June 22, 2005

What Do They Stand For?

The folks over at ProgressNow are having a little identity crisis.

Some are talking about how we can "frame" our issues better. Others are arguing over a list of common values or positions. But it's really the same conversation -- What do we stand for?

So, in the spirit of the conservative manifesto The Wisdom of Crowds (although one might be tempted to question the wisdom of this crowd), they've thrown the floor open for suggestions.

Well, when an old boss like JB calls for help, how can I refuse?

  • We stand for activist judges - when we agree with them.
  • We stand with our enemies and against our country.
  • We stand for the environment.
  • We stand for interpreting "the environment" to mean anything we like, robbing it of practical value but not of practical effect.
  • We stand for "fairness."
  • We stand for income redistribution as fairness.
  • We stand for racial preferences as fairness, even after they have long outlived their usefulness.
  • We stand for the Victim Society as "fairness."
  • We stand for the balkanization of the culture as "fairness."
  • We stand for subsidizing poverty as "fairness."
  • We stand for religion - cleansed from the public square.
  • We stand for the socializing of as much of society as possible.
  • We stand for income tax withholding as a means of hiding the true costs of that socializing.
  • We stand for public education - according to our orthodoxies.
  • We stand for the restriction of free political speech.
  • We stand for the laundering of political money through unions.
  • Finally, We stand for plausible deniability of this list. Which is where your suggestions come in.

"To succeed, we need to be able to answer such a question during an elevator ride."

No, not because by the time they finish, people will be fighting over the emergency phone and lifting each other through the maintenance panel on the ceiling.

Because with them, it really is still about words, not ideas.

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June 20, 2005

Carnival of the Capitalists...

...is up, over at Blog Business World.

So, which ride do you think best represents the market?

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June 19, 2005

Low Blow

I realize that losing hurts, but this is simply stooping too low. Dispatching the Unfunny One on a revenge tour to Denver is more than even I would have expected from the Conspiracy Theorists of the North. (Oh, complain they may, but Duane himself as much as admits that he tried to keep the polls open long enough for the Gophers to catch up.)

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Ralph Waldo Emerson

As part of my new What Do I Do With All This Free Time Liberal Arts Self-Education Program (WDIDWATFT LASEP), I've been working through the Teaching Company's Classics of American Literature. You see, in order to get anything out of the course, you actually have to read the books, which presented a problem up until recently.

The second author in the series is Ralph "Don't Ask Where's?" Waldo Emerson. Emerson was a deeply subversive writer, but the lecturer points out that very intelligent, well-educated people often walked out of his lectures not quite sure what he had been talking about. As with certain recent President candidates, this may be more an assumption of intelligence than an actual reflection thereof.

Still, some individual quotes are quite striking:

Who looks upon a river in a meditative hour, and is not reminded of the flux of all things?

Heh. Newton thought of the calculus, which he called "fluxions," while he was trying to solve the problem of calculating the flow of a river around a bend. I have no idea if Emerson was aware of this, but I don't see any reason to assume he wasn't.

Thus architecture is called "frozen music" by De Stael and Goethe. Vitrivius thought an architect should be a musician.

There's an overused quote, "Writing about music is like dancing about architecture." If the quote really is older than a 1983 interview with Elvis Costello - and there's no a priori reason we should credit him with this original thought - then it probably means something other than the way he used it, that writing about music was absurd. I have my own ideas, but the floor is open for interpretations.

And then, from "The American Scholar," one I like the best.

Thus far, our holiday has been simply a friendly sign of the survival of the love of letters amongst a people too busy to give letters any more. As such, it is precious as the sign of an indestructible instinct. Perhaps the time is already come, when it ought to be, and will be, something else; when the sluggard intellect of this continent will look from under its iron lids, and fill the postponed expectation of the world with something better than the exertions of mechanical skill. Our day of dependence, our long apprenticeship to the learning of other lands, draws to a close (emphasis added -ed.)

Remember, Emerson was writing only a few years after de Toqueville, when the country was still slightly bewildering to a European for its attention to business and its restlessness. He wasn't arguing that business was bad, only that the country also needed scholarship.

And he certainly wasn't arguing for bookishness. Instead, he was hoping for a peculiarly American type of literature, poetry, and scholarship, informed by but not dependent on (or overly reverent of) our European heritage

That's a hope that one of our main political parties appears to have abandoned.

Meek young men grow up in libraries, believing it their duty to accept the views, which Cicero, which Locke, which Bacon have given, forgetful that Cicero, Locke, and Bacon were only young men in libraries, when they wrote these books.

Substitute Ward Churchill, Catherine McKinnon, and Cornell West, and you'd get a fair sense of academia today. Leaving aside the rather dramatic dropoff in the quality of thought, it doesn't appear that academia's defense of its orthodoxies is any different now from then. But if I had to have my child brainwashed, I'd rather it were by Cicero, Locke, and Bacon.

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June 17, 2005


As part of my research, I've been looking at something called Returns Based Style Analysis. Reading through the papers and the technique, I can't believe anyone ever took this stuff seriously at the style-box level.

RBSA purports to be a way of determining if a Growth manager really is doing what he says he's doing. The idea is that you take a Growth Index and a Value Index, and then maybe a large-, a small-, and maybe a mid-cap index, and see how well the manager's returns correlate with each of them.

The actual equation is this:

R = a + b1R1 + b2R2 + ... + e

where R is the fund's return, a is the manager's alpha, e is an error term. Each R is the return for a given index, and each b is the fund's exposure to the style represented by that index. If you do this for a series of quarters or years, you can solve for the b's, and find out the manager's actual (as opposed to advertised) style.


This is like trying to figure out whether a pitcher is a power pitcher or not by looking at his ERA.

Now, RBSA was originally invented by the Nobel Prize Winner William Sharpe, a founder of modern portfolio theory, CAPM, and the Sharpe Ratio, so naturally I'm a little reluctant to call it bunk. Still, "Nobel Prize Winner" probably had a lot more heft to it before two of them almost crashed the world financial system in 1998. Secondly, it's far from clear that these relationships actually are linear.

One thing, though, that distinguishes Sharpe's idea from current usage is that he was using actual asset classes. We know what a stock is, and we know what gold is, and it's unlikely that someone's going to mix up the two. But there are at least five different indexing services out there (Wilshire, S&P, Morningstar, Russell, Morgan-Stanley), and they can't agree from quarter-to-quarter what's a growth stock and what's a value stock. Heck, they can't even agree what large, mid, and small mean, and some can't even agree that there is such a thing as mid-cap. The granddaddy of risk factor exposure, Barra, even admits that a firm definition is impossible.

So now, it's like trying to figure out whether a pitcher is a power pitcher or not by looking at his ERA, only the official scorer routinely tries a little too hard to support the sponsor (you know, Coors, Busch, Milwaukee), and can't figure out what an error is.

Finally, we have something better. We can actually look at mutual funds' holdings, and decide for ourselves what this manager is up to.

So really, what RBSA is trying to do is figure out a pitcher's style by using an inconsistent definition of an earned run, when two columns over, we can see his strikeouts and walks, fly-outs and ground-outs.

We can do better than this. Really, we can.

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Salazar on Durbin


At least, that's the answer I got when I called the senator's DC office this morning. No official statement yet, and no entry into the Senate record.

Duane, who appears to have taken poll-operating lessons in St. Louis, has a long discourse on the senior Senator from Illinois's Churchill-like rant, pointing out where Durbin says something, quotes himself saying it, and then denies that he said it.

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June 15, 2005

Maxwell Falls

Maxwell Falls is one of those hikes where all of the signatures in the register are from Denver or Evergreen, possibly Conifer. The falls themselves aren't much, but the getting there is a lot of fun. As always, click to enlarge, (although the larger ones are a little over 200K).

While "Colorado" means "red," visitors are always surprised that the state isn't greener. It's amazing what a little rain will do...

It's hard enough being a lab without also be asked to be a llama:

As it turns out, four other large dogs were similarly burdened, so I didn't feel too bad about asking Sage to carry the water. Hey, he's gotta earn his keep somehow.

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June 14, 2005

McMad Update

Longtime readers will remember a discussion of a new McDonald's being planned for an old neighborhood.

Lynn Pressnall, and aide to City Councilman Marcia Johnson sent the following comment concerning plans for the intersection:

The Colfax/Krameria intersection has been scheduled for improvements including a left-turn light but has not happened previously due to problems with gaining enough land to add lanes and smooth out the off-set intersection. The developer, Drake Development, gave the land to the City in May of 2004. Since Colfax is a state highway, funds were then applied for by Denver to complete the improvements. The intersection will be redesigned.

To be fully informed about the background of this development, and to have a full description of "use by right", please go to our website at www.denvergov.org/councildistrict5. On our site you will have access to statements regarding this development by Councilwoman Johnson, the City Attorney, the Manager of Public Works as well as access to site plans for the development.

This certainly sounds like good news. The amount of land involved appears to be small, and wouldn't have affected the buildings in the strip mall, only perhaps a couple of parking places. I'm not certain how much goodwill this is going to buy the developer, given the level to which relations had deteriorated. But it can't hurt, and it also avoids having businesses at an intersection with a reputation for creating accidents.

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June 12, 2005


Oy. Just as things settle down enough for me to start blogging more, we get another holiday, Shavuot, known to many of you as the Feast of Weeks. No blogging until late Tuesday. For those of you who'd like more than an introduction, Yeshivat Har Etzion in Israel has a Shavuot Journal worth checking out.

Jews were commanded to count seven weeks from Passover to another holiday known as Shavuot, literally "weeks." The holiday also commemorates the anniversary of the giving of the Torah. We read the Book of Ruth, as well as a mystical poem that nobody understands, called Akdamut. The hardier souls relive the excitement of the night before the giving of the Torah by staying up all night learning.

Passover and Shavuot are connected by the counting of the weeks in-between, indicating a spiritual connection between the two as well. If Passover represents freedom, Shavuot and the giving of the Torah provide the structure essential to keeping that freedom from degenerating into anarchy.

I've always made the comparison between Isaiah Berlin's "freedom from" and "freedom to" from his famous essay, "Two Concepts of Liberty." (Microsoft Word Doc). The one prevents other men from interfering in my life. The other provides me with the means to exploit that freedom. Either alone is subject to abuse, but together they allow a meaningful life.

Similarly, although not identically, Rabbi Joseph Soloveitchik describes in his long essay, "The Lonely Man of Faith" argues that there are two parts to man: Man who works and Man who seeks redemption. We must be both. I see Passover as enabling the first, and Shavuot as enabling the second.

See you Tuesday.

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Carnival of the Capitalists

Byrne Hobart has this week's up a little early. Go there, follow the links, and print out some posts to read during the slow parts of tonight's NBA Finals game. Like, everything before 4:00 to go in the game...

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June 10, 2005

New CFA Blog

With the end of academics, it's time to...start studying! For the CFA, or Chartered Financial Analyst Exam Level I, in December. Since I don't want this blog to get drowned in exam talk, I'm starting another blog dedicated to that pursuit.

*Sigh* It never ends, does it?

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June 08, 2005

Laboratories of Finance

The Wall Street Journal reported this morning on the proposed impending regulation of hedge funds ("Hedge Funds Brace for Regulation"):

Last year, amid the growing surge of interest from investors in hedge funds, William Donaldson, the outgoing chairman of the Securities and Exchange Commission, championed a staff recommendation that most hedge-fund managers register with the SEC as investment advisers. More pension plans, endowments and charities have shifted into hedge funds, which more directly impacts smaller investors. Sparking additional concern, more investors today meet the wealth requirements to invest in hedge funds -- set to be raised to $1.5 million of net worth, from $1 million. An estimated 8,000 hedge funds worldwide manage about $1 trillion in assets.

Even more important, the growth of hedge funds and the fact that they often use borrowed money to expand their investments means that the funds play a bigger part in daily movements of the market. Mr. Donaldson last year said the agency "needs to have a means for examining hedge-fund advisors and monitoring their activity."

The rule change, which doesn't have the support of certain officials, including Federal Reserve Chairman Alan Greenspan, is scheduled to take effect in February 2006 and would subject hedge-fund firms to regular audits and inspections. Funds also will have to provide the backgrounds of their executives, details of their trading strategies and how they value their portfolios, among other things. About 35% or so of hedge-fund managers currently are registered with the SEC.

Hedge funds were exempted from the 1940 regulation because of two assumptions: 1) people with net worth of $1 million didn't need to be protected - a somewhat patronizing assumption perhaps, for the rest of us, and 2) no individual fund could move the market.

Now, just because pension funds are foolish enough to invest in these things doesn't mean that they should be regulated. After all, Schwab doesn't consider roulette to be suitable investment for my IRA money, but Vegas still stays lit at night. Thanks to my water, of course. Ahem. But I digress.

The better reason for some hedge fund regulation is that the assumptions aren't operative any more. While $1 million isn't chicken feed, many many middle-class families can aspire to that goal within their lifetimes. And if Meriwether and his Meri Band of Academics at LTCM taught us anything about letting them outside the classroom, it was that one well-placed, poorly-timed, over-leveraged, under-supervised group of kids can spoil it for everyone.

Here's the problem, though:

Hundreds, if not thousands, of firms manage less than $100 million, and they might not be able to bear these burdens, some say. A $50 million firm, for example, likely charges its investors about 1% of assets a year as a management fee to cover the running of the fund. With the cost of registering so high, at least in the first year, some might think twice about starting their own funds.

A good compliance officer can pretty much eat up the entire fee of a small fund. While the Wild West mentality of most hedge fund managers will lead them to rebel at first, the larger funds will soon find, like their bretheren in other industries, that regulation is a swell barrier to entry.

Why do we need smaller funds? As the laboratories of finance. They're more nimble, can liquidate positions more easily without moving the market, and often represent the newer, more innovative uses of modern finance theory. If someone has a creative way of combining derivatives, they ought to be free to pursue that without having to tell the whole world what they're doing.

So instead of simply regulating the entire industry, which can only stifle innovation, the SEC should consider either one threshold, or a series of them as the fund increases in value, leverage, and impersonality.

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June 07, 2005

Finally, Spring Break 2005

Finally, only 2 1/2 months late, the Spring Break 2005 pictures are up, with attendant commentary.

Hey, it's been busy.

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Uh, Sure, He Said, Backing Slowly Towards the Door

As the long Minnesota winter nears its end, one can't help but feel slightly sorry for Chad the Very Elder, whose name betrays his demeanor. His are the rantings of an aged man, a beer in one hand, bitterly decrying a world that has passed him by, powerless to effect change, hoping merely to attract attention.

In the past, I've taken pity on him by providing him Lexis-Nexis transcripts, seeing as even his university bretheren and legal friends were unwilling to do so. But now, I question the wisdom (and loyalty) of one so bereft of friends that he and his - gang - have been placed on perpetual probation by the Commish.

I can see him now, Photoshopping away, like some Robert Crumb cartoon character, chortling away in a gravely voice, "heh, that'll get 'em." Frankly, I'm impressed that he knew where to find any pictures where the women are wearing clothes. Under other circumstances (which ones, frankly, I can't begin to imagine), I'd be flattered, but as it is, I'd advise any and all members of the Northern Alliance to travel in groups to any Minnesota blogging events.

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And You Thought the FEC Was Bad

China is requiring all websites - including blogs - to register with the government, and will use Net Crawler technology to search the web for unregistered sites. This will move blogs offshore, where the Government-sponsored filters can monitor incoming traffic as they currently do US news sites.

They've also installed surveillance cameras and begun requiring visitors to Shanghai Internet cafes to register using their official identity cards all in an effort to keep tabs on who's seeing and saying what online.

Right. So much for that Comments section you've been keeping spam-free.

Talk about a "chilling effect." Just because a censor can't be comprehensive doesn't mean it can't be effective.

Inasmuch as business and public policy frequently intersect - especially in a "mature fascist state," as Michael Ledeen likes to call China - this is going to make honest business blogging and even honest business discussion much more difficult to carry on. I can't believe that eventually this isn't going to catch up with them.

My favorite paragraph is this:

"The Internet has profited many people but it also has brought many problems, such as sex, violence and feudal superstitions and other harmful information that has seriously poisoned people's spirits," the MII Web site said in explaining the rules, which were quietly introduced in March.

Maybe the Fraters Guys have been imbibing "seriously poisoned spirits," and I can certainly understand China wanting to defend themselves against that sort of thing. But what on earth are "feudal superstitions?" Christianity? I don't want to be disrespectful here of anyone's reigion, but what do these guys think the I Ching is?

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June 06, 2005

Yom Yerushalayim

Going by the Jewish calendar, today is the 38th anniversary of the liberation of Jerusalem (Yerushalayim in Hebrew), by Israeli forces in 1967's Six-Day War. As if to make Bernard Lewis's point, the only substantial victory by Arab forces in the 1948 War of Independence was won by a British general, John Glubb, commanding Jordan's Arab Legion. That victory came in the Old City of Jerusalem, and it would be 19 more years before Jews took control of our Temple Mount.

In those intervening 19 years, the Jordanian government and army would systematically demolish almost the entire Jewish Quarter, including the synagogues, one of which would be used for stabling horses.

It is my understanding that they did far worse things to the Torah scrolls there than handle them without gloves.

Jews (not Israelis, Jews) would be barred from praying at the Western Wall. Jews would be expelled from Jerusalem's Old City altogether.

The Jordanian government would allow the construction of an Intercontinental Hotel atop the Mount of Olives, a Jewish cemetery. The headstones would be used as paving stones.

Clearly, for Jews who might have to live under Palestinian rule, the question isn't whether they could tolerate it, but whether the Arabs are capable of tolerating them.

UPDATE: Anne Lieberman at Boker Tov, Boulder has some evidence that they can't,

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June 05, 2005

Carnival of the Capitalists

Over at Gala Time this week. It's better than the opening of Elitch's!

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New Houses

Boy, it's been a while. Thought I had forgotten, didn't you? Go ahead, start with the new ones, and then run through all the old friends.

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Colorful Sunset Colorado

Since the Governor of Minnesota and one James Lileks late of that state have taken to ridiculing our new state quarter, as well as the signage reading "Welcome to Colorful Colorado," erected at great taxpayer expense on all roads leading into the state, I thought I'd remind them of why those signs exist. As always, click to enlarge.

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Colorful Xeriscape Colorado

Every so often, one of the local papers runs a column about how xeriscaping doesn't mean brown. Over the last couple of years, I've planted a series of xeriscape plants along the front of our lawn, on the Strip The Kills Growing Things (click to enlarge):

It even look as though this year, my favorites, the Hens 'n' Chicks, will have multiple blooms...

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June 03, 2005

Graduation Day

This is probably more appropriate for a 20-year-old getting a bachelor's than a 38-year-old (gulp) receiving a masters. But there weren't any blogs then.

You go to post with the songs you have, not to songs you'd like to have, I suppose.

Bright college days, oh, carefree days that fly,
To thee we sing with our glasses raised on high. [holds up eyeglasses]
Let's drink a toast as each of us recalls
Ivy-covered professors in ivy-covered halls.

Turn on the spigot,
Pour the beer and swig it,
And gaudeamus igit-itur.**

Here's to parties we tossed,
To the games that we lost
(We shall claim that we won them someday).
To the girls, young and sweet,
To the spacious back seat
Of our roommate's beat up Chevrolet.
To the beer and benzedrine,
To the way that the dean
Tried so hard to be pals with us all.
To excuses we fibbed,
To the papers we cribbed
From the genius who lived down the hall.

To the tables down at Mory's***
(Wherever that may be),
Let us drink a toast to all we love the best.
We will sleep through all the lectures,
And cheat on the exams,
And we'll pass, and be forgotten with the rest.

Oh, soon we'll be out amid the cold world's strife.
Soon we'll be sliding down the razor blade of life. (Oooh!)
(laughter) ... Ready? ...
But as we go our sordid separate ways,
We shall ne'er forget thee, thou golden college days.

Hearts full of youth,
Hearts full of truth,
Six parts gin to one part vermouth.

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Cinderella Man


For those of you who've been asleep for the last year, Cinderella Man tells the story of Jim Braddock, a boxer who could have been one of the great ones, struggling to keep his family fed, alive, and together, through the Depression. (Actual starvation, unthinkable in America today and unimaginable for most of us, was a real threat. It's been 70 years since the events the film depicts, but I can promise you I'll never look at food the same way again.) His boxing comeback becomes an inspiration to millions. I remember as a kid listening to some late 1930s radio show where one of the characters makes a crack about Braddock. I can't remember the joke, but at least now I know what he was talking about.

The film opens with a still photo of a boxer's face, grotesquely distorted at the moment of impact by a gloved fist. The face is some unknown fighter. The fist belongs to Jim "Bulldog of Bergen" Braddock, on his way up the ladder to a light heavyweight title fight. Throughout the fight scenes, a particularly hard blow to the head will come with a blinding white light, both from the punch and from the cameras, mixing the brutality of the sport with its entertainment value. Yes, you do believe these men are really fighting, not just putting on some stunt-double ballet to advance the plot.

That night in late , Braddock goes home to his wife, Mae, and his family. The chemistry between them is immediate and real. Zellweger exudes adoration for her husband, although she's obviously not thrilled about his making a living getting hit. They both are willing to buy into the boxer's eternal dream of beating the game, retiring with a title belt, a nest egg, and all his marbles and most of his health intact.

The next scene, all that's over. It's the Depression. Braddock has a broken right hand, he's fighting (literally) with a broken right hand to put food on the table. Braddock had had his chance in 1929, but dropped the light heavyweight championship fight in Yankee Stadium. Between the Depression which swallowed up his winnings, and a series of injuries including a broken right hand, he had pretty much lost everything except his family.

Cinderella Man follows Braddock's comeback, culminating with a championship bout against Max Baer that can only be described as combat.

Not having lived through the 30s, I can't testify to the accuracy of the mood of the time, but it sure seems that way. It conveys that sense of hardness, toughness, desperation, that we associate with 1934. The look of the time is pitched perfectly. There's a scene, maybe a second or two, where Braddock is on the bus riding from New Jersey to Manhattan for the fight with Baer. He looks out the window, and the crowd scene could have been plucked from a 1939 still photo at the World's Fair that Lileks is always going on about.

The one historical objection I have is to the portrayal of Max Baer. Yes, Baer did really kill one man in the ring (not two, as the movie would have it). But Baer never made hay out of it, and in fact he was so shaken by it, it almost ruined his career. He donated a number of purses to the dead man's family, and lost a number of fights after that one, in part from fear of a repeat. The idea of the real Baer taunting Braddock the way he does in the movie is absurd, and the real Braddock's family says as much.

Braddock himself is an immensely appealing hero, perfect for Ron Howard. It's just as well that the movie takes place 70 years ago. Today, in an era when the registered coyote services drop the illegals off at the welfare office, it's hard to imagine a man paying back his public assistance money when he's flush again. Crowe pulls the whole thing off beautifully, though, makes the man both believable and heroic. He's a man, a mensch, for whom taking responsibility isn't even a question. If Tom Hanks is this generation's Jimmy Stewart, Russell Crowe is channeling William Holden.

The other performances are magnificent. Zellweger inhabits Mae, as she listens - possibly for the first time - to the 15th round of the Baer fight, we feel her feeling every punch Jim takes. Paul Giamatti makes us care about Joe Gould, Braddock's manager, and Bruce McGill is all business as the boxing promoter with the New Jersey Boxing Commission under his thumb.

Normally during a film, often just before it starts to build towards the climax, there's a point when I realize I'm watching a movie, when I look at the edges of the screen, maybe check the time.

Never happened. This is one for the ages.

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June 02, 2005

Finance Fault Line?

Steve Liesman wrote his last Macro Investor column for the Wall Street Journal yesterday, musing on the current state of hedge funds. At the end, comes this:

Former New York Federal Reserve Bank President Gerald Corrigan ... doesn't believe another meltdown like Long Term Capital Management is likely. Mr. Corrigan is now at Goldman Sachs and heads a private-sector group, The Counter-Party Risk Management Group II, set up to offer guidelines for assessing risk in the derivatives market that is often the playing field for hedge funds. He believes the finance world has learned much from the LTCM meltdown and that leverage in the hedge-fund industry is not as great as it was.

Yet he acknowledges that there is simply no way for any individual banker or regulatory agency to know and he wouldn't rule out a significant shock from a hedge-fund blowup. The best regulators can do is try to limit both the concentration of a single banks' lending to a single fund and into a single asset class or trade.

This is curious, because massive leverage was only one reason for the LTCM meltdown that gave financial markets a glimpse at the abyss. As important was the fact that there were, by 1998, many players in the same game, all using the same exit criteria. Leverage itself, even without the Archimedean levels required by LTCM's bets, was enough to close the feedback loop. Once prices began to fall or, in this case, once spreads began to widen, the only way out was to unwind positions, the effect of which was to further widen spreads.

This is exactly the same dynamic that caused the 1929 crash and the 1987 crash. In 1929 it was people buying on margin, using the stocks as collateral; in 1987 it was people shorting stocks as insurance. Both of these crashes occurred not because the magnitude of the leverage was particularly large, but because too many people were playing the same game at the same time.

I'll have much more to say about hedge funds in general, and LTCM in particular, in succeeding posts. I've just finished reading both Inventing Money and When Genius Failed, and am working my way through a raft of academic papers on the subjects raised. But for the moment, I'll just say that Mr. Corrigan's statement leaves me less than comforted.

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June 01, 2005

Channeling Ezra Taft Benson

When I said that I didn't think Mitt Romney (whose father was a serious early 1968 presidential hopeful) would be "channeling Ezra Taft Benson," this quote from Sherman Adams's First-Hand Report (p. 206) was what I had in mind. Benson was a two-term Secretary of Agriculture under Eisenhower:

Since he is one of the Twelve Apostles of the Mormon Church, everything that Benson does is deeply influenced by his religious faith. When Eisenhower offered him the Agriculture post, he hesitated at first, as he said afterward. "I told him that I had dedicated my remaining years to spiritual matters, that I had responded to the call of my church and that I was not sure that a minister of the Gospel belonged in the Cabinet." Eisenhower won him over, Benson recalled, by asking him in return if a position of responsibility in the government was not a spiritual job.

In Washington, Benson was sometimes difficult to deal with because he overlooked many of the required procedures of government work. Enveloped in a kind of celestial optimism, he was convinced that his big decisions were right and therefore bound to turn out for the best in the end.

Romney is from a political family, and it's clear that he's got more political sense than Benson did.

Massachussetts is hardly Utah. On the other hand, I don't think he'll be using this slogan.

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Kohelet (Ecclesiastes) 7:2

"It is better to go to the house of mourning than to the house of feasting, for that is the end of all men..."

My father-in-law passed away on Thursday evening. I flew to New York for the funeral on Friday (Jewish law requires that the burial take place as quickly as possible), stayed for Shabbat and the weekend, and am now back in Denver.

In fact, on Sunday, there was a wedding at the shul literally next door to the shiva house, although I don't think many people had a choice about which place to visit.

For all of you who've expressed your concern, thank you. David was a good man, and while I can't believe that his passing was a blessing in any sense, his memory should be.

Posted by joshuasharf at 06:06 AM | Comments (0) | TrackBack


In his Washington Post column from today, George Will pretty much sums up Europe's Nanny-state infantilization:

It is fine for people who are not French to admire from afar how "civilized" the French are in cherishing their "way of life" -- short workweeks, many weeks of vacation, laws "protecting" labor by making it difficult to fire people. But those laws, by making employers reluctant to hire, help explain France's double-digit unemployment.

Cast a cold eye on this way of life -- this amalgam of desires for increasing affluence and leisure and weight in the world -- and "civilized" looks like a euphemism for "childish." Children are unaware of the costs of things, and the incompatibility of many desires.

Will doesn't say so, but there's no question that 50+ years of living under the American defense umbrella, in a world economy powered by American growth, has reduced the western part of the continent to the emotional stage of teenagers: old enough to operate the toys but not to produce or even understand them.

The EU was the means by which the delinquent French, Germans, and Belgians would entice college-bound New Europe to hang out for the summer rather than working.

The truly sad part is that Europe has entrepreneurial talent out that wazoo - just look at cell phones - but that talent is stifled by a system that resents success, especially new success. America has always benefitted by welcoming such people. Perhaps one of our greatest systemic threats is a China that now also does so, combined with a Democratic party that wants to replicate Europe's political culture here.

Posted by joshuasharf at 05:58 AM | Comments (0) | TrackBack