< meta name="DC.Date.Valid.End" content="20050825"> Amendment Nine: May 2005

Friday, May 27, 2005

Outsourcing Grades

This article was sent to me by Mitya, and I greatly appreciate it. The topic of grades is immensely important; to me, to this country, and to all knowledge loving beings everywhere. In fact I believe we just don't take grades seriously enough anymore. This will sound odd to most educators who live in a hyper-sensitive, grade inflated world. But it isn't odd at all. The competition to "get As" is as much as a downward spiral as shopping at Wal-Mart. In fact, it is worse. Here is what I mean.

The article suggests outsourcing the grading function because its tedious, time-consuming, and ultimately wasteful from a pure teaching point of view. That is, the teacher derives no benefit from grading, and most of the students don't derive much of a benefit either. Rather than waste time on this administrative task, send it to India and let them do it while the teacher can focus time on more important, "value added" tasks.

When did it become okay in America to view education this way? When I grew up, grades were everything, and the teacher did her or his best to make sure your grades improved. If your grades improved, that meant you were improving. That isn't the case anymore. Most colleges and graduate schools today use multiple choice tests and grade curves to determine who is the "best in the pack". Or, as a former colleague once told me: "the goal of these finals is to separate the goats from the sheep."

The problem with that approach, and the problem with the approach argued for in this article, is that the pack just might not be so hot. Just because one student, and one student only, gets an A+ doesn't mean that student deserved it. Just because one student is the worst in the pack, doesn't mean they necessarily deserve the low mark they get either... the pack he's in might be a really good one. I have ample anecdotal evidence to support this, but I don't think its too difficult for one to follow this logic. When standards of excellence are determined ex post, what you get are popularity contests. Excellence slumps towards normalcy; or "tends toward the mean" as the statisticians say.

I have an even more revolutionary idea than outsourcing grades. Why not just get rid of grades altogether? Or at least, get rid of the pack, curved, popularity contests we call grades today? Why not ask every teacher to assure that the student earning an A today would have earned an A yesterday, and that each particular student deserves the grade they are getting? Why not ask teachers to evaluate their students openly, honestly, directly to the student rather than through the medium of grades? You can still have grades for credit purposes, but why not give tailored feedback to students instead of the regurgitated phlegm we call grades today? Think this is revolutionary? It isn't, its how teaching has always occurred until very recently in historical terms, and it is a shame that we don't go back to it. Incidentally, such a program is already in effect at St. John's College (the don rag-note the historical references), perhaps we can study that to see if its really a good alternative?

Which is why you can't

IM on this blog. Ha ha ha. More gas on the fire here. I'll be chronicling the latest efforts to up-end the hedge fund industry over the next little while. Should be good fun.

UPDATE: CNBC's "Squawkback" poll this AM is

Should Hedge Funds be more tightly regulated? Yes // No

I have a poll, should CNBC reveal its conflict of interest with respect to hedge fund regulation? Yes or No?

Thursday, May 26, 2005

The Truth Comes Out

Ever wonder why CNBC and other corporate cheerleaders are so negative on hedge funds? Ever wonder where all these rumors about hedge fund scandals come from? Here's a hint.

Wednesday, May 25, 2005

Instrumentalism v. Formalism (or Truth v. Beauty)

I've been following a little debate on legal instrumentalism and its drawbacks versus legal formalism and its drawbacks. I'm amused by this debate. Amused and alarmed. Lawrence Solum opens things up with a post detailing Brian Tamanaha's critique of instrumentalism. The pertinent quotes can be found in the abstract, but let me offer my own synopsis. Legal instrumentalism is viewed as the prevailing legal theory of the day. But the author cautions us to realize it hasn't always been so, in the past, formalism was the dominant epistemological framework for jurisprudence (I agree with this, but doesn't everyone know that?). Then the author argues that if the instrumentalist experiment, where law is viewed as an instrument for social change, what (and I"ll quote here) results is:
a Hobbsean war of all against all that takes place within the legal order over control of the legal apparatus. Opposing groups within society will attempt to seize or co-opt the law in every context possible, and in every way possible, to enlist or wield it on behalf of achieving the ends they desire. Even those groups that might prefer to abstain from seizing the law are forced nevertheless to engage in the contest, if only defensively to keep it out of the hands of their less restrained opponents. Spiraling conflicts will ensue with no evident halting point or termination (short of exhaustion of resources or total victory by one side).

Depressing huh? First, let me just say this, to think that anything worth a damn has ever been anything but a "Hobbsean war of all against all" is just naive. Really folks, don't they require people to read anymore? Where I went to college, they did, and we had a name for people who used this sort of pessimism as an argument, "the world is flat club." As in, "yes you are right, the world is flat. Now run along and fall off why don't you?"

Second, and more importantly, in sum, the author, and Solum in his lexicon, argue that legal realism is undone by its own conceit. Its turned into a slippery slope of relativism. Here is where the rising tide of legal formalists, and the dominant crowd of liberal apologists, miss the boat entirely. Legal realism's critique is to the entire study of jurisprudence exactly what Nietzsche's critique is to the entire study of philosophy: a gutt check so severe, of such dramatic proportion, that the entire body of thought may not ever recover.

What makes this critique so important is not its substance either. No one cares, or at least they shouldn't care, what Nietzsche's personal philosophy is or was. Just as no one cares, nor should they care, what was the political agenda of Karl Llewellyn. The critique is so devasting because of its simplicity, its elegance, its inability to be trumped by a more simple explanation. Law is veiled power, so say the realists. And philosophy is veiled power as well, so says Nietzche. How can either discipline ever bounce back from this?

The doom and gloom Tamanaha sees isn't "instrumentalism", its the last gasps of law itself. The rise in law and economics shows where the "law" is heading, to the statistician's corner where bean counters determine legal outcomes based on scientific principles and social engineering precepts. Law, my friends, is dying. And just like its precursor, philosophy, it is being replaced by science proper. Until legal theorists start realizing this, and stop trying to escape to some alternate reality like formalism, they are doomed to repeat the silly dance philosophy departments in America play with Kant every day: stripping content out of contentless thought and championing the most empty freedom ever found.

The realist critique allows political reality to consume law, and legal theorists are left running for the formalist foothills. But these offer no sanctuary, legal formalism is as impotent a jurisprudence as no jurisprudence at all. Those theorists working to pin the law back to its natural beginnings are the only ones trying to save us from anarchy, those theorists debating instrumentalism versus formalism are fiddle players at the inferno. Sorry, but it needed to be said. More fiddle tunes can be heard here, and here.

Tuesday, May 24, 2005

Lindsey Graham, Political Genius

First, in the summer of '97, he started the coup against Gingrich. Lots of folks said one of the two wouldn't last in DC long, turned out to be Gingrich. Next up, he goes after leader Frist, again lots of folks said one of the two wouldn't last long, and today it looks like its gonna be Frist first.

This morning, the christian conservatives rise up in a rapture over this, their ire directed squarely at Sen. Graham, and as a result, Lindsey looks just like the independent, straight-talking, statesmenlike senator that South Carolinians just love. With every step they take against him, with every threat they throw at him, one more re-election is assured for the smooth talking southerner.

The only question is, whose Lindsey going after next? And further, can anyone stop him?

Monday, May 23, 2005

Sidelining the Surgeon

Make no mistake about it--surgeons don't like their operations cancelled, and Frist is going home with a "what am I good for now" mentality. His colleagues forcibly wrenched the scalpel from his hand, and for its effect on his psyche, they might just as well have turned the scalpel and thrust it between his legs. Politicians retreat from defeats to consider the next contest; surgeons retreat with shock, horror, and deep depression. For the first time in his life, he has been publicly disrespected, and in the immediate aftermath he cannot cope. The White House will help him spin it, but he will not recover from the simple fact that some his colleagues were unwilling to trust his judgment in the operating room. His will not be permitted to become the surgical serial killer of the senate.

Sunday, May 22, 2005

Long on Porridge

... I am not among those who fear the people. They, and not the rich, are our dependence for continued freedom. And to preserve their independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts, as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expeses; and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes.

-- Letter from Thomas Jefferson to Sameul Kercheval, 7/12/1816

The surgeon and his subordinates.

Confronting Frist requires disabling his surgeon mentality--of entitlement not only to high fees and wide public respect but also to absolute obedience in the operating room. He will succeed as long as his colleagues who disagree with him nevertheless defer to his "leadership"--which is exactly what they are saying they will do. Only if it becomes obvious that he is not worthy of their respect, that he's an imposter in the operating room, will they withhold their obedience. And only then will he retreat. There's plenty: (a) Frist stands publically accused by his peers of violating medical ethics and issuing incompetent diagnoses; (b) his employee stands formally indicted in federal court for conspiracy to deprive American citizens of the right to vote; and (c) he stands humiliated as a liar on the senate floor, for saying he believes filibusters of judges are unconstitutional when he's filibustered them himself. And you're going to pass the scalpel to this quack?

Friday, May 20, 2005

Start-Ups for Up-Starts

One of the better articles I've read by Paul Graham. He argues, rather elegantly, that the cost of starting-up has fallen so far below the cost of attending college that today's 18 y.o's should begin a business venture instead of going to school. Following reason like this:

So if the algorithm is to filter out people who say stupid things, as many investors and employers unconsciously do, you're going to get a lot of false positives.

Graham persuades me that the current sorting systems for valuing college grads is inefficient. He also makes clear this trend shall only continue, resulting in more buyouts of smaller start-ups by larger corporations. I have a nephew just beginning his college search now. After reading Graham's argument, I'm going to talk to his father about that.

You don't understand Frist

. . . unless you understand that he is a surgeon--first and always. And you don't understand surgery unless you understand that it is a carefully scripted drama, where the single actor is also the stage director and all other players are just that--players. (Not for nothing is the operating room called a "theatre" in most of the English speaking world outside the USA.) Nor do you understand surgery unless you understand that it presumes certainty at the outset--"there is a lesion or other anomaly, it must be excised or corrected, I will do it, and everybody else will assist me at my direction." And finally, you do not understand surgeons unless you understand what they will not admit but what is universally true--they carry a lifelong sense of entitlement, really a "right," to be overpaid and overly deferred to. That sense of entitlement is a direct result of medical and residency training practices that first of all inflict intense overwork (80 hours a week for four or five years is the current limit for residents--a limit that is bitterly opposed by most senior attending physicians and hospital administrators who complain that it deprives them of the cheap labor they need to make their own practices and institutions economically viable). But this overwork is accompanied by equal doses of a "pay day someday" promise of good times coming in their later practice--when fees will be high and community adulation will be profuse. More later on how to confront, resist, and defeat a surgeon who thinks he performing surgery on the body politic. (Hint: hit him where it hurts--at his sense of entitlement to respect for honesty and competence.)

Thursday, May 19, 2005

Debt Restructuring Cycle

Its coming to a close now, and I'm filled with nostalgic reflection. Worldcom, Enron, Adelphia, ah, those were the days. I'll post more on what we've learned a little later, at least one goose is still in the pot. For now, I'd like to recommend to any other vultures out there with a little time to read, Sol Stein's "Feast for Lawyers". Federalist gave me his copy awhile back, and I just finished it. Great book, slightly repetitive, and there are several "inside" references that no one except people directly involved in the Stein and Day Chapter 11 would ever understand. The best line in the book though is one I'll treasure:

Do you eat with your hands when a knife and fork are readily available? If you don't, in a Chapter 11 you'll meet people who do.

Those "people" are the bankruptcy bar, who Stein skewers with great accuracy. Good fun.

More on that Kirby Article

I've reread the Kirby article now. It's pretty devastating. Essentially, if he's right, a financial meltdown of massive proportions is about to occur. Let me give you an example. When I was about 12 years old, I went down to the shore with my dad. We parked in a public parking lot, and were going to go fishing. Some guy who looked like an official of some sort was handing out flyers and selling tickets. He was making quite a ruckus, and people seemed very enthused to speak with him. We approached. "How you two doing today!" He roared. "Let's get those rusty fishing poles back in the wagon and get ready to have the night of your lives." He continued: "In just a few short hours the northern public access parking lot will be filled to capacity with a carnival like you've never seen." He went on for several minutes, finally letting us in on the deal, 2 tickets, $2, right here, right now. We bought them. As did hundreds of others (it seemed) that day. Later that evening, when we came back, there was no carnival anywhere. We weren't the only ones tossing our tickets in the trash. Lesson: its okay to sell dreams, as long you deliver. If you don't deliver, you're just selling trash.

The implication of the Kirby article, if true, is that our government has been selling trash, literally, for the last few months. They've been saying lots of hedge funds have taken the place of Asian Central banks, and have continued to buy long treasury notes. According to this article though, that is simply not the case. There is no Caribbean carnival. If there were, it would be gone by now anyway. 40% losses in a $20B position would tend to do that to anyone, except the US Govt. The case that we're printing money and cooking the TIC books is a pretty good one. It deserves some more attention and examination, but its a pretty good one. Go read the article, read the initial article too, and then come back and let me know what you think!

I'm Non-Partisan

Or, rather I should say, I'm non-caring when it comes to politics (unless of course the politics ends up stealing some of my money, in which case I'm quite partisan). I just read this Salon article by Juan Cole (he has a little blurb here too if you don't have a salon subscription). Someone had printed it out and left it on a stack of other papers that I routinely read through. Not sure why this was there, probably by accident, but damn it to hell it really pissed me off! The article really made me angry. What used to seem like a bunch of good ol' boys looking to hit the enemy back, now looks like a bunch of fraternity brothers looking for their next con-job. After reading this article, I asked myself what seemed like a pretty crazy question: who told the President to lie, and more importantly, why?

It's official

As of the end of June, I'll no longer be in NYC. Taking a job at a small hedge fund starting up in Singapore. Some of you are no doubt shocked, it was a well guarded secret. Not sure if I'll be able to continue posting here. Not sure I'll have time to. As one can imagine, I'm excited and anxious. There is a lot of potential in eastern Asia and the hedge fund industry is just beginning to move to criticial mass there. Hopefully I'll make enough to money retire on in three years time!


I do not feel that this requires much commentary. My hope is that more will follow. This took a great deal of courage to write and sign. I'm impressed, and moved.

Printing Money?

Thats probably the first conclusion you come to when you read this, and this. Another conclusion is that people at the Fed and Treasury are idiots. Neither conclusion is a good one.

Wednesday, May 18, 2005


Looks like I'm not the only one with a beef against CNBC, Bill catches them up to their ususal BS. Thanks to Mover Mike for the heads up.

Tuesday, May 17, 2005

Uzbekistan's Nightmare

It is slowly becoming clear that what happened in Uzbekistan over the weekend is nothing short of a massacre. Some reports indicate it may be worse than Tianenmen Square in 1989.

The world has been cheering along democratic revolutions over the past few months, but it seems that the further off the beaten path, the less attention. Uzbekistan is pretty damn far off the beaten path. I blogged at Democracy Guy that US policy in response has been pretty pathetic. What worse nightmare for people groaning under tyranny than to have the US turn a blind eye when the tyrants start shooting.

Since 9/11 there has been a US military base in Uzbekistan. Should the US stand by the thugs who perpetrated this crime, it will be incredibly counterproductive. Stay tuned...and get supportive.

Long on Coffee

Lots of folks have been commenting on the bean market. Yesterday someone told me they thought it was all smoke caused by people who got in during the late 90s. Could be, but the fundamentals alone are worth the risk in my opinion. 60% to 70% below their peak, coffee is certainly in position for a run-up. Combine that with the fact that coffee producers have been exiting in droves over the last three decades and a coffee tree takes 3-5 years to produce beans... you've got a good bull market brewing. I also personally think that coffee will explode in China over the next 3-5 years, just before new trees start producing. Starbucks already has about 200 stores there, and as economies boom, coffee 's consumed (thats my line, but you can use it for free). And remember, annual global demand already outstrips production by about 10 million bags, and inventories are at their lowest point in nearly two decades. Throw in a few extra million caffeine guzzling Chinese and you've got a coffee investor's paradise. I'm going to put a pot on, and brew a little profit.

Monday, May 16, 2005


You mean Conservatives outnumber Liberals? Oh shit, plan B guys, this ain't gonna work.

Fraud Is as Fraud Does

Many of you read the Wall Street Journal article today on Adelphia's creditors. Its pretty good as a short context of the fight over the auction proceeds winds down. On one side are Arahova creditors (an operating company acquired by Adelphia pre-petition) and on the other side are the senior holdco creditors at Adelphia. The article briefly describes the intercompany claim which senior holdco creditors assert entitles them to be paid out first (essentially, they argue THEY are Arahova creditors to the tune of $1.9B). The article then says that Arahova noteholders assert the whole intercompany payable is a result of fraud (which everyone knows was pretty substantial at pre-petition Adelphia).

Here is what the article didn't say. Just before filing bankruptcy, Adelphia (the holding company) filed consolidated financial statements in their scheduled SEC disclosure. In this statement, Adelphia listed a $1.9B note receivable from Arahova. Just after this, they filed chapter 11. The receivable had no note, no explanation, no discussion in the MD&A section. Generally speaking, an almost $2B receivable gets a little mention somewhere in the company's statements. It was pretty clear to everyone then, as it is now, that receivable was bull. No one can point to anything which would justify the intercompany claim. Adelphia was likely cooking the books, as they did before, to make themselves appear to be a creditor to the operating companies where value still existed.

Recently though, the spread between senior holdco bonds at Adelphia and the Arahova notes has tightened. The market seems to be impressed with the defense holdco creditors are mounting, and feel a deal is in the works. This may be, I have no way of knowing for sure. However, as respecting the law, it seems clear to a lot of us that in a chapter 11 case where the financial statements prior to the petition were fraudulent, the party arguing for the veracity of those statements bears the burden of proof. If you unwind the transactions and tranfers between Arahova and the other Adelphia opcos at the time (this is a favorite point of those arguing the holdco creditor position) you have a hard time meeting this burden. In fact, it doesn't even pass the smell test. Markets need to know that when they see fraud, its going to stay fraud, absent proof to the contrary. Unless a silver bullet appears, I don't think the holdco creditors have much by way of proof. (note: if there was a silver bullet, it probably would have already appeared). If I had a few million to play with, I'd go long Arahova and short Adelphia holdco notes.

Grist Ground Frist

You thought the Dems were the only party capable of a little factionalism?

Supreme Court

Overrules ban on interstate wine shipments... "And there was much rejoicing."

This occurs just in time for my mid-summer party. O'Connor, Rehnquist, Stevens and Thomas... you are NOT invited, the rest of you are.

Sunday, May 15, 2005


When you hear stories like this, you gotta think its almost over.

Saturday, May 14, 2005

Want to laugh?

Click here, and follow the link to an mp3 file, about a 3 minute voicemail which will leave you in tears.

Friday, May 13, 2005

Bow wow

Germany sucks. I'm off to the Heidelburg to see if they'll take me back. Oh yeah, and by break I meant end of day. Who the hell has time for this shit after lunch? In all seriousness, let me end the week with this thought, everyone has been sniping at hedge funds this week, and even hardened hedge fund veterans know that this is just the beginning of it, eventually regulation will make the whole game impossible. But has it struck anyone that the mere rumor of trouble with hedgies caused a good degree of panic and teeth chattering? Some one is wagging the dog here, and it ain't the hedgies.

Property Derivatives, Leveraged Loan CDS, and more.

According to the Evening Standard (sorry, no links today - just print) ICAP is setting up a commercial property derivatives team and they'll be pitching to pension and hedgies soon enough. We think the market for property derivatives will explode over the next few years. Good move.

FT reports Morgan Stanley is unveiling a "new" (funny) credit default swap instrument based on leveraged loans (start at 25 - 30% most actives; Europe). Lets you buy protection on risk exposure to leveraged loans, and lets me bet on which loans will default first. I'm there.

In another interesting article from FT, Morgan Stanley calculates total value of CDOs sold since 2004 as $131B. They then adjust for credit risk, and get a real value of $350B. Thats it? Whats the problelm guys. 3x levered ain't bad!

See you at the break.

Thursday, May 12, 2005

Enough With the Hedge Fund BS

Bugging me today is the reporting on the hedge fund "crisis" or "problem" or "bad news" or whatever they've dumbed it down to now. It is seriously off point. The rumors out there, at least the ones I've heard, have nothing to do with hedge fund greed and overreaching or over-leveraging. The rumors are all about the credit default swap market and possible exposure to under-collateralized protection. Yeah, PRO-TECT-TION. Here is a down and dirty synopsis.

GM and F are now junk. Fixed income arbitrage managers had owned a lot of those bonds. The tanking isn't bad for them per se, so long as GM and F make their payments (in some instances, FI arb mgrs might actually be doing better now because of the junk rating). Of course, arb managers are afraid of risk to the point that they shit themselves when they hear the word. So, they have purchased a LOT of protection on all their bonds. One example of this is the CDS market. Buyers are hedgies looking to protect against possible default. Sellers are ins. cos and institutions looking to make some cash. Sellers offer protection, buyers give cash. The protection is the problem. What if one of these sellers goes bust? What if they renege? ("efficient breach" as some lawyers I know like to say). The hedgies are out and caught on the long side of a sell off. Further, what happens when that hedge fund is in trouble? He can't make payments on his other contracts, which then causes the other sellers to renege on other contracts, and so on and so on. That is the doomsday scenario, and its a result of an unregulated SELLER in the derivatives market, not hedge funds taking on too much risk (quite the opposite actually).

I accept that hedge funds will eventually be regulated out of existence, but lets at least understand the real reason why.


Federalist X won't be posting until next week. He's left me in charge to make sure the limp-wristed and the blood-thirsty wings of the Democratic party don't kill one another. Since I don't care if that happens, go at it you freaks. Howard Dean sucks, so does Clinton. Now fight. I won't delete any comments unless I disagree with them, or find them annoying, in which case I'll probably just edit them so as to flatter me!

In other and much more important news, midtown is shocked as hegde fund managers have been seen wearing suits, ties, and dress shoes, rather than the obligatory khakis, button down, and sneakers. One can only imagine they're having to reassure investors. All the while, private equity players continue their pump and dump, and not a word from CNBC (they prefer to spew shit about arb trades gone bad). Just another spring day. Will summer start already and get these prying eyes to the beach?

Harping On Ignorance

A few folks here at Amendment Nine are worried some of us are harping too much on the unfounded arguments and uncivil discourse from the anonymous high priests of the left leaning blogosphere. Rather than subject this blog to the nonsense I've been subjected to today, I refer you to this post at Democracy Guy.

In sum...this 'dead horse' needs to be beaten over and over again, before we wake up one day and find the dead, anonymous horses running our party.

Wednesday, May 11, 2005

And With the All Clear

we're booking profits. I thought my co-workers were crazy, but they predicted a "domestic emergency" four weeks ago and set up some trades to profit from the quick market movement. Just now, the Capitol was evacuated because a single-engine land plane flew over DC. The all clear was just given. They made a pretty good return.

Simple Sophistry

Armando still has a problem with Reason. His arguments repeatedly contradict themselves. Just when he's been caught, and in danger of being found out, he argues the opposite of what he already said and makes no apology for it. Here is an example, with context first.

The Context. Armando believes that Republican judicial nominiees like Judge Owens are "judicial activists" because of their intemperance, or, propensity to make rulings in order to achieve a particular result (instead of impartially applying the law, no matter the result). If you don't believe me, ask Armando, or go read this. Armando distinguishes between objecting to a judge because they are "results based" or "activist" or "judicially intemperant" and objecting to a judge for exclusively "ideological" reasons. He says when you object for both reasons, its a good objection.

The Question. Federalist X then asks: could it not be the case that result oriented judging is an "ideology" all to itself? [note: I know Federalist X well. He often asks questions like this. They may sound overly formal, but if you think about, should the answer be "yes" then Armando's argument above is completely meaningless.]

The Contradiction. Armando responds: Red herring ... And the whole substantive due process conundrum. Read the Slaughterhouse Cases to understand why the results based canard is not germane.

But later in the same thread he says: The most common line of attack on judicial activism is very much related to substantive due process.

The Conclusion. To me, this is pretty simple sophistry. First Armando says that substantive due process is a Red herring, the whole issue is not germane. Later, when it suits him, he decides that substantive due process is very much related, in fact it is most common. If anyone, even Armando, can save these two statements from contradiction, I will publicly ask Federalist X to apologize or retract. Here at Amendment IX we value criticism. Go for it.

Monday, May 09, 2005

That Map Looks Familiar

Very interesting little map I ran across, apparently blue states are rich states and red states aren't. Generalization of course but check it out. More analysis on this from Legal Fiction here. Someone should do a similar map with per capita 13 filings. That would make the betrayal clear.

Barclays Back in SA

Missed by the Americans, Barclays has returned to S. Africa. Marty has the specs. I was a proponent of this move over a year ago, glad its finally happened. A good friend of mine from back in business school told me just yesterday that the smart money was heading South, of Kenya that is. But with the Rand's rise, will there be any more?

Duke Energy Deal

Somebody just asked me why the Cinergy buyout hasn't caused more excitement. It might have, except that Duke Energy is the raider. This co. has had some serious difficulties, and remains on my own watchlist for some regulatory impact. Truth is, I don't see how the Cinergy deal is gonna help. Call me a pessimist, but I think Duke's peaked.

News Flash - Blair, In Fact, Won

Tony Blair won an election last week. Resoundingly. The hard left has convinced itself he lost - Mr. Kos last week;

Blair's "New Labour" policies, moving rightward to grab more of the center, has [sic] been thoroughly rejected by the British electorate.

This planet the hard left lives on, where John Kerry won and Tony Blair lost, must be one hell of a place.

Here's the reality. In 1997 and 2001, Britain's electorate unleashed a tidal wave of Tory hatred. Far from being about Iraq, the 2005 election has merely begun the process of returning the damaged shoreline to its natural state...other than being a spark for protest votes, Iraq has very little to do with the political tectonics.

In short, the 66 seat majority Blair has won in 2005 is almost precisely the result Labour would have had, even the result Labour expected, in 1997 absent the tidal wave. Such a result in1997 would have been called a landslide. Iraq may have been a factor this year, but Britain's politically conservative DNA re-asserting itself is the real story of 2005...not Iraq.

See the full post at Democracy Guy.

Saturday, May 07, 2005

Prelude to a Discourse

At his invititation, I just posted the below over at RT's site. I'm hoping the slightly more right/center crowd over there will have some interesting things to say. Many of you already know I'm working on this. And several of you are aware of a great many details already. What follows was originally written as a precis when beginning the article. Some of it is out of date, though the overall gist of it is still where the paper is going. Please feel free to comment, question, criticize or anything else. I'll have the final work out by mid-June. The likely title for the piece is Discourse on the Devaluation of Sovereign America.

In America at 1790, the term citizen was defined far more narrowly than it is today. The school of progressive, liberal democracy takes pride in this fact. Indeed, all of America is especially proud of this. As a people, we boldly insist that citizenship be broadly defined, so that all voices are counted. Today, ownership of property no longer pre-qualifies the rights and privileges of citizenship. Today, African Americans, free from the bonds of servitude, are counted as a whole person, instead of the three-fifths they once were. And today, women too, are counted as the equals of men. Citizen, today, means much more than citizen in 1790.

It is therefore ironic, to say the least, that as we have insisted on incorporating those previously marginalized sets of society into the term citizen, at the same time we have systematically eliminated the representation that these new citizens may have in our federal government. As this paper makes clear, a white, propertied, Anglo male from 1790 enjoyed a level of access to his Congressman that today is found only in the smallest of municipalities. So, while citizen may include more subsections of society than did the same term in 1790, the power each citizen wields, the ability each American has to gain access to their federal Representative, is far, far less. As America has grown, access to the federal government has failed to keep pace.

The future of American democratic government therefore, remains unstable due to the ever expanding population and the current limitation of its lower house to 435 members. At a certain theoretical point, failing to increase the level of representation will cause a qualitative shift. One morning, after the birth of some American child, America will no longer be a democracy, by definition. The cause of this situation is clear: the jealous guarding of Congressional power by the House of Representatives since 1911.

For support, the essay relies heavily on assembled statistical evidence. Abstracts containing the data tables are supplied. Of all the statistics studied so far, not one is more troubling than the following: if today’s level of federal representation were applied to the year 2000, there would only be 416 members in the House of Representatives. In other words, over the time span of just one presidential term, America’s citizens have lost almost twenty seats in the House. Were this result achieved through violence, Americans would be outraged. Instead, population growth combined with a size limitation scheme continues to ravage the citizenry’s voice in Washington.


Could be a good weekend. also betting on Bandini. He's sufficiently pissed off right now.

UPDATE: didn't win. But man was that a race. Jesus H.

Friday, May 06, 2005

Is the "d" for Dishonest?

In an apparent reversal, dKos founder Markos Moulitsas now says Blair's rightward drifting policies of "New Labour" are the reason for Labour's loss of around 100 seats yesterday. Yet on Sunday, May 1, the hard hitting "kos" as he's known, said that the Tories were the ones guilty of betraying their party's principals. In this article published by the UK's Guardian News, kos draws a clear analogy between "republican-lite" Democrats or DINOs (Democrats in Name Only, as he calls them), and labour-lite Tories. Surmising that " the direct parallel between disaffected American Democrats and disaffected British Tories was startling", kos went on to describe how Blair's ability to "frame" the political debate gave Tories a major disadvantage.

Yet now, kos says Blair has been "undone." dKos readers may be rightfully puzzled. Which is it? Was the "labour-lite" strategy kos criticized on Sunday the reason for Tory success? Or is kos now mistaken about Blair's right-leaning policies? What seems clear enough today though is that whichever party won yesterday's election, kos had half a headline already written "xxxx-lite is rejected by voters".

UPDATE: apparently I'm not the only one catching this. How many more of these square pegs has kos forced into round holes?

Thursday, May 05, 2005

Poof! There goes my summer vacation

Well, no time off for me for the next century, thanks guys! Gonna be a frenzy like you've never seen.

Tuesday, May 03, 2005

"Sometimes, a Fool is just a fool."

Armando, a front-page contributor to dKos, is either a fool, a moron, or both. In his latest excruciatingly long front page post, he rips those ripping the filibuster repeal movement, including Professors Juan Cole and Cass Sunstein; who I have it on high authority are both bright, well-spoken, and perhaps even well-read intellectuals. Of course, before exposing himself, Armando gives the obligatory "I definitely agree with this and that and this part too" and then lowers the boom "but I disagree with" ... Where I went to college, back when students were required to read, we had a Greek expression for this rhetoric: "men ... de". And we all noticed it was employed most frequently to obfuscate transparent mendacity. The whole of Armando's screeching may be found here.

After a brief perusal, I was struck by the thumetic charge of Armando's post. He was clearly advocating a position that sought to place objective standards into an otherwise ideological debate; the confirmation of judges. In his view, Republican partisanship against Clinton appointees was merely ideological, whilst the same could not fairly be said of Democratic partisan maneuvering against Bush appointees. Instead, he felt confident that judicial temperance, or lack thereof, was the critical inquiry and Democrats had correctly objected to those scoring too low on the temperance scale. So I asked what seemed like a simple question, prefaced by a stipulation that some scholars use the Lochner opinion (bottom few paragraphs) as an example that results based judging has its own philosophy. My question was, simply, could it be the case that "results based judging", which Armando equated to judicial intemperance, is in fact an ideology unto itself?

The response was less than reassuring. He instructed me to read (ironically it turns out) the Slaughterhouse Cases to see why my question, and the whole "substantive due process canard" was simply a "red herring" (again, ironic term usage). It just so turns out I'm quite familiar with Slaughterhouse. And was unaware that the dead-lettering of the privilege and immunities clause of the 14th Amendment had anything at all to do with my, much more philosophic, if not logical, question on results based judging. I replied in kind. To which Armando laid bare what I had long ago suspected... he's an idiot.

"Because substantive due process, the target of conservatives for their accusations of results based judicial activism, springs from the destruction of the P&I clause. Pretty simple really."

Scratching your head? Me too. Like a first year law student, Armando hears the word "Lochner" and quickly shouts back "Slaughterhouse" without ever reading the question. Armando knows that the right order is Slaughterhouse then Lochner, but again, he never read the question! He even throws in a pedantic reference to Llewellyn (which I take to be a reference to legal realism, and according to the order, follows right after Lochner!). Does this yelping recitation without any supporting reason remind you of something?

No Armando, it isn't simple, really. Firstly, substantive due process does not spring from the destruction of anything. Sure Slaughterhouse (1873) is often used as an introduction to substantive due process in a first year Conlaw class, but that fact alone doesn't mean anything on its own. Substantive Due Process was alive and well long before Lochner (see Herbert Spencer's Social Statics, from 1851. Spencer argues for a "law of life" and "natural law" which restricts the only legitimate use of government to the police power and individual rights protection... sound like a certain Justice you may know? Similarly, see Cooley's Treatise on Constitutional Limitations - from 1868 ). If substantive due process theory springs, it springs from classical laissez-faire philosophy like that articulated by Cooley and Spencer , or from legal formalism itself (assuming its stipulated there's a difference between the two-which is conventional, but in my view, incorrect). Secondly, conservatives are not targeting substantive due process. If anything it is quite the opposite. The libertarian impulses of Justices like Scalia, and the originalist impulses of Justices like Thomas, make such an assertion absurd.

A cursory glance of literature dealing with laissez-faire Constitutionalism and substantive due process would undoubtedly have clued Armando in. Yet, there he was throwing around loaded phrases like substantive due process and citing to cases like Slaughterhouse. There he was arguing this was all so simple. And still it turns out, he is either using all these terms unknowingly, or unwittingly, or both.

Coincidentally, another dKos user emailed me the following quote from Armando, made just a short time ago: " Idiotic is people talking about something they clearly have no knowledge of." Well, Armando, you certainly are the expert!

Monday, May 02, 2005

Contrary Contrarian's View

Everyone knows about Roach's view, Gross's view, and the views of other big bad bears alike. Most of the sentiment in these views I share (bond players afterall, are bond players). Let me play a contrary view for a spell, if for no other reason than the bulls would never say such a thing (call it the Contrary Contrarian's, or CC view).

First, there is oil. Peak oil fans forecast doom and gloom (we recommend some here and here). No way to keep up with demand. That is all true in my view. The peak in oil supply and the slow drift downwards in production will doubtless cause pain and misery for many in the world. The CC view would argue that the pain will be felt almost exclusively in the third world. The reason is that the first world has the capital resources to shift its energy production whenever necessary. If supply can't keep up with demand, new markets shall be made. Precisely what this is remains to be seen, but the CC sees it as if its already there. Sure it will be expensive, sure a lot of money will be wasted, but industrialized economies can and will do it, notso in the third world.

Second, there is oil. Consumption in the US will slow, steadily, due to a period of energy production decreases. This, it turns out, is most welcomed news for US economists because it begins the hard task of rebalancing America's, and Americans, over-extended debt. Again, Asian economies not dynamic enough to switch out of the currency exchange game and create their own domestic demand will fail. This will cause exports sold in America to decrease, short-term, though margins improve long-term. Another round of slack US consumer demand follows as export prices increase (less competition). The slackening though is not violent in the US. Its slow but steady and helps us more than it hurts.

Third, there is bankruptcy. The slower consumption rates lead to increase savings rates, which inevitably lead to lower than forecasted bankruptcy rates. The mass consumer restructuring many of us predicted never unfolds, all thats noticed is a slight increase in actual filings, though its far less than anticipated. With the disaster avoided, lenders become increasingly competitive and real interest rates fall accordingly.

Fourth, there is the next asset bubble. The first asset bubble, equities, popped with the end of the tech boom. However, it didn't cause the huge rebalancing many had predicted because another bubble took its place, real estate. This freed up huge sums of leveraged capital for Americans and stretched housing markets to their now nauseating heights. Yet, just like equities, the real estate bubble pop will not be felt as drastically as most assume. The CC view says another bubble takes it place, probably intellectual property rights, and America is saved from feeling the sharp effects of a real estate correction.

That is the CC view, for what its worth.

Sunday, May 01, 2005

"This Week" w/George Snuffalumpugus

One of the most entertaining segments I've seen in awhile was today's interview by George Stephanopolus(sp?) of the right Reverand Robertson (aka Fat Pat).

Fat Pat was asked by the young Snuffalumpugus whether or not it was Fat Pat's belief that only Christians and Jews should serve in the federal judiciary?

Fat Pat stumbled, stuttered, then said he's not sure about blanket statements like that, but in the end, he thought that federal judges must share the same philosophy as Americans have always shared.... so on and so forth.

... [long pause] ... [scratch head] ... I give up.