Tuesday, February 10, 2009

Compensating Differentials During War Time and the Arbitrage Process

Everbody is clucking that economic theory has not helped us with this financial crisis. But, I keep seeing economics being relevant in day to day situations. In this narrative below, I like the quote from the Israeli looking for an arbitrage opportunity during the recent battle. "Kobi said he didn’t live nearby. He came to sniff around. Now that Beersheba’s in rocket range, it has opened up quite a few real estate possibilities. Land values will drop; the state will hand out extra construction permits. In short, an entrepreneur who plays his cards right can find great opportunities."

New students who have not thought about economics before are often surprised by our optimism that opportunities will be seized by somebody. Does this cute little story have any implications for the "macro crisis" today?

This Kobi may not be Kobi Bryant but his individual actions help to keep our vibrant world system going. What are you doing for me?


New York Times Magazine
February 8, 2009
Lives
Matchstick War
By ETGAR KERET

When the fighting in Gaza began last month, I found myself with a lot of spare time. The university in Beersheeba where I teach was within the range of missiles fired by Hamas, and they had to close it. But after a couple of weeks, it reopened, and the next day I found myself taking an hour-and-a-half train ride from Tel Aviv, where I live, to Beersheeba again. Half the students weren’t there — mainly the ones from the center of the country — but the other half, those living in Beersheeba itself, showed up. The bombs were dropping on them in any case, and conventional wisdom among the students was that the university’s classrooms were better protected than their dorms and housing projects.

While I was having my coffee at the cafeteria, the bomb-shelter alarm started blaring outside. There wasn’t time to get to a proper shelter, so I ran with some other people into the thick-walled, almost windowless entrance of a nearby university building. Around me were a few frightened students and a grave-faced lecturer who went on eating his sandwich on the concrete steps as if nothing were happening. A couple of the students said they’d heard an explosion in the distance, so it was probably safe to leave, but the lecturer, his mouth still full, pointed out that sometimes they shoot more than one missile and that we’d be better off waiting a few more minutes. It was while I was waiting there that I recognized Kobi, a crazy kid from my childhood in Ramat Gan who liked fifth grade so much he stayed in it for two years.

At 42, Kobi looked exactly the same. It’s not that he looked especially young; it’s just that, even in elementary school, he seemed to be approaching middle age: a thick, hairy neck, powerful body, high forehead and the smiling yet tough expression of an aging child who had already learned a thing or two about this stupid world. In retrospect, the malicious rumor among the kids at school that he was already shaving was probably true.

“Well, what do you know?” Kobi said, hugging me. “You haven’t changed a bit” — by way of accuracy, adding, “even the same height, just like elementary school.”

Kobi and I caught up a bit, and after a while people around us felt safe enough to start making their way out of the protected space, leaving it for us. “That rocket was a stroke of luck,” Kobi said. “Just think: if it wasn’t for that Qassam rocket, we could have walked right past each other and never met.”

Kobi said he didn’t live nearby. He came to sniff around. Now that Beersheba’s in rocket range, it has opened up quite a few real estate possibilities. Land values will drop; the state will hand out extra construction permits. In short, an entrepreneur who plays his cards right can find great opportunities.

The last time we met was almost 20 years ago. There were missiles then too, Scuds that Saddam Hussein rained down on Ramat Gan. Kobi was still living at home. I’d gone back to be with my stubborn parents, who refused to leave the city. Kobi took our friend Uzi and me to his parents’ apartment and showed us what he referred to as his Weapon and Matchstick Museum. There, on the walls of his childhood bedroom, hung an impressive collection of weaponry: swords, pistols, even flails. Beneath them stood a huge Eiffel Tower and a life-size guitar he had made out of matchsticks. He explained to us that the museum had originally been devoted to weapons alone, but after he was convicted of stealing grenades for the exhibition, he took advantage of his eight-month sentence to build the Eiffel Tower and the guitar and added them to the collection.

In those days, he was especially worried that an Iraqi missile strike would shatter the Eiffel Tower, on which he’d spent most of his jail time. Today, his matchstick creations are still at his parents’ place, but Ramat Gan is outside the effective range of the missiles and rockets. “As far as the matchstick Eiffel Tower goes,” Kobi said, “my situation over the last 20 years has definitely improved. I have my doubts about the rest.”

On the train from Beersheba I read a paper that someone had left behind on a seat. There was an item about the lions and ostriches at the Gaza Zoo. They were suffering from the bombing and hadn’t been fed regularly since the war began. The brigade commander wanted to rescue one particular lion in a special operation and transfer it to Israel. The other animals were going to have to fend for themselves. Another, smaller, item, without a picture, reported that the number of children who had died in the bombing of Gaza so far had passed 300. Like the ostriches, the rest of the children there would also have to fend for themselves. Our situation at the level of the matchstick Eiffel Tower has indeed improved beyond recognition. As for the rest, like Kobi, I have my doubts.

Etgar Keret is a filmmaker and the author of several books, most recently “The Girl on the Fridge: Stories.” This essay was translated by Anthony Berris from the Hebrew.

Submissions for Lives may be sent to lives@nytimes.com. The magazine cannot return or respond to unsolicited manuscripts.

1 comment :

Alan Cabal said...

Etgar Keret is woefully ignorant of the fate of the Gaza Zoo. Here are the facts:

http://www.gulfnews.com/gntv/videos/10278777.html