July 29, 2005

Can Markets Both Be Efficient and Make Mistakes?

Personally, I think this is one of those questions that answers itself. If one believes in efficient markets, one has to admit that something very mistake-like happened in 1929, 1987, 1998, 2000, and 2001.

And yet, many of us would still argue that it's difficult-to-impossible for most investors to beat the market.

How can this be true?

First off, let me point out that you don't have to believe in Modern Portfolio Theory to believe in Efficient Markets. These really are two separate things. I personally think Modern Portfolio Theory is largely a crock, based on a distribution of returns that just doesn't hold long enough to be useful.

That, however, is an argument for another day. For the moment, let me just reiterate that one can dismiss MPT, and still believe in Efficient Markets.

Not perfectly efficient markets, mind you. Data clearly shows leakage prior to major announcements, it shows momentum, mean reversion, and all sorts of other tantalizing bits that people have been following for years. That few, if any of these turn out to be investable doesn't refute their existence, and may in fact account for their persistence.

Still, how can an efficient market overshoot targets time after time?

I think the answer comes from another book that's awaiting review: The Wisdom of Crowds by James Surowiecki. He points out two things about collective, aggregated, independent crowds. First, that they are consistently smarter than even their smartest members; although individual members will inevtiable beat the crowd each time, these winners will invariably differ from run to run. And second, the decisions, the valuations, if you will, have to be independent.

The first observation results from efficiency under normal conditions. You and I may beat the market from time to time, but on the whole, the market is smarter than either of us.

The second observation is what causes mistakes. Since at any given moment, we assume that the market is smarter than we are, the tendency is to go along for the ride. And most of the time that's the right thing to do. The warning sign is when people stop looking ahead, and start looking side-to-side at what everyone else is doing.

That's when decisions stop being independent. First, people start looking for a greater fool. Then, they all head for the exits. That's what happened in 2000 during the tech bubble, and it's also what happened in stages to Long-Term Capital Management in 1998.

Even during a run, the market is smarter than we are. Even during Tulipmania, the market at each point is probably smarter than we are. There's a point where decisions stop being independent. But since nobody really knows when the fever breaks, it's hard for even the smart, cold-blooded investors to forgo certain profits and get off the merry-go-round before he's thrown off.

Posted by joshuasharf at 07:49 PM | TrackBack

On Meetings and Fatwas

My favorite American Muslims traveled to the Capitol to meet with Tom Tancredo on Wednesday. They didn't manage to get any farther than anyone else with Nuclear Tom, but they did manage to show a remarkable amount of patience in doing so.

Coalition member Ahmad Subhy Mansor, an imam who attended the meeting, said, "If I were in his place, an American congressman concerned about Americans being killed by terrorists, I would say the same thing as the congressman."

Just about the only thing Tancredo has done right in this whole mess is to stiff CAIR, refusing to meet with the little Hamas-niks. By meeting with Nawash, he may also be trying to boost Americans who act like it.

Still, having seen the way Jewish organizations treat each other, this scenario is dismayingly familiar:

Underlying the controversy is a dispute over who truly represents moderate Muslims.

Nawash, who ran unsuccessfully for the Virginia Senate in 2003 as a Republican and frequently appears on cable news shows, says his was the first U.S. Muslim group to thoroughly denounce terrorism.

He says his group has 9,500 members. But when he put together what was billed as Washington's first Muslim-led rally against terrorism in May, he drew only a few dozen people.

"His constituency, you could put it in a phone booth," said Mahdi Bray of the Muslim American Society Freedom Foundation.

Nawash dismisses such criticism as part of a petty rivalry. "There's no one group that represents all Muslims in America," Nawash said.

I would point out that thus far, it's the only Muslim-led rally against terrorism. The only Muslims other anti-terror rallies managed to attract out here have to be kept on the other side of the Thin Blue Line to keep them from painting the town red, so to speak.

And CAIR rejects criticism that it doesn't represent moderate Muslims or that it hasn't condemned terrorism.

"We rack our brains every day trying to think of new ways to denounce terrorism," Hooper said. "I don't know what more the American Muslim community can say about terrorist attacks by people who claim to represent Islam."

Poor Ibrahim Hooper. Now, I will say this fatwa is better than nothing, but not much, not this late in the game. Go ahead and read it.

Welcome back. First, what's right with it.

  • It's the first inward-directed statement I've seen. It's a fatwa, a real live, honest-to-Allah religious document, as opposed to the signs, and the fairly bland political statements CAIR manages to choke out in-between curses.
  • It specifically singles out suicide bombings.
  • It specifically requires cooperation with the police
  • It doesn't mention Israel. For instance, it doesn't say, "no matter what the provocation by the Zionist entity, nothing can justify..." No conditions.

    Now, what's wrong with it.

  • It doesn't mention Israel. Why is this bad? Because generally, these folks don't consider Israelis civilians, but in a ironic twist worthy of O. Henry, Crusaders.
  • It doesn't list enough specifics. Acts which are currently being celebrated by the Wahhabists and Moslem Brotherhood are left mentioned only by implication. In the past, contemporaneous statements condemning this or that attack have been generic and bland, and almost always contain the word "but." Here was a chance to say that Bus 19 wasn't just a tactical mistake, but immoral.
  • It doesn't list a non-exhaustive list of specific acts that are forbidden. I believe a major Western document does this.
  • I don't know if such a thing is permitted in a fatwa, but it also doesn't mention any punishment for getting mixed up in one of these forbidden acts. I do know Salman Rushdie's punishment was pretty specific.
  • There's enough wiggle room that a woman who wants to keep a driver's license photo from showing her face, pretty much defeating the point of the photo, is still allowed. CAIR may complain about this being brought up. Well, they started it.

    Look, Ibrahim Hooper may be wracking his poor, addle-pated brain trying to think of new ways to condemn terrorism, but he clearly hasn't bothered to ask what kind of things would work. Why not? Too degrading? Too bad. They and their multicultural apologists expect us to "engage" them so we can calculate just the right amount of subserviance in any statements we make, laws we pass, or wars we fight.

    But then, they didn't ask me.

    UPDATE: Steven Emerson is even harder on the fatwa than I am.

    Posted by joshuasharf at 12:47 AM | TrackBack
  • July 28, 2005

    Postal Over Plame

    The Denver Post is at it again, assuming the worst in order to exonerate one of their own (Reporter pays an unfair price).

    Three weeks ago, New York Times reporter Judith Miller went to federal prison to defend a principle: that in a free society, journalists must sometimes rely on unidentified sources. Miller, it should be noted, has never been accused of a crime and in fact did not even publish the information she was given by her anonymous source or sources.

    What anonymous sources have to do with a free society is unclear at best. The First Amendment is completely silent on the issue of anonymous sources. There is no federal shield law (and in my opinion, there shouldn't be one). Certainly, journalists must be free to print what's legal, and prior restraint is very limited, but as the Post admits, that isn't what's at stake here.

    The fact is that Miller, while not charged with a crime, is in violation of a court order, and is being held in contempt of court. Now the law does state that someone should only be imprisoned if there's a reasonable expectation that it will encourage them to - um, obey the law. There's every reason to believe that Miller can tough it out playing tennis and taking notes for her book on her three months of hell. But the Post doesn't make that argument, either. Instead, it argues that journalists are above the law.

    Meanwhile, two other characters who will have to account for their actions remain silent - relying on lawyers' advice and unusually high connections: President Bush's deputy chief of staff, Karl Rove, and Vice President Cheney's top aide, Lewis "Scooter" Libby. Both men have conceded that they spoke with reporters about former CIA operative Valerie Plame, whose clandestine cover was blown in an article by conservative columnist Robert Novak.

    *Sigh*. Once again, we don't know if Plame was undercover at the time, covered by the IIPA or not. We do know that major media organizations, whose reporters had or would be subpeonaed, filed a brief with the court arguing that no crime had been committed.

    As a side note, neither Miller nor Russert is identified as "liberal." Novak himself said that he did not know that Plame was undercover, and that he would not have published her name had he known.

    Then-White House press secretary Ari Fleischer's name has come up, too.

    As has that of Matt Cooper, Joe Wilson, and even Valerie Plame herself. Lots of names have come up. A throw-away mention like this reminds me of the Great Mentioner.

    It is illegal to knowingly unmask an undercover operative, and special prosecutor Patrick Fitzgerald has been reviewing discrepancies in witness testimony in his investigation into who told reporters about Plame. Novak first published Plame's occupation in July 2003 in what looked to be an administration effort to discredit her husband, former Ambassador Joseph Wilson, who had questioned the reasons President Bush launched the Iraq war.

    Or, an attempt to warn reporters that Wilson was in fact submarining the administration through a series of lies, dependent on his wife's position within the agency. The shredding of Wilson's credibility by the Senate Inelligence Committee wouldn't happen for another year, but when it did come, it would be virtually ignored by the Post and most other papers.

    Rove's lawyer says Rove wasn't the original source of the information. (We have to wonder, how would he know?)

    Rove is bound by federal laws that prohibit government officials from unveiling the name of covert U.S. operatives and by the restrictions that come with a top security clearance. Yet Miller sits in jail for doing her job.

    Well, since reporters who aren't under subpeona aren't allowed into the grand jury room, the Post wouldn't know. But then a great many statements have been made by a great many people, and the Post doesn't question those quite so easily.

    Moreover, the phrasing simply assumes Rove's guilt. Of course, if Karl Rove violated the IIPA, he should be charged. (Although one might well ask the what position the Post took on the Pentagon Papers.) Rove, it should be pointed out, has as yet been charged with no crime. So far, the only document connecting him with Mrs. Wilson seems to have been far too indistinctly classified, and at far too low a level, to have meant anything to anyone who didn't already know where she worked.

    The Washington Post reported that Libby told a grand jury he learned of Plame's name from NBC correspondent Tim Russert. But Russert said in a statement last year that he told the federal prosecutor "he did not know Ms. Plame's name or that she was a CIA operative" and that he did not provide such information to Libby in July 2003. Libby has paid no price in the matter. Yet Miller sits in jail for doing her job.

    Libby says one thing. Russert says something else. The Post simply assumes that Russert is telling the truth,and that Libby is lying. Libby hasn't been charged with a crime, either, and the probe may not even be about him, but the Post wants his job.

    The Post, in its cry for justice, wants scalps before charges have even been issued. And the dichotomy is completely false. Even if Rove and Libby were to be charged tomorrow for treason, those charges would have nothing to do with Judith Miller.

    Judith Miller is in violation of a court order. Journalists, even when they believe they are doing their jobs, are not above the law.

    Until Fitzgerald finishes his investigation, the public will not know if he believes anyone broke the law in outing Plame.

    (Scratching head.) So exactly what are we to assume that Libby and Rove are to pay a price for now? The Post is obviously throwing this in at the end to show that they defend the rule of law impartially, but it invalidates the whole editorial!

    He has erred in criminalizing Miller, who has been trapped in a high-stakes investigation and paid dearly to maintain her commitments and her credibility. She should be released while Fitzgerald sorts out this dirty business that has cost Plame her career.

    Wow. At least they didn't follow Jow Wilson in claiming They had endangered her life. Still, spare me all the righteous indignation about Valerie Plame. Bobby Ray Inman is quoted at National Review's Media Blog as saying the following:

    [The leaking of Plame's identity] is still one I would rather not see, but she was working in an analytical organization, and thereís nothing that precludes anyone from identifying analytical officers. I watch all the hand-wringing over the ruining of careers - there are a lot of operatives whose covers are blown. It doesnít mean the end of their careers. Many move to the analytical world, which is where she already was. It meant she couldnít deploy back off to Africa, but nothing Iíve seen indicated that was possible in the first place.

    Inman, by the way, ran Naval Intelligence under Ford, the NSA under Jimmy Carter, and was Deputy DCI for a year under Reagan. Clinton nominated him for Secretary of Defense, but Inman later withdrew.

    The Post, in trying to hold journalists to be above the law, has systematically ignored facts, reprinted lies, drawn false dichotomies, sought to deny others due process, and misunderstood the intelligence world to a degree even they should find embarassing.

    Cross-Posted at Oh, That Liberal Media.

    Posted by joshuasharf at 12:22 AM | TrackBack

    July 27, 2005

    CFA Blog Rises From the Dead

    Finally, I've started reading, so I've started writing.

    Posted by joshuasharf at 10:28 PM | TrackBack

    July 26, 2005

    Big Labor Disintegrates

    So another dinosaur bites the dust. Pretty soon, students of American business will look at the 20th Century the way we look at the Jurassic era. "What was the AFL-CIO, and who was this AT&T they had a problem with?"

    Big Bill Heyward would know what to do. Before two major unions walked out on their brothers, there'd be finger-snapping and Leonard Bernstein music playing over the loudspeakers.

    According to accounts, two, five, or seven major unions, fed up with a leadership that promised enrollment and elections and has managed to squander both, have and will soon pull out of the AFL-CIO and start their own umbrella organization.

    Now, this isn't exactly going to force John Sweeney to seek refuge in Avignon, mostly because union membership down to about 1/8 of the workforce, and half of that is public employees. (No, the other half is not newspaper writers.)

    Another one of the issues was competition. The dissident unions wanted the AFL-CIO to basically go all the way to godfather, sorting out inter-union disputes, marking out territories, forcing mergers, and preventing competition. That's actually pretty rich coming from the SEIU, which even now is scoping out the juiciest AFSCME territory for raids.

    The Ted Kennedys (what union did he belong to? Riverboat pilots?) and Dick Durbins of the world can rail all they want about how Management, sitting pig-like in their boardrooms, smoking cigars in their tophats, are chortling over the self-destruction of their greatest foe, but the fact is, management had long ceased seeing unions that way.

    Wal-Mart fights them, of course, but it was the unions that pillaged United and, even now, keep the company alive only to feed on its carcass. I remember talking to the head of one local company whose plant had recently unionized. You could tell, behind all the talk about how a single standard made things easier, that it really hadn't. But it was just a fact of life, not a hazard to navigation.

    The new umbrella organization apparently believes that if you're losing elections anyway, your problem may be that you can't mobilize enough voters. So their main focus will be on recruitment. Fine. It also is probably at least a little in response to a membership that was voting 35% of the time Republican, while watching 99% of their political contributions go to Democrats. The UAW was only able to get away with this because of a combination of neglect and cowardice in the face of a very clear Supreme Court ruling.

    Still, when most people still associate "union" with "hollow downtown Detroit," it's hard to see where all those new members are going to come from.

    Posted by joshuasharf at 09:23 PM | TrackBack

    July 25, 2005

    No Sacrifice?

    The New York Times's Thom Shanker has decided that our soldiers have decided that you're not doing enough:

    There is no serious talk of a draft to share the burden of fighting across the broad citizenry, and neither Republicans nor Democrats are pressing for a tax increase to force Americans to cover the $5 billion a month in costs from Iraq, Afghanistan and new counterterrorism missions.

    There are not even concerted efforts like the savings-bond drives or gasoline rationing that helped to unite the country behind its fighting forces in wars past.

    "Nobody in America is asked to sacrifice, except us," said one officer just back from a yearlong tour in Iraq, voicing a frustration now drawing the attention of academic specialists in military sociology.

    Remarkably, I also haven't seen schoolboys, silhouette reference cards in hand, scanning the skies for enemy bombers. Nor have I been silently asked at the light rail "Is This Trip Necessary?" to make way for departing troop trains. I was recently able to replace my tires at very reasonable prices.

    Why? Because while the military is on a war footing, we simply neither need nor want the kind of mobilization we had for WWII. There is no need for the government to comandeer the national economy. In fact, we're better off if we don't do that, Bernard Baruch notwithstanding.

    Shanker laments the lack of a tax increase to pay for the war. Except that the deficit has been shrinking for a little while now, thanks to the fact that Uncle Sam doesn't have to intercept wheat shipments and send them to the front.

    What Shanker doesn't examine is the source of this bitterness, whose extent, I might add, we really have no idea of. Is it possible that a soldier might feel just a little put-upon by Senators who compare their work to gulags, Representatives who call them as bad as Saddam? If the Army is watching CNN on its off-hours, I can see why they might be inclined to ask why these whining civvies aren't being asked to help out.

    Except that they have, and they do. I've heard the President speak of the need to support the troops in a tangible way. I've heard him give web addresses. I probably haven't heard it enough. I cetainly haven't heard it from Senator "Turban" Durbin's office.

    So, Senators, Congressmen, Governors, start with Soldier's Angels, Operation Uplink,
    Books For Soldiers. Every time you give a speech, mention these guys.

    Posted by joshuasharf at 10:40 PM | TrackBack

    Good Fundraising News

    The Rocky is reporting that the GOP candidates for governor are way ahead of their Democratic counterparts in fundraising.

    One advisor does suggest that a lack of enthusiasm on the Democratic side may have something to do with this.

    No kidding.

    Posted by joshuasharf at 10:14 PM | TrackBack

    Hugh "the Dhimmi" Hewitt

    Not. Look, I thought Hugh was a little less than aggressive in his questioning of CAIR's Hussam Ayloush. So did Froggy. So did Aaron. (Aaron, by the way, lays out the case against CAIR like few I've seen.)

    But "dhimmi?" C'mon guys. Hugh's able to get the bad guys to come on his show because he gives them a fair hearing, lets them say their piece, and then, when they're done, filets them like Uma Thurman in a bad mood.

    Anyway, since they're done, bring out the knives. Since Aaron is cool with a group fisking, I'll take two points made by the main from CAIR. First, Hugh asked him about the utter lack of religious plurality in Saudi Arabia, and Hussam replied that since 99.9% of Saudi Arabia was Muslim, there was no need for churches.

    Hugh's rather lame response was that the lack of churches certainly discouraged immigration.

    A better response would have been that the 2 million+ Philippino guest workers have no place to go. Admittedly, the mosques there tend to be of the radical sort. ("Welcome to Saudi Arabia. Where the family that prays together slays together.") But the fact is that Islamic law has, for centuries, banned to building of new churches and synagogues, although existing ones can be maintained. After all, they might "spread poison."

    The conversation moved on to MEMRI. Hugh had nothing but praise for these guys, but Hussam considered that they were doing a "grave disservice," by letting the world know what was being said in Arabic on Friday morning. After all, anyone can pick out the few crazies from the thousands of mosques.

    Hugh rightly replied that there really aren't very many crazies in churches and synagogues here in the states. A better reply would have been the following catalog of the minor, insignificant preachers given over to slight hyperbole:

  • Leading Saudi Imam
  • Head of Manhattan Islamic Center
  • Saudi TV
  • The Palestinian Authority

    The same page will also show, by the way, a fair number of Muslims and Arabs who think that maybe their religion and culture took a wrong turn at some point, and that if they want to regain their place in the world, they're not quite going about it the right way.

    So much for accentuating the negative.

    Hugh knows this stuff. I won't speculate as to why he didn't take a harder line, but I'm fairly confident that he still knows what side he's on.

    Posted by joshuasharf at 10:06 PM | TrackBack
  • Carnival of the Capitalists

    This week's Carnival is up, over at Political Calculations. Lots of stuff there worth reading this week.

    Posted by joshuasharf at 06:39 AM | TrackBack

    July 22, 2005

    Outdoor Pictures

    A couple of weeks ago, I took the afternoon off and drove out to Canyonlands National Park in search of a particular picture. I wanted Mesa Arch, at sunset, with a full moon rising.

    Two problems. First, it was cloudy. Second, I had forgotten about a large rock (that the Park Service clearly needs to dynamite) that blocks the sun from the Arch's western side. And yet, I still managed to get some pictures worth posting:

         

    The following weekend, on a lark I decided to head out camping.

     

    Yes, that's a friend's dog I had for the weekend, and yes, that's the new, larger tent I bought for the occasion. I walked off to go use the bathroom, and the dogs panicked at being left alone, and busted right through the screen door. I've always come back before, of course, but you never know what might happen between the tent and the primitive.

    Posted by joshuasharf at 12:15 PM | TrackBack

    Those Signs Again

    A few more thoughts on those signs.

    Yes, they probably would do more good if they were posted on the inside of the mosque rather than the outside. What we're asking for isn't so much a PR campaign as introspection and self-analysis.

    And there are several excellent questions that the banners invite, not all of them snarky. For instance, how does one explain the concept of dhimmitude in light of Islam's advertised tradition of tolerance?

    And yet, most of the questions have to do with problems overseas. People tend to come to America, to cross a wide ocean with expensive airfares, to get away from these problems. If there's any place that can work its assimilationist magic on this problem, it's here.

    I think the fact that the banners have pictures of the American flag on them is significant. After 9/11, houses, from those of residence to those of worship to those of ill-repute, put out the Red, White, & Blue. But I searched in vain for Old Glory over a mosque. Admittedly, a picture of a flag isn't the same thing as a flag itself, but again, we're talking baby steps here.

    In fact, this particular mosque has a little history in that regard. It was this mosque that some idiot AM shock jocks invaded with horns and noisemakers the morning after a Muslim Nuggets basketball player ostentatiously sat down during the national anthem before a game. No higher power than Allah, so how can he stand up for the flag? The Imams pretty quickly said he had been getting some bad advice, and the whole thing went away.

    But really. If you've got a universal religion, even symbols of a temporal power might be a problem. I don't see a lot of Union Jacks or Tri-colors or Bundesbanners at Muslim marches in Europe, either. So putting a picture of the flag up may be the beginnings of an American identity.

    One last point. Yes, the banners are directed outward. But remember, if first, people are ashamed to say certain things, they may soon be ashamed to think them.

    Posted by joshuasharf at 07:06 AM | TrackBack

    July 21, 2005

    How Not to Diversify

    Welcome Hugh Hewitt listeners. Scroll down if you're looking for the posting of the mosque pictures. Start here if you want to learn something about investing.

    What follows is the blogger's digest version of this Word working paper.

    For generations now, investors have been told to diversify on the basis of size and value-growth. There's no question that 1) value tends to outperform growth, 2) small tends to outperform large, and 3) it's good to diversify.

    But size and value-growth do not denote asset classes. Instead, US Equities should be seen as a single asset class. Diversification is still a good idea, but the differences in returns among cap sizes, and between value and growth stocks, are not great enough for them to define asset classes.

    Who says otherwise? Lots of people. Fund managers, advisors, journalists, researchers.

    I'd like to propose three requirements for asset classes:


    1. Orthogonality in Performance. Different asset classes should have low correlations in their returns. Individual stocks may be exposed to interest rates or commodities, but in general will not rise or fall solely in response to those factors. This quality is necessary to make sure that different asset classes actually contribute to return while lowering risk and volatility.
    2. Mutually-Exclusive Definition. An asset should not be able to live in more than one asset class. A corollary to this is that an assetís class should be clear and generally agreed-upon. Different analysts should not be able to classify the same asset differently.
    3. Stability. Assets should not be changing class frequently, if at all. While this follows from No. 2, it isnít the same thing. An asset could change characteristics in such as a way that analysts agree it should be re-classified, but this should be rare. Still, for definitions to have integrity, assets shouldnít be popping in and out of them, or drifting across class lines easily.

    There are a number of large indexing firms that break US stocks down into these categories. They don't fit any of these requirements.

    Orthogonality in Performance

    There is very high correlation among these various indices. Here, for instance, is a scatterplot of the daily returns of the Morgan-Stanley Large-Cap Value vs. Small-Cap Growth for the last 13 years.

    If I use the following list of asset classes as a baseline,


    • Cash Equivalents
    • Foreign Cash
    • Government Bonds
    • Tax-Exempt Bonds
    • Corporate Bonds
    • Large Stocks
    • Small Stocks
    • Foreign Stocks
    • Investment Real Estate Unlevgd
    • Residential Real Estate Unlevgd
    • Farm Real Estate
    • Energy
    • Precious Metals

    The average correlation in annual returns is 0.068. Here's what that looks like:

    These high correlations hold across countries, indexing services, decades, value-growth, and size. Once in a while, you'll get something as low as 0.444, such as the Morgan-Stanley Value and Growth indices for Ireland. But those are anomalies, serious outliers, which probably show that whatever metric their overlaying on the stocks doesn't work all the time.

    If you believe in modern portfolio theory, CAPM, and the Efficient Frontier, this is a problem. Because if you add in any sub-class by itself, you end up moving the frontier to the right, not to the left. The risk contribution, as measured by standard deviation, adds up faster than the return contribution, because the correlations are higher within US equities than between US equities and anything else in the list.

    If you don't believe in modern portfolio theory, because returns aren't normally distributed, you should still come up short, because correlations still matter in normal times, and correlations within US equity "asset classes" dwarf anything else in the list.

    Mutually-Exclusive Definition

    If you're going to draw lines, draw lines. It's no good having the same stock rated as Value by Mr. Morgan and Growth by Mr. Stanley. It's no good having the same stock rated as Large by Morning and Small by star. It's also no good having your mid-cap range cover the same ground as your small-cap.

    Guess what.

    Here's how five different indexing services define Small, Medium, and Large:

    Now we know where shirt-makers have been taking their cue from. Note that one of them doesn't even believe that "mid" exists, slicing it off as the smaller part of "large."

    Comparing the latest S&P and Morningstar index components, and looking only at the components they have in common, we also see a fair amount of disagreement:

     

    What's really problematic is that the indexers aren't even internally consistent:

    This may overstate the amount of overlap, since the distributions aren't flat. But still. Now part of this is a result of drift. Indexing services are reluctant to reclassify stocks just because they happen to float over the line between "Large" and "Mid." Maybe they just swam into the lane markers, and are really still behaving like a Large stock. Which brings us to

    Stability

    Every six months, S&P reconstitutes their 1500 index, comprised of the Large 500, the Mid 400, and the Small 600. Each of those is broken into Value and Growth. Over the course of six months, they'll have more than 1500 stocks in the list. Here's how many of the total 1500 change categories every six months:

    Again, these are only the stocks that stay in the 1500, but change index. It averages more than 1 stock in 9.

    Now, indexers will argue that it's not fair to expect mutual-exclusivity and stability. I would argue that that's an excellent reason why you can't break US equities down into separate asset classes, at least not by size and value-growth.

    This means that while you still want to diversify your portfolio, maybe by industry, maybe by Barra risk factors, you don't gain anything by diversifying across size and value-growth.

    Posted by joshuasharf at 07:01 PM | TrackBack

    A Very Good Start

    UPDATE: Welcome Hugh Hewitt Listeners. Look around, and while you're here, check out the rest of the Rocky Mountain Alliance.

    Today, I happened to drive by the local Islamic Center, not the mosque of Imam Kazerooni, who is Shiite, but a Suuni mosque. They've added some very welcome decoration:

        

    This is good. For one thing, it's the first time I've seen an American flag anywhere near a mosque since September 11. For another thing, they really do say all the right things. The more this becomes the message from Islam, the better. (They could use a better proofreader, but it's no worse than a whole lot of Israeli menus I've seen in LA.)

    There's no question that the fact that the London bombers were homegrown has finally gotten through to some American Muslims that this is their problem, that they can't say to themselves and others, "these guys are from someplace else, they don't have anything to do with me."

    That said, I think these banners need to face inward every bit as much as they face outward, if not on Parker Rd. then elsewhere.

    Posted by joshuasharf at 04:37 PM | TrackBack

    July 20, 2005

    Cato and Chinese Straw-Men

    K-Lo summarizes a conversation she had with Jerry Taylor of the Cato Institute concerning the Cnooc bid for Unocal.

    This is why you don't ever let Cato guys anywhere near foreign policy. He's got so many straw-man arguments here that he's going to have to resurrect Ray Bolger to fill them out.

    Our hostility to China's takeover of Unocal isn't based on hostility to a prosperous China. I don't know anyone who thinks this.

    It's based on China's hostility to us. I don't care if this makes China more prosperous. I do care if it's China using frankly imperialist measures to lock up half the world's natural resources, making it pre-emptively harder for us to get them, especially in a crisis.

    China hasn't gone to war with anyone because they have lacked the means and the motive. They're certainly not shy about threatening to incinerate half of the western US if we try to defend Taiwan. And, um, China attacks Taiwan, but we're the aggressor? How does he get there from here?

    If Taylor's sick of hearing about China's attitude towards human rights, he should take it up with the Chinese. French instincts on human rights aren't mine, but I'm pretty sure French correspondents for the Washington Post haven't been tossed incommunicado into the Bastille anytime recently. Major operations, like, oh, the oil industry, are substantially government-controlled. And by my count, the number of major political parties in China is "one." Perhaps he'd like to go over there and try to form another.

    Finally, US investment in China is one of the great con-games of all time. Foreigners can't outright own Chinese companies. They own assets at a minority share, and if Taylor doesn't think every vote counts, he should ask Al Gore. The government routinely demands technology transfer, and the currency isn't convertible. China knows it needs foreign direct investment, and it gets it by pointing to 1 billion Chinese and the promise of tomorrow's profits. So far, nobody's making any money over there.

    I want free trade with China. I'm well aware of, and support the idea that a growing middle class is going to demand control over their lives. That's what scared the Junkers into starting WWI, too.

    Posted by joshuasharf at 05:00 PM | TrackBack

    Dread Pirate Roberts

    OK. So the Progress for America folks have reserved www.judgeroberts.com to help promote his confirmation. The Judicial Confirmation Network has reserved Confirm Judge Roberts.

    Why not www.confirmroberts.com? Because that domain was already squatted last November by none other than one Brian Komar of the Leadership Conference on Civil Rights.

    How - childish. Of course, Wade Henderson gets interviewed by every newspaper in the country looking for opposition to Roberts, but he needs to hijack a perfectly good site, months in advance. I don't suppose a third party can establish prior use on someone else's name, especially one as common as
    Roberts, though.

    If these people want to be taken seriously as anything other than political bullies and name-callers, they'll have to come up with some ideas that can stand on their own, without having to fly under a false flag to get attention.

    UPDATE: I had second thought, hopes that the LCCR had some legitimate reason for wanting confirmroberts, especially as far back as November 17, 2004. Perhaps there was a Judge Roberts they liked, or a special election or local nomination or perhaps a state judge named Roberts.

    Nope. They never fail to disappoint. They also took confirmluttig.com

    ANOTHER UPDATE: Defeatroberts.com, along with rejectroberts.com and a host of related domains were also reserved yesterday by someone named Marcus Belk, claiming to be a democratic political consultant based in Hoboken. Maybe. Truebluedemocrats.com is the only reference I could find for him, but he is offering the domains for sale, rather than trying to deny access to his opponents.

    Posted by joshuasharf at 12:33 PM | TrackBack

    July 18, 2005

    Way Behind the Curve

    Ed Quillen, the Denver Post's resident ex-journalist and current curmudgeon, is generally an excellent read. He's not conservative by any stretch. He writes from Salida, Colorado, and calls Denver the "Front Strange."

    His Sunday oped was about the Plame kerfuffle, and was so factually-challenged that one wonders whether the fine Coloado summer had gotten to him a little.

    Every time a reporter goes to jail to protect a confidential source, it inspires some anguish here. It happened last week, when Judith Miller, a reporter for The New York Times, went to jail rather than testify before a grand jury about a conversation she had with someone whose privacy she had promised to protect.

    It's part of one of those "inside the Beltway" issues that gets people all riled up in Washington, but it's not the stuff of morning coffee chatter in territory where people have to work for a living.

    If Quillen is correct, then most people reading his column are hearing about the whole kerfuffle for the first time. What he says will be the story they remember. You would think that, as an old newspaperman, he'd bother to get the facts right.

    In February 2002, Joseph C. Wilson IV was sent by the CIA to Niger to investigate rumors that Iraq was trying to buy nuclear material there. A year later, he began criticizing the Bush administration for exaggerating the threat from Saddam Hussein.

    Well, when you put it that way, sure. Never mind that the way he "critized the Bush administration" was to lie about the origin, contents, manner, and results of his "investigation." This is a bit like saying that Mussolini was "criticizing" the Italian government in the 20s.

    Shortly thereafter, syndicated Washington columnist Robert D. Novak wrote that two administration officials had told him that Wilson's Niger trip had been suggested by Wilson's wife, Valerie Plame, an undercover CIA operative.

    Well, there are two ways to read this sentence, and both of them are wrong. Novak never wrote that Plame was an undercover CIA officer. And Plame wasn't an undercover CIA officer.

    Presumably, the idea was to discredit Wilson.

    Actually, the idea was at least to let Newsweek's reporter know that maybe Wilson wasn't all he was pretending to be.

    Wilson would do a fine job of discrediting himself in fairly short order.

    It is a federal felony to identify an active undercover CIA officer. Thus the officials who talked to Novak might have committed a crime. A special prosecutor, Patrick Fitzgerald, was appointed, and he's trying to find out who leaked Plame's name. He has summoned reporters before a grand jury, with the threat that they'll be held in contempt if they don't testify. Miller wouldn't talk, and she's in jail.

    Most states, including Colorado, have a "shield law" that helps protect journalists from being questioned about anonymous sources during a criminal investigation.

    There isn't a federal shield law, and there's an argument against one, since the First Amendment belongs to all Americans, not just those with printing presses or broadcast licenses. Why should reporters enjoy any more rights than anyone else?

    There's a partial answer in that reporters spend a lot of time talking to people, and if there weren't a shield law, lazy prosecuting attorneys would use reporters to do their investigations.

    ...

    Now, I don't know if Fitzgerald, the special prosecutor in the CIA-agent-identity-leak case, is haling reporters before a grand jury because he's lazy or because that's the only way he can get information about a crime, reporters' promises or not.

    I've skipped a story here about how Quillen had to deal with a similar situation in the past. Similar, but not identical. Because while Quillen was trying to protect someone who had told him about a crime, Miller is going to jail because the act of telling her something may have been a crime. That's why Fitzgerald is talking to reporters.

    I do know that when somebody calls me and says, "I've got some hot information, but you can't tell anybody you heard it from me," I tell them to call someone else if the secret must be kept. I'm a blabbermouth by nature and my business is presenting things to the public, not hiding things from the public.

    Except that Cooper called Rove, not the other way around. And Cooper asked Rove about Wilson, not the other way around.

    And I'm willing to bet on this: Miller will be the only one to serve any jail time as a result of this Beltway brouhaha. After all, she's part of the Liberal Media Elite, and in these times, many Americans will figure she deserves it, as opposed to some White House source who put an American agent's life at risk.

    I used to work for the Agency, indirectly, as a contractor. I knew CIA officers, lots of them. I have a fair sense of how the Agency operates. It's entirely possible that Plame could work at Langley and be undercover. Operatives frequently do rotations at HQ before being sent back out into the field. But if Plame is going around telling her friends and family where she works, she's not undercover. No way, no how. Miller may be the only one to serve jail time because there may not actually be a crime here at all.

    I don't want to be too hard on Mr. Quillen. He tends to answer emails, and he's the property of no political party. But there's plenty of original-source material out there for him to check. A piece like this might have been forgiveable two weeks or two months or two years ago. I don't know what the lead time on his columns is, and it's possible he wrote this before the Latest Startling Revelations became public. By Sunday, if the Post hadn't been sleeping off their hangovers, they certainly should have spiked the column for inaccuracy.

    Cross-Posted at Oh, That Liberal Media.

    Posted by joshuasharf at 09:46 PM | TrackBack

    Tancredo Goes Nuclear

    Hugh Hewitt spent most of his show explaining why Tom Tancredo's threat to nuke Mecca in response to an al Qaeda nuclear attack on America is thoroughly irresponsible. I don't need to rehash that here, except to say that Hugh's right.

    That said, wars do this to people. Wars distort and heighten emotion, and lead otherwise responsible people to do and say really, really stupid things.

    Therefore, the imperative is not to end this war with a minimum of damage, or to try to finesse its conduct, but to end it as quickly as we possibly can. To end the Syrian regime, and to help the Iranian people annihilate the mullahs as quickly as possible. Life is, sadly, messy, and many wars have been lost by being too clever by half. Unless we do that, we're going to be seeing more of this from other Tancredos and Turban Durbins.

    Welcome to the multi-polar world. Latin America doing its NASCAR impersonation with a series of hard left turns. Chinese generals a threatening to incinerate everything west of the Mississippi unless we admit that resistance is futile and that Taiwan will be assimilated.

    These Islamicists are a big deal, and yet, at the same time, pretty small fry. Let's finish them off.

    Posted by joshuasharf at 08:52 PM | TrackBack

    July 17, 2005

    The Joys of Federalism

    One of the pleasures of a federal system is that every state does things just a little bit differently. John Andrews writes first to correct an error. Gov. Owens did in fact appoint the oft-dissenting Justice Coats, so this would be his second appointment, not his first.

    As to the process of appointing state Supreme Court Justices, apparently a nominating commission recommends three candidates, of whom the governor gets to pick one. There's no further immediate review, but the voters must approve the new Justice for a 10-year term, in the first even-numbered year after the appointment.

    The membership of the nominating commission is quite remarkable:

    The chief justice of the supreme court chairs the commission and is a non-voting member. This commission includes one citizen admitted to practice law in Colorado and one citizen not admitted to practice law residing in each of the stateís seven congressional districts, and one additional citizen not admitted to practice law in Colorado.

    ...

    Commission members serve six-year terms. Non-lawyers, who are the majority of every nominating commission, are appointed by the governor. Lawyer members are appointed by joint action of the governor, attorney general, and chief justice.

    The idea of deliberately including non-lawyers at the highest levels of the process is heartening. Giving them an outright majority takes checks and balances to practically Athenian levels.

    I would point out, though, that Justice Coats was appointed in 2000, a little over a year into Governor Owens's first term. I assume the terms are staggered, so the membership of the nomination commission would still be overwhelmingly holdovers from Gov. Romer's tenure. This would be the first Justice appointed using players Gov. Owens had recruited, so to speak.

    Posted by joshuasharf at 04:32 PM | TrackBack

    July 15, 2005

    Madame Justice Kourlis?

    The Denver Post is reporting that the next Supreme Court Justice may come from the Colorado Supreme Court, Justice Rebecca Love Kourlis.

    While Justice Kourlis was appointed by Gov. Roy Roemer in 1995, she has tended to be a strict constructionist and a proponent of judicial restraint. She wrote the dissent when then-Attorney General Ken Salazar went to bat for his party, getting the courts to usurp the redistricting power of the legislature. From that dissent:

    I fundamentally disagree. Courts cannot be lawmakers under Article V of the Colorado Constitution. Courts do not enact or create laws; courts declare what the law is and what it requires. To hold otherwise violates the clear language of Article V and also the mandates of Article III of the Colorado Constitution, which delineates the separation of powers among the three coordinate branches of Colorado government.

    The only authority that courts have to intervene in this purely political, legislative process is to review the constitutionality of existing districts, as we would review the constitutionality of any law, in order to protect the voting rights of aggrieved claimants. Within that limited framework, courts may enter emergency or remedial orders for the purpose of allowing elections to go forward. Such court orders are interstitial, and cannot then serve to preempt the legislature from reclaiming its authority to redistrict.

    And in what's frequently a loser these days, she argues that the Colorado Supreme Court should have held off for a while:

    I also note that I do not believe that this court should ever have chosen to accept original jurisdiction in this case. At the time this court did so, there was a case pending in the Denver District Court that raised all of the issues before us now, plus a variety of other legal and factual issues. If that case had been allowed to proceed, the trial court would not only have addressed all disputed issues of fact but would also have ruled on all legal theories presented by the plaintiffs. In that situation, we would be in a position to resolve the issues with a full factual record. By taking this case when we did, we unnecessarily circumvented the normal process of case resolution, and limited ourselves to addressing the constitutional issues first rather than as a last resort.

    Interestingly, she also dissented in the case that overturned Colorado's voucher law on the pretext that that law violated local control over schools. Her dissent contained this paragraph:

    Further, although I agree that this court authored four cases dated between 1915 and 1931 that appear to equate local control over instruction with local control over educational tax dollars, in my view, the court has already moved away from that strict formulation in our more recent cases and it would be inconsistent with those modern cases to hold the Pilot Program unconstitutional.

    This would seem to place her more in the Scalia mold than the Thomas mold, since she relies on more recent precedent rather than an originalist reading of the state Constitution here. In both cases, though, she opts for actually reading the Constitution instead of making it up as we go along.

    If there's one drawback to Justice Kourlis's career, it's that the words "Justice Kourlis joins Justice Coates in the dissent" appear frequently in Supreme Court opinions. No doubt some will complain that by not surrendering to the Will of the Majority, she doesn't play well with others. Naturally, there's no actual evidence of a personality disorder, just a penchant for sticking to principle.

    As a side-note, this would create Governor Owens's first chance to appoint a State Supreme Court Justice. He could do worse, than MoHo, the Honorable Morris Hoffman of Colorado's 2nd District. Hoffman wrote the opinion in Common Cause's attempt to disrupt the 2004 elections by counting every ballot, valid or not. He's respected, and has a reputation in the legal community for doing his homework and taking his cases seriously.

    On the downside, I have no idea how common it is for a judge to jump to the State Supreme Court straight from a district court. And while the governor would be replacing one conservative justice with another, I also don't know how obstreperous the Senate Democrats would choose to be. My personal guess is that with an 18-17 majority, there are any number of sane Senators willing to be reasonable.

    Posted by joshuasharf at 07:58 PM | TrackBack

    July 13, 2005

    Conference Calls

    Yesterday, I had the chance to sit in on two separate conference calls concerning the upcoming Supreme Court appointment. One fulfilled the prophecy of the other.

    The first was by the group Progress for America, working to support the President's nominee. The other was a call sponsored by the DSCC, featuring Howard Dean and Harry Reid, working to oppose the nominee.

    Without a nominee yet, PFA has been able to play offense, ridiculing the Democrats' pre-emptive carpet-bombing of someone they haven't even seen yet. They unveiled the Rage Gauge, a catalog of Democratic and leftist hysteria. PFA has also published the rules of the game, as it's now played in Washington, in the hope that forewarned is both forearmed and inoculated.

    Harry Reid, well, Harry pretty much read their script and his. His call was sponsored by the DSCC, and featued an introduction by Howard Dean wishfully calling him the majority leader.

    I would point out that during his introduction, Dean noted that "there's thousands of people on this call." The invitation I received didn't say anything about not recording it. It explicitly suggested that I forward the email and the response link along to friends, to increase the participation. A screening process that lets a registered Republican participate in a conference call along with "thousands of people" can hardly be the result of an expectation of privacy.

    I think the important thing is I recognize this first meeting is not "consultation." It's the beginning of consultation.

    And who knows where it might end? The Democrats have a bit of a problem here, because nobody wants to formalize the process outside the committee hearings and floor devate, but it's completely unclear as to what "consultation" means. Rest assured that these are rocket-propelled goal posts on roller-blades.

    I've said publicly this is a chance to unite the country. We've been through this waste of time, the nuclear option. He has tried to spend a lot of time on Social Security, and now people are just walking away from it, even Republicans. A little over 20% of the people think that's a good idea. We have intractable war in Iraq.

    There's almost not a word of this that's true, and even less of it that's relevant. This is not a chance to unite a country, and not even clear that that's the role of a Supreme Court nomination. The nominations of Ginsburg and Breyer didn't unite the country - they passed because the Republicans didn't fight qualified, albeit very liberal - nominees.

    What Social Security and the Iraq War have to do with this is beyond my imagining, except that they tell you something about where the Democratic Party has wandered off to. While conservatives point out that the Court will likely have to decide on cases inolving the conduct of the war, Reid simply uses it to undermine the effort and the Administration.

    Does anyone really think that a Supreme Court nomination is going to unite the country? Is Reid really suggesting that the proper nominee will make it easier to work with the Democrats on Social Security and national defense?

    We don't want this to be a show of, uh, consultation that really doesn't exist. The fact that reached out and called a lot of Senators saying, "what do you think, uh, give us some names" that's not consultation. We need to know the names of people he's talking about putting on this very, very important job to replace Sandra Day O'Connor.

    So it's not consultation to come up with a list of names without talking, and it's not consultation to ask for names that the Democrats would consider acceptable. As I said, rocket-propelled goalposts. On rollerblades.

    In response to a question about filibusters:

    The nuclear option is gone. It's over with. It's history. Even Ben Nelson, probably the most conservative member of our caucus has said, if there is an activist judge, and he feels that's extraordinary, he'll move for filibuster.

    It looks more as more as though this deal was a bad one fore the Democrats, and that Reid is trying to rein in his caucus. I'd be more than a little worried about Nelson staying on the reservation, especially since he's up in 2006.

    That said, the nuclear option was never about what the Democrats would do, it's about what the Republicans would do. If the Republicans believe that the Democrats have acted in bad faith, or that they're looking up "extraordinary" in foreign dictionaries, it's pretty clear that there are two votes there to revive the nuclear option. Reid can't control that, so he has to try to talk the nuclear option to death by pretending there weren't two sides to the deal.

    I am very concerned about Sen. Frist. Today, we had a good meeting in the White House. He comes to the Senate floor, half hour after the meeting ends, and annouces that he does not want "co-nominations." This is something that came directly from the mouth of Jim Dobson, I'm sure. There wasn't anything brought up in that meeting, no one suggests that that's what we're gonna do.

    Ding! Another talking point, James Dobson. Now, either Reid is just making this up, or he's tapped Frist's phones. How does he know where Frist got this from?

    Look, I'm very unhappy with James Dobson being the poster boy for the judicial nominations fight. I don't think he's good at it, and I don't think he understands the differences among conservative activism, judicial restraint, and originalism. But dragging him here in from right field is just wacky, something to keep the base riled up.

    If the President sends us a consensus nominee, the Senate will confirm that nominee easily. If he sends us a divisive nominee, we will use all procedural tools at our disposal to protect the American people. And finally, let me say this. What kind of a message does President Bush want to send to the American people? A judge that's approved on a party-line vote? I don't think that's very good.

    "Protect the American people." From what? Local governments kicking us out of our homes? Oh, wait. Never mind.

    Actually, the President is getting ready to send up a justice who will, against the will of the rest of the Court, write such rulings that will have governments all over the country putting in orders to Hugo Boss for those smashing black uniforms with the little red-white-and-black logos on them. Right.

    But notice that last line. If the nuclear option is dead, then a Justice couldn't get approved on a party-line vote. The only way that could happen is if the Democrats refused to filibuster, but then voted en bloc against the nominee.

    Reid has just admitted that the nuclear option is still very much alive.

    At this point, the host read a question asking how he could avoid having the nomination become hostage to competing litmus tests.

    I'm amazed, all this talk about litmus tests. It's interesting. It's not Democrats who have a litmus test for nominees. Actually, there's been a lot of talk from the right wing about "litmus tests." President Bush has recently had to tell some of the more extreme activists to tone down the rhetoric when they attacked his own Attorney General.

    Again, there's a process in place which nominees are evaluated. If the President, I repeat, nominates someone like Sandra Day O'Connor - we know she was a conservative - there shouldn't be a problem with getting him or her confirmed.

    We're not here to pick a fight; it's up to the President to avoid a confrontation.

    No Democratic litmus test? One word - abortion. Notice that all the Democratic, and left-wing activists, talk about political philosophy, while the Republicans talk about judicial philosophy.

    And, um, let's leave the cognitive dissonance, the internal contradictions of that last sentence, to Sen. Reid and his analyst.

    Finally, Reid commented on Sen. Frist's claim that Presidential consultation of the sort we saw yesterday was "unprecedented." He all but called Frist a liar, and then provided two historical examples.

    Herbert Hoover had an ampening - opening, on the
    Supreme Court. He called the very, very powerful Borah, senator from Idaho, down to the White House to talk about him. And in fact, the President gave Sen. Borah a list of people he was thinking about putting on the Supreme Court.

    Borah looked it over and he said, "Mr. President, this is a great list except you have it upside-down. And he moved Benjamin Cardozo, who was last, first. And he became one of our great justices."

    Except that Borah was a single member, a Republican, and a member of the President's own party, and in the majority at the time. Reid might want to win a few elections before he starts claiming those privileges.

    President Clinton. President Clinton wanted very badly to have his friend Bruce Babbitt go on the Supreme Court. He sent that name to Hatch and the Republican members of the Judiciary Committee, Hatch said, "no, that's a battle that you will wish you hadn't gotten involved in." As a result of that we had a good Supreme Court justice. I don't know whether that was Breyer or Ginsburg, one of them stepped in there.

    Again, the President is consulting with the majority party, not the minority here. He probably already had some idea of what the Democrats thought.

    Bruce Babbitt was not known as a judge, he was known as a Senator and cabinet secretary. Objections to what could be interpreted as a political nomination to the Court were prefectly reasonable.

    And the justice who got approved, whether it was Breyer or Ginsburg, was very liberal.

    Harry, you're going to have to do better than following the other guy's script.

    Posted by joshuasharf at 10:01 AM | TrackBack

    July 11, 2005

    Carnival of the Capitalists

    The Carnival is up!

    I'm seriously looking forward to hosting this thing in a few weeks.

    Posted by joshuasharf at 05:33 PM | TrackBack

    Some of Colorado is Burning

    This year's wildfire season has been mild thus far, but there's one going now just west of Pueblo, near a little town called Wetmore. I spent a week there in December of 2002 at a cabin, hanging out with the dog, relaxing, driving, hiking a little, reflecting on the first quarter of b-school and wondering what I had gotten myself into. As I recall, the stay coincided with the Leonid(?) meteor shower, although it seems to me there was also a moon out that evening.

    Gorgeous country, and the sooner they can get it under control, the better.

    What's that, you say? You want pictures?

            

    Posted by joshuasharf at 11:57 AM | TrackBack

    July 10, 2005

    London Attacked - Local Cleric Seeks Victim Status

    Even as the British authorities try to find the perpetrators of the attack, and even as speculation grows that the terrorists were - surprise! - home-grown rather than imported, the local Denver Imam is making sure to cover himself. After all, the real victims of the attacks aren't the dead and maimed. No, the real victims are the Muslims, who will be made to worry that someone might blame them for failing to help out the police ahead of time, rather than after the fact.

    He added that when people stereotype any group, such as linking all Muslims to a terrorist incident, "people react with irrational behavior."

    No doubt this also includes asking local religious leaders why exactly they're sharing afternoon tea with their bretheren who say one thing in Arabic on Friday and something rather different in English the rest of the week. One shouldn't, of course, look at a Muslim and assume he harbors any sympathy for murder. But these harder, community and institutional questions are simply called out of bounds, when in fact, they offer the only excuse for not lumping all Muslims together.

    The two men - who have been working together on the church's Abrahamic Initiative, a project designed to build relationships among Jews, Christians and Muslims, for nearly a year - condemned the attacks and cautioned anyone against linking those responsible to any particular group.

    When they spoke, it was not clear who was behind the London attacks; a previously unknown group called the Secret Organization of al-Qaeda in Europe had made an unverified claim of responsibility.

    Funny, though, that no rabbis were interviewed in the writing of this article. I wouldn't expect them to say anything different, but still, it would have been nice. I have an email in to Ms. House asking about that.

    In fact, though, it's the linking of the bombing to a general group, not a particular one, that poses the greatest threat to truth. Just as we wouldn't want to assume that any given religious Muslim is hosting light-rail bombing planning sessions in his apartment, it's most important for Muslims to identify - and tip off the police - other Muslims who are spending the weekends testing out blasting caps and poertable timers.

    Then again, perhaps the second paragraph insists on a little too much specificity. We may not yet have the names and addresses of the bombers, and the locale of the mosque whose imam gave them his blessing, but I think it's pretty clear who in a philosophical and political sense was behind this.

    While Eaton said he was as "surprised and shocked as anybody," Kazerooni said the war in Iraq may have been a motivation for the attackers. Britain and the United States don't appear to be seeking a resolution, Kazerooni said.

    "The longer the occupation continues, the more it becomes a hotbed of terrorism," Kazerooni said.

    Ah yes, maybe 9/11 was just a pre-emptive attack in case Iraq was invaded, then. Well, if they're teaching that sort of prophecy down at the mosque, I'd imagine you'd see some pretty hot action down at the sportsbook window at Caesar's.

    Left unsaid is that Kazrooni, while a Shiite refugee from Saddam's Peaceable Kingdom himself, opposed the invasion from the beginning, and that London has looked like a pretty jiucy target since well before April 2003. Sure, they may be trying to pry Britain loose from the coalition, but that's tactics, not strategy. My guess is that this has more to do with the 10th anniversary of Srbenica than with any brothers-in-arms in Fallujah who've gone on to Eternal Disappointment.

    Both men said reports that British Muslims were encouraged to remain at home were disturbing.

    "It focuses this on a group of people who have no relation to this act at all," Eaton said.

    What they didn't say was that the people doing the encouraging were something called the "Islamic Human Rights Commission," whose main contribution to Islamic Human Rights was the unconditional support of Palestinian terror, and whose best friends seem to be the Noturei Karta, a group of a couple hundred Orthodox Jews who think Israel was a grand cosmological mistake.

    It's no trick as to why they'd be peddling this line. A group whose whole means of support comes from a siege mentality is going to do their best to put their own people under seige, even if they have to bring in the battering rams themselves.

    We've said it before, and we'll say it again. Until we demand that the Muslim community begins taking collective responsibility as eagerly as it files for collective greivances, this is going to get a lot worse before it gets better.

    Posted by joshuasharf at 11:40 PM | TrackBack

    Air

    So, I'm sitting out here in Cherry Creek North, enjoying the free Wifi thoughtfully provided by the neighborhood business community, getting a little writing done on the finance research. It's lovely weather. The Sunday evening cafe society is alive and well, and the ubiquitous stop signs keep all but the most ambitious motorcycle engines to a purr. And polite dogs are welcome.

    Suddenly, as I'm sitting here, I notice that I don't feel the air. At all. There's no breeze, and the temperature has just crossed into the no-man's land between "a little warmer than skin temperature" and "a little cooler than." It's a remarkably - odd - feeling of nothing. You lose yourself, you lose the sensation of having a skin. You lose the sensation of there being any air, although continued breathing is reassuring.

    Such moments don't last, obviously. Ah, even now, it's just a little cooler, and that's all it takes to break the spell. But while it lasts, the air is as clear to the touch as it is to sight.

    Posted by joshuasharf at 08:47 PM | TrackBack

    July 06, 2005

    Adm. Stockdale, RIP

    Admiral James Stockdale has died. For those looking for heroes, Stockdale was the genuine article. Kept in the Hanoi Hilton for 8 years, Stockdale became the leader of the POWs there, helping them survive an actual torture camp.

    Jim Collins recounts interviewing Stockdale for his book, Good to Great:


    "I never lost faith in the end of the story," he said, when I asked him. "I never doubted not only that I would get out, but also that I would prevail in the end, and that I would turn the experience into the defining moment of my life, which, in retrospect, I would not trade."

    I didn't say anything for many minutes, and we continued the slow walk toward the faculty club, Stockdale limping and arc-swinging his stiff leg that had never fully recovered from repeated torture. Finally, after about 100 meters of silence, I asked, "Who didn't make it out?"

    "Oh, that's easy," he said, "the optimists."

    "The optimists? I don't understand," I said, now completely confused, given what he'd said a hundred meters earlier.

    "The optimists. Oh, they were the ones who said, 'We're going to be out by Christmas.' And Christmas would come, and Christmas would go. Then they'd say, 'We're going to be out by Easter.' And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart."

    Another long paus, and more walking. Then he turned to me and said, "This is a very important lesson. You must never confuse faith that you will prevail in the end - which you can never afford to lose - with the discipline to confront the most brutal facts of your current reality, whatever they might be."

    To this day, I carry a mental image of Stockdale admonishing the optimists: "We're not getting out by Christmas; deal with it!"

    Those who like to prate on about the evils of Gitmo would do well to read his memoirs of those years. But then, that would take the guts to confront the most brutal facts of their reality.

    Posted by joshuasharf at 11:38 AM | TrackBack

    Deconstructing a Sukkah

    Ah, at long last, the silence is broken. So, after graduation, I thought, I'll have all this free time! Right. For the moment, that free time is being used catching up on 3 years of neglected household chores. Like finishing the garage (pictures to follow).

    And then, there's the beginning of the back yard's Long March back from xeriscaping nightmare to plush green grass & garden. Step 1: clear out all the accumulated detritus so I can actually get to work on it, killing weeds, planting grass, maybe tilling a small area for tomatoes and corn. The first thing is to get rid of an excess wardrobe I had put shelves in and was using as an ersatz toolchest. (Thus the gorilla shelving in the garage.)

    The second thing is getting rid of the old solid wood sukkah. Each panel was a 4x8 piece of plywood nailed onto an 8-frame of 2x4s. One of those panels had a swinging door. Before I replaced it with a tarp-and-tube design, it was warm, cheerful, homey, and solid. It also took a three-many crew four hours to put up.

    The problem with building something to last is that it takes a professional wrecking crew to break it down. I figured I could just use the hand-held circular saw to cut all the panels in half, and put the stuff out for large-item pickup. Except that, according to the lady on the phone, some contractors had the same idea over the years, and the remnants of brick walls and A-frames had gotten a little too much to handle, so now they aren't taking "building materials."

    "But I'm not a contractor."

    "They damage our trucks."

    "But you'll take a large wooden bureau I'm going to put out."

    "Yes."

    "And it's wood, too. And the drywall remnants won't damage the truck. They crumble into dust."

    "We provide this service as a courtesy..."

    "It's not a courtesy. I'm paying for it."

    "I'll be happy to give you the names of services to come haul your stuff away."

    At least she didn't lecture me about how she lives in Aurora and pays taxes and doesn't even get these services and I'm not the only one who pays taxes and the service is spread all over Denver and I ought to appreciate what I do get. Although she did start down the Dark Path of the Philosophy of Law, and why some bad apples had ruined everything for the rest of us.

    Since the last time I had a public servant talk to me as though I were in the 4th grade was when actually was in the 4th grade, I figured that now would be a good time to take up her offer to have the regional supervisor call me so we could get this cleared up.

    We'll see. The alternative may be to pry the thing apart piece by piece and start hiding the remnants in the bottom of the large garbage can.

    Posted by joshuasharf at 09:13 AM | TrackBack