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Sunday, October 12, 2014

1984: Thirty years and still no justice.....

All confusion around us.  But at least we were still safe and there was no fear for our lives.

But I cant say the same thing for my Sikh friends who were all locked up in their houses.  God alone knows what must have been going through their minds.  Unfortunately, I never asked them later when things had returned to normal.  But then we were a group of 10-12 year old kids and all we cared for was fun and play.  But then again, I never imagined that I would be writing these lines 30 years after the barbaric events that were unfolding all around me from Oct. 1st till Nov 3rd and to which I was completely oblivious. And even today no one really seems to be interested in that story.  Perhaps the victims also wish to move on.  I don't know for sure.  Have I ever asked any of the women who were widowed in the most cruel way during those three days if she has moved on? No.  Do I have the courage to ask? I dont know. 

India is not an easy country to live in if you are not conventional.  By conventional I mean someone who is a non-Hindu, non-upper caste, not rich or of course, a woman.  Any of these people will find this land of saints a tough place to live in.  And while I am conventional in every sense of the above definition, the anti-sikh pogrom of 1984 has been a personal wound I have nursed over the years. And as each year has passed by and not a single murderer brought to justice by law,  my despair has turned to anguish.  The message of the Indian state is loud and clear: learn to live with your tragedies.  

So this year we observe 30 years of the time of multiple crimes which visited North India after Indira Gandhi was assassinated by her security guards.  But the hope lives on.  The story of 1984 will not go away.  Some have paid the price but the bigger fish are still not in the net.  I don't have the facility of telepathy but just to make myself feel a bit better, I will close my eyes and stretch my hand out and try to wipe the tears of the thousand of grieving orphans and widows who I cant see and will never see.

The story of LTCM failure, a sit down chat with John Meriwether and co by Michael Lewis

I stumbled upon this while researching derivatives.  Beautiful insights into the human nature. One quote to give a flavour of the piece:

"The hurricane is not more or less likely to hit because more hurricane insurance has been written. In the financial markets this is not true. The more people write financial insurance, the more likely it is that a disaster will happen, because the people who know you have sold the insurance can make it happen."

Here's the entire piece. (Source: NYT, Jan 24, 1999)

How the Eggheads Cracked



Michael Lewis
John Meriwether
A lot of unusual things have happened in the four months since Long-Term Capital Management announced that it lost more than $4 billion in a bizarre six-week financial panic late last summer, but nothing nearly so unusual as what hasn't happened. None of the 180 employees of the hedge fund have stood up to explain, to fess up or to excuse themselves from the table. Even the two Nobel Laureates on staff, who could very easily have slipped back into their caps and gowns in the dead of night and pretended none of this ever happened, have stayed and worked, quietly. The man in charge, John Meriwether, has shown a genius for lying low. Photographers in helicopters circle his house, and journalists bang on his front door at odd hours and frighten his wife. Yet whenever the question ''Who is John Meriwether?'' has demanded an answer, it has been supplied not by those who know him and work with him but by a self-appointed cast of casual acquaintances and perfect strangers. They have described Meriwether and his colleagues as reliable Wall Street stereotypes: the overreaching, self-deluded speculators. In doing so they have missed pretty much everything interesting about them.
Not long ago, I visited the hedge fund's offices in Greenwich, Conn., to see if its collapse made any more sense from the inside than it did from the outside. So many different activities take place in enterprises called ''hedge funds'' that the term is perhaps more confusing than helpful. In general, hedge funds attract money from rich people and big institutions and, as a result, are somewhat less stringently regulated than ordinary money managers. Long-Term Capital was an especially odd case, less a conventional money manager than a sophisticated Wall Street bond-trading firm. The floor it had constructed in Greenwich was a smaller version of a Wall Street trading floor, with subtle differences. The old wall between the trading floor and the research department had been pulled down, for instance. For most of Wall Street the trading floor is a separate room, distinct from research. The people who pick up the phone and place the bets (the traders) are the highly paid risk takers, while the people who analyze and explain the more complicated securities (the researchers) are glorified clerks. Back in 1993, when Meriwether established Long-Term Capital, he also created a new status system. The title ''trader'' would no longer exist. At Long-Term Capital, anyone who had anything to do with thinking about how to make money in financial markets would be called a ''strategist.''
The strategists spent several days with me going over the details of their collapse. They began with a six-hour presentation they had just put together for the investors whose money they had lost, because, as one of the fund's partners puts it: ''Virtually no one has called and asked us for the facts. They just believe what they read in the papers.'' Then I was shown the bets that had cost the strategists their fortunes and their reputations as the smartest traders on or off Wall Street. The guided tour of the spectacular ruin concluded with a conversation with John Meriwether. He, and they, offered a neat illustration of the limits of reason in human affairs.
Riding the Crash of '87 With Meriwether and His Young Professors
''The first time I saw a market panic up close was also the last time I had seen John Meriwether -- the stock-market crash of Oct. 19, 1987. I was working at Salomon Brothers, then the leading trading firm on Wall Street. A few yards to one side of me sat Salomon's C.E.O., John Gutfreund; a few yards to the other side sat Meriwether, the firm's most beguiling character. The stock market plummeted and the bond market soared that day as they had never done in anyone's experience, and the two men did extraordinary things.
I didn't appreciate what they had done until much later. You cannot really see a thing unless you know what you are looking for, and I did not know what I was looking for. I was so slow to grasp the importance of the scene that I failed to make use of it later in ''Liar's Poker,'' the memoir I wrote about my Wall Street experience. But the events of those few hours were in many ways the most important I ever saw on Wall Street.
What happened in the stock-market crash was one of those transfers of authority that seem to occur in the financial marketplace every decade or so. The markets in a panic are like a country during a coup, and seen in retrospect that is how they were that day. One small group of people with its old, established way of looking at the world was hustled from its seat of power. Another small group of people with a new way of looking at the world was rising up to claim the throne. And it was all happening in a few thousand square feet at the top of a tall office building at the bottom of Manhattan.
John Gutfreund moved back and forth between his desk and the long, narrow row of government-bond traders, where he huddled with Craig Coats Jr., Salomon's head of government-bond trading. Together they decided that the world was coming to an end, as it came to an end in the Crash of 1929. The end of the world is good news for the bond market -- which is why it was soaring. Gutfreund and Coats decided to buy $2 billion worth of the newly issued 30-year United States Treasury bond. They were marvelous to watch, a pair of lions in their jungle. They did not stop to ask themselves, Why do we of all people on the planet enjoy the privilege of knowing what will happen next? They believed in their instincts. They had the nerve, the guts or whatever it was that distinguished a winner from a loser on a Wall Street trading floor in 1987.
And in truth they had been the winners of the 80's boom. Business Week had anointed Gutfreund the King of Wall Street. Coats was believed by many to be the model for the main character in a book then just published called ''The Bonfire of the Vanities.'' Coats was tall and handsome and charismatic. He was everything that a bond trader in the 80's was supposed to be.
Except that he was wrong. The world was not coming to an end. Bond prices were not about to keep rising. The world would pretty much ignore the stock-market crash. Soon, Coats would arrive at work and find that his $2 billion of Treasury bonds had acquired a new name: the Whale. Traders near Coats started asking him about the Whale. As in, ''How's that Whale today, Craig?'' Or, ''That Whale still beached?'' In the end, the gut decision to buy the Whale cost Salomon Brothers $75 million.
Meanwhile, 20 yards away was Meriwether. When I think of people in American life who might have been like him, I think not of financial types but creative ones -- Harold Ross of the old New Yorker, say, or Quentin Tarantino. Meriwether was like a gifted editor or a brilliant director: he had a nose for unusual people and the ability to persuade them to run with their talents. Right beside him were his first protgs, four young men fresh from graduate schools -- Eric Rosenfeld, Larry Hilibrand, Greg Hawkins and Victor Haghani. Meriwether had taken it upon himself to set up a sort of underground railroad that ran from the finest graduate finance and math programs directly onto the Salomon trading floor. Robert Merton, the economist who himself would later become a consultant to Salomon Brothers and, later still, a partner at Long-Term Capital, complained that Meriwether was stealing an entire generation of academic talent.
No one back then really knew what to make of the ''young professors.'' They were nothing like the others on the trading floor. They were physically unintimidating, their bodies merely life-support systems for their brains, which were in turn extensions of their computers. They were polite and mild-mannered and hesitant. When you asked them a simple question, they thought about it for eight months before they answered, and then their answer was so complicated you wished you had never asked. This was especially true if you asked a simple question about their business. Something as straightforward as ''Why is this bond cheaper than that bond?'' elicited a dissertation. They didn't think the same way about the markets as Craig Coats did or, for that matter, as anyone else on Wall Street did.
It turned out that there was a reason for this. On the surface, American finance was losing its mystique, what with ordinary people leaping into mutual funds, mortgage products and credit-card debt. But below the surface, a new and wider gap was opening between high finance and low finance. The old high finance was merely a bit mysterious; the new high finance was incomprehensible. The financial markets were spawning vastly complicated new instruments -- options, futures, swaps, mortgage bonds and more. Their complexity baffled laypeople, and still does, but created opportunities for those who could parse it. At the behest of John Meriwether, the young professors were reinventing finance, and redefining what it meant to be a bond trader. Their presence on the trading floor marked the end of anti-intellectualism in American financial life.
But at that moment of panic, the young professors did not fully appreciate their own powers. All their well-thought-out strategies, which had yielded them profits of perhaps $200 million over the first 10 months of 1987, wilted that October day in the heat of other people's madness. They lost at least $120 million, which was sufficient to ruin the quarterly earnings of the entire firm. Two years before, they were being paid $29,000 to teach Finance 101 to undergraduates. Now they had lost $120 million! And not just anybody's $120 million! One hundred twenty million dollars that belonged in part to some very large, very hairy men. They were unnerved, as you can imagine, until Meriwether convinced them that they should not be unnerved but energized. He told them to pick their two or three most promising trades and triple them.
They did it, of course. They paid special attention to one big trade. They sold short the newly issued 30-year U.S. Treasury bond of which Craig Coats had just purchased $2 billion and bought identical amounts of the 30-year bond the Treasury had issued three months before -- that is, a 29-year bond. (To ''short'' a stock or bond means to bet that its price will fall.) The young professors were not the first to see that the two bonds were nearly identical. But they were the first to have studied so meticulously the relationship between them. Newly issued Treasury bonds change hands more frequently than older ones. They acquire what is called a ''liquidity premium,'' which is to say that professional bond traders pay a bit more for them because they are a bit easier to resell. In the panic, the premium on the 30-year bond became grotesquely large, and the young professors, or at any rate their computers, noticed. They laid a bet that the premium would shrink when the panic subsided.
But there was something else going on that had nothing to do with computers. The young professors weren't happy making money unless they could explain to themselves why they were making money. And if they couldn't find the reason for a market inefficiency they became suspicious and declined to bet on it. But when they stood up on Oct. 19, 1987, and peered out over their computers, they discovered the reason: everyone else was confused. Salomon's own long-bond trader, the very best in the business, was lost. Here was the guy who was meant to be the soul of reason in the government-bond markets, and he looked like a lab rat that had become lost in a maze. This brute with razor instincts, it turned out, relied on a cheat sheet that laid out the prices of old long bonds as the market moved. The move in the bond market during the panic had blown all these bonds right off his sheet. ''He's moved beyond his intuition,'' one of the young professors thought. ''He doesn't have the tools to cope. And if he doesn't have the tools, who does?'' His confusion was an opportunity for the young professors to exploit.
Years later it would be difficult for them to recapture the thrill of this moment, and dozens of others like it. It was as if they had been granted a more evolved set of senses, and a sixth one to boot. And they had nerve: they were willing to put money where their theory was. Three weeks after the 1987 crash, when the markets calmed down, they cashed out of the Treasury bonds with a profit of $50 million. All in all, the bets they placed in the teeth of one of the greatest panics Wall Street had ever seen eventually made them more money than any bets they had ever made, perhaps $150 million altogether. By comparison, all of Merrill Lynch generated $391 million in profits that year. The lesson in this was not lost on the young professors: panic was good for business. The stupid things people did with money when they were frightened was an opportunity for more reasonable people to exploit. The young professors knew that in theory already; now they knew it in practice. It was a lesson they would regret during the next big panic, far bigger and more mysterious than the Crash of October 1987 -- the panic of August 1998. They would still be working together, but at Long-Term Capital Management.
What Long-Term Capital Was and Wasn't About
I was a tad uneasy about meeting these people again. All those pregnant pauses! All those explanations! Even more than 10 years later, I can recall the dreadful minutes after I had asked them to walk me through one of their trades, when my brain felt like a beaten cornerback watching the receiver dancing into the end zone. On top of it all was their Spock-like analytical detachment, which still hung heavy in the air in Greenwich and overshadowed any larger consideration, like shrewd management of the press. ''If everything had gone well,'' one of the young professors said not long after I stepped off the elevator, ''we wouldn't be talking to you.'' But everything did not go well, and they had decided to explain themselves to someone they had practice explaining things to.
When I heard that Long-Term Capital had collapsed, my initial reaction was a sneaky relief: Hans Hufschmid was no longer worth $50 million. Anyone who has quit one life for another will understand the importance of insuring that none of the people you leave behind do so well for themselves as to suggest that you have made a truly colossal mistake. Since I left Salomon Brothers in 1988 to make a living as a writer, I had remained curious about how rich I would have become if I had stayed on Wall Street. There were several people whose fortunes I considered fair proxies for my own, and whom I tagged for further observation, like wolves released in a wildlife experiment.
Hans was one of them. Back in 1986, Hans and I left the same New York training program for the same London trading floor, where we were ultimately supervised by John Meriwether. Although neither of us was a young professor, we had gone into the same arcane line of work. We both spent half of our time flying around Europe trying to coax innocent investors into complicated new American-born financial instruments and the other half seeking out speculations for those who needed no coaxing. But those were just our surface similarities. Deep down, Hans and I shared a dirty little secret: we couldn't keep up with the young professors. We belonged to a new semi-informed breed who could ''pass'' as experts on the new financial complexity without possessing true understanding.
In any case, Hans was one of those people I might have become had I remained on Wall Street. And so, at the end of 1993, after I heard that Salomon Brothers had paid Hans a bonus of $28 million, I spent at least three hours wondering why I hadn't done so. Twenty-eight million dollars was just the original insult. At the end of 1994, Hans left Salomon to become a partner in Long-Term Capital's London office. It gives you an idea just how desirable it was to work for John Meriwether that to do so people quit jobs at the finest Wall Street firms, which paid them bonuses of $28 million. Word came that Hans had sunk not merely his $28 million bonus into the fund but also $15 million he had borrowed from some bank.
The fund rose by 43 percent in 1995, by 41 percent in 1996 and by 17 percent in 1997. At the end of each year, Hans reinvested his profits in the fund. That was another odd thing about the people at Long-Term Capital. They did not define themselves in the usual Wall Street way, by their material possessions. Their hundreds of millions of dollars didn't lead inexorably to private jets and new life styles. (They would be better off now if that had been the case.) Their favorite form of conspicuous consumption was to buy more and more of their own investment genius. As a result, before their demise, Long-Term Capital's 16 partners had invested roughly $1.9 billion of their own money in their fund. Making some fairly conservative assumptions about Hans and his effective tax rate, $50 million of that pile belonged to him. This, to my way of thinking, made it a bit more expensive than it should have been not to be Hans Hufschmid.
And then . . . poof . . . it was not so very expensive at all. Not being Hans was positively joyous. By the end of September 1998, the same friends from Salomon Brothers who had informed me how rich Hans was becoming in late 1997 were telling me that he and all his partners were wiped out. As Hans himself had borrowed to invest in himself, it was at least conceivable that he was worth less than zero.
That did it for me: I demanded no further reparations. I was once again satisfied to be paid by the word. But it turned out that I was alone in this sentiment. A lot of people wanted not only Hans's money but also his hide, along with the hides of Larry Hilibrand, Victor Haghani, Eric Rosenfeld, Greg Hawkins and John Meriwether. Plus those of Robert Merton and Myron Scholes, Nobel Prize-winning economists who had joined Meriwether. (They won the 1997 Nobel Prize for their work on risk management of options.) Hans and his partners were accused by all sorts of people of behaving recklessly, succumbing to hubris and jeopardizing the economic health of the West.
One number that kept popping up in the papers was the ''$1.2 trillion'' that Hans and the young professors had supposedly wagered. The $1.2 trillion represented what are known as the open trading positions of the fund. Anyone who works on Wall Street knows that a firm's open trading positions contain all sorts of things that offset one another. At any given time, Goldman, Sachs or Shearson Lehman, which had only about twice as much capital available as Long-Term, might carry $7 trillion or $8 trillion in positions on their books. What was important was not the gross amount of the positions but the amount of risk in them.
That's where ''leverage'' came into the newspaper accounts. Leverage means borrowing to buy things you otherwise could not afford, and many of the public accounts invariably equated it with ''risk.'' ''At L.T.C.M.,'' wrote Carol J. Loomis in Fortune, ''the best minds were destroyed by the oldest and most famously addictive drug in finance, leverage.'' Possibly there was once a time when leverage was a good measure of risk. But one consequence of the new complexity in financial markets has been to make any such simple calculation impossible. A portfolio might be leveraged 50 times and have almost no risk. A portfolio might be leveraged five times and be perfectly mad. Long-Term Capital had been in pretty much the same line of work as a Wall Street investment bank, and Wall Street investment banks were leveraged the same amounts, about 25 times (although a Wall Street investment bank can lay its hands on capital more quickly than a hedge fund can).
The important number in any portfolio is not its leverage but its volatility: how much do its net assets rise and fall each day? By that measure, to which no one paid much attention, Long-Term Capital was running a fund that looked to all of Wall Street a bit less risky than if it had taken its capital and simply invested all of it, unleveraged, in a diversified portfolio of U.S. stocks.
Then there was the inevitable search for True Character. One of the stories I had told in 1989 about Meriwether had been twisted beyond recognition into evidence that he was indeed a madman. The story ran as follows: John Gutfreund, who routinely dropped tens of thousands of dollars to the young professors playing liar's poker, a game of both chance and skill using the serial numbers on dollar bills, challenged Meriwether to one hand for $1 million. (''One hand, $1 million, no tears'' was what he supposedly said.) Meriwether replied that he would play only for $10 million. Gutfreund walked away. End of story. All sorts of people, Gutfreund included, later denied that the incident ever occurred, but in any case the point of the episode was just the opposite of the interpretation now placed on it. The point of the story was that in a world where you weren't supposed to flinch from financial risk, Meriwether had found a clever way to avoid what was clearly an act of lunacy.
But even without knowing much about what Meriwether did, or how he did it, or what sort of man he was, you could see that the public accounts of the collapse of Long-Term Capital were, at the very least, incomplete. From the mid-80's right up until last summer, the young professors had been the most widely imitated men on Wall Street. If they were so wildly irresponsible, why had every big Wall Street firm copied them? Even after Long-Term's collapse, a lot of smart people were sniffing acquisitively around their portfolio. If that portfolio was so recklessly speculative, why was Warren Buffett, among others, trying to buy it?
Between the lines of the stories were hints of a more complicated one. The most remarkable gurgling noises from last summer's panic came from the inner sanctums of finance. Treasury Secretary Robert Rubin said then that ''the world is now experiencing its worst financial crisis in 50 years.'' That was something coming from a man who specialized in soothing investors and who had been on a trading desk at Goldman, Sachs during the Crash of 1987. Alan Greenspan, the Federal Reserve Chairman, said that he had never seen anything in his lifetime that compared to the terror of August 1998. From one end of Wall Street to the other, firms were announcing record bond-trading losses. Goldman, Sachs, which worked harder than any other firm to copy Meriwether's success, explained its own disaster by saying that ''our risk model did not take into account enough the copycat problem.'' That statement was true but inadequate. It failed to mention the name of the original cat.
How Meriwether and the Young Professors Lost Control
If you didn't know who John Meriwether was, you wouldn't have the slightest curiosity about him. He has small, even features, a shock of cowlicky brown hair that droops boyishly down over his forehead and a blank expression that could mean nothing or everything. His movements are quick, however, and so is his talk. He speaks in fragments and moves rapidly from one idea to the next, leaving behind a trail of untidy thoughts. He shapes other people more completely than he does himself. His discomfort with the first person occasionally makes him difficult to follow, especially when he is supposed to be talking about himself. When he says, ''If anyone wants to focus on anybody and wants to take them apart, he can,'' he means, ''I believe that people set out to destroy me, and succeeded.''
When I arrived, he was hunched over at his desk on the trading floor, but by the time I got to him he was in his office. It was a token office, big and empty and conspicuously unused. It had a nice view of some trees, which I'm sure no one had glanced at in months. A tall stack of books and a large basket of shiny apples crowded the area beside his desk. Meriwether offered me one of each.
The book was ''Miracle on the 17th Green,'' a fantasy for adults about a regular middle-aged man who one day is blessed with the talent of a golf champion. ''Extraordinary things happen to ordinary people,'' said the back of the dust jacket. It was soon clear that this reflects Meriwether's own sense of himself and his current situation. About the first thing he said after we sat down across from his coffee table was, ''I don't want this story to be about me.''
To insure that it was not, he would not allow me to quote him much. And for good measure, he insisted that Richard Leahy, who hired me onto the Salomon trading floor and who is Meriwether's oldest business partner, sit in on our conversation.
My own guess is that Meriwether would rather people think him a bit weird than know the real reason he avoids publicity, which is that he is deeply uncomfortable with the attention. He has a phobia about public speaking, for instance. When you passed him on the Salomon trading floor, you could see him force himself to meet your eye. In conversations in which he might be expected to take control -- say over drinks with a couple of new employees -- he would shrink from the responsibility. He was one of those people whose desire in conversation was for everyone to be ''equal.'' Oddly, the adjective he often chooses to describe the people he most admires is ''shy.'' He means this as a compliment, as in ''shy and polite.'' Shy and polite was a bizarre combination in the testosterone tank of the Salomon trading floor. It was a handicap, at least for someone seeking power in its usual corporate form, through control over large numbers of people. Meriwether sought power in a different form, through the markets.
In the five years after the 1987 crash, Meriwether and the young professors made billions for Salomon and tens of millions for themselves. They started out as oddballs but became the heart of the firm. From the mid-80's through the early 90's the rest of Wall Street, and Goldman, Sachs in particular, poached bond-trading talent from every major bond department at Salomon -- corporates, governments, mortgages. Jon Corzine, who was co-C.E.O. of Goldman, Sachs until a shake-up earlier this month, rose in the firm in part by buying the right people off the Salomon trading floor.
The single exception to this diaspora was John Meriwether's group: it wasn't for sale. In the end, it was broken up by force. A government-bond trader at Salomon Brothers named Paul Mozer, who replaced Craig Coats in 1988 and who reported to Meriwether, tried to corner the U.S. Treasury-bond market. In 1990 and 1991, he submitted phony bids at the Treasury's quarterly auctions that enabled him to buy more than his legal share. Meriwether found out, and went to his superiors, including Gutfreund, and Gutfreund agreed that the Treasury should be informed. For whatever reason, Gutfreund failed to follow up immediately, and it was several months before Salomon informed the Government.
The fate of the firm hung in the balance until Warren Buffett, Salomon's biggest shareholder, stepped in and cut a deal with the Treasury. Salomon would survive if Buffett would oversee the reform of its culture, and Gutfreund was encouraged to resign. And though everyone including Buffett acknowledged that Meriwether had done nothing wrong, Meriwether was encouraged to resign, too. He quit and created a new firm.
In many ways, Long-Term Capital was better designed for the young professors than Salomon Brothers was. There was only one noticeable disadvantage. Other Wall Street firms might have sensed how well Salomon's young professors and their strategy was paying off and sought to mimic their subtle workings. But they could not actually see these workings. When the young professors left Salomon Brothers, they opened themselves and their bets up for inspection by Wall Street. In exchange for lending Long-Term Capital the money to make its trades, the big firms -- Morgan Stanley, Merrill Lynch, Goldman, Sachs -- demanded to know what it was up to. This in turn led to higher-fidelity imitation.
''Everyone else started catching up to us,'' Eric Rosenfeld says. We'd go to put on a trade, but when we started to nibble the opportunity would vanish.'' Every time they took action, others noticed and copied them, and eliminated whatever slight irrationality had crept into the markets.
At some point, Meriwether lost control of his esoteric markets. In our conversation, I asked him how that experience had changed his ideas about making money. He replied that his old ideas, which worked so well for 15 years, have been in some sense consumed, and that he needs to find new ones. Then he proceeded to explain why.
In its broad outlines, the Long-Term Capital story could be described by a couple of pie charts. The first pie chart would lay out its losses. Of the $4.4 billion lost, $1.9 belonged to the partners personally, $700 million to Union Bank of Switzerland and $1.8 billion to other investors, half of them European banks. But as original investments had long ago been paid back to most of the banks, the losses came mainly out of their profits. The second and more interesting pie chart would describe how the money was lost. The public accounts have suggested that it was lost in all manner of exotic speculations that the young professors had irresponsibly digressed into. The speculations were exotic enough, but they were hardly digressions. When I paged through their trades, the only thing I hadn't expected to find was a taste for betting on corporate takeovers. One hundred fifty million dollars vanished from Long-Term Capital when a company called Tellabs failed to complete its acquisition of a company called Ciena, and the price of Ciena stock, which Long-Term owned, dropped from 56 to 31 1/4. (''This trade was by far the most controversial in our partnership,'' Rosenfeld says. ''A lot of people felt we shouldn't be in the risk arb business because it is so information sensitive and we weren't trying to trade in an information-sensitive way.'') Of course, Long-Term had some complicated notion of its advantage in risk arbitrage, but that notion now looked silly. Still, even taking account of the $150 million loss in Ciena shares, its stock-market trading was profitable.
The big losses that destroyed Long-Term Capital occurred in the areas the young professors had for years been masters of. The killer blows -- a good $3 billion of the $4.4 billion -- came from two bets that Meriwether and his team had been making for at least a decade: interest-rate swaps and long-term options in the stock market. Now there is no reason anyone should feel obliged to understand interest-rate-swap arbitrage. The important point about it is the degree of risk it typically involves.
Like most of Long-Term Capital's trades, these bets required the strategists to buy one thing and sell short another, so that they maintained a Swiss-like neutrality in the market. Like most of their trades, the thing they bought was similar to the thing they sold. (Their gift was for mathematical metaphor: they noticed similarities where others saw nothing but differences.) But like only some of their trades, the thing they bought became -- or was supposed to become, after a period of time, and under certain conditions -- identical to the thing they sold.
One way to understand this, and to see how bizarre was the panic of August 1998, is to imagine a world with two kinds of dollars, blue dollars and red dollars. The blue dollar and the red dollar are both worth a dollar, but you can't spend them for five years. In five years, you can turn them both in for green dollars. But for all sorts of reasons -- a mania for blue, a nasty article about red -- the blue dollar becomes more expensive than the red dollar. The blue dollar is selling for $1.05 and the red dollar is selling for 95 cents.
If you are an ordinary sane person who holds blue dollars, you simply trade them in for more red dollars. If you are Long-Term Capital, or any large Wall Street firm for that matter, and are able to borrow money cheaply, you borrow against your capital and buy a lot of red dollars and sell the same number of blue dollars. The effect is to force the price of red dollars and blue dollars back together again. In any case, you wait for blue dollars and red dollars to converge to their ultimate value of a dollar apiece.
At best, the odd passions that drove the red and the blue dollar apart subside quickly, and you reap your profits now. At worst, you must wait five years to collect your profits. The ''model'' tells you that you will one day make at least a nickel for every red dollar you buy for 95 cents and another nickel for every blue dollar you sell at $1.05. But as Ayman Hindy, a Long-Term Capital strategist, puts it: ''The models tell you where things will be in five years. But they don't tell you what happens before you get to the moment of certainty.''
Which brings us to the case of Long-Term Capital in August 1998, when the red dollar and the blue dollar were driven apart in value to ridiculous extremes. Actually, when you look at the young professors' books, you can see that the first sign of trouble came earlier, on July 17, when Salomon Brothers announced that it was liquidating all of its red dollar-blue dollar trades, which turned out to be the same trades Long-Term Capital had made. For the rest of that month, the fund dropped about 10 percent because Salomon Brothers was selling all the things that Long-Term owned.
Then, on Aug. 17, Russia defaulted on its debt. At that moment the heads of the other big financial firms recanted their beliefs about red dollars and blue dollars. Their fear overruled their reason. Once enough people gave into their fear, fear became reasonable. Fairly rapidly the other big financial firms unwound their own trades, which, having been made in the spirit of Long-Term Capital, were virtually identical to the trades of Long-Term Capital. The red dollar was suddenly worth 25 cents and the blue dollar $3. The history of red dollars and blue dollars made the statistical probability of that happening 1 in 50 million.
''What we did is rely on experience,'' Victor Haghani says. And all science is based on experience. And if you're not willing to draw any conclusions from experience, you might as well sit on your hands and do nothing.''
Aug. 21, 1998, was the worst day in the young history of scientific finance. On that day alone, Long-Term Capital lost $550 million.
The young professors' attachment to higher reason was a great advantage only as long as there was a limit to the market's unreason. Suddenly there was no limit. Alan Greenspan and Robert Rubin said they had never seen such a crisis, and neither had anyone else. It was one thing for the average stock-market investor to panic. It was another for the world's biggest financial firms to panic. The world's financial institutions created a bank run on a huge, global scale. ''We put very little emphasis on what other leveraged players were doing,'' Haghani says, ''because I think we thought they would behave very similarly to ourselves.''
Long-Term Capital had worked on the assumption that there was a pool of professional money around that would see that red dollars and blue dollars were both dollars and therefore should maintain some reasonable relation to each other. But in the crisis, the young professors were the only ones who clung to such reasoning.
Did Long-Term Capital Die or Was It Killed?
By the end of August, Long-Term Capital had run through $2 billion of its $4.8 billion in capital. Even so, the fund might well have survived and prospered. But what started as a run on the markets, at least from Long-Term Capital's point of view, turned into a run on Long-Term Capital. ''It was as if there was someone out there with our exact portfolio,'' Haghani says, ''only it was three times as large as ours, and they were liquidating all at once.''
For nearly 15 years, Meriwether and the young professors had been engaged in an experiment to determine how far human reason alone could take them. They failed to appreciate that their fabulous success had made them, quite unreasonably, part of the experiment. No longer were they the creatures of higher reason who could remain detached and aloof. They were the lab rats lost in the maze.
Inside Long-Term Capital, the collapse is understood as a two-stage affair. First came the market panic by big Wall Street firms that made many of the same bets as Long-Term Capital. Then came a kind of social panic. Word spread that Long-Term was weakened. That weakness, Meriwether and the others say, very quickly became an opportunity for others to prey upon.
''The few things we had on that the market didn't know about came back quickly,'' Meriwether says. ''It was the trades that the market knew we had on that caused us trouble.'' Richard Leahy, the Long-Term partner, says: ''It ceased to feel like people were liquidating positions similar to ours. All of a sudden they were liquidating our positions.''
It was this second stage of his demise that clearly ate at Meriwether. As our conversation drifted toward the subject his unease turned to bitterness and his phrasing became so tortured as to be as useless to me as he hoped it would be.
By the end of August, Long-Term Capital badly needed $1.5 billion. The trades that the strategists had made lost money, but they would recover their losses if they could obtain the capital to finance them. If Long-Term Capital could ride out the panic, Meriwether figured, it would make more money than ever. ''We dreamed of the day when we'd have opportunities like this,'' Eric Rosenfeld says.
Meriwether called people rich enough to pony up the entire sum Long-Term Capital needed, among them one of America's richest men, Warren Buffett. Buffett was interested in the portfolio but not in Meriwether. ''Buffett cares about one thing,'' one of the fund's partners says. ''His reputation. Because of the Salomon scandal he couldn't be seen to be in business with J.M.''
Meriwether also called Jon Corzine at Goldman, Sachs. Goldman, Sachs agreed to find the capital but in exchange wanted more than a fee. It wanted to own half of Long-Term Capital. Meriwether and Corzine had been aware of each other's existence since the late 60's, when they studied together at the University of Chicago. For 15 years, Corzine had done his best to figure out what Meriwether was up to. This was his chance to know for all time.
What neither man realized was that the game of saving Long-Term Capital was over before it began. First came the rumors. Traders at other firms began to use ''Long-Term'' the way weathermen used El Nio -- to justify whatever they needed to justify. Lou Dobbs appeared on CNN to explain that certain stocks were falling because Long-Term Capital was selling them. The young professors, who had not been selling stocks or anything else, watched in wonder. International Financing Review, the most widely read trade sheet in the bond markets, wrote that Long-Term Capital was sitting on $10 billion of floating rate notes. The young professors say they owned no such things.
The rumors that contained some truth were more damaging, of course, and now the truth was out there, available to Goldman, Sachs and others. Every day someone would publish something about them that left them more exposed than ever to those who might prey on them. ''Every rumor about the size of our positions was always double the truth,'' Richard Leahy says. ''Except the rumor about our position in Danish mortgages. That was 10 times what we actually had.''
Banks that called up to bid on Long-Term Capital's positions would say things like, ''We can't buy all of what we've heard you've got, but we'd like a piece.'' They would then ask to buy twice what Long-Term actually owned. According to the young professors, Wall Street firms began to get out in front of the fund's positions: if a trader elsewhere knew Long-Term Capital owned a lot of interest-rate swap, for instance, he sold interest-rate swaps, and further weakened Long-Term's hand. The idea was that if you put enough pressure on Long-Term Capital, Long-Term Capital would be forced to sell in a panic and you would reap the profits. And even if Long-Term didn't break, the mere rumor that it had problems might lead to a windfall for you. A Goldman, Sachs partner had been heard to brag that the firm had made a fortune in this manner. A spokesman for Goldman, Sachs said that the idea that the firm had made money from Long-Term Capital's distress was ''absurd'' in light of how much Goldman, Sachs had lost making exactly the same bets.
When one player in any market is sufficiently big and weak, its size and weakness are reason enough for the market to destroy it. The rumors about Long-Term Capital led to further losses, which in turn led to more rumors. The losses mounted, but strangely. The losses in August were part of a market rout. The losses that continued into September were part of a rout of Long-Term Capital.
The trouble led the New York Federal Reserve to help bring together a consortium of Wall Street banks and brokerage houses to come to the rescue. Goldman, Sachs, a consortium member, was dissatisfied to find itself one of many. It had hoped to control Long-Term, and to acquire the wisdom of the young professors. And so before the consortium finalized its plans, Goldman, Sachs turned up with Warren Buffet and about $4 billion in an attempt to buy the firm.
Long-Term Capital was caught in a squeeze -- for that's what it's called, and that's what it felt like to Meriwether and the young professors. On the very day, Sept. 21, that Warren Buffett and Goldman, Sachs turned up, Long-Term Capital, for the second time in its history, lost more than $500 million in one day. Half of that was lost in its second disastrous trade, a short position in five-year equity options. Essentially, it had sold insurance against violent movement in the stock market. The price it received for the insurance was so high that the bet would almost certainly be hugely profitable -- in the long run. But on Sept. 21, the short run took over, in a new and more venal fashion. Meriwether received phone calls from J.P. Morgan and Union Bank of Switzerland telling him that the options he had sold short were rocketing up in thin markets thanks to bids from American International Group, the U.S. insurance company. The brokers were outraged on Meriwether's behalf, as they assumed that A.I.G. was trying to profit from Long-Term's weakness. A spokesman for A.I.G. declined to comment.
But what the people who called Meriwether did not know was that at just that moment, A.I.G. was, along with Warren Buffett and Goldman, Sachs, negotiating to purchase Long-Term Capital's portfolio. But one consequence of A.I.G.'s activities was to pressure Meriwether to sell his company and its portfolio cheaply. Meriwether is convinced that A.I.G. was trying to put him out of business, a contention A.I.G. would also not comment on.
It is interesting to look over the clippings and see the role played by the media in this stage of Long-Term Capital's demise. After the firm entered negotiations to sell its portfolio through Goldman, Sachs, rumors about its holdings trickled out in the financial press, exposing Long-Term Capital's trading positions to outside attack. After negotiations among the fund and Goldman, Sachs and Warren Buffett broke down, a new wave of articles appeared. Carol Loomis wrote in Fortune, ''Warren Buffett is a longtime friend of this writer,'' and then went on to tell the following tale -- that Long-Term Capital had refused his bid because John Meriwether didn't like his terms. The story played down the fact that William McDonough, president of the New York Fed, came to the same conclusions as Meriwether -- different from Buffett's -- that the fund could not legally sell without consulting its investors, which Buffett had given them less than an hour to do. Buffett declined to comment.
The Fortune story and others like it, the Long-Term strategists maintain, created even more pressure on Meriwether to sell the next time someone made a low bid. Meriwether also says that the A.I.G. trade was ''minor compared to some of the things we saw.'' But he declined to say what these things were, and no wonder. On Sept. 23, a consortium of 14 Wall Street banks and brokerage houses gave Long-Term $3.6 billion, in exchange for 90 percent of the firm. Some of the things Meriwether ''saw'' could well have been perpetrated by some of the very Wall Street firms that now own his firm, and that he now works for.
Meriwether did say this about his treatment at the hands of the big Wall Street firms: ''I like the way Victor'' -- Haghani, one of the young professors --''put it: The hurricane is not more or less likely to hit because more hurricane insurance has been written. In the financial markets this is not true. The more people write financial insurance, the more likely it is that a disaster will happen, because the people who know you have sold the insurance can make it happen. So you have to monitor what other people are doing.''
The End of the World as Long-Term Capital Knew It
In October 1987, the markets took power from people who traded with their intuition and bestowed it upon people who traded with their formulas. In August 1998, the markets took power away from people with formulas who hoped to remain detached from the marketplace and bestowed it upon the large Wall Street firms that oversee the marketplace. These firms will do pretty much exactly the same complicated trading as Long-Term Capital, perhaps in a slightly watered down form, once the whiff of scandal vanishes from the activity. Indeed, the global economy now expects it of them. Without it, risk would be poorly priced and capital poorly distributed. And in any case, Long-Term Capital's portfolio has already turned around, rising almost 10 percent by year's end.
The events of August and September 1998 have left Meriwether and the young professors exactly where they did not want to be, working for the large Wall Street firms. Back is the messy company politics they thought they had left behind. In place of the hundreds of millions they made each year for themselves they are now paid salaries of $250,000, or the wage of a beginning bond trader without a bonus. In the best-case scenario, their portfolio will make the fortune they predicted for it, they will convince the money culture that they are still worth having around and they will find other rich people to replace their current owners. In the worst and more likely case, they are finished as a group.
It is interesting to see how people respond when the assumptions that get them out of bed in the morning are declared ridiculous by the wider world. There is obviously now a very great social pressure on the young professors to abandon the thing they cherish most, their hyperrational view of the world. In the coming months, they could very well be hauled before some Congressional committee to explain their role in jeopardizing the free world. Oddly, the question that occupies them is not whether to push on with their models of financial behavior but how to improve the models in light of what has happened to them. ''The solution,'' Robert Merton says, ''is not to go back to the old, simple methods. That never works. You can't go back. The world has changed. And the solution is greater complexity.''
''It's like there are two businesses here,'' Eric Rosenfeld says, ''the old business, which works fine under normal conditions, and this stand-by business, when the world goes mad. And for that, you either need to buy insurance or have a pool of stand-by capital to take advantage of these opportunities.''
The money culture has never been very good at distinguishing bad character from bad judgment and bad judgment from bad luck, and in the complex case of Long-Term Capital it has been worse than usual. Reputations are ruined, fortunes lost and precious ideas simultaneously ridiculed and stolen. So maybe the most interesting thing to happen since Long-Term got itself into trouble is what has not happened. There have been none of the venal self-preservatory acts that often accompany great financial collapse. No one has pointed a finger at his partners. Already several partners have declined offers to work for other fund managers or big Wall Street firms.
Yet for the first time in 15 years, John Meriwether and his young professors cannot steer toward some moment of certainty in the distant future. What they hope will happen next is no longer the same as what they think will happen next. Which is to say that they are, for the first time in 15 years, just like everyone else.

Thursday, August 14, 2014

Robin Williams is no more

Robin Williams left this world this week.  Last year in April he wrote a piece in NYT as a homage to Jonathan Winters. A bit over a year later the world is coming to terms with his own death.  RW's piece for JW below.




April 15, 2013

A Madman, but Angelic



My father’s laughter introduced me to the comedy of Jonathan Winters. My dad was a sweet man, but not an easy laugh. We were watching Jack Paar on “The Tonight Show” on our black-and-white television, and on came Jonathan in a pith helmet.
“Who are you?” Paar asked.
“I’m a great white hunter,” Jonathan said in an effete voice. “I hunt mainly squirrels.”
“How do you do that?”
“I aim for their little nuts.”
My dad and I lost it. Seeing my father laugh like that made me think, “Who is this guy and what’s he on?”
A short time later, Jonathan was on Paar again. This time Jack handed him a stick, and what happened next was extraordinary. Jon did a four-minute freestyle riff in which that stick became a fishing rod, a spear, a giant beetle antenna, even Bing Crosby’s golf club complete with song. Each transformation was a cameo with characters and sound effects. He was performing comedic alchemy. The world was his laboratory. I was hooked.
Not only was Jonathan funny on TV, but his comedy albums are also auditory bliss. One of my favorite routines involved a mad scientist who sounded like Boris Karloff. But instead of creating a Frankenstein, he made thousands of little men that he unleashed on the world. His shocked assistant cried out, “What are they looking for?”
The professor replied, “Little women, you fool.”
He also created comic characters like Maude Frickert and the overgrown child Chester Honeyhugger. In one classic pre-P.C.-era routine, he had Maude being molested by a huge farmhand. She protested, “Stop, I’m church people.” After he had his way, he was off to do his chores, and she called out, “Don’t be long.”
Mort Sahl said Jonathan was seen as a great improviser, but to him he was just being himself. He was a rebel without a pause, whether he was portraying the WASP who couldn’t get a decent martini in Mombasa or the cowboy who couldn’t ride a horse and backed out of frame. Jonathan’s wife, Eileen, maybe had the best quote. She said that Jonathan went through his terrible 2’s but that they lasted 20 years.
In 1981, my sitcom “Mork & Mindy” was about to enter its fourth and final season. The show had run its course and we wanted to go out swinging. The producers suggested hiring Jonathan to play my son, who ages backward. That woke me out of a two-year slump. The cavalry was on the way.
Jonathan’s improvs on “Mork & Mindy” were legendary. People on the Paramount lot would pack the soundstage on the nights we filmed him. He once did a World War I parody in which he portrayed upper-class English generals, Cockney infantrymen, a Scottish sergeant no one could understand and a Zulu who was in the wrong war. The bit went on so long that all three cameras ran out of film. Sometimes I would join in, but I felt like a kazoo player sitting in with Coltrane.
On one of his first days on the show, a young man asked Jonathan how to get into show business. He said: “You know how movie studios have a front gate? You get a Camaro with a steel grill, drive it through the gate, and once you’re on the lot, you’re in showbiz.”
No audience was too small for Jonathan. I once saw him do a hissing cat for a lone beagle.
His comedy sometimes had an edge. Once, at a gun show, Jon was looking at antique pistols and a man asked if he was a gun proponent. He said: “No, I prefer grenades. They’re more effective.”
Earlier in his life, he had a breakdown and spent some time in a mental institution. He joked that the head doctor told him: “You can get out of here. All you need is 57 keys.” He also hinted that Eileen wanted him to stay there at least until Christmas because he made great ornaments.
Even in his later years, he exorcised his demons in public. His car had handicap plates. He once parked in a blue lane and a woman approached him and said, “You don’t look handicapped to me.”
Jonathan said, “Madam, can you see inside my mind?”
If you wanted a visual representation of Jonathan’s mind, you’d have to go to his house. It is awe-inspiring. There are his paintings (a combination of Miró and Navajo); baseball memorabilia; Civil War pistols and swords; model airplanes, trains, and tin trucks from the ’20s; miniature cowboys and Indians; and toys of all kinds.
We shared a love of painted military miniatures. He once sent me four tiny Napoleonic hookers in various states of undress with a note that read, “For zee troops!”
But the toys were a manifestation of a dark time in his life. Jonathan was a Marine who fought in the Pacific in World War II. When he came home from the war, he went to his old bedroom and discovered that his prized tin trucks were gone.
He asked his mother what she did with his stuff.
“I gave them to the mission,” she said.
“Why did you do that?”
“I didn’t think you were coming back,” she replied.
Jonathan has shuffled off this mortal coil. So here’s to Jonny Winters, the cherubic madman with a stick who touched so many. Damn, am I going to miss you!

Thursday, October 3, 2013

Why Are There Still So Few Women in Science?

Physics Conference 1927 (Marie Curie is the white haired seated person)

 

Last summer, researchers at Yale published a study proving that physicists, chemists and biologists are likely to view a young male scientist more favorably than a woman with the same qualifications. Presented with identical summaries of the accomplishments of two imaginary applicants, professors at six major research institutions were significantly more willing to offer the man a job. If they did hire the woman, they set her salary, on average, nearly $4,000 lower than the man’s. Surprisingly, female scientists were as biased as their male counterparts.
The new study goes a long way toward providing hard evidence of a continuing bias against women in the sciences. Only one-fifth of physics Ph.D.’s in this country are awarded to women, and only about half of those women are American; of all the physics professors in the United States, only 14 percent are women. The numbers of black and Hispanic scientists are even lower; in a typical year, 13 African-Americans and 20 Latinos of either sex receive Ph.D.’s in physics. The reasons for those shortages are hardly mysterious — many minority students attend secondary schools that leave them too far behind to catch up in science, and the effects of prejudice at every stage of their education are well documented. But what could still be keeping women out of the STEM fields (“STEM” being the current shorthand for “science, technology, engineering and mathematics”), which offer so much in the way of job prospects, prestige, intellectual stimulation and income?
As one of the first two women to earn a bachelor of science degree in physics from Yale — I graduated in 1978 — this question concerns me deeply. I attended a rural public school whose few accelerated courses in physics and calculus I wasn’t allowed to take because, as my principal put it, “girls never go on in science and math.” Angry and bored, I began reading about space and time and teaching myself calculus from a book. When I arrived at Yale, I was woefully unprepared. The boys in my introductory physics class, who had taken far more rigorous math and science classes in high school, yawned as our professor sped through the material, while I grew panicked at how little I understood. The only woman in the room, I debated whether to raise my hand and expose myself to ridicule, thereby losing track of the lecture and falling further behind.
In the end, I graduated summa cum laude, Phi Beta Kappa, with honors in the major, having excelled in the department’s three-term sequence in quantum mechanics and a graduate course in gravitational physics, all while teaching myself to program Yale’s mainframe computer. But I didn’t go into physics as a career. At the end of four years, I was exhausted by all the lonely hours I spent catching up to my classmates, hiding my insecurities, struggling to do my problem sets while the boys worked in teams to finish theirs. I was tired of dressing one way to be taken seriously as a scientist while dressing another to feel feminine. And while some of the men I wanted to date weren’t put off by my major, many of them were.
Mostly, though, I didn’t go on in physics because not a single professor — not even the adviser who supervised my senior thesis — encouraged me to go to graduate school. Certain this meant I wasn’t talented enough to succeed in physics, I left the rough draft of my senior thesis outside my adviser’s door and slunk away in shame. Pained by the dream I had failed to achieve, I locked my textbooks, lab reports and problem sets in my father’s army footlocker and turned my back on physics and math forever.
Not until 2005, when Lawrence Summers, then president of Harvard, wondered aloud at a lunchtime talk why more women don’t end up holding tenured positions in the hard sciences, did I feel compelled to reopen that footlocker. I have known Summers since my teens, when he judged my high-school debate team, and he has always struck me as an admirer of smart women. When he suggested — among several other pertinent reasons — that innate disparities in scientific and mathematical aptitude at the very highest end of the spectrum might account for the paucity of tenured female faculty, I got the sense that he had asked the question because he genuinely cared about the answer. I was taken aback by his suggestion that the problem might have something to do with biological inequalities between the sexes, but as I read the heated responses to his comments, I realized that even I wasn’t sure why so many women were still giving up on physics and math before completing advanced degrees. I decided to look up my former classmates and professors, review the research on women’s performance in STEM fields and return to Yale to see what, if anything, had changed since I studied there. I wanted to understand why I had walked away from my dream, and why so many other women still walk away from theirs.
In many ways, of course, the climate has become more welcoming to young women who want to study science and math. Female students at the high school I attended in upstate New York no longer need to teach themselves calculus from a book, and the physics classes are taught by a charismatic young woman. When I first returned to Yale in the fall of 2010, everyone kept boasting that 30 to 40 percent of the undergraduates majoring in physics and physics-related fields were women. More remarkable, those young women studied in a department whose chairwoman was the formidable astrophysicist Meg Urry, who earned her Ph.D. from Johns Hopkins, completed a postdoctorate at M.I.T.’s center for space research and served on the faculty of the Hubble space telescope before Yale hired her as a full professor in 2001. (At the time, there wasn’t a single other female faculty member in the department.)
In recent years, Urry has become devoted to using hard data and anecdotes from her own experience to alter her colleagues’ perceptions as to why there are so few women in the sciences. In response to the Summers controversy, she published an essay in The Washington Post describing her gradual realization that women were leaving the profession not because they weren’t gifted but because of the “slow drumbeat of being underappreciated, feeling uncomfortable and encountering roadblocks along the path to success.”
Although Urry confessed in her op-ed column that as a young scientist she interpreted her repeated failures to be hired or promoted as proof that she wasn’t good enough, anyone who meets her now would have a hard time seeing her as lacking in confidence. She has a quizzical smile and radiant eyes and an irreverent sense of humor; not one but five people described her to me as the busiest woman on campus.
Before we met, Urry predicted that the female students in her department would recognize the struggles she and I had faced but that their support system protected them from the same kind of self-doubt. For instance, under the direction of Bonnie Fleming, the second woman to gain tenure in the physics department at Yale, the students sponsor a semiregular Conference for Undergraduate Women in Physics at Yale. Beyond that, Urry suggested that with so many women studying physics at Yale, and so many of them at the top of their class, the faculty couldn’t help recognizing that their abilities didn’t differ from the men’s. When I mentioned that a tea was being held that afternoon so I could interview female students interested in science and gender, Urry said she would try to attend.
Judith Krauss, the professor who was hosting the tea (she is the former dean of nursing and now master of Silliman College, where I lived as an undergraduate), warned me that very few students would be interested enough to show up. When 80 young women (and three curious men) crowded into the room, Krauss and I were stunned. By the time Urry hurried in, she was lucky to find a seat.
The students clamored to share their stories. One young woman had been disconcerted to find herself one of only three girls in her AP physics course in high school, and even more so when the other two dropped out. Another student was the only girl in her AP physics class from the start. Her classmates teased her mercilessly: “You’re a girl. Girls can’t do physics.” She expected the teacher to put an end to the teasing, but he didn’t.
Other women chimed in to say that their teachers were the ones who teased them the most. In one physics class, the teacher announced that the boys would be graded on the “boy curve,” while the one girl would be graded on the “girl curve”; when asked why, the teacher explained that he couldn’t reasonably expect a girl to compete in physics on equal terms with boys.
The only members of the audience who didn’t know what the rest were talking about were the women who had attended all-girls secondary schools or had grown up in foreign countries. (The lesbian scientists with whom I spoke, at the tea and elsewhere, reported differing reactions to the gender dynamic of the classroom and the lab, but voiced many of the same concerns as the straight women.) One student — I took her to be Indian or Pakistani — said she arrived on campus having taken lots of advanced classes and didn’t hesitate to sign up for the most rigorous math course. Shaken to find herself the only girl in the class, unable to follow the first lecture, she asked the professor: Should I be here? “If you’re not confident that you should be here” — she imitated his scorn — “you shouldn’t take the class.”
After the tea, a dozen girls stayed to talk. “The boys in my group don’t take anything I say seriously,” one astrophysics major complained. “I hate to be aggressive. Is that what it takes? I wasn’t brought up that way. Will I have to be this aggressive in graduate school? For the rest of my life?” Another said she disliked when she and her sister went out to a club and her sister introduced her as an astrophysics major. “I kick her under the table. I hate when people in a bar or at a party find out I’m majoring in physics. The minute they find out, I can see the guys turn away.” Yet another went on about how even at Yale the men didn’t want to date a physics major, and how she was worried she’d go through four years there without a date.
After the students left, I asked Urry if she was as flabbergasted as I was. “More,” she said — after all, she was the chairwoman of the department in which most of these girls were studying.
In the two years that followed, I heard similar accounts echoed among young women in Michigan, upstate New York and Connecticut. I was dismayed to find that the cultural and psychological factors that I experienced in the ’70s not only persist but also seem all the more pernicious in a society in which women are told that nothing is preventing them from succeeding in any field. If anything, the pressures to be conventionally feminine seem even more intense now than when I was young.
For proof of the stereotypes that continue to shape American attitudes about science, and about women in science in particular, you need only watch an episode of the popular television show “The Big Bang Theory,” about a group of awkward but endearing male Caltech physicists and their neighbor, Penny, an attractive blonde who has moved to L.A. to make it as an actress. Although two of the scientists on the show are women, one, Bernadette, speaks in a voice so shrill it could shatter a test tube. When she was working her way toward a Ph.D. in microbiology, rather than working in a lab, as any real doctoral student would do, she waitressed with Penny. Mayim Bialik, the actress who plays Amy, a neurobiologist who becomes semiromantically involved with the childlike but brilliant physicist Sheldon, really does have a Ph.D. in neuroscience and is in no way the hideously dumpy woman she is presented as on the show. “The Big Bang Theory” is a sitcom, of course, and therefore every character is a caricature, but what remotely normal young person would want to enter a field populated by misfits like Sheldon, Howard and Raj? And what remotely normal young woman would want to imagine herself as dowdy, socially clueless Amy rather than as stylish, bouncy, math-and-science-illiterate Penny?
Although Americans take for granted that scientists are geeks, in other cultures a gift for math is often seen as demonstrating that a person is intuitive and creative. In 2008, the American Mathematical Society published data from a number of prestigious international competitions in an effort to track standout performers. The American competitors were almost always the children of immigrants, and very rarely female. For example, between 1959 and 2008, Bulgaria sent 21 girls to the International Mathematical Olympiad, while the U.S., from 1974, when it first entered the competition, to 2008, sent only 3; no woman even made the American team until 1998. According to the study’s authors, native-born American students of both sexes steer clear of math clubs and competitions because “only Asians and nerds” would voluntarily do math. “In other words, it is deemed uncool within the social context of U.S.A. middle and high schools to do mathematics for fun; doing so can lead to social ostracism. Consequently, gifted girls, even more so than boys, usually camouflage their mathematical talent to fit in well with their peers.”
The study’s findings apply equally in science. Urry told me that at the space telescope institute where she used to work, the women from Italy and France “dress very well, what Americans would call revealing. You’ll see a Frenchwoman in a short skirt and fishnets; that’s normal for them. The men in those countries seem able to keep someone’s sexual identity separate from her scientific identity. American men can’t seem to appreciate a woman as a woman and as a scientist; it’s one or the other.”
That the disparity between men and women’s representation in science and math arises from culture rather than genetics seems beyond dispute. In the early 1980s, a large group of American middle-schoolers were given the SAT exam in math; among those who scored higher than 700, boys outperformed girls by 13 to 1. But scoring 700 or higher on the SATs, even in middle school, doesn’t necessarily reveal true mathematical creativity or facility with higher-level concepts. And these were all American students. The mathematical society’s study of the top achievers in international competitions went much further in examining genius by analyzing the performance of young women in other cultures. The study’s conclusion? The scarcity of women at the very highest echelons “is due, in significant part, to changeable factors that vary with time, country and ethnic group. First and foremost, some countries identify and nurture females with very high ability in mathematics at a much higher frequency than do others.” Besides, the ratio of boys to girls scoring 700 or higher on the math SAT in middle school is now only three to one. If girls were so constrained by their biology, how could their scores have risen so steadily in such a short time?
In elementary school, girls and boys perform equally well in math and science. But by the time they reach high school, when those subjects begin to seem more difficult to students of both sexes, the numbers diverge. Although the percentage of girls taking high-school physics rose to 47 percent in 1997 from 39 percent in 1987, that figure has remained constant into the new millennium. And the numbers become more alarming when you look at AP classes rather than general physics, and at the scores on AP exams rather than mere attendance in AP classes. The statistics tend to be a bit more encouraging in AP calculus, but they are far worse in computer science. Maybe boys care more about physics and computer science than girls do. But an equally plausible explanation is that boys are encouraged to tough out difficult courses in unpopular subjects, while girls, no matter how smart, receive fewer arguments from their parents, teachers or guidance counselors if they drop a physics class or shrug off an AP exam.
That cultural signals can affect a student’s ability to perform on an exam has long been known. In a frequently cited 1999 study, a sample of University of Michigan students with similarly strong backgrounds and abilities in math were divided into two groups. In the first, the students were told that men perform better on math tests than women; in the second, the students were assured that despite what they might have heard, there was no difference between male and female performance. Both groups were given a math test. In the first, the men outscored the women by 20 points; in the second, the men scored only 2 points higher.
It’s even possible that gifts in science and math aren’t identifiable by scores on tests. Less than one-third of the white American males who populate the ranks of engineering, computer science, math and the physical sciences scored higher than 650 on their math SATs, and more than one-third scored below 550. In the middle ranks, hard work, determination and encouragement seem to be as important as raw talent. Even at the very highest levels, test scores might be irrelevant; apparently, Richard Feynman’s I.Q. was a less-than-remarkable 125.
The most powerful determinant of whether a woman goes on in science might be whether anyone encourages her to go on. My freshman year at Yale, I earned a 32 on my first physics midterm. My parents urged me to switch majors. All they wanted was that I be able to earn a living until I married a man who could support me, and physics seemed unlikely to accomplish either goal.
I trudged up Science Hill to ask my professor, Michael Zeller, to sign my withdrawal slip. I took the elevator to Professor Zeller’s floor, then navigated corridors lined with photos of the all-male faculty and notices for lectures whose titles struck me as incomprehensible. I knocked at my professor’s door and managed to stammer that I had gotten a 32 on the midterm and needed him to sign my drop slip.
“Why?” he asked. He received D’s in two of his physics courses. Not on the midterms — in the courses. The story sounded like something a nice professor would invent to make his least talented student feel less dumb. In his case, the D’s clearly were aberrations. In my case, the 32 signified that I wasn’t any good at physics.
“Just swim in your own lane,” he said. Seeing my confusion, he told me that he had been on the swimming team at Stanford. His stroke was as good as anyone’s. But he kept coming in second. “Zeller,” the coach said, “your problem is you keep looking around to see how the other guys are doing. Keep your eyes on your own lane, swim your fastest and you’ll win.”
I gathered this meant he wouldn’t be signing my drop slip.
“You can do it,” he said. “Stick it out.”
I stayed in the course. Week after week, I struggled to do my problem sets, until they no longer seemed impenetrable. The deeper I now tunnel into my four-inch-thick freshman physics textbook, the more equations I find festooned with comet-like exclamation points and theorems whose beauty I noted with exploding novas of hot-pink asterisks. The markings in the book return me to a time when, sitting in my cramped dorm room, I suddenly grasped some principle that governs the way objects interact, whether here on earth or light years distant, and I marveled that such vastness and complexity could be reducible to the equation I had highlighted in my book. Could anything have been more thrilling than comprehending an entirely new way of seeing, a reality more real than the real itself?
I earned a B in the course; the next semester I got an A. By the start of my senior year, I was at the top of my class, with the most experience conducting research. But not a single professor asked me if I was going on to graduate school. When I mentioned shyly to Professor Zeller that my dream was to apply to Princeton and become a theoretician, he shook his head and said that if you went to Princeton, you had better put your ego in your back pocket, because those guys were so brilliant and competitive that you would get that ego crushed, which made me feel as if I weren’t brilliant or competitive enough to apply.
Not even the math professor who supervised my senior thesis urged me to go on for a Ph.D. I had spent nine months missing parties, skipping dinners and losing sleep, trying to figure out why waves — of sound, of light, of anything — travel in a spherical shell, like the skin of a balloon, in any odd-dimensional space, but like a solid bowling ball in any space of even dimension. When at last I found the answer, I knocked triumphantly at my adviser’s door. Yet I don’t remember him praising me in any way. I was dying to ask if my ability to solve the problem meant that I was good enough to make it as a theoretical physicist. But I knew that if I needed to ask, I wasn’t.
Years later, when I contacted that same professor, the mathematician Roger Howe, he responded enthusiastically to my request that we get together to discuss women in science and math. We met at his office, in a building that still has a large poster of famous mathematicians (all male) in the lobby, although someone has tacked a smaller poster of “famous women in math” on the top floor beside the women’s bathroom. Howe appeared remarkably youthful, even when you consider that when I studied with him, he was the youngest full professor at Yale. He suggested we grab a sandwich, and as we sat waiting for our panini, I told him that one reason I didn’t go to graduate school was that I compared myself with him and judged my talents wanting. After all, I’d had such a difficult time solving the problem he had challenged me to solve.
He looked puzzled. “But you solved it.”
“Yeah,” I said. “At the end I really understood what I was doing. But it took me such a long time.”
“But that’s just how it is,” he said. “You don’t see it until you do, and then you wonder why you didn’t see it all along.”
But I had needed to drop my class in real analysis.
Howe shrugged. There are a lot of different math personalities. Different mathematicians are good at different fields.
I asked if he had noticed any differences between the ways male and female students approach math problems, whether they have different “math personalities.” No, he said. Then again, he couldn’t get inside his students’ heads. He did have two female students go on in math, and both had done fairly well.
I asked why even now there were no female professors on Yale’s math faculty. No tenured women, Howe corrected me. Just recently, the department had voted to hire a woman for a tenure-track job. (That woman did not receive tenure, but this year the faculty did hire a senior female professor.) Well, I said, that’s still not very many. He stared into the distance. “I guess I just haven’t seen that many women whose work I’m excited about.” I watched him mull over his answer, the way I used to watch him visualize n-dimensional toruses cradled in his hands. “Maybe women are victims of misperception,” he said finally. Not long ago, one of his colleagues at another school admitted to him that back when all of them were starting out, there were two people in his field, a woman and a man, and this colleague assumed the man must be the better mathematician, but the woman has gone on to do better work.
I finally came straight out and asked what he thought of my project. How did it compare with all the other undergraduate research projects he must have supervised?
His eyebrows lifted, as if to express the mathematical symbol for puzzlement. Actually, he hadn’t supervised more than two or three undergraduates in his entire career. “It’s very unusual for any undergraduate to do an independent project in mathematics,” he said. “By that measure, I would have to say that what you did was exceptional.”
“Exceptional?” I echoed. Then why had he never told me?
The question took him aback. I asked if he ever specifically encouraged any undergraduates to go on for Ph.D.’s; after all, he was now the director of undergraduate studies. But he said he never encouraged anyone to go on in math. “It’s a very hard life,” he told me. “You need to enjoy it. There’s a lot of pressure being a mathematician. The life, the culture, it’s very hard.”
When I told Meg Urry that Howe and several other of my professors said they don’t encourage anyone to go on in physics or math because it’s such a hard life, she blew raspberries. “Oh, come on,” she said. “They’re their own bosses. They’re well paid. They love what they do. Why not encourage other people to go on in what you love?” She gives many alumni talks, “and there’s always a woman who comes up to me and says the same thing you said, I wanted to become a physicist, but no one encouraged me. If even one person had said, ‘You can do this.’ ” She laughed. “Women need more positive reinforcement, and men need more negative reinforcement. Men wildly overestimate their learning abilities, their earning abilities. Women say, ‘Oh, I’m not good, I won’t earn much, whatever you want to give me is O.K.’ ”
One student told Urry she doubted that she was good enough for grad school, and Urry asked why — the student had earned nearly all A’s at Yale, which has one of the most rigorous physics programs in the country. “A woman like that didn’t think she was qualified, whereas I’ve written lots of letters for men with B averages.” She won’t say that getting a Ph.D. is easy. “It is a grind. When a young woman says, ‘How is this going to be for me?’ I have to say that yes, there are easier things to do. But that doesn’t mean I need to discourage her from trying. You don’t need to be a genius to do what I do. When I told my adviser what I wanted to do, he said, ‘Oh, Meg, you have to be a genius to be an astrophysicist.’ I was the best physics major they had. What he was really saying was that I wasn’t a genius, wasn’t good enough. What, all those theoreticians out there are all Feynman or Einstein? I don’t think so.”
Not long ago, I met five young Yale alumna at a Vietnamese restaurant in Cambridge. Three of the women were attending graduate school at Harvard — two in physics and one in astronomy — and two were studying oceanography at M.I.T. None expressed anxiety about surviving graduate school, but all five said they frequently worried about how they would teach and conduct research once they had children.
“That’s where you lose all the female physicists,” one woman said.
“Yeah, it’s even hard to get your kid into child care at M.I.T.,” said another.
“Women are just as willing as men to sacrifice other things for work,” said a third. “But we’re not willing to do even more work than the men — work in the lab and teach, plus do all the child care and housework.”
What most young women don’t realize, Urry said, is that being an academic provides a female scientist with more flexibility than most other professions. She met her husband on her first day at the Goddard Space Flight Center. “And we have a completely equal relationship,” she told me. “When he looks after the kids, he doesn’t say he’s helping me.” No one is claiming that juggling a career in physics while raising children is easy. But having a family while establishing a career as a doctor or a lawyer isn’t exactly easy either, and that doesn’t prevent women from pursuing those callings. Urry suspects that raising a family is often the excuse women use when they leave science, when in fact they have been discouraged to the point of giving up.
All Ph.D.’s face the long slog of competing for a junior position, writing grants and conducting enough research to earn tenure. Yet women running the tenure race must leap hurdles that are higher than those facing their male competitors, often without realizing any such disparity exists.
In the mid-1990s, three senior female professors at M.I.T. came to suspect that their careers had been hampered by similar patterns of marginalization. They took the matter to the dean, who appointed a committee of six senior women and three senior men to investigate their concerns. After performing the investigation and studying the data, the committee concluded that the marginalization experienced by female scientists at M.I.T. “was often accompanied by differences in salary, space, awards, resources and response to outside offers between men and women faculty, with women receiving less despite professional accomplishments equal to those of their colleagues.” The dean concurred with the committee’s findings. And yet, as was noted in the committee’s report, his fellow administrators “resisted the notion that there was any problem that arose from gender bias in the treatment of the women faculty. Some argued that it was the masculine culture of M.I.T. that was to blame, and little could be done to change that.” In other words, women didn’t become scientists because science — and scientists — were male.
The committee’s most resonant finding was that the discrimination facing female scientists in the final quarter of the 20th century was qualitatively different from the more obvious forms of sexism addressed by civil rights laws and affirmative action, but no less real. As Nancy Hopkins, one of the professors who initiated the study, put it in an online forum: “I have found that even when women win the Nobel Prize, someone is bound to tell me they did not deserve it, or the discovery was really made by a man, or the important result was made by a man, or the woman really isn’t that smart. This is what discrimination looks like in 2011.”
Not everyone agrees that what was uncovered at M.I.T. actually qualifies as discrimination. Judith Kleinfeld, a professor emeritus in the psychology department at the University of Alaska, argues that the M.I.T. study isn’t persuasive because the number of faculty members involved is too small and university officials refuse to release the data. Even if female professors have been shortchanged or shunted aside, their marginalization might be a result of the same sorts of departmental infighting, personality conflicts and “mistaken impressions” that cause male faculty members to feel slighted as well. “Perceptions of discrimination are evidence of nothing but subjective feelings,” Kleinfeld scoffs.
But broader studies show that the perception of discrimination is often accompanied by a very real difference in the allotment of resources. In February 2012, the American Institute of Physics published a survey of 15,000 male and female physicists across 130 countries. In almost all cultures, the female scientists received less financing, lab space, office support and grants for equipment and travel, even after the researchers controlled for differences other than sex. “In fact,” the researchers concluded, “women physicists could be the majority in some hypothetical future yet still find their careers experience problems that stem from often unconscious bias.”
Jo Handelsman spends much of her time studying micro-organisms in the soil and the guts of insects, but since the early 1990s, she also has devoted herself to increasing the participation of women and minorities in science. Although she long suspected that the same subtle biases documented in the general population were at work among scientists, she had no data to support such assertions. “People said, ‘Oh, that might happen in the Midwest or in the South, but not in New England, or not in my department — we just graduated a woman.’ They would say, ‘That only happens in economics.’ ” Male scientists told Handelsman: I have women in my lab! My female students are smarter than the men! “They go to their experience,” she said, “with a sample size of one.” She laughed. “Scientists can be so unscientific.”
In 2010, Handelsman teamed up with Corinne Moss-Racusin, then a postdoctoral associate at Yale, to begin work on the study that was published last year, which directly documented gender bias in American faculty members in three scientific fields — physics, chemistry and biology — at six major research institutions scattered across the country.
Moss-Racusin, along with collaborators in the departments of psychology, psychiatry and the School of Management, designed a study that involved sending out identical résumés to professors of both sexes, with a cover page stating that the young applicant had recently obtained a bachelor’s degree and was now seeking a position as a lab manager. Half of the 127 participants received a résumé for a student named John; the other half received the identical résumé for Jennifer. In both cases, the applicant’s qualifications were sufficient for the job (with supportive letters of recommendation and the coauthorship of a journal article) but not overwhelmingly persuasive — the applicant’s G.P.A. was only 3.2, and he or she had withdrawn from one science class. Each faculty member was asked to rate John or Jennifer on a scale of one to seven in terms of competence, hireability, likability and the extent to which the professor might be willing to mentor the student. The professors were then asked to choose a salary range they would be willing to pay the candidate.
The results were startling. No matter the respondent’s age, sex, area of specialization or level of seniority, John was rated an average of half a point higher than Jennifer in all areas except likability, where Jennifer scored nearly half a point higher. Moreover, John was offered an average starting salary of $30,238, versus $26,508 for Jennifer. Handelsman told me that whenever she and Moss-Racusin show the graph to an audience of psychologists, “we hear a collective gasp, the significance is really so big.”
I asked Handelsman if she was surprised that senior female faculty members demonstrated as much bias as male professors, regardless of age, and she said no; she had seen too many similar results in other studies. Nor was she surprised that the bias against women was as strong in biology as in physics or chemistry, despite the presence of more female biologists in most departments. Biologists may see women in their labs, she says, but their biases have been formed by images and attitudes they have been absorbing since birth. In a way, Handelsman is grateful that the women she studied turned out to be as biased as the men. When she gives a talk and reveals the results, she said, “you can watch the tension in the room drop. I can say: ‘We all do this. It’s not only you. It’s not just the bad boys who do this.’ ”
I asked Handelsman about the objection I commonly heard that John is a stronger name than Jennifer. She shook her head. “It’s not just a question of syllables, believe me,” she said. “There have been studies of which names convey the same qualities to respondents in surveys, and John and Jennifer are widely seen as conveying the same level of respectability and competence.” That faculty members reported liking Jennifer more than John makes the covert bias all the more insidious. As the authors make clear, their results mesh with the findings of similar studies indicating that people’s biases stem from “repeated exposure to pervasive cultural stereotypes that portray women as less competent by simultaneously emphasizing their warmth and likability compared to men.”
And when you combine that subconscious institutional bias with the internal bias against their own abilities that many young female scientists report experiencing, the results are particularly troubling. Of all the data her study uncovered, Handelsman finds the mentoring results to be the most devastating. “If you add up all the little interactions a student goes through with a professor — asking questions after class, an adviser recommending which courses to take or suggesting what a student might do for the coming summer, whether he or she should apply for a research program, whether to go on to graduate school, all those mini-interactions that students use to gauge what we think of them so they’ll know whether to go on or not. . . . You might think they would know for themselves, but they don’t.” Handelsman shook her head. “Mentoring, advising, discussing — all the little kicks that women get, as opposed to all the responses that men get that make them feel more a part of the party.”
Some critics argue that no real harm is done if women choose not to go into science. David Lubinski and Camilla Persson Benbow, psychologists at Vanderbilt University, spent decades studying thousands of mathematically precocious 12-year-olds. Their conclusion? The girls tended from the start to be “better rounded” and more eager to work with people, plants and animals than with things. Although more of the boys went on to enter careers in math or science, the women secured similar proportions of advanced degrees and high-level careers in fields like law, medicine and the social sciences. By their mid-30s, the men and women appeared to be equally happy with their life choices and viewed themselves as equally successful.
And yet the argument that women are underrepresented in the sciences because they know they will be happier in “people” fields strikes me as misdirected.
The problem is that most girls — and boys — decide they don’t like math and science before those subjects reveal their true beauty, a condition worsened by the unimaginative ways in which science and math are taught. Last year, the President’s Council of Advisers on Science and Technology issued an urgent plea for substantial reform if we are to meet the demand for one million more STEM professionals than the United States is currently on track to produce in the next decade.
But beyond strengthening our curriculum, we need to make sure that we stop losing girls at every step as they fall victim to their lack of self-esteem, their misperceptions as to who does or doesn’t go on in science and their inaccurate assessments of their talents.
As daunting as such reform might be, it is far from impossible. A book called “Math Doesn’t Suck,” by the actress Danica McKellar (who starred as Winnie Cooper on “The Wonder Years” before earning her bachelor’s degree in math at U.C.L.A.), along with her follow-up books, “Kiss My Math,” “Hot X: Algebra Exposed” and “Girls Get Curves: Geometry Takes Shape,” may well have done more to encourage girls to stick with math than any government task force. McKellar’s math books might go a little far in pandering to adolescent girls’ stereotypical obsessions (the problems involve best friends, beads and Barbies rather than baseballs and speeding cars), but the wildly enthusiastic response they have received speaks to the effect that can be achieved by reworking the contents of standard math and science problems and countering the perception that boys won’t like girls who are smart.
The key to reform is persuading educators, researchers and administrators that broadening the pool of female scientists and making the culture more livable for them doesn’t lower standards. If society needs a certain number of scientists, Urry said, and you can look for those scientists only among the males of the population, you are going to have to go much farther toward the bottom of the barrel than if you also can search among the females in the population, especially the females who are at the top of their barrel.
In addition, she said, her colleagues need to recognize the potential of women who discover a passion for science relatively late. Studies show that an early interest in science doesn’t correlate with ability. You can be a science nut from infancy and not grow up to be good at research, Urry said, or you can come to science very late and turn out to be a whiz.
With a little practice and confidence, girls can even make up for an initial disadvantage working with machines, tools and electronic equipment. While boys consistently outperform girls in tests that measure the spatial skills essential for lab work and engineering, studies also show that spatial aptitude is a function of experience. At Olin College of Engineering in Massachusetts, the administration is dedicated to making sure that half the students in each entering class are women. All of Olin’s incoming students are required to take a machining course the first semester. According to Yevgeniya Zastavker, a faculty member who conducts research in biophysics and studies the role of gender in science: “Everyone is faced straight on with gender differences in the lab. We set them up in coed teams and ask them to design a tool or a product. If the gender dynamics get weird, we intervene, and that one intervention early on has a ginormous effect.”
Back at Yale, Urry laughed at my own stories of how inept I had been in lab — drizzling acid on my stockings, which dissolved and went up in smoke, getting hurled across the room by a shock from an ungrounded oscilloscope, not being able to replicate the Millikan oil-drop experiment. Even she had been a disaster in lab in college. Only when she took a more advanced lab and spent hours poring over a circuit diagram, figuring out that her fellow students had set up an experiment wrong, did she realize she knew as much as they did.
“I’m soldering things, and I’m thinking, Hey, I’m really good at this. I know the principles. It’s like an art. It took me years to realize I’m actually good with my hands. I have all these small-motor skills from all the years I spent sewing, knitting and designing things. We should tell young women, ‘That stuff actually prepares you for working in a lab.’ ”
As the Yale study laid bare — scientists of both sexes also need to realize that they can’t always see the way their bias affects their day-to-day lives. Abigail Stewart, director of the University of Michigan’s Advance program, which seeks to improve the lives of female and minority faculty members, told me in an e-mail that Handelsman’s study shakes the passionately held belief of most scientists that they are devoted to accurately identifying and nurturing merit in their students. “Evidence that we are not as likely to recognize and encourage talent (even modest talent, as in this study) shakes our confidence and (I hope) will make us more attentive to our limitations in recognizing talent where we don’t expect to find it.”
Like Stewart, Urry thinks Handelsman’s study might catalyze the changes she has been agitating to achieve for years. “I’ve thought for a long time that understanding this implicit bias exists is critical. If you believe the playing field is equal, then any action you take is privileging women. But if you know that women are being undervalued, then you must do something, because otherwise you will be losing people who are qualified.”
Most of all, we need to make sure that women — and men — don’t grow up in a society in which they absorb images of scientists as geeky male misfits. According to Catherine Riegle-Crumb, an associate professor at the University of Texas at Austin, gender differences in enrollment rates in high-school physics tend to be correlated with the number of women in the larger community who do or do not work in STEM fields. Handelsman, who is awaiting Senate confirmation as associate director of science in the White House Office for Science and Technology Policy, told me that she would love to see murals of women scientists painted on the walls of Yale’s classrooms, “say, a big mural with Rosalind Franklin in the front and Watson and Crick in tiny proportion in the back.”
The good news is that, slowly and steadily, as more institutions acknowledge the bias against women and initiate programs to remedy it, real change is taking place. Peter Parker, who was director of undergraduate studies in physics when I was at Yale and for many years thereafter, told Urry that he wasn’t surprised that all the students and professors in the department were male. In his later years, Urry said, he would exclaim with glee that, say, 21 out of 49 of the physics majors in the junior class that year were women. Not long ago, Roger Howe wrote me to say that he’d had a gifted female student, would I get in touch with her to offer some advice and support? At M.I.T., 19 years after those three senior women began comparing their experiences and demanding changes, the university now has a significant number of female administrators. Day care is more readily available. Faculty members find it more acceptable to have children before they achieve tenure. And deans and department chairs seem committed to increasing the number of female professors.
Urry, who stepped down as chairwoman of Yale’s physics department this summer but will soon be president of the American Astronomical Society, wonders if her department’s commitment to gender equality will continue or stall. One fall Friday, she invited me to attend a picnic the physics and astronomy departments were throwing to welcome back its graduate students and faculty. The professors were sipping wine from plastic cups and chatting with colleagues they hadn’t seen all summer. Hungry graduate students surveyed tables crowded with bowls of salad, barbecue fixings, pies, cakes and a plate of brownies that Urry’s husband baked that morning when he realized she had overslept. Four young women — one black, two white, one Asian by way of Australia — explained to me how they had made it so far when so many other women had given up.
“Oh, that’s easy,” one of them said. “We’re the women who don’t give a crap.”
Don’t give a crap about — ?
“What people expect us to do.”
“Or not do.”
“Or about men not taking you seriously because you dress like a girl. I figure if you’re not going to take my science seriously because of how I look, that’s your problem.”
“Face it,” one of the women said, “grad school is a hazing for anyone, male or female. But if there are enough women in your class, you can help each other get through.”
The young black woman told me she did her undergraduate work at a historically black college, then entered a master’s program designed to help minority students develop the research skills and one-on-one mentoring relationships that would help them make the transition to a Ph.D. program. Her first year at Yale was rough, but her mentors helped her through. “As my mother always taught me,” she said, “success is the best revenge.”
As so many studies have demonstrated, success in math and the hard sciences, far from being a matter of gender, is almost entirely dependent on culture — a culture that teaches girls math isn’t cool and no one will date them if they excel in physics; a culture in which professors rarely encourage their female students to continue on for advanced degrees; a culture in which success in graduate school is a matter of isolation, competition and ridiculously long hours in the lab; a culture in which female scientists are hired less frequently than men, earn less money and are allotted fewer resources.
And yet, as I listened to these four young women laugh at the stereotypes and fears that had discouraged so many others, I was heartened that even these few had made it this far, that theirs will be the faces the next generation grows up imagining when they think of a female scientist.
 
Eileen Pollack is a professor of creative writing at the University of Michigan and author of “Breaking and Entering” and “In the Mouth.” She is at work on a book about women in the sciences.