi

The People At The End Of The Road:
- "I don't know what your destiny will be, but one thing I know: the only ones among you who will be really happy are those who will have sought and found how to serve." - Albert Schweitzer
- They start at the end of the road and work their way back. Serve the most remote areas overlooked by other NGOs
- When ordinary human beings perform extraordinary acts of generosity, endurance, or compassion we are all made richer by their example
- Works alliances with anyone including Taliban and hires inexperienced based on gut instinct
- He learned it from his father who had done the same in Africa with a hospital

The Man With The Broken Hand:
- "Mountains can never reach each other despite their bigness. But humans can." - Afghan proverb
- Sarfraz Khan has a tough but incredible background
- Like everywhere else in Afghanistan, geography is far less important than relationships
- When you comprehend the dynamics of power, everything else falls into place
- "And so it was that our conversation on that snowy evening in Zuudkhan marked the beginning of the greatest friendship of my life." - Greg Mortenson
- "For me, a hard life is no problem. But for our children, this life is no good. We have little food, poor houses, and no school. We know you have been building schools in Pakistan, so will you come and build the same for us in Afghanistan? We will donate the land, the stones, the labor, everything that you ask. Come now and stay with us for the winter as our guest. We will take tea together. We will butcher our biggest sheep. We will discuss matters properly and we will plan a school." - Roshan Khan a Kirghiz rider
- Greg promises to build the Kirghiz a school way up in the Wakhan

The Zero Year:
- Of the many ways in which the Taliban perverted and brutalized the tenets of Islam, however, nothing quite matched the crimes that they visited upon their sisters, daughters, mothers, and wives
- Within the first week of taking Kabul the Taliban stripped away these privileges and summarily rendered the female population silent and invisible
- Winter 2002 = zero year in Afghanistan
- After 9/11 $680M in aide money promised by President Bush had been "redirected" to build runways and bulk up supply depots in Bahrain, Kuwait, and Qatar for the upcoming invasion of Iraq. Afghanistan was now receiving less than a third of the per-capita assistance that had been plowed into reconstruction efforts in Bosnia, East Timor, or Rwanda, and of that less than half was going to long term development projects such as education.

The Sound Of Peace:
- Sarfraz delivered the hand recorded census of the Kirghiz and Greg appointed him the "most remote area project manager."
- "Look here. Look at these hills. There has been far too much dying in these hills. Every rock, every boulder that you see before you is one of my mujahadeen, shahids, martyrs, who sacrificed their lives fighting the Russians and the Taliban. Now we must make their sacrifice worthwhile. We must turn these stones into schools." - Sadhar Khan
- "You may be a veteran but you are not a warrior because you have never fought in battle. Sitting here watching the water rush past is the only way that I can justify having gone to war. The reason I fought the Soviets and then the Taliban was for moments such as the one we're having right now. Unless you have been inside the fire of a battle, this is something that you will never understand." - Sadhar Khan

Style Is Everything:
- "War has forced us to starve not only our bodies but also our minds. This should never again happen to my people." - Sadhar Khan
- The pleading was always polite but the needs were endless
- Official paperwork was always a challenge due to the (lack of) Afghanistan's functioning government

The Seal Of The Kirghiz Khan:
- "But I know, somehow, that only when it is dark enough, you can see the stars." - Martin Luther King Jr.
- In the 90's drug trade flourished to fund the mujahadeens war efforts. Eventually it began to infiltrate peasants and remote villages
- Up to 1/4 of the adult population were addicts
- Karzai made promises to Abdul Rashid Khan but didnt follow through
- The desecration of the Koran at Guantanamo had the entire region enraged. Proof that we are growing increasingly interconnected in this world
- Elders stopped the rioting and ransacking of the CAI school in Baharak. The elders claimed it as their school. They had ownership.

Qayamat (The Apocalypse) Part II:
A Dark and Distant Roar:
- Pakistan earthquake occurred on 8 Oct 2005
- In the past 50 years Pakistan has suffered through 4 wars, two political coups, floods, political assassinations, and other disruptions but never anything like the earthquake. 7.6 magnitude that triggered 2,252 landslides. Over 86,000 deaths making it the 12th most destructive earthquake of all time. A quarter of those deaths were children in school. Over 3,794 schools in Kashmir and 2,159 schools in the Northwest frontier were destroyed.

No Idea What To Do:
- CAI went to Kashmir to give aid after the quake
- US Chinook helicopters were helping the relief effort. "Sarfraz talked to some of the pilots and learned that those who had served in Iraq could not believe that the people of Pakistan actually liked them. In the coming years, many of these pilots and their crew members would look back upon those weeks as the highlight of their military careers."
- Islamic extremists were often better at aid than the various NGOs
- Combining aid with ideology was a highly effective strategy. "I have always been dismayed by the West's failure, or unwillingness, to recognize that establishing secular schools that offer children a balanced and non extremist form of education is probably the cheapest and most effective way of combating this kind of indoctrination." - Greg Mortenson

Farzana's Desks:
- "When you take the time to actually listen, with humility, to what people have to say, it's amazing what you can learn. Especially if the people who are doing the talking also happen to be children." - Greg Mortenson
- Greg's daughter tells him to start putting playgrounds in the schoolyards. He is amazed he hasn't thought of it.
- Taliban sympathizers even get a kick out of the playgrounds

Sarfraz's Promise:
- Sarfraz got an infection and had surgery
- Recruited Chinese to start building earthquake proof schools
- He was following in his father's footsteps without ever really intending to

The Chance That Must Be Taken:
- "History is a race between education and catastrophe." - H.G. Wells
- CAI started sponsoring girls for advanced education
- Often family and community object
- With the success of the first book Greg was travelling and fundraising nonstop. He crashed and had to return to home to rest. He became the fundraiser and sacrificed his trips to the schools, the thing he loved most.

Part III: The School On The Roof Of The World:
An Email From An American Colonel:
- "Education is the long term solution to fanaticism." - Colonel Christopher Kolenda
- "People in that part of the world are used to death and violence. And if you tell them 'We're sorry your father died, but he died a martyr so that Afghanistan could be free,' and if you offer them compensation and honor their sacrifice, I think that people will support us even now. But the worst thing you can do is what we're doing--ignoring the victims by calling them collateral damage and not even trying to count the numbers of the dead. Because to ignore them is to deny they ever existed, and there is no greater insult in the Islamic world. For that, we will not be forgiven." - Greg Mortenson
- "I'm no military expert and these figures might not be exactly right. But as best I can tell, we've launched 114 Tomahawk cruise missiles into Afghanistan so far. Now take the cost of one of those missiles, tipped with a Raytheon guidance system, which I think is about $840,000. For that much money, you could build dozens of schools that could provide tens of thousands of students with a balanced non extremist education over the course of a generation. Which do you think will make us more secure?" - Greg Mortenson
- It was the American military officers who felt the US strategy needed to be revamped in both wars
- "We can't kill our way to victory." - Admiral Mike Mullen
- The military embraced Greg and Three Cups of Tea
- "More than almost any other profession I have encountered, members of the military seem willing to acknowledge their failures and mistakes and to recognize that this is the first step towards learning and growth." - Greg Mortenson

The Man From The Jalozai Refugee Camp:
- Locals went against the Taliban and had girls attend school
- Unknowingly the schools they built in Afghanistan formed an arc that pointed to the birthplace of the Taliban

Barnstorming Through Badakshan:
- Finally certified as an NGO in Afghanistan
- Honored by Musharraf of Pakistan. Ironic they have better relations with Pakistan than our own government
- Musharraf is impeached
- They met with Musharraf for more than 4 hours. "Most high level delegations, they only get very short meetings with Musharraf. The President of China --maybe 30 minutes. George Bush, maximum 15 minutes!" - Nazir
- "The contrast between my activities and those of most of my staff seemed to underscore an even larger problem: the extent to which I have been forced to pull away from the aspects of my work that I find personally and spiritually fulfilling in order to attend to what is generally referred to as 'the big picture.'" I have similar feelings with my own charity as I have been forced geographically to tend to the bigger picture without being heavily involved in the gratifying groundwork.

A Meeting Of Two Warriors:
- "The Muslim community is a subtle world we don't fully--and don't always-- attempt to understand. Only through a shared appreciation of people's culture, needs, and hopes for the future can we hope ourselves to supplant the extremist narrative. We cannot capture hears and minds. We must engage them; we must listen to them, one heart and one mind at a time." - Admiral Mike Mullen
- Started neighborhood literacy centers for older women and it exploded
- "Wakil quickly realized that this enthusiasm was the byproduct of taking a group of women who had been forced to lead restricted and sequestered lives, putting them into the same room, and simply giving them the license to dream."
- Admiral Mullen inaugurated one of the CAI schools

The Point Of Return:
- Back in the Kirghiz but can't figure out how to get supplies in
- "How do you build a school on the Roof of the World when transporting the construction materials from any direction is virtually impossible?"
- Greg slipped into an intense fever and is forced to return home short of the Kirghiz village

The Last Best School:
-Abdul Rashid Khan the leader of the Kirghiz fell ill. Greg broke his promise and asked the US military for help. It made its way all the way up to Gen Patraeus and McChrystal
- The mission was too close to China and too risky based on fuel
- "This was no the outcome I had hoped for, but as I read the General's message I also understood that it was the correct decision. Although the assessment team's calculus may have sounded somewhat cold, it underscored the most important question to ask: Would it be right to place the lives of two American helicopter crews on the line while risking international incident on behalf of a patient who was probably beyond help? In my heart, I knew that the answer was no." - Greg Mortenson

Epilogue:
- "We live at the edge of the world, and since no help is going to arrive, we have no choice but to do this ourselves. This school is our priority. At this point, we have almost no resources left. But starting from this moment, everything that we have will be focused on one goal. Inshallah, we are going to finish what we have started." - Abdul Rashid Khan
- Nearly a decade after Greg's initial promise to the Kirghiz the school was finally finished
- "Like it or not, you see, my reasons for wanting to get a first hand glimpse of that gem of a school in the High Pamir are probably not compatible with the role that I played in its completion. Because when it really comes down to it, aside from the service that I performed as a kind of one man yak train that faithfully transported the donations of ordinary Americans to the far side of the world, what was accomplished at Bozai Gumbaz had nothing whatsoever to do with me. A fact that for a time, I must now admit, was not easy for me to accept." - Greg Mortenson
- "By succeeding at an endeavor in which a government, an army, and an NGO had failed, a band of impoverished nomads were able to construct, on the loftiest and most distant corner of their republic, something even greater than a school. They had raised a beacon of hope that called out not only to the Kirghiz themselves, but also to every village and town in Afghanistan where children yearn for education, and where fathers and mothers dream of building a school whose doors will open not only to their sons but also to their daughters. Including, and perhaps especially, those places that are surrounded by a ring of men with Kalashnikovs who help to sustain the grotesque lie that flinging battery acid into the face of a girl who longs to study arithmetic is somehow in keeping with the teachings of the Koran." - Greg Mortenson

Thoughts On "Why Are All Our Best Officers Leaving The MIlitary"

There is an article that was recently published in The Atlantic magazine that is surely stirring up some controversy. The article is bluntly called, "Why Our Best Officers Are Leaving The Military."

I must start with a disclaimer of sorts. I am transitioning out of the military this summer. With my pending transition the title of the article definitely caught my eye, as it surely was designed to do. However, it wasn't because I consider myself the "best." I am a pretty humble guy so by nature it is hard to view myself as one of the best officers. I was more curious than anything else. With that being said, I certainly do not think that ALL of our nation's best officers are leaving the military. I have served with some unbelievably talented officers and leaders that are making the military a career and like any other organization the leaders will be a representation of our nation as a whole with the good, the bad, and the ugly making up our leadership ranks.

With my personal disclaimer out of the way, I must say that I think the article most definitely holds some validity and that many of the problems identified in throughout author's article are real.

Why are so many of the most talented officers now abandoning military life for the private sector? An exclusive survey of West Point graduates shows that it’s not just money. Increasingly, the military is creating a command structure that rewards conformism and ignores merit. As a result, it’s losing its vaunted ability to cultivate entrepreneurs in uniform.

What I really liked about the article is that it wasn't just some naive opinion piece with a catchy title. The writing was backed with real life studies and surveys that have been researched over the years. As I began to read the findings that came from the aforementioned surveys and studies I was amazed at how closely they matched my own reasons for separating. Not only my own reasons but the frustrations I have discussed with my peers over the course of my military career.

A widely circulated 2010 report from the Strategic Studies Institute of the Army War College said: “Since the late 1980s … prospects for the Officer Corps’ future have been darkened by … plummeting company-grade officer retention rates. Significantly, this leakage includes a large share of high-performing officers.” Similar alarms have been sounded for decades, starting long before the wars in Iraq and Afghanistan made the exit rate of good officers an acute crisis. When General Peter Schoomaker served as Army chief of staff from 2003 to 2007, he emphasized a “culture of innovation” up and down the ranks to shift the Army away from its Cold War focus on big, conventional battles and toward new threats. In many respects (weapons, tactics, logistics, training), the Army did transform. But the talent crisis persisted for a simple reason: the problem isn’t cultural. The military’s problem is a deeply anti-entrepreneurial personnel structure. From officer evaluations to promotions to job assignments, all branches of the military operate more like a government bureaucracy with a unionized workforce than like a cutting-edge meritocracy.

And that is when it hit me. When I read the final word of the passage. The word 'meritocracy' instantly took me back to something I did while deployed to Iraq. While deployed, at the request of my Commander, I completed a voluntary and informal "exit survey." The survey was created by my Commander, when she learned I was separating from the Air Force, to track trends of departing Company Grade Officers from the Contracting career field. Her genuine desire to address the problems in our military/career field coupled with her care for her people not only made me feel obligated to complete the survey, it made me feel honored to provide brutally honest feedback that may in some small way make the Air Force a bit better for the people behind me.

I opened my 'exit survey' for the first time since submitting it to my Commander in Iraq and I went to one of the first sections. The section asked me to describe my top five reasons for separating. Under reason number four I had listed "Meritocracy." Below is an excerpt of my response:

Meritocracy: I have always been very intrinsically motivated. I enjoy giving my best and do so without many external incentives. However, I have found that working in the government setting can be frustrating at times. I think that being in a career field that is heavily populated with civilians and contractors as well as military has made it even more frustrating. It is hard to work in [the] contracting [career field] and not notice that there are plenty of workers who do in fact very little working. Not only is it frustrating to watch as a fellow teammate but it is typically compounded by the fact that many of these people make more money than me and get more time away from the office than me. Not that money is everything to me. Not even close. I think that as an officer [in the military] the money and benefits are more than sufficient for my lifestyle and I am appreciative of how I have been able to set myself up quite nicely for the future given the paycheck I receive. However, I do have a problem working in an environment where the external incentives seem completely misaligned with the amount of responsibility and contributions to the team. I hate to generalize my civilian counterparts because I have worked with some great ones, but over time I have noticed a trend that many civilians want all the benefits of being in the military without any of the sacrifice that comes with it. I am not naïve enough to think that my transition to the corporate world with solve all my frustrations and that everything will be “fair”. However, I am looking for an environment where I can differentiate myself through performance and be compensated both internally and externally based on my merits.

As I continued through the article, I was amazed at the findings from the respondents in the survey and how closely they matched many of my peers sentiments and experiences. Below are some of the results that really stood out to me.

Among active- duty respondents, 82 percent believed that half or more of the best are leaving. Only 30 percent of the full panel agreed that the military personnel system “does a good job promoting the right officers to General,” and a mere 7 percent agreed that it “does a good job retaining the best leaders.”

Is this so terrible? One can argue that every system has flaws and that the military should be judged on its ultimate mission: maintaining national security and winning wars. But that’s exactly the point: 65 percent of the graduates agreed that the exit rate of the best officers leads to a less competent general-officer corps. Seventy-eight percent agreed that it harms national security.

The shame of this loss of talent is that the U.S. military does such a good job attracting and training great leaders. The men and women who volunteer as military officers learn to remain calm and think quickly under intense pressure. They are comfortable making command decisions, working in teams, and motivating people. Such skills translate powerfully to the private sector, particularly business: male military officers are almost three times as likely as other American men to become CEOs, according to a 2006 Korn/Ferry International study.

I too believe that the military does an excellent job attracting and training leaders. In fact one of the sections of my exit survey asked what I thought the Air Force does well. Below is my response:

What do you think the Air Force does exceptionally well?

Developing professional critical thinking leaders: I look back at all the unique challenges, experiences, and educational opportunities I have been given while in the Air Force and I start to think that the Air Force has given me much more than I ever gave in return. Sure the sacrifices are difficult; however I feel that the 9 years I spent in the military lifestyle have set me up for success in any endeavor I choose to pursue.

I think the Air Force has developed a culture, especially amongst its officers, that is founded on professional character based leadership. This is not an easy culture to establish en masse, but the further I go along in my career the more I realize how successful the Air Force has been at providing me a foundation for leadership success.

I think that based on the statistics above, Corporate America is finding value in folks with military leadership experience. The fact that men with military experience are three times as likely to become CEO as compared to their civilian counterparts is a statistic that shows the transitional success is not a mere coincidence. So why does the military have a hard time retaining great leaders when they do such a great job crafting them? That is a question author Tim Kane also sought to answer through his research.

Why is the military so bad at retaining these people? It’s convenient to believe that top officers simply have more- lucrative opportunities in the private sector, and that their departures are inevitable. But the reason overwhelmingly cited by veterans and active-duty officers alike is that the military personnel system—every aspect of it—is nearly blind to merit. Performance evaluations emphasize a zero-defect mentality, meaning that risk-avoidance trickles down the chain of command. Promotions can be anticipated almost to the day— regardless of an officer’s competence—so that there is essentially no difference in rank among officers the same age, even after 15 years of service. Job assignments are managed by a faceless, centralized bureaucracy that keeps everyone guessing where they might be shipped next.

The Pentagon’s response to such complaints has traditionally been to throw money at the problem, in the form of millions of dollars in talent-blind retention bonuses. More often than not, such bonuses go to any officer in the “critical” career fields of the moment, regardless of performance evaluations. This only ensures that the services retain the most risk-averse, and leads to long-term mediocrity.

When I asked veterans for the reasons they left the military, the top response was “frustration with military bureaucracy”—cited by 82 percent of respondents (with 50 percent agreeing strongly). In contrast, the conventional explanation for talent bleed—the high frequency of deployments—was cited by only 63 percent of respondents, and was the fifth-most-common reason. According to 9 out of 10 respondents, many of the best officers would stay if the military was more of a meritocracy.

Ironically deployments was the fifth reason out of five on my exit questionnaire as well. Although these generalizations are not true for all members of the military I think that there are many that do feel aligned with the concerns cited above. Most of my best friends in the military are competitors. Many spent years competing at the highest levels of sports, academics, etc. and the most frustrating environment you could possibly put them in is one where they feel constrained and held back. I am a firm believer that over time people rise and fall to where they deserve to be based on their merits. However, when driven people are given the choice to enter an environment that more efficiently rewards overachievers and winners inevitably some will make the jump.

Another facet of the current military struggle is differing outlooks on the status quo. For better or for worse many within the younger generations look at the status quo differently than their upper leadership. It is not that the younger leaders of the military do not buy into a culture that promotes integrity, honor, service and excellence, as that is definitely a cultural norm that they believe in. What the youth of the military struggles with is the status quo line of thinking. The youth of our country has been brought up to embrace their differences, to stand out, and to become their own unique person. One has to look no further than the trends of our information age to see the demand for individualization thriving. Anyone can start a blog, a Facebook page, a YouTube channel, a Twitter account, and much more. People are creating their own individual identities and virtual thought profiles online from a very young age. In a sense the new currency is ideas and the marketplace is rewarding people for their ideas. Anyone who has served in the military knows that is not always the case in the military environment. Often the individualized personas and unique beliefs that are embraced in the new world are seen as 'risky' in the military world.

In a 2007 essay in the Armed Forces Journal, Lieutenant Colonel Paul Yingling offered a compelling explanation for this risk-averse tendency. A veteran of three tours in Iraq, Yingling articulated a common frustration among the troops: that a failure of generalship was losing the war. His critique focused not on failures of strategy but on the failures of the general-officer corps making the strategy, and of the anti-entrepreneurial career ladder that produced them: “It is unreasonable to expect that an officer who spends 25 years conforming to institutional expectations will emerge as an innovator in his late forties.”

In America today, capitalism is entrepreneurial: our economy is defined by individuals failing or succeeding on the strength of their ideas. Crucially, the military has not recognized this shift. And the Army, in particular, has not changed from its “inefficient industrial era practices,” as a report by the Strategic Studies Institute put it last year. It still treats each employee as an interchangeable commodity rather than as a unique individual with skills that can be optimized.

That last line really hits it on the head for me. How can the military take the unique individuals that serve as the core of its make up and skillfully utilize those assets to make the organization better than it was? That is the ultimate goal. Of course it is easier said than done in one of the largest organizations in the world but the journey of a thousand miles starts with one step.

I love the military and what it stands for. Any organization that is consistently recognized as one of America's most trusted institutions while simultaneously navigating some of the most critical and challenging missions on the planet is doing a lot of things right. I decided to write this post because I believe in our military and I want it to continue to be the world's best for my friends that stay in, for my country, and for the next generation. I truly believe that by consistently striving to improve and by continually addressing the evolving challenges like the ones outlined in this article, our nation's fighting force will continue its tradition of success long after I am gone.

BadskiBlog Top 10 Of 2010!

2010 was a challenging year. Between adapting to new job/city, going into hibernation for 2-3 months studying for the GMAT, running Checking For Charity from afar, and a six month deployment to Iraq away from my lovely wife and dog it is easy to see why it has been a challenging year and why BadskiBlog has taken a hit as far as quantity of content goes. With that being said, I can honestly say that I have been much more conscious of churning out quality verses quantity this past year. As I get “better” at blogging I find myself struggling more and more to ensure I have worthy topics to write about. I don’t want to write posts that don’t get my adrenaline going a bit. I want to post topics that challenge me and continue my goal of exploration and growth. Here are my 'self proclaimed' best posts of 2010 in no particular order. Thanks to everyone who has been part of this blog in one way, shape, or form.

1. Full Circle - Lessons From One Sandbox To Another: A group of life and leadership lessons that were learned as a child yet helped me while I was deployed to Iraq.

2. Optimist Optimized: A post detailing how my deployment experience changed my perspective on my life stateside. The greatest gift I was given was the ability to see just how blessed my life stateside is.

3. What You Can Learn From A Group Of Has Been Metalheads - Anvil: The Story Of Anvil: A movie review of "Anvil: The Story of Anvil." The movie is an unbelievable feel good movie that made huge waves in the independent movie scene. It is not just about playing loud with these guys, it is about living a fulfilling life. Plenty of life lessons to be learned from these unlikely wise men.

4. Practice, Preparation, and Paralleling Reality: Thoughts on optimizing your habits, practice and preparation to successfully accomplish your goals.

5. Warren Buffett On Integrity: An awesome video from a humble, wise, and honorable business leader on the importance of integrity. I love how Warren Buffett makes the most simple statements seem like the most insightful statements in the world. Often we get so bogged down in complex theories and practices that we forget the powerful and truly timeless themes for success that are overarching in a myriad of pursuits.

6. Humility & Hubris - Learning From A Punch In The Mouth: This passage explores different scenarios where getting a dose of humility can be a good thing and how you can approach adversity and come out the other side a better person.

7. A Combat Landing - Welcome To Your New World: Initial thoughts and observations of my journey in Baghdad, Iraq. A combination narrative and introspective exploration of the deployed world.

8. Mental Balance And A Growing Trend: A couple articles on the unique skills and experiences that Junior Military Officers (JMOs) are bringing to Corporate America. The post also has interesting statistics showing the changing value placed on JMOs by Corporate America over time and of course some of my own thoughts on the subject.

9. The Deployment Mirror - Part I, Part II, Part III and Part IV: Narratives detailing my daily life in Iraq. The posts mostly spawned from requests of family and friends to share my experiences in a manner similar to the Combat Landing post above. I must say that as a kid I did want to be a "creative writer" when I grew up so these posts were a welcome departure from my normal blogging.

10. Goodbye Baghdad!: Quick thoughts from Al Udeid, Qatar just a few short hours after I had departed Baghdad for home.

Becoming The Trend

Above is the (great) video for "Icarus Lives!" by the band Periphery. I must admit that when my brother first turned me on to them I didn't necessarily know how to digest them. I dug their sound but looking back I definitely didn't appreciate just how unique their music really is. Judging by the 'e-chatter' floating around about these guys it is safe to say that they have made an impact on the metal community. Although I wouldn't say they are my favorite band of all time it does speak volumes that I have probably listened to their cd more in the last few months than I have any other cd I have. Why am I intrigued by this band? Because they don't sound like anybody else.

That got me thinking back to all the bands that I have really dug over the years. What do they have in common? They don't sound like anyone else. They have a distinct personality or dare I say it, brand. Of course there are copy bands that will follow in the footsteps of unique bands, but when a great band steps outside of what is common there is a period of time where they truly stand alone. I think those few drops of sand in the hourglass where a band is out ahead of the trends are really special moments. And it is those moments that generally shift the way a genre is headed. Led Zeppelin, Black Sabbath, Iron Maiden, Judas Priest, Megadeth, Metallica, Pantera, In Flames, At The Gates, Killswitch Engage, The Black Dahlia Murder are a few that come to mind over the last few decades that have truly been unique and influential and that stand alone for a brief period of time before eventually shifting the direction of the genre (list is definitely up for debate). So what happens when a band bucks the trend and ventures out into aberrance? They become the trend.

Although established social norms often reward conformance and toeing the line so to speak, it is these trips off the beaten path that can be the most rewarding and defining in the long run. How can I seek opportunities to break free from the status quo, to truly grow as a person, yet still remain tangible and enjoyable to be around as a husband, a friend, a professional, and a member of society? Where can I go against the grain and become the trend for the betterment of myself and those around me? That is the challenge, and if it takes analyzing metal bands on my blog for me to recognize this transcendent life lesson so be it.

Passion Barometer

"If I had all the money in the world, I would be doing exactly what I'm doing right now."

Can you say that about your job? Your life? Well that is exactly what Jennifer Simonetti-Bryan was quoted as saying in her interview with the CNN Small Business Blog. Simonetti-Bryan transitioned from a career in finance to achieve a coveted Master of Wine certification. Below are some details of her story with the full article available here.

Simonetti-Bryan had an existential crisis that many young professionals face: Working nights and weekends, staring at models on a computer screen, she felt bored and unsatisfied. Only 10 more years, a colleague told her, and she'd make managing director.

A few weeks after that, a fateful business lunch set the analyst on a new course. While giving a presentation in the corporate dining room of Citicorp's London office, Simonetti-Bryan was served an herb-crusted salmon paired with a Sancerre, a crisp white wine from France's Loire Valley. The way the acid in the wine cut right through the oil from the fish sparked her curiosity. She began taking classes in wine appreciation, and in the wake of Citi's merger with Smith Barney in 1998, she took the plunge, abandoning her six-figure salary for a wine shop job, then becoming brand manager for Cakebread Cellars and Domaine Carneros while collecting industry certifications.

One of those was the Master of Wine designation, the industry's highest honor. After passing a four-day exam that involves identifying 36 wines, applicants must write an original piece of research that furthers the industry. Simonetti-Bryan studied six hours daily on top of a full workday, sometimes suffering from "palate fatigue." "There were some days," she says, "where I was like, 'I don't want to look at a glass of wine. I don't even want to think about a glass of wine,' and then you get that one glass of wine and you go, 'Ah, this is why I'm doing this.'" In 2008 she became only the fourth woman in the U.S., and one of 289 people worldwide, to obtain the coveted title.

Although I enjoy a good glass of wine (or bad…..I must admit I cannot always tell the difference), wine is not what drew me to this article. What drew me in was someone going through a transition that is integrated in both their work and life. I am a big proponent of work life integration versus work life balance so stories like Jennifer's always appeal to me. Her quote above is a quote that serves as the barometer for how she is living her life. She loves what she does and wouldn’t change a thing about it. This wasn’t always the case for her which allowed her to recognize what she had once she got there.

I am going through a work/life change as I transition out of the Air Force this summer. Although I can’t say that I wouldn’t change anything if I had all the money in the world, I really do love my life. The only part of my life that wasn’t as fulfilling as it needs to be for successful work life integration is the work part. Although I am good at what I do and I enjoy it…sometimes, my heart is not fully invested in my current career path. Being a sports guy, I know what is possible when you are truly passionate about something. I need to find that something again.

Coming out of the service is tough because I don’t necessarily know what I want to be when I grow up yet. There are a few different avenues in business that interest me but as far as a specific job title goes I haven’t narrowed that down yet. I may just have to steal the quote from her to use it as my own passion barometer in determining what I want to do moving forward.

Perhaps I am an idealist. Perhaps I am just naïve. Who knows. All I know is that Simonetti-Bryan has what I want. She has a life and a career that are successfully integrated and she truly loves what she is doing. I am a little nervous but very excited to be breaking into the great wide open (hat tip Tom Petty), but I will trust my gut, work hard, and see if I can’t land my dream job too.

Full Circle - Lessons From One Sandbox To Another

Life is a funny thing. As you get a bit older and get some experience under your belt your perspective on things definitely changes. The older I get the more I believe that the majority of what has made me successful in dynamic team environments was learned at a very young age. This concept hit me pretty hard while I was deployed to Iraq.

Over the course of my time in Iraq I was in charge of a team of military, civilian, and contractor personnel. I have been in charge of different people, teams, and groups before but for some reason when I was deployed I was much more apprehensive about my capabilities as a manager and leader. Maybe it is because the military mission was smacking me square in the face. Stateside you do not necessarily always see the negative impact of your mistakes. On a deployment the stakes are high. My contracting team's failures directly impacted the war fighters and support troops in theater carrying out the mission. That reality was definitely something I took seriously. As my nerves and doubts got the better of me I was constantly trying to remember lessons learned from college business classes, from the numerous management and leadership books I have read over the years, and from the blogs I frequent. Due to the nature of my no notice deployment and the operational tempo in Iraq I was thrust right in without the convenience of being able to revisit and review leadership and management principles; I was forced to go with my gut and what I have internalized over the years.

Now that I have been back in the good US of A for a few weeks and have had time to reflect on the extremely positive management and leadership experiences I had in Iraq, I look back and my nervousness and insecurities and I almost laugh. I am amazed at how much of what made me successful as a leader over there weren't complex theories and cutting edge management formulas but lessons that I learned as a kid playing on the playground or in the sandbox. Here are a few lessons learned in the school sandbox that helped me immensely in the deployed sandbox:

Learn to Share: I tried to redirect all compliments and make sure that the credit went to my team. Careerists often struggle with this one. We all want to advance and be recognized but avoiding taking credit for the team's successes is crucial to continued team success. Your team will recognize your gratitude for their efforts and your superiors will, over time, see that you are a component of the team success as well even though you humbly redirect credit.

Quit Now Be A Quitter For Life: I distinctly remember my parents drilling this lesson into my head at a very young age and I am grateful they did. I think this simple but impactful lesson has been transformed into many clichéd life lessons. When the going gets tough the tough get going. Work hard and the rest will take care of itself. Quitters never win. The list goes on. Regardless of how its worded, the spirit of the lesson helped me immensely overseas. There were times where I just didn't think that I could do all the work that needed to be done. There were times that I didn't think that I had the stamina to make it through the remaining months. I was uncomfortable, tired, overworked, and most of all I missed my family and friends back home. Whenever I felt overwhelmed like that I just put my head down and worked through it. What other choice did I have? Not much to be honest but I think life is the same way. When you get dealt a bad hand you just have to keep working through it, because you can't quit life either.

TEAM = Together Everyone Achieves More: I still remember playing two hand touch in elementary school with my buddies. I can remember the exhilarating feeling I got when we put together a team that kept winning. That was my first taste of synergy in action. All throughout my hockey career and now into my Air Force career I have loved the feeling of being on close knit high performing teams. Those types of teams are not easy to come by but the feeling you get being a part of one of those teams is amazing. In Iraq being part of a team is a necessity. Deployments are not easy so you have to lean on people more than you are used to. But that vulnerability and shared experience creates strong bonds which was refreshing and reminded me of my old hockey playing days.

Cheaters Never Win: People always talk about integrity in the military. I often hear it described as doing the right thing even when no one is looking. That definition, although quite tangible and good to live by, does the spirit of integrity a bit of injustice. Having integrity in what you do and what you say makes you a precious commodity. Normally I am fairly non confrontational. Out there working with the Army things were a bit different than what I was used to working in an office setting in Boston. If you don't speak up and know what you are talking about in Iraq you will get stream rolled by higher ranking hard charging Army dudes! The stakes are high, the tempo is fast paced, and people are stressed out. It is definitely not the place to be timid. So saying what you mean and living by your principles and virtues is more important than ever. Over time I saw that the leaders above me recognized that I had an opinion. Generally that opinion was thought out, reflected my true feelings, and it was founded on a genuine concern for our task at hand and a desire to improve. Having that integrity to stand behind what I said and did made me a constant source of consultation for the senior leaders in our organization. It was a good feeling. It was refreshing to know that you don't have to be a "yes man" or a "brown-noser" to be recognized as valuable to the team. If you work hard and do in your heart what you know is right then you will be recognized for your contributions to the team.

I am sure I could think of a few more but these are the big lessons that come to mind. I would love to hear comments on other childhood lessons that have served people well in their lives. Thanks for reading and it is great to be back!

Optimist Optimized

Before I deployed for six months to Iraq I thought that I would write about the many lessons learned throughout my time there. If you read my last post you know why that didn't happen. I thought that upon my return I would write about some of the lessons learned during my deployment once I had some time to reflect on all that I had experienced. That really hasn't happened either so far. So I find it a bit ironic that after a week back in the states adjusting to my old (but seemingly new) life that my first inkling to write again is not on the topic of what I learned in the desert of the middle east but what I have learned about my life stateside.

I have always been an optimist. Not a blind idealist by any means, but definitely someone who seeks to find the best in most situations. However after being purged of all but a few remnants of my stateside life for last six months, I now find my optimism optimized.

Like balance in anything else sometimes it takes the tough times to appreciate the good times. Although I never want to deploy and be away from the life I have built again, I am grateful for the experience because it has given me the ability to truly see how blessed my life really is.

The first few days I was back in Boston with my wife I could not stop gazing outside at the colors that were almost blinding after six months of different shades of brown. The sight of people living, working, and playing together in the neighborhood was suddenly a beautiful glance into what we have in this country and what our freedoms are all about. Holding my wife on a nice comfortable couch enjoying some good tea and even better conversation was the most fulfilling and enjoyable experience in the world.

I feel that with my small contribution overseas I have been given the gift that many great men and women veterans before me have been given; the gift of perspective. I can see now why most veterans are passionate people that enjoy life and love their country. They have seen what other areas of the world are missing. They have tasted the bitterness of sacrifice, many of them much more so than I ever did. They have felt the deep longing for loved ones and for a simple life back home. Most importantly, veterans have experienced the overwhelming feeling of a return home to a familiar life with a completely unfamiliar but glorious clarity of just how great the gift of life truly is.

Goodbye Baghdad!

I am sitting watching a beautiful desert sunset at Al Udeid Air Base in Qatar. As I logged into my blog I realized that it has been over a month since my last post. With all the things that were going on during my deployment, all the commitments, all the people to stay in touch with, and my own personal mental sanity something had to be sacrificed and unfortunately that something was my writing. After I take a few weeks to relax and fully enjoy time with my wife I plan on getting back into a more regularly scheduled writing regimen similar to the frequency pre-deployment. What will likely be different are the topics I write about and my views of the world. I have been through so much in such a relatively short period of time and these past six months have certainly changed me and helped me grow.

As I look back now that I am out of Iraq I think that subconsciously I may have avoided sitting down and writing. I think I avoided writing because I was acutely aware that the multitude of experiences within my deployment were just too much to fully process. I am sure that over time I will have a better understanding of the magnitude of the reality I was living and how that reality was shaping me as a person.

I went through some tough times during my deployment but I also went through some great ones. The experiences I gained from my time in the desert are undoubtedly priceless experiences. I feel more confident in myself and what I can achieve moving forward. I cannot wait to taste my old life again and appreciate just how great it is, and I cannot wait to make it even better. Although I would never willingly seek out another six months away from my family and friends again, I wouldn't trade what I have experienced either.

Some of what I have taken away will undoubtedly be shared as it will not only benefit those who have not experienced what I have but it will help me understand and grow from my deployment. Some experiences will be shared with friends, some will be saved for my family, and some will remained locked within as the moments and emotions cannot be successfully transfigured into words.

I thank you all for standing behind me as I made this journey and I look forward to rejoining you and living the good life back in the best country in the world. Goodbye Baghdad!

Book Review: The Big Short

Coming off of one of the best books I have read in a while, Mustaine, I didn't think I would steam through another book so quickly. However, when I picked up The Big Short by Michael Lewis I was hooked instantly. The book is an incredible read that takes the reader on a surprisingly tangible trip through the subprime mortgage crisis.

Michael Lewis, most famous for his piece The Blind Side, which was recently turned into a major motion picture, does an excellent job of not only making what happened to our economy understandable but also entertaining. He does so by profiling a few interesting and important characters in the subprime mortgage meltdown. Although he does showcase some big name players and tell of their roles in how history played out, the real magic of his work comes from telling the tale through eyes of the few who saw it coming. Hence the title The Big Short.

The Big Short is not the story of the crisis, as the crisis is commonly understood. The failure of Lehman brothers and of Fannie Mae and Freddie Mac; the stock-market crash; the bail-out of Detroit; the fevered all-nighters pulled at Treasury and the New York Fed; the fears that the entire global financial system was on the brink of collapse -- little if any of that is in this book.

Instead, Lewis has found a different story -- one which he started mining for a spectacular cover story in the December 2007 issue of Portfolio magazine, and which has culminated in this book, over two years later. It's the story of what used to be called the "subprime crisis" before it metastasized into something much larger and more dangerous than that. And it's also, like all Michael Lewis tales, a human story, which takes us deep inside unique characters like Steve Eisman and Mike Burry.

Telling the story through the eyes of those betting against Wall Street's big hitters and the mortgage backed securities that eventually led to the chaos experienced in September of 2008 makes for a truly interesting perspective. It also allows Lewis to come off as less of an I know it all author who has forgotten that hindsight is 20:20. The story is told from the guys who can truly say 'I told you so' because the whole time they were putting their money where their mouths were.

Here are some notes from the book:

Prologue: Poltergeist:
- Predicted crash would occur almost 20 years ago in his first book Liar's Poker
- "If you'd gotten a few drinks in me and then asked what effect the book would have on the world, I might have said something like,'I hope that college students trying to decide what to do with their lives might read it and decide that its silly to phony it up, and abandon their passions or even their faint interests, to become financiers.'
- He kept waiting for a rebellion but it didn't happen

A Secret Origin Story:
-Steve Eisman was a nerdy badass
- "You don't even own stock in your company" said Eisman to the Japanese businessman. "In Japan it is not customary for management to own stock," said the businessman. Eisman noted that the guy's financial statements didn't actually disclose any of the really important details about the guy's company but rather than simply say that he lifted the statement in the air as if disposing of a turd. "This......this is toilet paper. Translate that!" he said.
- When asked about the pattern of upset he leaves in his wake, Eisman simply looks puzzled, even a bit wounded. "I forget myself sometimes."
- The big fear of the 1980 mortgage bond investor was being repaid too quickly not fear of not being repaid at all.
-"And the story they liked to tell was that 'we're helping the customer. Because were taking him out of his high interest rate credit card debt and putting him into a lower interest rate mortgage debt.' And I believed that story." Then something changed.
- None of his fellow accountants was able to explain why the traders were doing what they were doing. "I didn't know what I was doing," said Vinny. "But the scary thing was, my managers didn't know anything either. I asked these basic questions--like, Why do they own this mortgage bond? Are they just betting on it, or is it part of some larger strategy? I thought I needed to know. It's really difficult to audit a company if you can't connect the dots."
- Essentially a ponzi scheme. As long as they were growing the illusion was masked.
- Eisman wrote a report and trashed all the subprime mortgage originators. "Here is the difference between the view of the world they are presenting to you and the actual numbers." The subprime companies did not appreciate his effort. "He created a shitstorm," said Vinny. "All these subprime companies were calling and hollering at him: you're wrong. Your data's wrong. And he just hollered back at them, 'It's YOUR fucking data!"
- "You have to understand, I did subprime first. I lived with the worst first. These guys lied to infinity. What I learned from that experience was that Wall Street didn't give a shit what it sold."
- "The very first day we said, 'There's going to come a time when were going to make a fortune shorting this stuff. It's going to blow up. We just don't know how or when."

In The Land Of The Blind:
- Worst loans by Michael Burry's standards are interest only negative amortizing adjustable rate subprime mortgages
- "What you want to watch are the lenders, not the borrowers. The borrowers will always be willing to take a great deal for themselves. Its up to the lenders to show restraint, and when they love it, watch out." By 2003 he knew the borrowers had already lost it. By early 2005 he saw that lenders had too.
- You couldn't short the mortgage bonds
- Burry began buying corporate credit default swaps on companies he though may suffer from a real estate downturn but there was no guarantee these companies would go bankrupt and that is the only way he would get paid.
- He bought credit default swaps on subprime mortgage bonds in 2005 guessing in two years after teaser rates jumped his bet would pay off.
- The market didn't exist so Burry pitched Wall St. Only Deutsche and Goldman had any interest and no one saw what he was doing.
- He went from blogger to millionaire overnight because Gotham Capital was making money off his picks and offered him a million to open his own fund.
- White Mountain followed shortly after
- Volatility doesn't equal risk. "By and large the wealthiest of the wealthy and their representatives have accepted that most managers are average, and the better ones are able to achieve average returns while exhibiting below average volatility. By this logic a dollar selling for fifty cents one day, sixty cents the next day, and forty cents the next somehow becomes worth less than a dollar selling for fifty cents all three days. I would argue that the ability to buy at forty cents presents an opportunity, not risk, and that the dollar is still worth a dollar."
- He was turning away money after a few years. "He designed Scion so it was bad for business but good for investing."
- Charlie Munger said you can always predict how people are going to behave by looking at their incentives.
- "You can say everyone knows that. I think I've been in the top five percent of my age cohort all my life in understanding the power of incentives, and all my life I've underestimated it. And never a year passes but I get some surprise that pushes my limit a little farther," said Charlie Munger.
- He went against the industry fee standard to properly align incentives
- Their decision making was one guy in a room pouring over publicly available information
- 2003 Bury called the real estate bubble. "You just have to watch for the level at which even nearly unlimited or unprecedented credit can no longer drive the housing market higher. I am extremely bearish, and feel the consequences could very easily be a 50% drop in residential real estate in the US....A large portion of current housing demand at current prices would disappear if only people became convinced that prices weren't rising. The collateral damage is likely to be orders of magnitude worse than anyone now considers."
- In 2005 when he first tried to convince Wall St of the credit default swaps for subprime mortgage bonds his first big problem was that they didn't share his sense of urgency
- He started buying and was amazed that no one on Wall St cared which funds he was shorting. It was like all subprime bonds were the same thing
- "Burry devoted himself to finding exactly the right ones to bet against. He'd read dozens of prospectuses and scoured hundreds more, looking for the dodgiest pools of mortgages, and was still pretty certain even then (and dead certain later) that he was the only human being on earth who read them, apart from the lawyers who drafted them."
- He even found a mortgage pool that was 100% floating rate negative amortizing so the borrower could not pay any interest and just have their loan grow and grow until default. Goldman sent him a congratulations for being the first to buy a credit default swap on it!
- He tried to start a fund to do only CDS but no one would pony up money
- The S&P was down 6.84% in 5 years and he was up 242% but no one believed him when it came to credit default swaps
- People wouldn't give him money but started prodding Goldman on how to do it themselves
- All the Wall St players started coming to him to buy back his CDS all at once
- He sold back to Deutsche and then saw an email that said "Greg Lippmann, the head subprime mortgage trader at Deutsche bank was in here the other day. He told us that he was short 1 Billion dollars of this stuff and was going to make 'oceans' of money. His exuberance was a little scary"

How Can A Guy Who Can't Speak English Lie?:
- Greg Lippmann of Deutsche went to pitch Eisman as if the CDS idea was his own
- Lippmann used a Chinese guy to give credibility to his numbers. "Eugene Xu was responsible for every piece of data in Lippmann's presentation. Once Eugene was introduced into the equation, no one bothered Lippmann about his math or his data. As Lippmann put it 'How can a guy who cant speak English lie?'"
- Eisman had two questions: 1. How does a CDS work again? 2. Why are you asking me to bet against the bonds at your firm?
- "When he walked in and said you can make money shorting subprime paper, it was like putting a naked supermodel in front of me. What I couldn't understand was why he wanted me to do it," said Eisman.
- Burry didn't know who was to be left holding the bag from Goldman and others if the CDS turned out the way he thought. He knew Goldman wouldn't have done the deals if the risk was on them.....turns out it was AIG
- Goldman had created Collateralized Debt Obligations (CDO) which just lumped together a bunch of the mortgage bonds to supposedly mitigate the risk but that already happened with the mortgage bonds
- The did CDO's to get shit bonds re-rated as AAA
- The CDO was, in effect, a credit laundering service for the residents of lower middle class America. For Wall St. it was a machine that turned lead into gold
- After a while they didn't need to do CDOs of mortgage bonds they did them on the CDS. This essentially created a market and money for banks out of nothing
- Ratings agencies didn't know how to rate these
- Lippmann although forced into the shorting of mortgage bonds by Deutsche realized it was a gold mine
- He couldn't convince others to short so he went to AIG to try and blow up the market so he could cash in

How to Harvest a Migrant Worker:
- Joe Cassano was the bullying prick CEO of AIG
- Gene Park asked people most closely tied to CDS what percentage of the loans were subprime. They were all saying 10-20%. No one knew it was 95%
- No one believed housing prices could fall nationally all at once
- Park convinced Cassano to stop insuring but they didn't unload what they had
- Lippmann went looking for others who agreed with his beliefs and ran into Eisman
- The simple measure of sanity in housing prices was the ratio of median home price to income. Historically in the US it ran around 3:1 by late 2004 it had risen nationally to 4:1. "All these people were saying it was nearly as high in some other countries. But the problem wasn't just that it was four to one. In Las Angeles it was ten to one and in Miami eight to one. And then you coupled that with the buyers. They weren't real buyers. They were speculators."

Accidental Capitalists:
- A smaller number of people, more than ten, fewer than twenty, made a straightforward bet against the entire multi trillion dollar subprime mortgage market and by extension the global financial system. In and of itself it was a remarkable fact: The catastrophe was foreseeable, yet only a handful noticed.
- The few who saw it coming could be traced back to Lippman, except Mike Burry
- "I loved the concept of shorting a bond because your downside is limited. Its an asymmetrical bet." Said Paulson. He was shocked how much easier and cheaper it was to buy a credit default swap than it was to sell short an actual cash bond even though they represented the exact same bet.
- Charlie Ledley got a hold of Lippman's presentation
- He and a few buddies began buying options they viewed as mispriced and built their own fortunes in a short time
- They eventually got Wall St to sell them CDS
- "It took us weeks to really grasp it because it was so weird. But the more we looked at what a CDO really was, the more we were like Holy shit, that's just fucking crazy. That's fraud. Maybe you cant prove it in a court of law. But its fraud." - Charlie Ledley
- They were even buying the AA tranches of the CDS and they were the first to do so because they realized they were no better than the BBB but cheaper
- "A lot of people when we called them said hey why don't you guys buy some stocks? They couldn't believe that these young guys wanted to buy not just CDS but CDS's so esoteric that no one else had bought it."
- They didn't realize yet that the bonds inside their CDOs were actually credit default swaps on the bonds, and so their CDO's werent ordinary CDOs but synthetic CDOs or that the bonds on which the swaps were based had been handpicked by Mike Burry and Steve Eisman and others betting against the market. In many ways they were still innocents.

Spiderman At The Venetian:
- Eisman met Wing Chau a CDO manager and thought he would be hurting with the housing prices falling because the CDO managers had filled the void left by AIG. But the CDO managers were selling to Institutional Clients. Everyone was passing the risk.
- "He 'managed' the CDOs. But managed what? I was just appalled that the structured finance market could be so insane to allow someone to manage a CDO portfolio without having any exposure to the CDOs. People would pay up to have soomeone 'manage' their CDOs as if this moron was helping you. I thought, you prick, you dont give a fuck about the investors in this thing." - Eisman talking about Wing Chau a CDO manager
- Chau's real job was to serve as a new kind of front man for the Wall St firms he "hired"; investors felt better buying a Merrill Lynch CDO if it didnt appear to be run by Merrill Lynch.
- After the dinner Eisman grabbed Greg Lippmann and said "Whatever that guy (Chau) is buying, I want to short it." Lippman took it as a joke but Eisman was serious. He wanted to specifically bet against Wing Chau. "I want to short his paper. Sight unseen."
"Usually when you do a trade you can find some smart people on the other side of it. In this instance we couldnt. Nobody we talked to had any credible reason to think this wasnt going to become a big problem. No one was really thinking about it." Cornwall Capital guys
- People believed the collapse of the subprime market was unlikely precisely because it would be such a tragedy.
- Eisman, "In Vegas it became clear to me that this entire huge industry was just trusting in the ratings so they didnt have to think about it."
- "You know how when you walk into a post office you realize there is such a difference between a government employee and other people? The ratings agency people were all like government employees." - Vinny
- "That was the moment when we said, 'Holy shit, this isnt just credit. This is a fictitious Ponzi scheme." - Vinny
- "There were more morons than crooks but the crooks were higher up." - Vinny and Eisman
- Eisman got back from Vegas and increased his shorts by $250M

The Great Treasure Hunt:
- Charley traded with Morgan Stanley and literally overnight they said they couldnt do CDS anymore.
- In a portfolio of 30 million Charley and Cornwall Capital owned 250 million and were disappointed they didnt own more
- Charley even went to the SEC but they didnt get it and never investigated
- "We always asked the same question. Where are the ratings agencies in all this? And I'd always get the same reaction. It was a physical reaction because they didnt want to say it. It was a smirk. They were just assuming home prices would keep going up," Eisman said.

The Long Quiet:
- Mike Burry had 1.9 billion in CDS and he shouldve been recieving money as the market took its lumps but since he was one of the only players Wall St was setting the market price of his shorts
- So he started asking to buy at the prices they were telling him his shorts were worth but of course they wouldnt sell him any more. It was BS.
- "One of the oldest adages in investing is that if youre reading about it in the paper it is too late. Not this time."
- Burry's investors all wanted their money back including partner Joel Greenblatt. When he locked up their funds from withdrawal they started organizing to sue.
- Wall St stopped responding for a few days then all called at once saying they wanted to ensure the value of his shorts were fair. They were getting in on the shorts themselves before the crash.
- "When I first started shorting these mortgages in 2005 I knew full well that is was not likely to pay out within two years. And for a very simple reason. The vast majority of mortgages originated in the last few years had a rather ominously attractive feature called the teaser rate period. Those 2005 mortgages are only now reaching the end of their teaser rate periods and it will be 2008 before the 2006 mortgages get there. What sane person on Earth would confidently conclude in early 2007, smack dab in the midst of the mother of all teaser rate scams that the subprime fallout will not result in contagion? The bill literally has not even come due." Burry
- "Nobody came back and said, 'Yeah you were right.' It was very quiet. It was extremely quiet. The silence infuriated me." Burry

A Death Of Interest:
- Howie Hubler of Morgan Stanley is profiled as the stereotypical trader with the blinders on
- "It was more than a little weird. There was a lot of angst about it. It was sort of viewed as, These folks dont know what theyre talking about. If losses go to ten percent there will be, like, a million homeless people." Losses in Hublers group would eventually go to 40%.
- "They kept saying That state of the world cant happen!"
- "It is one thing to bet on red or black and know that you are betting on red or black. Its another to bet on a form of red and not to know it."
- "They werent lying. They genuinely failed to understand the nature of the subprime CDO
- Howie went on vacation and never came back. The losses left behind were 9 billion, the largest in Wall St history for a single trader
- The last buyer of subprime mortgage risk had stopped buying
- Cornwall began to worry Bear Stearns would go out of business and would be unable to pay up so they sought buyers of their CDOs.
- UBS offered 30 points up front. That means Cornwall's $205M in CDS were now worth $60M (30% of $205M) when it cost them only $1M to buy them
-"It's the first time were seeing any prices that reflect anything close to what they're really worth. We had positions that were being valued by Bear Stearns at six hundred grand that went to six million the next day." Charlie Ledley
- Mike Burry also started to make a killing. In a portfolio totalling $550M he maid $720M in one year
- "Even when it was clear it was a big year and I was proven right, there was no triumph in it. Making money was nothing like I thought it would be," said Mike. To his founding investor, Gotham Capital, he shot off an unsolicited email that said only, "Youre welcome." He'd already decided to kick them out of the fund and insist they sell their stake in his business. When they asked him to suggest a price, he replied, "How about you keep the tens of millions you nearly prevented me from earning for you last year and we call it even?"

Two Men In A Boat:
- "Being short in 2007 and making money from it was fun, because we were short bad guys. In 2008 it was the entire financial system that was at risk. We were still short. But you dont want the system to crash. Its sort of like the floods about to happen and youre Noah. Youre on the ark. Yeah youre okay. But you are not happy looking out at the flood. Thats not a happy moment for Noah." - Eisman
- Frontpoint's fund went from $700M to $1.5B
- "What, the entire American population woke up one morning and said, 'Yeah I am going to lie on my loan application'? Yeah people lied. They lied because they were told to lie."
- Sept 18 2008 all hell was breaking loose
- Eisman sold all his CDS back to Lippmann two months earlier. They were now back to stock market investors and shorting all the banks. On the 18th minutes after opening they were up $10M
- "There wer no bids in the market for anything. There was no market. It was really only then I realized there was a bigger issue than just our portfolio. Fundamentals didnt matter. Stocks were going to move up or down on pure emotion and speculation of what the government would do." Danny
- They were a subsidiary of Morgan Stanley
- "I'm thinking, Weve got the world by the fucking balls and the company we work for is going bankrupt."
- Mike Burry and Scion earned invesors a 490% gain in 3 years but all his investors were pulling their money out
- He shut down his fund and vanished
- Eisman ran into Merrill's CFO Jeff Edwards and said "You remember what I said about those risk models of yours? I guess I was right huh?"
- "I felt bad about it. It was obnoxious. He was a lovely guy. He was just wrong. I was no longer the underdog. And I had to conduct myself in a different way." Eisman
- "The investment banking industry is fucked. These guys are only beginning to understand how fucked they are. Its like being a scholastic, prior to Newton. Newton comes along and one morning you wake up: 'Holy shit, I'm wrong!" Eisman

Everything Is Correlated:
- The worst part of the crisis is that everyone came out rich. All the guys who called it and they guys on the wrong side of the bet. Even those who ran their companies bankrupt
- "What are the odds that people will make smart decisions about money if they dont need to make smart decisions--if they can get rich making dumb decisions" The incentives on Wall Street were all wrong; theyre still wrong."
- Handouts by the government
- "There's no limit to the risk in the market. A bank with a market capitalization of one billion dollars might have one trillion dollars' worth of credit default swaps outstanding. No one knows how many there are! And no one knows where they are!"
- Michael Lewis has lunch with an old associate who basically created the credit default swap. He is a former king of Wall St. Lewis says he is thinking about doing a book on the subprime, revisiting his old Liars Poker days. Wall St guy says, "I think we can agree about this; Your fucking book destroyed my career and it made yours."