Friday, April 30, 2010

Agency vs. principal, and Goldman 

Thanks are due again to Anon lawyer for linking to the article in Cardinalpark's thread below, providing the news that federal prosecutors are conducting a criminal investigation into Goldman Sachs, though no charges have been filed at this point; but, the story did move the market lower today. In the body of that article, reference is made to the prosecution against Bear Stearns executives, presumably referring to the Cioffi case. Having read House of Cards by William Cohan, I think that the facts were much worse in that case from the standpoint of the defendants, yet they were acquitted. So, nothing is a slam-dunk in front of a jury.

For about the last 30 years, since Salomon starting trading MBS for its own account (in addition to creating the MBS market and underwriting lots of bonds), there has been an erosion (to say the least) of the distinction between acting as a broker for a client and acting as a principal in a transaction. To the extent that it harms a client, it is a real problem, falling under the category of breach of fiduciary duty -- and that kind of problem is true in any market for any product or service, not just securities.

Yet, to the extent that clients are aware of the two functions, and accept it, I am not sure that government-initiated litigation is the best cure. I personally don't like it (I have much more of a "principal" or managerial mentality), and don't want to be on a trading desk somewhere, but if sophisticated participants want to play in that arena and go in eyes wide open, then so be it. If a party feels, after the fact, that fraud has been committed, then that party should sue in a special civil court, not the SEC (which, frankly, ought to be completely redone, given some teeth, and put under the FBI and Justice). The European banks and ACA, presumably the injured parties in the ABACUS case, are likely cooperating with the SEC, but that is not the same thing as being the plaintiff in a civil case. If there is criminal wrongdoing, again, an injured party ought to press charges and stand behind them and work with federal prosecutors.

I don't want to be an apologist for Goldman, but I think it is a mistake to count the firm out, as frequent commenter The Truth is Out There does in the thread below. While I would agree with him that Goldman should un-flip the switch that made it into a bank holding company at the height of the crisis in September 2008, I would counter that the investment banking side of the business has done a huge amount of good work over the past generation, including industrial companies. That's really the original business of the firm. If the Goldman parent company (The Goldman Sachs Group, Inc.) were somehow given a government edict death sentence tomorrow, the investment bankers at Goldman would re-form a new entity the next day, and open up shop under a new name with the same culture, and continue to do corporate finance and M&A work.

Here is the perspective of a long-time Goldman client, interviewed this week on Nightly Business Report (video at link):

TOM HUDSON: Since the Securities and Exchange Commission filed a civil fraud charge against Goldman Sachs almost two weeks ago, its stock is down about 15 percent. Tonight's "Street Critique" guest knows Goldman very well. Hilary Kramer is the editor of gamechangerstocks.com and chief investment officer at A&G Capital Research joining us this evening from the NASDAQ. Hilary, welcome back to NBR.

HILARY KRAMER, CHIEF INVESTMENT OFFICER, A&G CAPITAL RESEARCH: Thank you Tom. It's a pleasure to be here again.

HUDSON: You're in a very unique position. Not only are you a shareholder of Goldman. You've been a client for 16 years. In the past couple of weeks with what you've learned about Goldman allegedly and real, has your relationship changed at all? Have you reconsidered that relationship?

KRAMER: My relationship with Goldman Sachs is stronger than ever. The firm I'm very, very loyal to, all the firms on Wall Street and I've been a client in investment banking, mergers and acquisitions, restructuring, hedge fund, client and private wealth management as well as all aspects of even derivatives trading and I'm very, very dedicated to Goldman and still trust the company.

HUDSON: So really with all that experience with Goldman, the client, you, is at the center of this Senate deliberations and inquiries yesterday. Does it bother you that Goldman may be trading against your position?

KRAMER: It's not just Goldman, Tom. It's the entire Street. They're not saints. They're not angels. It's Wall Street. There's a reason why Goldman Sachs made $12.8 billion in net revenue in the first quarter. This is the game. This is the way it's played. When you make a trade there's someone on the other side. Buyer beware.

HUDSON: But what if Goldman is acting more than just a broker, matching you with that buyer seller, but Goldman itself is the buyer seller of that product that you're purchasing through Goldman?

KRAMER: But Tom, I understand that and I understand that across the street, because they're acting as a market maker or they're a principal investor, that's the way it is. Is it right, not always. But it's the way business works on the Street
As long as most Goldman clients maintain that perspective -- and I realize some will say that such a perspective comports with that of a battered wife -- then Goldman will stay in business and make money, both for itself and its clients.

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Thursday, April 29, 2010

The Obama administration's continuing war on business 

The hits just keep coming, and people wonder why business people are demoralized, not investing, not borrowing, and not hiring: Another pointless burden on American business, and another step toward the all-surveillance, all-the-time society.


In other news, I've been staying up late and getting up early packing up my house so that I can move tomorrow, so I admit I am approaching all news of unnecessary bureaucratic work with an already grumpy attitude.

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Wednesday, April 28, 2010

Goldman Hearing 

I will remark only briefly. And I will say upfront that I am a former Goldman employee. I was in a direct investment business there during the 90s. Today I am a CEO of a private investment firm.

I thought the senior executives of Goldman Sachs, particular CEO Lloyd Blankfein and CFO David Viniar testified very effectively and responded admirably and patiently to what in general was shabby, ill informed and generally ignorant questioning. And I would observe that the ignorance was generally bipartisan.

The one thing I thought the Goldman executives should have remarked, when questioned about their tactical short overlay to reduce their long exposure to the mortgage morket, would have been to add that, had they not gone net short, they very likely would have been in line testifying with Dick Fuld from Lehman Brothers. And I know which questioning, however ignorant, I would prefer to face.

Today, I am a proud Goldman alum.

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Tuesday, April 27, 2010


Which cocoon lets in less light, the left or the right?

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Sowell this morning 

Thomas Sowell's column this morning on the uses and abuses of history is going to irritate all the right left people. I'd excerpt it, but then you might not read it all.

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Snow in Tupper Lake 

Weather is not climate, so we report that it is snowing this morning in Tupper Lake, New York, a few miles from our home up there, with no political point in mind. Watch it on the Wild Center's web cam.

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Monday, April 26, 2010

Another possible cause of natural disasters 

Last week, we linked to a CNN editorial that proposed isostasy (thanks, Anon commenter, for that fancy term) -- a stretching of the earth's crust resulting from the surface being unburdened of melted ice -- as a possible cause of the Iceland volcano, which I mocked as Gaia feeling bloated.

We have something that clearly tops that, thanks to Purple Avenger over at Ace.

"Many women who do not dress modestly... lead young men astray, corrupt their chastity and spread adultery in society, which (consequently) increases earthquakes," Hojatoleslam Kazem Sedighi was quoted as saying by Iranian media.
Perhaps Sedighi is just speaking metaphorically. Just brainstorming, there might actually be a good set of lyrics for a Barry White song in there, if Mr. White was not serenading in his unique way up in heaven.


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An Obama administration foreign policy initiative everybody can get behind 

Who could be against this treaty?

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The chickengreens strike again 

Years ago we coined the term "chickengreens" to describe rich environmentalists who tell other people to reduce their own standard of living to "save the planet" but who live lavishly themselves. We admit, we had no idea the word would have such broad and persistent usefulness. To wit.

CWCID: Glenn Reynolds.

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Sunday, April 25, 2010

Mob rule 

Skinner smiles:

CWCID: Regular commenter Bomber Girl's Facebook scroll.

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Client Number 9's latest metaphor 

You have to hand it to Eliot Spitzer. Just when you think his unjustified self-importance has exceeded the entire experience of homo sapiens to date, he again blows through our tiresome expectations:

Spitzer talks at length in the movie. Sitting on a couch with his arm often draped comfortably to the side, he talks of his successes in financial reform and never dodges the tough questions.

Did his hooker habit pose a problem with his job? "It never interfered with governance."

How did he section off that part of his life? "It's part of the mysteries of the human mind."

How does he view it now? "The metaphor I think of is Icarus" - the flying god burned by the sun.

Such a shame that the ancient Greeks had no god of douchebaggery.

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LIFE magazine: Photographs from inside the home of one of America's most notorious serial killers. Read the captions.

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Wheels about town 

Love the paint job.


The proud property of Princeton's class of 1982.

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Jon Stewart, defender of free speech 

Jon Stewart has a thing or two to say about the threats against Comedy Central for depicting the Prophet Mohammad, or not, in South Park. Stewart is the rare liberal who does not apologize for Muslims out of some undifferentiated notion that the "victims" of colonialism get a perpetual free pass. Anyway, watch the whole thing.

The Daily Show With Jon StewartMon - Thurs 11p / 10c
South Park Death Threats
Daily Show Full EpisodesPolitical HumorTea Party

MORE: An excellent point.

CWCID: Glenn Reynolds.

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Saturday, April 24, 2010

Me and Scott Sipprelle 

If you live in (or for that matter near) New Jersey's hideously gerrymandered 12th Congressional District, you could help your country by getting out there and hustling for Scott Sipprelle to replace Rush Holt, one of Nancy Pelosi's most reliable supporters, in the United States Congress. Click on his campaign's web site to learn more. Below, a rare picture of Your Blogger with the candidate.

Me and Scott Sipprelle

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Saturday morning questions 

Let's see how you live your life. Answer us this:

If 100 people your age were chosen at random, how many do you think you'd find leading a more satisfying life than yours?

After you have given that question some thought, modify it so:
If 100 Americans your age were chosen at random, how many do you think you'd find leading a more satisfying life than yours?

Post your answers in the comments with such elaboration you deem appropriate.

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Good news on Earth Day! 

You'll never read it in the mainstream media, but on Earth Day Artic sea ice extant was at its highest level for the date in 8 years. One would think that would be cause for rejoicing, but apparently nobody is much interested.

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Presidential vacation watch: It is time to do "middle class" 

You have to love the way the British press covers the United States:

Barack and Michelle Obama flew off for a brief holiday in North Carolina on Friday in what was seen as an attempt to take a "middle class" vacation more in keeping with those of ordinary Americans.

The Obamas spent their holidays last year in Hawaii and Martha's Vineyard, the Massachusetts island beloved of millionaire businessmen and celebrities.

However, following the US president's fresh attack on Wall Street greed this week, it was apparently deemed wiser for Mr Obama not to be pictured relaxing alongside the same bankers he has been lambasting.

The couple left Washington without their children for a long weekend in Asheville, nestled in the Blue Ridge Mountains in the west of the south-eastern state.

Although the area is a far cry from Martha's Vineyard, the Obamas are not exactly venturing into the back of beyond.

Asheville, a city of about 73,000 people, is home to the Vanderbilt family's lavish Biltmore estate and also has dozens of art galleries and elegant restaurants.

The White House said the Obamas will be staying at Asheville's most famous hotel, the Grove Park Inn, which claims that 10 presidents have stayed there.

On his last visit to Asheville, in October 2008, the final month of his presidential campaign, Mr Obama complained that he did not have the time to play golf on the hotel's private course, and vowed to return.

Next up, West Virginia. At the Greenbriar.

Of course, I do not mind a president with genuine populist tastes. See, e.g., the clearing of brush or chopping of wood that came to symbolize earlier presidential relaxation. One does get the sense, though, that this president will be back to Martha's Vinyard or its equivalent once he has accomplished his political point. And played golf at the Grove Park Inn.

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Friday, April 23, 2010

There's something Cheever-esque about the West Hartford false craigslist ad scandal.
A Connecticut man who was feuding with his neighbor targeted her in an explicit online posting that invited strangers to a rowdy orgy with a bored soccer mom, police said.

..If you know West Hartford, that is. My wife is from there, and it has to be the most whitebread suburb in the country. In the early '80s I don't think you could pass the city limits without a pair of four panel pants. God, remember those?

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The stretching of the crust 

Bestselling author Alan Weisman writes an op-ed today on CNN's website. As near as I can tell, the topic is volcanos, and while I cannot be sure that Weisman wrote the headline ("Is the earth striking back?"), he might consider a career writing scripts for Hollywood disaster movies.
Both Iceland and the United States exalt democracy as a social achievement worthy of lasting an eternity. Yet the latter's unprecedented strength has derived not just from enlightened government, but from the release of its own hot clouds: exhaust from its vast industries, fleets and mechanized agriculture.

As we have learned, these gases form an invisible barrier that, like a greenhouse's glass ceiling, keeps reflected heat of the sun from escaping our atmosphere. The denser that gaseous barrier grows, the hotter things get and the faster glaciers melt.

As they flow off the land, we are warned, seas rise. Yet something else is lately worrying geologists: the likelihood that the Earth's crust, relieved of so much formidable weight of ice borne for many thousands of years, has begun to stretch and rebound.
(Emphasis added)

Short version - Gaia: "Oh, I feel so bloated today."

I guess we are going to need a lot of virgins to sacrifice.


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National Public Radio Friday afternoon exploitation post 

I'm going to admit that I've never thought of NPR as a great source for cheesecake. Until now, that is.

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Comedy Central's capitulation 

Newshounds know that Comedy Central has caved in to a veiled threat (couched as a "prediction") from a Muslim group over a planned depiction of the Prophet Muhammad. We've seen this story before, and if we do not speak up and indeed confront it will happen again and again. As the linked story reminds us, this is not the first time this has happened. From just over four years ago, my (then) widely-linked post "Comedy Central and the violence veto":

The right of freedom of speech -- as I tirelessly and tiresomely remind my readers at every opportunity -- is only relevant for people who say unpopular or controversial things. If speech is sufficiently unpopular or controversial, people may threaten violence with the goal of coercing the speaker into withdrawing the speech or suspending its publication and intimidating future speakers from saying the controversial thing in the first place. Actual or threatened violence is the method that mobs of ignorant or unthinking people use to confront ideas that they do not like, because they are incapable of suffering the idea to exist and lack the capacity to argue against it. The mob does not accept freedom of speech, and seeks to destroy it. The only way to stand for freedom of speech, therefore, is to stand up to the mob and its violence. If we do not do that, we give violent people a veto over our speech, and we therefore have no freedom of speech. None that matters, anyway.

Muslims -- not all of them but many of those who are most visible, including activists in this country -- claim the right to express the opinion that is their religion unencumbered by the risk that it might be criticized by others. That is incompatible with a free society. People, mostly liberals, who deny this in the interests of "diversity" or sectarian comity are subverting our most important freedoms.

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The Obama administration's boundless cynicism 

Tom Maguire persuasively exposes a bait and switch at the White House so cynical that even the Bushies (I crack me up) did not go for it. Not surprisingly, the New York Times ignored it in a bit of "journalism" so credulous that even Times readers will fall slack-jawed in despair.

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On this day... 

From the Princeton University Alumni Association Facebook page this morning:

On this day in 1861 – An exodus of Southern students continues as 56 leave the College “in consequence of the state of the country.” They are honorably excused.

Ten days after the bombardment of Ft. Sumter.

A crisis of ultimately catastrophic proportions sometimes seems most tangible in little moments you do not read about in the history books, such as the students from one region leaving a national university en masse "in consequence of the state of the country."

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Thursday, April 22, 2010

This book is going to irritate all the left people 

In the mail, Andy McCarthy's new book: The Grand Jihad: How Islam and the Left Sabotage America.

Available for purchase now in advance of its publication on May 18 by Roger Kimball's Encounter Books.

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Paolo Pelligrini 

Wanting to highlight a particular link that TigerHawk provided in his tab dump below, I think it is worth excerpting from the CNBC article regarding former Paulson employee Paolo Pelligrini, and his interactions with employees of ACA Management.
In one part of Pellegrini's testimony, a government official asked him: "Did you tell (Schwartz) that you were interested in taking a short position in Abacus?"

"Yes, that was the purpose of the meeting," Pellegrini responded.

"How did you explain that to her?" the government official said.

"That we wanted to buy protection on traunches of a synthetic RMBS portfolio." Pellegrini said.

The SEC does not mention this exchange in its complaint against Goldman.
Either the SEC will be able to successfully impeach Pelligrini's testimony, or it may have quasi-Nifonged itself in a political sense. Most of what I have read about this case that has been written by actual securities law experts indicates that it turns on the concept of "material disclosure." If there is testimony that a Paulson employee told an ACA employee, "yup, we wanna be short," then the SEC is left with a few low cards to play -- that Goldman's promotional material did not contain such a disclosure (possibly showing also that ACA did not informally share the information from Pellegrini with other buyers), and that Paulson's role in the selection of the underlying RMBSs was too much of a thumb on the scale, also not disclosed, notwithstanding that fact that ACA did have final say over the pool, and could have walked anytime it wanted, if it felt the synthetic security wasn't worthy of its stamp.

Again, I am not condoning or condemning what Goldman did or failed to do in this transaction. It is not a line of business I wish to be in, and I was invited to interview at the firm just over two decades ago. My primary point is that the SEC needed to lead with its best punch in its first major action relating to the financial crisis, and this barely constitutes a bitch slap.

UPDATE: Apologies to co-blogger Cardinalpark and frequent poster MTF for stepping on their comments in the thread below, having posted at almost exactly the same time today on this point. Here is the clip referenced by MTF:

I do not think it is the situation right now that the more we learn, the stronger the SEC's case seems. That could change, and proving fraud in a civil case is a lower threshold than in a criminal case, but if you are on the Sullivan & Cromwell team representing Goldman, you are probably eating and sleeping fine this week.

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The Specter-Sestak primary 

Things are getting tense in the Democratic primary for the U.S. Senate seat in Pennsylvania, the Philadelphia Inquirer reports.
The campaign of U.S. Rep. Joe Sestak, a retired admiral challenging Arlen Specter in the Democratic Senate primary, accused the incumbent Wednesday of "Swift Boat" tactics over an ad that implies the Navy fired him.

It was an escalation of the battle between the candidates one day after Sestak began statewide TV ads focusing on his biography and Specter responded by ripping the challenger's service record with another commercial.

"Joe Sestak, relieved of duty in the Navy for creating a poor command climate," a narrator says in the ad, referring to morale among Sestak's subordinates. The spot, which began running Tuesday, also smacks Sestak for missing 127 votes in the House last year.

Sestak's campaign sought to rally veterans to defend him by recalling how the Swift Boat Veterans for Truth tried to discredit Democrat John Kerry's service in a Navy patrol vessel in Vietnam during Kerry's 2004 presidential race against George W. Bush.
In Democratic political circles, being accused of swiftboating is about as bad as it gets. Specter has a big war chest, and it is interesting that he has gone this negative this quickly. Specter is a survivor, but for him to be a U.S. Senator this time next year, he will have used up all nine lives.

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Outed as straight 

The front page of today's Philadelphia Inquirer has a story with a unique twist on politics and sexuality.
It's happened so often that it's now a cultural cliche: the gay politician pretending to be straight. In most parts of the nation, homosexuality or bisexuality is a clear electoral liability.

Not in Center City's 182d state House district. There, it's a badge of honor.

Veteran Rep. Babette Josephs (D., Phila.) last Thursday accused her primary opponent, Gregg Kravitz, of pretending to be bisexual in order to pander to lesbian, gay, bisexual, and transgender voters, a powerful bloc in the district.

"I outed him as a straight person," Josephs said during a fund-raiser at the Black Sheep Pub & Restaurant, as some in the audience gasped or laughed, "and now he goes around telling people, quote, 'I swing both ways.' That's quite a respectful way to talk about sexuality. This guy's a gem."

Kravitz, 29, said that he is sexually attracted to both men and women and called Josephs' comments offensive.
Well, I don't know who to believe, and maybe it does not matter all that much, since I don't live in that district.

There may be only one way to resolve the truth here, in the sense that the truth is in the act itself. George Costanza provides some guidance (from the Seinfeld episode in which an NYU reporter mistakenly believes Jerry and George are gay):

Time to, er, man up, Kravitz, or woman up -- whatever.

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The audacity of enviro-sanctimony 

As TH has often said, it would be easier to swallow the hysteria of the climate change alarmists if their own actions demonstrated the level of concern they expect all of us to have.
On a day when many Americans will be reflecting upon how they can reduce their impact on the environment, President Barack Obama and Vice President Joe Biden will board separate jets in Washington on Earth Day morning to fly 250 miles up the east coast to New York, where they will land at separate airports to attend separate events within a few miles of each other.

The parallel visits of Air Force One (a 747/VC-25 aircraft) and Air Force Two (a 757/C-32A aircraft) will delay dozens, if not hundreds of commercial flights at Kennedy and LaGuardia and other nearby airports as no-fly zones are implemented. Jets will be forced to circle and burn more fuel as they wait for the VIPs to come and go. Their security contingents consisting of dozens of cars, SUVs and helicopters will burn even more. Throw in thousands of commuters’ cars and delivery trucks sitting idle in traffic as law enforcement closes large swaths of the city and you have yourself a very Earth-unfriendly day.
Yes, we live in a never ending Simpsons episode, and we have for some time.

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Has the future been abolished? 

Richard Fernandez says as much in looking at what Western politicians have accomplished.

Until recently the difference between the First and Third Worlds was that the Western future was real. The Western tomorrow was a definite quantity; loans would mature at a certain date, elections would be held at scheduled times and the pension check would arrive in the mail every 15th and 30th of the month. By contrast the Third World timescale had only the present. Tomorrow was ink on a calendar. Only things you could touch, take or use now were real. Checks in the future were as unreal as rocket ships and rayguns.

What a whole generation of Western political leaders have done is abolish the future. Comprehensively and perhaps irretrievably. And since that hasn’t happened in two generations, very few can even come to terms with it.

Read the whole thing.

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Nimoy retires 

Leonard Nimoy, the actor best known for playing Spock in the Star Trek TV series and movies, is retiring.

The writers of the show always had a good time playing with the internal struggle in the half-breed character Spock, and Nimoy did an excellent job of fleshing it out. He is a cultural icon to many Americans, mostly men, who grew up (sort of) in the 1960s and 1970s and beyond. The character has apparently died a few times, had his brain removed, been blinded, seduced and scammed a Romulan female leader, struck a senior officer, and Nimoy carried it off in his unique style. He was, well, "fascinating."

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Mother of all Thursday morning tab dumps 

My Facebook friends and other contributors (thank you Bomber Girl!) have been sending me tons of interesting links. I would be betraying you, my loyal readers, if I did not pass them along with pithy accompaniment.

Charts, graphs, and 8 x 10 color glossy photographs with circles and arrows that show that countries get more liberal -- meaning, in this case, left wing -- after financial crises.

Photographing the police is not a crime, however much they would wish that it were.

The financial reform legislation now before Congress proposes to raise the financial threshold for determining whether an investor is sufficiently wealthy for our government to allow them to purchase securities in a private placement. The result, no doubt intended, will be to dry up "angel" (as opposed to venture fund) capital for start-ups. Why do I say intentional? Because the partners in the big venture capital firms are big contributors to political campaigns. Read the whole thing, and then ask yourself whether the Obama administration actually gives a rat's ass about private sector (as opposed to public) employment growth. Much more along the same lines here, including the point that the financial reform bill is yet another huge piece of legislation that even experts do not understand.

This would seem to be bad news for the government's case against Goldman Sachs, which is itself a huge political bet by the SEC. Meanwhile, Goldman has recruited a player from the opposing team to its defense.

I am nothing if not fair and balanced: Letterman's Goldman Sachs "top ten excuses."

George Will's column on the Trenton Thunder -- New Jersey's tough new Republican governor -- is tremendously good. He is certainly winning fans, even on the right; Christie had to win a primary over a more conservative Republican, but last week I heard Ann Coulter tell the students of Ramapo College in Mahwah that she hoped Christie runs for president some day. To huge cheers, I might add.

Two long articles, neither of which I have finished, that fall in the category of essential reading: "The false religion of Mideast peace: And why I'm no longer a believer" and "The Jihadist Laws of War" (by my friend, military historian Mary Habeck).

Is General Motors actually repaying government money, as it claims? Er, no.

The video Michael "hide the decline" Mann does not want you to see.

All about biking in the Adirondacks, a subject close to my heart.


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Wednesday, April 21, 2010

GM's repayment 

The Obama administration is happily talking about the repayment of $8.1 billion in U.S. and Canadian government loans by GM, ahead of schedule.
"This turnaround wasn't an accident of history," said White House economic adviser Larry Summers. "It was the result of considered and politically difficult decisions made by President Obama to provide GM and Chrysler — and indeed the auto industry — a lifeline, if they could demonstrate the will to reshape their businesses."

Vice President Joe Biden said President Barack Obama "took a lot of heat" to keep GM alive. "And this has even exceeded our expectations."

Biden said GM is now in a better position to "make what the market demands: energy-efficient vehicles for a cleaner world."
Having been involved in a few workout situations, I have found that it is well and good to be pleased that there is forward progress, but that it is important never to lose sight of the broader context and plan. GM posted a $3.4 billion loss in Q4 2009, not all of it an operating loss, but it is difficult to know at this point whether GM can realistically generate sustained positive cash flow from operating activities. The hope in Washington, D.C., and in Detroit is obviously that profits are forthcoming and can be maintained, and in fact there is discussion of a public offering of GM stock later this year, contingent upon the company posting a profit.

Noting that it is a good thing that the talk of an IPO is just talk at this point (otherwise Vice President Biden and White House economic adviser Larry Summers might be in violation of securities laws governing the so-called "quiet period," instead of just being politicians trying to score political points), let's do another informal TigerHawk poll.

If GM has an IPO during 2010, would you consider purchasing shares of GM common stock?
Absolutely, put me down for 5,000 shares
Same as above; I expect a same-day double and flip
Maybe, depends on what the company looks like then
Probably not
GM? Wait, I'm a taxpayer, don't I already own shares?
pollcode.com free polls

The foregoing poll and blog post is not an offer, or a solicitation of an offer, to buy or sell securities mentioned herein. Heh.

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Respect from the right 

Law professor Charles Fried, who self-identifies as a conservative, says nice things about Elena Kagan. She is currently the Solicitor General, and is considered to be on the short list for the seat on the Supreme Court occupied Justice Stevens, who is retiring.

About ten days ago, Tom Goldstein (founder of SCOTUSblog) wrote that "General Kagan deserves the title 'prohibitive front runner.'"

Should General Kagan be nominated, her confirmation by the Senate would be a high probability event, and would likely entail a minimum of political bloodshed. She may be the most easily confirmable candidate, partly because she is very smart and capable, and would do well in front of the Senate, but also because she has nothing in the way of a history of judicial decisions that can be dissected (she has not served as a judge) by either side.

Exit question: Would it be, on balance, a net negative or net positive for President Obama and for Democrats in the Senate standing for re-election this year if, instead of General Kagan, the nominee turns out to be a more doctrinaire liberal who rallies the base, but who has a tougher confirmation process?


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Tuesday, April 20, 2010

The Luntz memo 

There has been much discussion in other threads regarding the politics of the enforcement action against Goldman, and the environment for regulatory reform.

I thought it might be helpful to step back and look at the presentation by Frank Luntz, who generally is described as a Republican pollster and political strategist, and see how he views the current environment.

It is worth reading through all 30 slides.

CWCID: Business Insider

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Legerdemain Obama style 

Niiiice one! Very smooth. Smooth like butter. So smooth it slipped right by the mainstream media.

If we were liberals and therefore easily insulted, those of us who have actually created jobs would take offense at poseurs like our president.

CWCID: Glenn Reynolds.

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Business Insider headline of the day:

CNBC's Porn Special Gets Bigger Young Audience Than Goldman Sachs Scandal Coverage

Here's a clip from the special, including an interview with someone named "Jesse Jane" (don't you love how porn names are kind of like preppie names -- Parker Brooks or Brooks Parker -- you can reverse the order, and it still works?):

Ms. Jane seems to have a firm grasp of the concept of marketing a high-end product by feeding the consumer the illusion of scarcity, and apparently has accomplished this without the benefit of an MBA. Good for her. Maybe the board of Goldman should consider her as a replacement for Lloyd Blankfein. It certainly would make recruiting interviews more interesting.

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Unless you look at everything through a Republican political lens, this is good news, or at least its harbinger:

The Conference Board found its index of leading economic indicators reached a record high after rising for the 12th consecutive month in March, according to Reuters. The index beat forecasts for a 1.0% rise by adding 1.4% in March, while the February gain was upwardly revised from a 0.1% gain to a 0.4% gain.

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Lehman investigator: The SEC blew it 

Are people going to pay more or less attention to this news on account of the enforcement action against Goldman Sachs announced on Friday? Moments ago:

The man of the hour is Anton Valukas, the bankruptcy investigator into Lehman Brothers’s collapse. The public’s trust, Valukas tells the House Financial Services Committee, in the Securities & Exchange Commission’s regulation of Lehman was not fulfilled.

The SEC knew that Lehman was failing its own risk limits in 2008, but never required Lehman to address the breach of risk limits, nor to disclose the breach.

Further, the SEC did not know of Lehman’s use of Repo 105 that year because “the SEC did not ask the right questions.”

MORE: Henry Blodget has perhaps the best explanation yet for the timing of the Goldman suit.

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Historical footnote of the day: The marathon run celebrates its 2,500th anniversary this year.

But the most important date for a 26.2-mile race — and perhaps the Western world as a whole — is 490 B.C., the year of an Athenian victory on the plains of Marathon that gave birth to the namesake race and protected the cradle of democracy from a Persian invasion.

"As my old Latin professor used to say, 'If it weren't for Marathon, it's highly likely we'd all be speaking Farsi,'" said Matthew Gonzales, a classics professor at Saint Anselm College and contributor to a History Channel feature on the battle. "There are very few things you can think of in the modern world, as far as how we define ourselves in the West, that would not be fundamentally different."

I suppose we'll all yet be speaking Farsi if we do not man up against the Iranians, but there's still time to fix that.

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Memorandum to my children 

Please read this.

Less parental blogging will resume shortly.

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Chris Christie hunts the NJEA 

If you, like me, think that the teachers unions are one of the big reasons why our monopoly public schools deliver unacceptable results at too high a cost (a standard that liberals embrace when talking about health care, but curiously not education), the latest shot from New Jersey Governor Chris Christie will send a thrill up your leg.

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Monday, April 19, 2010

More on the enforcement action 

For those who care to peruse it, here are the responses to the Wells Notice that Goldman Sachs received last September. The response was filed by lawyers at Sullivan & Cromwell, outside counsel for Goldman Sachs, also in September.

Over at ZeroHedge, anti-Goldman blogger Tyler Durden offers his rebuttals to the Wells responses. Somewhere, somebody will make book on the case, so that we can all place bets on the outcome. At this moment, I would predict a small settlement (less than $100 million) before the end of the year.

GS stock closed up a couple of points today.

Also, Bloomberg reports that the vote at the SEC to sue Goldman was split 3-2 along party lines, with both Republicans voting no.

Eliot Spitzer, who knows something about the intersection of the worlds of politics and finance, and the, er, resulting intercourse, says that the timing of the filing of the suit by the SEC was not a coincidence.

Democrats in the House pile on, seeking a criminal inquiry, and the Senate Majority Leader slaps around the Senate Minority Leader for being so obtuse as to have had a recent meeting with Wall Street executives.

It is interesting that Democrats believe that there is a great deal of political hay to be made by using Goldman as a whipping boy. I suppose that Democrats are counting on the long-outdated stereotype of Wall Street as a bastion of Republican conservatism. As long as this link at OpenSecrets doesn't go down the memory hole, informed Americans might view this as an intra-family spat.

UPDATE: My apparent agnosticism on the enforcement action should not be mistaken for a "blind spot." If anything, I am disappointed that the case does not appear that strong, and that the SEC chose it as its first move in dealing with the securities aspect of financial crisis, in what should be its strongest case -- but, at best, it provides the most political theater and ammunition, in my cynical view.

On CNN tonight, Michael Lewis (author of "The Big Short") expressed the view that he has no idea whether Goldman violated the '33 or '34 Acts, but the better question might be why banks create synthetic securities for clients and then participate in a long or short position in that security for more than a moment in time (i.e., when an investment bank underwrites an equity offering, it is necessarily long that position for a brief period, until the new shares are fully distributed). Lewis is advocating consideration of the Volcker Rule, which would partly restore the agency model on Wall Street. The casino would still be open, it just would not be attached to large financial institutions. The theory is that the blow-ups would then be 1998 LTCM-sized conventional bombs, not 2008-sized hydrogen bombs. I will defer to others such as co-blogger Mindles H. Dreck, with vastly more experience in fixed income and/or structured finance, to point out the dangers of the wrong kind of new regulations for derivatives -- we don't want our generals preparing for the last war -- which is not the same thing as advocating no regulations.

STILL MORE (from TigerHawk): It will be interesting to see whether this book about John Paulson and "the greatest trade ever" holds up, or indeed supports the case against Goldman. Anybody here read it?

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In passing: Pro Obama, or anti? 

Yesterday afternoon my cousin and fellow blogger pointed me toward this curious rendering through the window of a Mexican restaurant in New Canaan, Connecticut (of all places). Yes, not only is that a depiction of Barack Obama as terrorist (or freedom fighter, according to your taste) Che Guevara, but the star on his hat expresses the colors of the flag of Mexico.

Pro, or con?

My question is this: Are the people who put up that picture supporters of Barack Obama, opponents, or just horribly confused?

Supplemental discussion here, only possibly relevant.

Release the hounds.

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EU self-parody watch: Vacation is the new human right 

If this happened here it would be a tragedy for any number of reasons, but in Europe it is both fitting and hilarious:

AN overseas holiday used to be thought of as a reward for a year’s hard work. Now Brussels has declared that tourism is a human right and pensioners, youths and those too poor to afford it should have their travel subsidised by the taxpayer.

Under the scheme, British pensioners could be given cut-price trips to Spain, while Greek teenagers could be taken around disused mills in Manchester to experience the cultural diversity of Europe.

Naturally, I have questions.

How does this policy square with the part about atmospheric carbon dioxide destroying the world?

If vacation is a human right, why aren't massages, good wine, India pale ale, and excellent cheese? Should I not be able to spend my vacation benefit on raising the quality of my staycation?

How do the Spanish feel about all those cut-rate British pensioners? Doesn't it suck enough to be a Greek teenager without having to schlep around disused mills in Manchester?

If they institute this policy in the United States, do I have to go to Detroit? Because I've been there already.

Your results may vary.

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Thought for the day 

Between the massive expense of the Icelandic financial crisis and the uncountable economic damage from the volcanoes erupting there now, Europe is losing billions because of an island in the North Atlantic with a few hundred thousand people. If the United States suffered similar damage under the same circumstances, how angry would American voters be?

I bet you could sell "Nuke Iceland" t-shirts in Germany right now.

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Witch Hunts and Atypical Recoveries 

Friday's civil suit launched by the SEC against Goldman Sachs maybe about seeking truth, justice and recompense. Let's say I have my doubts. In any event, this post really isn't about the merits of the SEC's case or about Goldman's defense. I don't think either matter much.

In a parallel thought, however, I would suggest we are experiencing an unusual economic "bounce," especially in the capital markets. Equity and credit markets are extremely liquid again, and at low capital cost. In fact, and as distinctly opposed to historical economic recoveries, our markets resumed their exuberance at price levels rivalling peak activity (especially credit). I am in the investment business, and let me say that, while we were active buyers in the first half of 2009, we are active sellers today. Why? And what does that have to do with Goldman and the SEC? Or a volcano in Iceland. Or Greek bond spreads?

Central bankers around the world, led by the US Federal Reserve, liquified what were parched capital markets. To use another analogy, global capital markets froze and they applied the blowtorch. Like it's never been applied before.

And it worked. Too well perhaps. Never have memories been so short. And so now our capital markets participants are back at trying to make money again.

And yet...we have signs of continued contraction directly in front of us, aided and abetted by political witch hunts aimed at providers of liquidity (those would be banks). Europe's economy, hardly a picture of health, beset by fiscal disasters in Greece, Portugal, Spain, Ireland and even the UK, faces a pending currency crisis. Europe's so unlucky, first Iceland's banks collapsed and needed an English rescue, and now its volcanoes are firing back. Our own economy, struggling with historically high unemployment levels, faces unprecedented tax increases. And eventually our Fed will have to take away the blowtorch.

All of this is simply to say, be very careful. Markets and economies struggle and contract due to multiple factors - it's never one thing. But you have before you the recipe for a reenactment or continuation of that which we experienced in 2008 and early 2009.

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Race as a political weapon against the right 

Conor Friedersdorf has written a nice piece about the left's use of race against the right (which has certainly done more than enough to makes itself vulnerable on the subject). The context is the argument over the ethnic composition of the Tea Party movement, sharpened to a point by Charles Blow's weekend op-ed in the New York Times. Friedersdorf quoting Blow, money graph at the end:

In any context except a Tea Party, the vast majority of liberal writers would praise the act of highlighting the voices of “people of color” even if they aren’t particularly representative of a crowd or corporation or university class. Let it happen at a rally of conservatives, however, and this winds up on the nation’s premier op-ed page:

I found the imagery surreal and a bit sad: the minorities trying desperately to prove that they were “one of the good ones”; the organizers trying desperately to resolve any racial guilt among the crowd. The message was clear: How could we be intolerant if these multicolored faces feel the same way we do?

And later in the same piece:
Thursday night I saw a political minstrel show devised for the entertainment of those on the rim of obliviousness and for those engaged in the subterfuge of intolerance. I was not amused.

It’s this kind of piece that causes people on the right to think that on matters of race, they’re damned if they do, and they’re damned if they don’t — if they don’t make efforts to include non-whites they’re unenlightened propagators of privilege, and if they do make those efforts they’re the cynical managers of a minstrel show, but either way, race is used as a cudgel to discredit them in a way that would never be applied to a political movement on the left.


Of course, this double standard is no accident. If the right ever did succeed in attracting a significant percentage of America's blacks and Hispanics, the Democrats would suffer enormously. Democrats who do not want to see that happen, including black and Hispanic Democrats, have a great incentive to make any black or Hispanic who does embrace conservative politics to pay as high a social price as possible for advertising as much, because the left simply must deter more defections. Ridicule, such as by calling such defectors "minstrels", is a very effective way of doing that. None of this is news to Charles Blow.

CWCID: Tom Maguire.

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Sunday, April 18, 2010

It's "Training Day" for Goldman 

After briefly examining the figures over at OpenSecrets -- which clearly details that nearly two-thirds of the political contributions made by Goldman Sachs employees over the past decade went to Democratic candidates, and fully three-quarters of contributions during the 2008 cycle -- I wondered why the Obama administration's SEC would pick on Goldman for its first major mortgage meltdown enforcement action. (Senator Obama received $994,795 from Goldman employees during the 2008 cycle, more than four times the amount received by Senator McCain).

While I won't go so far as to say that the political contributions of its employees should have purchased adequate protection for the firm, the theme of payments made by private entities to government officials has a rich history in modern drama and film. How is the amount of consideration calculated, and what happens when the officials think that it needs to be bumped up?

Antione Fuqua's 2001 hit movie Training Day examines such questions in one of its plot elements. In a key scene, Alonzo (Denzel Washington, in an Oscar-winning performance), a police detective, "taxes" Roger (Scott Glenn), a purveyor of street pharmaceuticals. Things don't go well for Roger (toggle ahead to 4:00, NSFW):

"Bad news, dog ... had lunch with the Wise Men today, they say you gotta render unto Caesar."

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Saturday, April 17, 2010

A short note on the Goldman Sachs enforcement action 

By now, everybody knows that the Securities and Exchange Commission is bringing an enforcement action against the world's most consistently profitable investment bank, Goldman Sachs, for allegedly structuring a complex mortgage securities transaction for the benefit of John Paulson, a hedge fund operator. The New York Times has a fairly comprehensive write-up in today's paper edition. Outside the Beltway covers the waterfront. Interestingly, the SEC is not bringing an action against the supposed beneficiary, billionaire Paulson. By way of explanation, the SEC says that Paulson did not actually make any "misrepresentations" in the deal.

Well, no, but is it really the case that the SEC could not find a conspiracy or aiding and abetting claim to file?

More likely, the SEC did not go after Paulson, the dude who actually seems to have profited from this alleged fraud, because they want him to be a friendly witness against big, bad, Goldman Sachs.

So why go after Goldman Sachs? Setting aside the chance that the SEC might just be doing its job -- it is certainly possible that Goldman actually committed fraud here, although that firm has famously rigorous compliance and risk management programs, so I doubt there is anything endemic -- there are at least two other reasons.

First, Goldman is so unfashionably profitable that there are obvious political points to be scored among jealous people and redistributionists. Fair enough, such actions are the stock and trade of prosecutors everywhere, in all governments.

Second, and perhaps most significantly, an attack on Goldman softens up the political defenses of the financial services industry for the massive regulatory reform that Barack Obama wants to pass this year. Ezra Klein notices the connection without drawing the conclusion:

Blanche Lincoln's derivatives bill is up. It's called "The Wall Street Transparency & Accountability Act of 2010," and you can get the text, the summary, and the section-by-section here. And it's good timing for Lincoln: The Goldman Sachs fraud filing that's in the news has to do with their treatment of -- yes, you guessed it -- derivatives, which is going to make this issue seem a lot more concrete for people.

Dollars for donuts that "good timing for Lincoln" is no coincidence.

Of course, your results may vary.

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Friday, April 16, 2010

TGIF mini tab dump 

On the train back from New York after a delightful evening of conservative chit-chat (where I met Harry Stein, the very interesting and amusing author of I Can't Believe I'm Sitting Next to a Republican: A Survival Guide for Conservatives Marooned Among the Angry, Smug, and Terminally Self-Righteous, an important therapeutic read for we wingnuts who live in blue states). I only have a few minutes, so you only get a sprinkling of tabs for now, but my Friday calendar is a bit light so there is the exciting possibility of more later.

The Obama administration is ordering hospitals that receive federal funds, which would be all of them, to allow the partners of gay patients to visit. On the one hand, it is, frankly, asinine that such an order needed to be issued. Where's the humanity in the contrary policy? On the other hand, we can expect more of this sort of social engineering via health care policy. A lot more. That is, after all, the whole point of health care "reform."

You know how Congressional Democrats have their panties in a wad over public companies booking liabilities because of the enactment of health care "reform"? Henry Waxman has ordered hearings to inquire into this outrageous accounting, seemingly oblivious to the point that these companies are booking charges, not profits, which public companies rarely do with enthusiasm. Anyway, Skadden Arps takes a look at the legal pitfalls that await the companies summoned to explain themselves. They are not trivial. Yet another example of the Congress politicizing a private business decision to the detriment of American economic growth.

Important celebrity news: Kate Hudson got herself some breast implants. Not that there is anything wrong with that.

The "most dangerous cities on the planet." We have two of them. See if you can guess them without peeking.

Vulcanology: Awesome photos of the eruption in Iceland.

Tom Maguire digs in to the Holder Justice Department's perhaps surprising indictment of the NSA leaker. Yes, Plame gets a mention. They seem to be picking on leaks to the Baltimore Sun, though. The Grey Bitch is going to get away again.

Finally, an outrageous invasion of privacy, and further evidence that we are fools to trust the schooling of our children to a government monopoly.


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Thursday, April 15, 2010

On the train to NYC tab dump 

There have been some complaints about my posting frequency. My bad. I have a vast plethora of tasks, large and small, professional and personal, that demand my attention, plus I am training for an athletic event which I will disclose to you when and if I participate and finish. We beg your forbearance.

Notwithstanding that, however, here is a big throbbing heap of accumulated tabs.

The vaunted rise in consumer thrift in perspective.

The University of Michigan Law School "Innocence Clinic" reverses another injustice. Good for them. No American should languish in jail under such circumstances. Read the whole thing.

Women can be blinded by jealousy. Literally. Well, almost literally.

SEC Commissioner Peredes, a holdover Republican, slams the Dodd financial regulation bill. His general point, that some risks are worth taking, is very true. Whether it applies in this case is another matter entirely.

The New York Times notices that "tea party backers" are "wealthier and more educated." Usually, liberals are all for ideas cooked up by "wealthier and more educated" people, they being the usual source for the idea that the average person is not competent to solve his or her own problems. But not, apparently, this time.

Women, please be careful when using the Wii Fit. Or not.

Union dude writes a memo that expresses the hope that New Jersey Governor Chris Christie dies. Christie is outraged and demands the union dude's resignation. On the one hand, this sort of oversensitivity and manufactured outrage over a hope for death and violence is tedious beyond belief. My new favorite governor needs to chillax. On the other hand, the liberals started it, having predicted hundreds of the last 0 attempts to assassinate Barack Obama, for example.

A black Republican woman describes her experiences with Haley Barbour. Not at all big tentish. I'll say it: I've never found the guy to be the least bit appealing.

Glenn Reynolds notices that initial jobless claims are up "unexpectedly." Invictus blames Cesar Chavez!

A near and dear TH relative notes on her Facebook page that there has been another protest going on today:

Participate in the Day of Silence. It's a national youth movement bringing attention to the silence faced by lesbian, gay, bisexual, and transgender people and their allies. Our deliberate silence from 6:30am to 6:30pm, April 16, 2010 echoes that silence faced by the members of the LGBT community, caused by anti-LGBT bullying, and harrassment. Think about the voices you are not hearing today. [NOTE: Date corrected on Friday morning. The day of silence is April 16, so you have not missed it yet.]

The implosion of Texas Stadium.

ClimateGate becomes WhitewashGate.

And ACLU initiative I can get behind.

Not surprisingly, TH fav liberal blogger Ezra Klein does not know anybody who has moved from one state to another because of taxes. I've known many of them. Perhaps if Ezra did know such people he would not be such a liberal.


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Wednesday, April 14, 2010

Two very bad headlines 

Israeli officials say Syria gives Hezbollah Scuds
JERUSALEM – Israeli defense officials said Wednesday they believe Hezbollah has Scud missiles that could hit all of Israel, a day after Israel's president accused Syria of supplying the Lebanese guerrillas with the weapons for the first time.

Israeli officials say the introduction of Scuds could alter the strategic balance with Hezbollah, the Iranian-backed militia that battled Israel to a stalemate during a monthlong war in 2006.

President Shimon Peres, speaking in Paris, charged that Syria is playing a double game, talking about peace, while "it is delivering Scuds to Hezbollah to threaten Israel," according to a statement from his office.

US officials: Iran could be a year away from bomb
WASHINGTON – Iran could amass enough nuclear material to build a bomb in about a year and with help might eventually be able to field a missile powerful enough to reach the United States, senior military and intelligence officials said Wednesday.

Four top representatives of the Obama administration told Congress they are pursuing new sanctions on Iran urgently and add that a military strike has not been ruled out.

President Barack Obama has said he won't "take any options off the table with respect to Iran," Undersecretary of Defense Michele Flournoy said. "Now, that means to me that military options remain on the table."
Double Ugh.

I hope that the Israelis will have a really good anti-missile system in place, and that the United States will, too. Not just good, actually, but perfect, if there is such a thing.

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No bounce 

The results of yet another poll indicate that President Obama has not enjoyed any sort of measurable bounce from the passage of the health care bill.
President Barack Obama's national standing has slipped to a new low after his victory on the historic health care overhaul, even in the face of growing signs of economic revival, according to the latest Associated Press-GfK poll.

The survey shows the political terrain growing rockier for Obama and congressional Democrats heading into midterm elections, boosting Republican hopes for a return to power this fall.

Just 49 percent of people now approve of the job Obama's doing overall, and less than that — 44 percent — like the way he's handled health care and the economy. Last September, Obama hit a low of 50 percent in job approval before ticking a bit higher. His high-water mark as president was 67 percent in February of last year, just after he took office.
While George W. Bush would have been quite happy with those approval figures during virtually any part of his second term, it is hard to see how a president with 15 months on the job can punch back through the 50% level and stay there for the next couple of years. Most political experts would not bet against the re-election of an incumbent with a 50% approval rating (or near that figure), depending upon a myriad of other factors, not the least of which would be the identity and qualifications of his opponent. Perhaps the 2012 Democratic strategy will be to hope that no Republican challenger can catch fire and develop the kind of devoted following that Senator Obama generated in 2008.

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Zero for seven 

CNN host Larry King is filing for divorce.
Larry King has filed for divorce from his seventh wife, court filings show.

The 76-year-old host of CNN's "Larry King Live" filed Wednesday to end the couple's nearly 13-year marriage, citing "irreconcilable differences." He married Shawn Southwick-King in a hospital room in 1997 shortly before surgery to clear a clogged blood vessel.
Southwick-King is 50 years old, so, doing the math, it is easy to see why this marriage failed: thirteen years ago, Larry King was 63 years old and his new wife was 37 years old, and according to the 50% plus 7 formula, King should have married a woman at least 38 years old in 1997. Just a bit too much of a stretch.

Eighth time will be the charm, big guy.

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News you can use: Regarding gross old toenails 

Is there anything Vick's VapoRub cannot do?

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Don't Buy M-Rated Games for Your 12-Year Old 

Speaking as a 19-year old college video gamer, one of the greatest plagues the community faces is the prepubescent.

I'll use the Xbox Live and the recent (and really, really good) release Call Of Duty: Modern Warfare 2 as my examples, though this problem is pervasive. There are several very good reasons to take the advice in the title of this post to heart.

The first reason that people usually come to is that the images, language and themes in Mature-rated games are too graphic and desensitizing to the young. While that's true to an extent, it is also true that most of them take a morbid glee in it. Few of them are, err, mature enough to deal with what they see with the proper weight it merits, so instead of being traumatized forever, a lot of them embrace it, and that's far worse. For example, in Modern Warfare 2, there is a stage (which got a lot of controversy and free publicity for the game) where you are an undercover CIA agent who has infiltrated a (Russian, Ultra-Nationalist) terrorist group that's trying to start a hot war between Russia and the US by going into Moscow International Airport and killing everyone in sight, nevermind the fact that you're secretly American, and you're not actually required to kill anybody. Now, because I grew up a tad since I was 12 (hard to believe as it may seem), I dealt with it in a fairly mature manner, realizing the game was trying to make a powerful moral statement. But the kids I talked to about it with on Xbox Live said it was their favorite level.

Now, the practical, less moral and preachy reasons. The prepubescent are extraordinarily annoying, by and large. They have high-pitched, squeaky voices, they whine when they lose, and they're extremely creative when they curse. (I'm really tempted to post some of these for humor's sake alone, but I won't.) They also are in the greatest demographic for cheaters, using techniques like shield-boosting and simply hacking the game to unlock the best weapons and skills, rather than working for it like the rest of us. That's just my pet peeve, though.

Furthermore, the parents that buy these games for their pre-teens are irresponsible, or at the very least, they're rather short on integrity, because I know that the kids whine and beg for the game because all of their friends have it, and rather than sticking to their guns about a game they suspect is less than healthy, parents will give in and buy it for them. Then one day when Mom is passing by Timmy's room, she'll notice he's shooting machine gun in an airport filled with civilians with gleeful abandon, and she'll assume a) the game made him this way and b) games are the work of The Devil. (in before WLindsayWheeler jumps in agreeing with point b).

Therefore, parents, pay attention to what you're buying before you buy it, like everything else. If you educate yourself and you know your child, it'll pay off in the long run.

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Tuesday, April 13, 2010

They are only reading it now 

As we have been writing for months, the most shocking thing about the just-passed health care "reform" law is that virtually nobody comprehensively understood its consequences to any meaningful degree. The latest evidence:

In a new report, the Congressional Research Service says the law may have significant unintended consequences for the “personal health insurance coverage” of senators, representatives and their staff members.

For example, it says, the law may “remove members of Congress and Congressional staff” from their current coverage, in the Federal Employees Health Benefits Program, before any alternatives are available.

The confusion raises the inevitable question: If they did not know exactly what they were doing to themselves, did lawmakers who wrote and passed the bill fully grasp the details of how it would influence the lives of other Americans?

Asked and answered. We all knew the answer when Nancy Pelosi and Harry Reid worked their legerdemain, but the New York Times is only willing to say it now.

Read the whole thing to get a sense of the transporting stupidity of it all.

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Monday, April 12, 2010

New you can use: Tax advice for the Obama years 


Buy munis, book losses, avoid marriage, consider a Roth conversion now and get your Lasik eye surgery next year.

Heckuva way to run a railroad.

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Flora and fauna: Virginia blue bells, lilacs, and flutterbys 

We took a morning walk through the woods, and saw a lot of flowers and butterflys. We're off to Appomattox for some history and lunch, but not before leaving you with the best of the bunch.

At Chellowe


Butterfly on blue bells

Caught this guy mid-flight:




Of course, professional and amateur entomologists can contribute by identifying these species in the comments.

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Contrarian indicator 

Damn. This could be quite possibly the worst economic news I've seen in weeks.

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Sunday, April 11, 2010

Hungarian rhapsody 

My mother was born in Budapest, and her father was active in post-WWII politics there before being, er, persuaded to leave (the alternative being a long unpaid vacation in Siberia), so I keep an eye on developments in Hungary.

The AP headline today is: "Hungary's ruling Socialists suffer stinging defeat."

AP's lede cannot resist the temptation of creating an association in the reader's mind between the center-right Fidesz party and the racist Jobbik far-right party (which could be ridiculed simply because of the funny hats some of the members wear):
BUDAPEST, Hungary – Hungary's center-right party reclaimed the right to govern on Sunday, winning over 50 percent of the vote and handing the ruling Socialists a humiliating defeat. Extreme rightists backed by black clad paramilitary troops took more than 15 percent to come in third.
Blaming problems on Jews and Gypsies is nothing new in Hungary, and that ugly phenomenon can be expected to increase in frequency during tougher economic times. I, for one, hope that Jobbik weakens quickly and withers away, and that Fidesz can harness the natural ingenuity of the Hungarian people (there's an old saying, "a Hungarian can go into a revolving door behind you and come out ahead of you") with a somewhat more restrained fiscal policy.

Whether Socialist parties in other European countries lose power is hard to say, and may depend on the party currently sitting in the majority -- clearly, there is a feeling in Europe, given the economic climate, that it is time to kick the bums out, whichever party the bums are in.

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In which nearly all of us will agree with President Obama 

AP reports on President Obama's remarks before the beginning of the summit in Washington, D.C., centered on securing the world's nuclear stockpile.
"The single biggest threat to U.S. security, both short-term, medium-term and long-term, would be the possibility of a terrorist organization obtaining a nuclear weapon," Obama said. "This is something that could change the security landscape in this country and around the world for years to come."

"If there was ever a detonation in New York City, or London, or Johannesburg, the ramifications economically, politically and from a security perspective would be devastating," the president said.

"We know that organizations like al-Qaida are in the process of trying to secure nuclear weapons or other weapons of mass destruction, and would have no compunction at using them," Obama said.
President Obama almost sounds like his predecessor in those remarks, or maybe he has just really gotten into the FOX TV show "24" as it winds down its final season. Now that we can all agree that Islamic terrorists would like to have a nuclear weapon, and would use it if they had it, what should be done about that problem?

Recall that there were more than a few people in 2001 (a good number of whom, in 2007-2008, became part of Senator Obama's base) who did not want military action taken against al-Qaida in Afghanistan, because many innocent Afghans would be killed. These concerned citizens forwarded what became a famous article by Afghan-American Tamim Ansary in a viral email, stating, essentially, please don't bomb and please don't invade with ground troops. President Obama must stay mindful of that part of his base, particularly in the present domestic political climate, with his overall approval ratings down.

Yes, securing nuclear stockpiles (particularly those from the former U.S.S.R.) is a critical element of a policy aimed at preventing terrorists from acquiring nuclear weapons. Stopping rogue states (cough. Iran, cough) from developing new weapons is another policy element. Having a forward-leaning military and political strategy which creates a great deal of operational friction for al-Qaida and its allies might be the most important leg of of the policy, and it is there that the Obama Administration is being criticized by Fouad Ajami in Friday's Wall Street Journal, who perceives that U.S. power is "receding" and not leaning forward:
All this plays out under the gaze of an Islamic world that is coming to a consensus that a discernible American retreat in the region is in the works. America's enemies are increasingly brazen, its friends unnerved. Witness the hapless Lebanese, once wards of U.S. power, now making pilgrimages, one leader at a time, to Damascus. They, too, can read the wind: If Washington is out to "engage" that terrible lot in Syria, they better scurry there to secure reasonable terms of surrender.

The shadow of American power is receding; the rogues are emboldened. The world has a way of calling the bluff of leaders and nations summoned to difficult endeavors. Would that our biggest source of worry in that arc of trouble was the intemperate outburst of our ally in Kabul.
It is good that there is a consensus with respect to defining the problem -- keeping nukes out of the hands of terrorists -- and it would be even better if there could be a consensus regarding the best policies to address the problem.

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Springtime in Virginia 

We rode through Buckingham and Cumberland counties this afternoon, basically from five miles east of Sprouse's Corner to Farmville, around 29 miles round trip over hill and dale. Before the ride I snapped a few pictures of the setting, abloom as it is with redbuds and dogwoods.

Ancient oak


Virginia spring

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Subversion, or anti-subversion propaganda? 

Glenn Reynolds links (without comment) to this site, which purports to organize people to "crash Tea Party" demonstrations by posing as genuine demonstrators with signs and such that "exaggerate their least appealing qualities." It seems to me that there are at least four possible explanations for this site:

  • It is genuine, insofar as it is as it describes itself: An anti-Tea Party black op.

  • It is a pro-Tea Party propaganda device to confuse the media's narrative regarding the "least appealing qualities" of the movement, or its hangers-on ("Hey, Mr. New York Times, how do you know that dude with the racist sign wasn't a liberal in disguise"?).

  • It is an anti-Tea Party device to collect the names and email addresses of people eager to do dirty deeds for the left.

  • It is a pro-Tea Party device to collect the names and email addresses of people eager to do dirty deeds for the left, so that they can be referred to the media or law enforcement, as the case may be.

  • Are there other explanations? Which is the most probable? Which is the least?

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    My whereabouts 

    I'm cycling in Virginia and between runs eating, drinking, and making arrangements to show my friends from elsewhere the local historical sites, which are many. Monticello today, and Appomattox tomorrow. Bandwidth is not very "width," here, but I should have a chance to toss you some links and perhaps even photos later.

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    Friday, April 09, 2010

    New Jersey's (non-charter) public schools 

    The prosecution rests.

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    News you can use 

    Casual sex is on the rise in the United States. Whether that is good or bad, you need to be aware!

    If you eat vegetables for medicinal purposes only, then you will be interested in this news.

    Think carefully before walking away from your mortgage.

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    Another victory for the nannies... 

    ...and another defeat for freedom.

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    Friday morning Atlantic City tab dump 

    Been tooling away in management meetings for the last couple of days, and then I will disappear in to the Virginia woods for a few days of cycling through the flowering trees. Blogging will depend on my air card reception, which will be somewhere between weak and non-existent. But here's what I have piled up in the last day or so.

    A short-hand look at the differences between conservatives and liberals. (Heh.)

    Ronald Wilson Obama??!? Conservatives are going to hate this piece, but in the interests of self-preservation ought to worry that it might be right.

    Retail sales and jobs are improving, which is annoying to both political parties.

    Both Republicans and Democrats are rooting for bad news. Republicans loath to give President Obama credit for anything, and Democrats want another stimulus bill passed. Hence, a recovery defeats what the parties seem to favor as an economic means to a political end.

    A sharp observation, and a measure of the cynicism of our political classes (and many bloggers on both sides). Future economic growth depends very much on our national mood, and responsible leaders should be working to improve that mood, not dampen it. A plague on both their houses.

    The New York Times, not surprisingly, trippingly skips by the real story. Bonus: A revealing correction at the Grey Lady.

    I admit, I do not understand the appeal of the weepy TV people, not Oprah and not Beck. But boy do they tap in to America's wallet.

    The "favorables" of the Democratic Party are at an 18-year low. No wonder Bart Stupak is retiring.

    A simple thank you would improve my mood considerably. Because I am a realist, I expect the vilification to continue.

    Unexplained discrepancies in the measurement of Arctic sea ice and the media uses thereof.

    At this point, only the surprise involvement of Eliot Spitzer could make the John Edwards affair more sordid than it already is. (Just a little fantasy of mine, move along.)

    Now that the Democrats (and the more irresponsible Republicans) have spent all the money that can possibly be collected by the personal income tax until the end of time, they are quite obviously laying the groundwork for a value-added tax. From a politician's standpoint, a VAT is a virtually bottomless piggy-bank because it is so invisible to the average voter. All they will see is that prices are going up and -- by all appearances -- "corporations" are responsible.

    Ezra has some sharp-eyed observations about two surprisingly successful "old media" organizations, NPR and The Economist.

    Keep the flags flying.

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