Boxing and football.
Two weekend reflections:
1) The Redskins' Draft. Most people, including TWO, were pleased with the Redskins draft. That does not mean that it was a good draft, it just means that Dan Snyder's plans to ruin the franchise were thwarted and we literally were forced into making a good decision (Brian Orakpo) with our first round pick. Vinny Cerrato's inability to correctly pronounce Orakpo (he kept saying Orapko) at the post-draft press conference at first seems like a funny/harmless slip up until you consider the fact that this man is charged with vigorously and thoroughly researching the minutia of all potential players that could be drafted and thus determine the franchise's future. And Vinny doesn't know the last name of our first round pick?
If that isn't evidence enough of our scant research, consider that the Redskins also selected a LB, Cody Glenn, who had pedestrian stats and was injured/suspended for most of his senior season. When questioned about the reason for the suspension - he lied. Hey - he's an average athlete and injury prone, but at least he's dishonest! In the 7th round, we picked a wide receiver described as having "failed to impress the NFL scouts." Guess which scouts were apparently totally impressed? Vinny & co.
Hail.
2. Carl Froch - Jermaine Taylor. Arguably one of the best fights of the year came and went with very little fanfare because of the NFL draft and NBA & NHL playoff series. Taylor dominated the early part of the fight, knocking down the undefeated Froch for the first time in his career, but Froch came back and scored a TKO with 14 seconds left in the 12th and final round to win. Taylor was ahead on all cards and would have won the fight otherwise. A couple of things. First, people compared the stoppage of the fight to a fight 19 years ago involving a different Taylor. The famous 1990 Meldrick Taylor - Julio Cesar Chavez fight probably shouldn't have been stopped. However, the Froch-Taylor fight was different. TWO, who was rooting for Jermaine Taylor, believes that the fight was correctly stopped as Taylor literally could not defend himself at all -- a defenseless fighter can sustain serious damage in just a few seconds, let alone 14.
Second, Jermaine Taylor is one of those guys who is frustrating to root for. He is similar to Zab Judah, in that he is faster and more talented than almost all of his opponents. Both Judah and Taylor do not have the requisite stamina to do well against top competition in fights that go past 7 rounds. Judah also has serious lapses in concentration and some behavioral issues, which adds to his problems. Taylor, meanwhile, is incredibly likeable which makes it all the more difficult to stomach what appears to be a lack of adequate preparation. If you look at Taylor's losses, he was faster than and should have knocked out Kelly Pavlik in Taylor-Pavlik I and lost a close fight in Taylor-Pavlik II. Taylor was clearly the faster and more powerful boxer through the first half of the Froch fight. Had he not completely collapsed in the 12th round - literally, anything short of a knockout or stoppage - he wins the fight. Zab Judah, meanwhile, has been outclassed by two fighters - Floyd Mayweather and Miguel Cotto (the latter just barely). His four other losses, in TWO's opinion, have been due to failure to adequately prepare or lapses in concentration. Even the Kostya Tszyu fight generally favored Zab, until he took 4 seconds off at the end of the 2nd round, got punched in the mouth and then staggered around jabbering to the referree like a drunk businessman hitting on a flight attendant on a turbulent plane.
What a simile!
In conclusion, Hatton in an upset over Pacquiao this weekend.
Tuesday, April 28, 2009
Friday, April 24, 2009
NFL Draft Ombudsman: Matt Franchez & Mel Kiper
Every day is an opportunity to make bad decisions.
And that is what its like being a Washington Redskins fan these days. TWO will reflect on the sad state of his favorite team and a quick Mel Kiper musing in his draft preview.
1) The Redskins. It is hard enough to win in this league as it is - you have to deal with injuries, coaching and players moving around - and even the best, most efficiently run teams play close games and lose and sometimes even miss the playoffs. But what if you had an owner who took active steps to worsen your favorite team? Welcome to my world. Being a Redskins fan is like watching a horror movie in a theater where the main character is clearly making a terrible decision that will lead to her bloody death but there is nothing you can do to stop her. Even when the obligatory fat black lady sitting near you says loudly "B*tch you better get out that house!" there is no effect...the script has already been written.
And in the Matt "Franchez" Sanchez sweepstakes, Danny Snyder is that main character clearly making a terrible decision, and all of us are the fat black woman yelling. Again, to be clear, all of us are fat black women. Anyway, the Redskins have at least a serviceable quarterback in Jason Campbell. What they don't have is a starting DE, an OLB, or an OT. When I say we don't have an outside linebacker, I literally mean that the Redskins might start the season off with a wild-eyed and disoriented Vinny Cerrato as a linebacker on our 53 man roster. There are also needs at center and several backup positions.
And yet, with all of our needs, Snyder is looking to do something that will further shake up a team that for the last 4 years has not had a chance to play under the same offensive system. And this goes beyond continuity - this could be a devastatingly bad pick: there is no guarantee that quarterbacks selected towards the top of the draft will be good. This is basic stuff, and Redskins fans are left wondering - is Snyder stupid - does he really think that you can just move pieces around interchangeably like a video game? Does he just like attention? Shouldn't someone who was so successful in their other business ventures have learned something about football over the past 10 years?
There is also a total lack of accountability. Last season, the Redskins traded a 2009 2nd round pick for Jason Taylor, who played about 10 games and then was released. This is not a small deal - essentially, we could have had the 40th best player in college football as a part of our team for a number of years, and instead, now, we have no player. That was the effect of that move. Here is Vinny Cerrato's quote when questioned a couple of days ago: "It is what it is. We made a trade last year with our second-round pick. We wish Jason [Taylor] would have stayed healthy, but it is what it is."
"It is what it is" is a tell-tale sign of being a fool. That is the equivalent of using the defined word in its definition: Q: whats a fool? A: Well, its basically someone who acts like a fool. Q: Vinny - what about trading a 2nd round pick for a guy who played 10 games? Vinny: Well, it is what it is...meaning that its a situation where we traded a 2nd round pick for a guy who played 10 games. "It is what it is" is the sibling of "Thats just Manny being Manny" and is the cousin of "He's just doing his thing" and "He just does what he does." TWO suggests any athlete or commentator using any of these phrases be banned from giving their opinions for one year.
Anyway, expect the Redskins to do whatever they can to mess up their own draft. The same duo that picked 2 wide receivers and a TE in 3 2nd round picks last year (when we had almost no defensive linemen) is totally capable of being toyed with and trading Clinton Portis, all of our first round picks until 2015 and FedEx Field for Matt Sanchez. The Redskins will be playing home games on the Montgomery Mall parking lot in Rockville, Maryland.
2) Mel Kiper. A couple of things to watch from Mel Kiper on draft day:
First, Mel, a man who would be selling elixers out of a covered wagon if this were the 19th century, will claim that he "had him going about there" no matter who is taken in what place. Mel releases so many mock drafts - most of them drastically conflicting, that at some point every player is in nearly every draft slot. Gregg Easterbrook's review from a couple years back (under the "Mel Kiper Watch" heading) sums Mel up perfectly.
Second, and this is related to the first, Mel hates Todd McShay. Watch for palpable anger, and possibly a fistfight, when the two of them spar. Before Todd McShay, Kiper was the only draft guru. He was free to shoot from the hip, because frankly no one (other than Easterbrook that one time) bothered to fact check or keep all of his mock drafts straight. But now, McShay is in there keeping him in line. And Mel hates it. For example, yesterday on Sports Center, Mel Kiper incredibly choose Josh Freeman as both his most likely draft bust AND his most likely draft boom! In years past, no one would have said anything, but McShay called him out and asked him to explain. Mel got flustered, mumbled something about upside and then tried to sell Hannah Storm a magic potion to cure her ailments before they cut to commercial.
In conclusion, at least I have this.
Monday, April 20, 2009
Common Sense Ombudsman: Guns
Bang bang.
10 years have past since Columbine, and the effect of that day on our culture is still debated. Certain corners of the media are wondering aloud today why support for gun control "petered out" in the decade since the massacre. Meanwhile, other groups long for a United States where we celebrate national holidays, including U.N. Day, by firing automatic weapons into the air. A microcosm of how foolish we've become about guns is the recent Sixty Minutes piece titled The Way of the Gun, which I had hoped would somehow involve Bruce Lee, but didn't. Despite having a reasonable central theme (closing the gunshow loophole) Leslie Stahl still came across as slanted and shrill, and the pro-gun guy countered Stahl's "Couldn't we....make every state require a background check?" with a witty "Or we could make every state not require a background check."
The media is partially to blame. Whenever there is a Virginia Tech or a Columbine, the media coverage is overwhelming and hacky journalists browbeat and lecture the public about gun control. This is distasteful for two reasons. First, tragedy should not be used as a convenient spring board for forwarding a political agenda. Second, TWO has long wondered why the media treats 25 people killed in the same place as more important than 25 people killed in different locations around the country. If gun violence is rampant and unacceptable then it's newsworthy. It shouldn't take an anomalous event to stir journalists from their torpor.
The people are also to blame. When something enters the "culture war" realm, forget about having any serious discussion on the merits. Aside from discussions about abortion and gay marriage or any debate occurring within six months of a presidential election, an intelligent dialogue about guns is one of the most difficult to come by. No one really cares any more about what the actual utility to society is of gun availability and gun control. Arguments boil down to "We need to ban guns to protect ourselves from the gun violence!" and "We need more guns to protect ourselves from the gun violence!" and never get much further. And, in the end, both are really just guises for saying "I'm a liberal" and "I hate liberals", respectively.
This is reflected not only in things like the Sixty Minutes piece, but also in the information universities, lobbying groups, government institutions and think tanks produce. TWO was amazed, when researching for this entry, how little meaningful information there was that could contribute to a discussion on gun control. Figures about crimes committed with legally held guns versus illegally held guns are, aside from anecdotes, virtually non-existent. There are no real estimates on how illegally held guns become illegal. Are they smuggled into the country? Purchased privately? Aside from vague anecdotes, no one knows. While there is some good info here and here and here, there is not a lot, in my opinion, that would help quantify and predict the effect on society of more or less gun control.
Below I present some basic facts and a premise that reasonable people should accept and then three suggestions for improvement. I realize that this may come across as a bit preachy, but then again, you are reading my blog.
1) Accept the basic facts:
- Citizens have a right to own weapons. The 2nd Amendment is clearly written and has been interpreted by the Supreme Court as providing an individual right.
- Legally owned weapons are involved in so few crimes and accidents that it should really be viewed as negligible.
- Under current laws, an increase in legal guns equals an increase in illegal guns. When the gunshow loop hole (described in link above) is combined with straw purchasers (people with clear FBI background checks who purchase weapons for criminals) there are essentially no actual barriers to criminals purchasing firearms.
2) Accepting the above as facts, and operating under the premise that reasonable people want others to be able to protect themselves but want to minimize the likelihood of gun violence, TWO offers the following:
- The gunshow loophole must be closed. The gunshow loophole, as described above, is a crazy exception to the rule that all purchasers at a gunshow must have FBI background checks -- that is, if you buy from a private person (not a dealer) at a gunshow, you do NOT have to have your background checked. In the Sixty Minutes clip, the gun guy's only argument against this was that the 2nd amendment doesn't require a background check. I half expected him to put on an oversized styrofoam hat and start shooting pistols in the air.
Yosemite Sam aside, there are all kinds of federal gun laws on the books that limit people's ability to own and transfer guns. A law primarily geared to stop sales of guns to people who are already ineligible to use them would seem to not further infringe anyone's gun rights. And the limitation on sales by the legal owner is not more onerous than already existing laws. All reasonable people should support federal laws closing the gunshow loophole.
- Second, rather than forcing an automatic weapons ban (which won't pass anyway) down the throats of the NRA and the millions of Americans who want them - consider a more novel approach. Our premise was that we wanted people to be able to protect themselves while limiting gun violence. Automatic weapons are good for protection, but in the wrong hands, can be abnormally and extremely dangerous. As such, statutory or strict liability imposed on the registered owner of any automatic weapon could be very effective in thwarting haphazard gun sales and more fairly distributing blame to culpable parties. Unless reported as stolen, the registered owner (or dealer/corporation) would retain some liability for criminal acts by a third party and would likely think twice before selling to someone under the table or out the back door. While this is a somewhat progressive idea, it is not without some precedent.
- Third, a limit on bulk sales to individuals will help slow the trickle of guns to criminals through straw purchasers. A limit to one automatic weapon every 1 or 2 months is hardly draconian (shockingly, some people go their whole lives without owning a single automatic weapon) and would not prevent ordinary, law abiding citizens from protecting themselves. Meanwhile, it would be an important step towards limiting the availability of weapons for criminals.
In conclusion, bang bang.
10 years have past since Columbine, and the effect of that day on our culture is still debated. Certain corners of the media are wondering aloud today why support for gun control "petered out" in the decade since the massacre. Meanwhile, other groups long for a United States where we celebrate national holidays, including U.N. Day, by firing automatic weapons into the air. A microcosm of how foolish we've become about guns is the recent Sixty Minutes piece titled The Way of the Gun, which I had hoped would somehow involve Bruce Lee, but didn't. Despite having a reasonable central theme (closing the gunshow loophole) Leslie Stahl still came across as slanted and shrill, and the pro-gun guy countered Stahl's "Couldn't we....make every state require a background check?" with a witty "Or we could make every state not require a background check."
The media is partially to blame. Whenever there is a Virginia Tech or a Columbine, the media coverage is overwhelming and hacky journalists browbeat and lecture the public about gun control. This is distasteful for two reasons. First, tragedy should not be used as a convenient spring board for forwarding a political agenda. Second, TWO has long wondered why the media treats 25 people killed in the same place as more important than 25 people killed in different locations around the country. If gun violence is rampant and unacceptable then it's newsworthy. It shouldn't take an anomalous event to stir journalists from their torpor.
The people are also to blame. When something enters the "culture war" realm, forget about having any serious discussion on the merits. Aside from discussions about abortion and gay marriage or any debate occurring within six months of a presidential election, an intelligent dialogue about guns is one of the most difficult to come by. No one really cares any more about what the actual utility to society is of gun availability and gun control. Arguments boil down to "We need to ban guns to protect ourselves from the gun violence!" and "We need more guns to protect ourselves from the gun violence!" and never get much further. And, in the end, both are really just guises for saying "I'm a liberal" and "I hate liberals", respectively.
This is reflected not only in things like the Sixty Minutes piece, but also in the information universities, lobbying groups, government institutions and think tanks produce. TWO was amazed, when researching for this entry, how little meaningful information there was that could contribute to a discussion on gun control. Figures about crimes committed with legally held guns versus illegally held guns are, aside from anecdotes, virtually non-existent. There are no real estimates on how illegally held guns become illegal. Are they smuggled into the country? Purchased privately? Aside from vague anecdotes, no one knows. While there is some good info here and here and here, there is not a lot, in my opinion, that would help quantify and predict the effect on society of more or less gun control.
Below I present some basic facts and a premise that reasonable people should accept and then three suggestions for improvement. I realize that this may come across as a bit preachy, but then again, you are reading my blog.
1) Accept the basic facts:
- Citizens have a right to own weapons. The 2nd Amendment is clearly written and has been interpreted by the Supreme Court as providing an individual right.
- Legally owned weapons are involved in so few crimes and accidents that it should really be viewed as negligible.
- Under current laws, an increase in legal guns equals an increase in illegal guns. When the gunshow loop hole (described in link above) is combined with straw purchasers (people with clear FBI background checks who purchase weapons for criminals) there are essentially no actual barriers to criminals purchasing firearms.
2) Accepting the above as facts, and operating under the premise that reasonable people want others to be able to protect themselves but want to minimize the likelihood of gun violence, TWO offers the following:
- The gunshow loophole must be closed. The gunshow loophole, as described above, is a crazy exception to the rule that all purchasers at a gunshow must have FBI background checks -- that is, if you buy from a private person (not a dealer) at a gunshow, you do NOT have to have your background checked. In the Sixty Minutes clip, the gun guy's only argument against this was that the 2nd amendment doesn't require a background check. I half expected him to put on an oversized styrofoam hat and start shooting pistols in the air.
Yosemite Sam aside, there are all kinds of federal gun laws on the books that limit people's ability to own and transfer guns. A law primarily geared to stop sales of guns to people who are already ineligible to use them would seem to not further infringe anyone's gun rights. And the limitation on sales by the legal owner is not more onerous than already existing laws. All reasonable people should support federal laws closing the gunshow loophole.
- Second, rather than forcing an automatic weapons ban (which won't pass anyway) down the throats of the NRA and the millions of Americans who want them - consider a more novel approach. Our premise was that we wanted people to be able to protect themselves while limiting gun violence. Automatic weapons are good for protection, but in the wrong hands, can be abnormally and extremely dangerous. As such, statutory or strict liability imposed on the registered owner of any automatic weapon could be very effective in thwarting haphazard gun sales and more fairly distributing blame to culpable parties. Unless reported as stolen, the registered owner (or dealer/corporation) would retain some liability for criminal acts by a third party and would likely think twice before selling to someone under the table or out the back door. While this is a somewhat progressive idea, it is not without some precedent.
- Third, a limit on bulk sales to individuals will help slow the trickle of guns to criminals through straw purchasers. A limit to one automatic weapon every 1 or 2 months is hardly draconian (shockingly, some people go their whole lives without owning a single automatic weapon) and would not prevent ordinary, law abiding citizens from protecting themselves. Meanwhile, it would be an important step towards limiting the availability of weapons for criminals.
In conclusion, bang bang.
Wednesday, April 15, 2009
Legal Ombudsman: Aspiring Hardcore Lawyers
Res ipsa loquitur.
Apparently April 14 was National Be Kind To Lawyers Day. TWO apologizes for not being au courant with lawyer holidays, but feels better knowing that his favorite legal blog, Above The Law, nearly forgot as well.
TWO has been lucky enough to befriend many young lawyers in New York who are normal, cool, friendly people. However, the very existence of National Be Kind To Lawyers Day implies that most lawyers aren't normal, cool or friendly. And that's correct. Socially awkward, insecure and, at times, angry people - what we will call hardcore lawyers - make up a majority of the profession, at least among big law firms. Therefore, for aspiring young associates, particularly those in Big Law - TWO presents the following tips for becoming a hardcore lawyer:
1) Your background. Its best if your background makes others feel inferior, but it must at least illustrate that you are on par with your colleagues. If you went to a top 10 or 20 law school there's no problem. Casually bring up your law school when you tell hilarious stories about drinking with your "Columbia Law friends" in Harlem. Harlem!!! If you went to a lower tier law school, always provide some sort of disclaimer, implying that you could have gone to nearly any other law school were it not for this particular circumstance. "Oh - Harvard? Yeah a ton of my friends went to law school there. I got a scholarship at Northeastern though, so...." Specialization is also a good trick: "I went to Brooklyn Law. Yeah, I was really interested in maritime law when I was looking at schools, and they have a great program there. I love the seas."
2) Your appearance. If you're a male, it is crucial that you pay a custom clothier, probably the one who wanders around your office from time to time, to make you a couple of outfits. That way, when someone asks you about where you got something you can interrupt them and say "Oh, I have a guy." This implies that the Thomas Pink, Jos. A. Bank or Brooks Brothers ensemble thrown together by the questioner just doesn't measure up to your discriminating tastes in style and fit. Also, cufflinks. Always. On every shirt. Even pajama tops.
If you're a female, always wear flats. Heels are for the hot lawyer girls who aren't as hardcore as you are, and also you hate them. An important sartorial move that says "I'm a chick lawyer making in the mid $200s" is to develop some special niche area where you will spend an inordinate amount of money. Two prominent examples are handbags and shoes. While you may not be able to wear the shoes you buy to the office, talk openly about what a huge problem you have spending way too much on shoes and then laugh, faux-self-disparagingly, at your own lack of discipline - HAHAHA. And then walk away feeling good because now other people know you have serious money from being a hardcore lawyer.
3)Your workload. You're incredibly busy. And the people should know. Accomplish this by remarking to everyone who happens into your office that you are totally exhausted from last night's due diligence/waiting for the client's mark up/seamless web mishap, whatever. You can never be well-rested. Tell law clerks and first year associates that you hate your job. This will give them the impression that you're just a normal guy or girl who doesn't like staying up late. But you know, and they probably do too, that you love it because it makes you feel serious. Finally - and this is an important step - regularly update your facebook status if you're in the office on a weekend or after 11pm on a weekday: "Sam Sweet is drafting an intercreditor agreement [1:31 am-Comment-Like]" and "Blossom Russo is document requests [11:04 pm-Comment-Like]" and "Jan Hammer hates working on a Sunday but is looking forward to his reunion w law school friends from Temple (where he got a scholarship)!!! [3:24pm-Comment-Like]"
4) Your expertise. By the time you're a third year associate, start playing up your expertise. When a deal you've been assigned to closes, take full credit. Say things like "I just closed a 1.1 billion dollar deal" even though in reality you were sent to a closing room somewhere and made to sit in an office with signature pages until a partner or senior associate, who actually closed the deal, called you and told you that you could return. Another move is to begin offering financial commentary. Despite the fact that your first few years as a lawyer have consisted primarily of word processing, quickly looking over organizational documents and avoiding pro bono assignments, you should give the impression that you have somehow acquired nuanced insights into financial markets unavailable to the layman. Tell people you're "bearish on equities" and bullish on something something. It can be anything. People will nod, look at your cufflinks, and think "This guy is a serious businessman!"
5) Your superiority. One thing the hardcore lawyer does is to furiously vent to other lawyers about other law firms and law schools, either in person, over email or by leaving angry comments on legal blogs. Here is a quick guide. Every law school or law firm that is ranked behind yours in the Vault Rankings, whether by one spot or 100 spots, should be referred to as TTT - third tier toilet. This can be done outright or by cleverly inserting it into the name of the institution you wish to denigrate: "Ha! I would never work for CovingTTTon!" This uproarious rhetorical device never gets old and will be absolutely hilarious to other hardcore lawyers. Any law firm ranked better than yours should be treated with unfettered, undiluted hatred. If you can find a story about a case they ruined, bring it up constantly and sound amazed that they could be considered better than your shop. That reminds me - sometimes you should refer to law firms as "shops." Shhh shhh shhh don't ask why just do it. Finally, if all else fails on a legal blog, try to find a typo in an earlier post.
Follow these steps and you'll be on your way to shedding your useless traits and acquiring the important ones. Once you've done that, invite me to a summer lunch at Gramercy Tavern.
In conclusion, Marc Dreier and I are taking out some clients this weekend if anyone wants to join.
Monday, April 13, 2009
Weekend Ombudsman: Musings
I have varied interests.
TWO spent a lot of time thinking this weekend. Here are some musings:
1) The Masters. Is there any other sport where the fans dress exactly like the athletes? Golfers all have their own style, from the understated, to the full-vest/visor accoutrement ensemble, to the late great Payne Stewart, who did his own thing. Here Payne appears to be playing golf for the Chicago Bears. I miss Payne Stewart.
But back to the issue. So I will accept the actual golfers wearing whatever they feel they need to to compete. But why is it necessary for fans (ignore numbering) to dress the same way? Yeah, honey - I've got tickets to the Masters...have you seen my golf pants, three button shirt, functionless golf vest and PING sun visor - I should probably bring my glove too, just in case.
Its as if each fan is hoping that, against all odds, Phil Mickelson might turn to them in the gallery and say - "Hey... you...yeah....you look like you know golf. Why don't you come out here and talk to me about this next hole. Hell - do you want to hit for me?"
"Why YES! Its a good thing I wore all my golf gear!"
Can you imagine this in any other sport? Do you see fans at a basketball game wearing high tops, ankles taped, headbands on, mouth guards in? Are women in the stands at Wimbledon wearing wristbands and tennis skirts - like a tennis match could break out at any point on their way to the ladies room and concession stand?
2. Economics. Two things interested TWO this weekend: price stickiness and stock market projections.
First, free market proponents (of which TWO is one) hail the ability of prices to fluctuate relatively quickly to reflect market conditions. However there are some areas where this does not happen. One area - a particularly troubling one - is commercial real estate. In New York City for example, where unemployment is skyrocketing, incomes and spending are falling, and businesses are failing, one would expect that rents charged to commercial tenants would decrease across the board. They have not. Many landlords have increased their rents up to 6%. As a result, businesses are closing their doors all over the city. Why?
The answer is that commercial rents typically lag well behind residential rents. Most of the commercial landlords have earned so much money from rents over the life of their holdings, that they can afford to receive no rent for extended periods of time. Banking on the fact that the economy will recover eventually, these landlords would rather get nothing for a year or so than lower rents and lock themselves into a 10 year lease at a rate that will be, in a few years, viewed as beneath market value.
While the landlords' behavior could be viewed as rational on a certain time horizon, it undeniably acts to sink us deeper into recession. TWO knows of a number of entrepreneurs interested in starting new businesses that have not been able to because of unreasonably high rents. The aggregated effects of this are immense when one considers that more than half (51% in 2004) of all employed people work for small businesses (defined as companies with less than 500 employees).
Second, many of you may have heard about investment houses issuing internal projections of 10% or more gains in equities by the end of 2009. Many think that this signals the beginning of the end of the economic downturn. They should think again.
Increases in equities can not be viewed outside of the context of money supply and spending levels. The deficit is already nearly $1 trillion, only half way through 2009. This is two times the highest-ever annual deficit. Barring increases in actual production, all of this spending - mostly funded by simply printing more money - will manifest itself in inflation. Inflationary periods are typically times when the bond market suffers (creditors are hurt and debtors are helped) and equity markets can do well, in nominal terms. However, in real terms, there is no reason to think that equity gains - if any - will signify any actual improvement in our economy - and in fact there is some reason to think that it might signify a dangerously inflation.
3. Boxing. Three things. First, Paul Williams, who dominated Winky Wright on Saturday, should never lose a fight. He is a 6 foot 2 inch boxer who fights anywhere from 147 - 160. He has an 82 inch wingspan and throws over 100 punches a round. He was - somehow - upset in one fight (in the re-match Williams avenged his loss with a devastating 1st round knockout). But that fluke aside, this guy should beat everyone at 147 and 154 and possibly even 160 (although Kelly Pavlik could be a tough matchup). Look for Williams and light-heavyweight Chad Dawson (with honorable mention to welterweight Andre Berto) to be the next great American boxing stars.
I purposely did not mention Chris Arreola. I am a Chris Arreola fan - he has an aggressive and fan-friendly style in the ring and star quality (complete with amazing interviews) outside of it. But before Arreola can convince me that he is ready to be the Mexican Tyson, he will have to show up for big fights in better shape. Additionally, Arreola takes a lot of hits. It is unclear how he would fare against a Klitschko were the fight to go into the late rounds and stamina became a factor.
Third, is there any sports show better than 24/7? The new series, of course, is about Hatton and Pacquioa's May 2nd fight. My view: I would short Pacman. I think Pacman's value is a bit inflated because of his domination of a frail Oscar De La Hoya. And because of exaggerated odds, Hatton might be the better bet. Look for odds to narrow closer to fight night.
In conclusion, I could out-box most economists.
TWO spent a lot of time thinking this weekend. Here are some musings:
1) The Masters. Is there any other sport where the fans dress exactly like the athletes? Golfers all have their own style, from the understated, to the full-vest/visor accoutrement ensemble, to the late great Payne Stewart, who did his own thing. Here Payne appears to be playing golf for the Chicago Bears. I miss Payne Stewart.
But back to the issue. So I will accept the actual golfers wearing whatever they feel they need to to compete. But why is it necessary for fans (ignore numbering) to dress the same way? Yeah, honey - I've got tickets to the Masters...have you seen my golf pants, three button shirt, functionless golf vest and PING sun visor - I should probably bring my glove too, just in case.
Its as if each fan is hoping that, against all odds, Phil Mickelson might turn to them in the gallery and say - "Hey... you...yeah....you look like you know golf. Why don't you come out here and talk to me about this next hole. Hell - do you want to hit for me?"
"Why YES! Its a good thing I wore all my golf gear!"
Can you imagine this in any other sport? Do you see fans at a basketball game wearing high tops, ankles taped, headbands on, mouth guards in? Are women in the stands at Wimbledon wearing wristbands and tennis skirts - like a tennis match could break out at any point on their way to the ladies room and concession stand?
2. Economics. Two things interested TWO this weekend: price stickiness and stock market projections.
First, free market proponents (of which TWO is one) hail the ability of prices to fluctuate relatively quickly to reflect market conditions. However there are some areas where this does not happen. One area - a particularly troubling one - is commercial real estate. In New York City for example, where unemployment is skyrocketing, incomes and spending are falling, and businesses are failing, one would expect that rents charged to commercial tenants would decrease across the board. They have not. Many landlords have increased their rents up to 6%. As a result, businesses are closing their doors all over the city. Why?
The answer is that commercial rents typically lag well behind residential rents. Most of the commercial landlords have earned so much money from rents over the life of their holdings, that they can afford to receive no rent for extended periods of time. Banking on the fact that the economy will recover eventually, these landlords would rather get nothing for a year or so than lower rents and lock themselves into a 10 year lease at a rate that will be, in a few years, viewed as beneath market value.
While the landlords' behavior could be viewed as rational on a certain time horizon, it undeniably acts to sink us deeper into recession. TWO knows of a number of entrepreneurs interested in starting new businesses that have not been able to because of unreasonably high rents. The aggregated effects of this are immense when one considers that more than half (51% in 2004) of all employed people work for small businesses (defined as companies with less than 500 employees).
Second, many of you may have heard about investment houses issuing internal projections of 10% or more gains in equities by the end of 2009. Many think that this signals the beginning of the end of the economic downturn. They should think again.
Increases in equities can not be viewed outside of the context of money supply and spending levels. The deficit is already nearly $1 trillion, only half way through 2009. This is two times the highest-ever annual deficit. Barring increases in actual production, all of this spending - mostly funded by simply printing more money - will manifest itself in inflation. Inflationary periods are typically times when the bond market suffers (creditors are hurt and debtors are helped) and equity markets can do well, in nominal terms. However, in real terms, there is no reason to think that equity gains - if any - will signify any actual improvement in our economy - and in fact there is some reason to think that it might signify a dangerously inflation.
3. Boxing. Three things. First, Paul Williams, who dominated Winky Wright on Saturday, should never lose a fight. He is a 6 foot 2 inch boxer who fights anywhere from 147 - 160. He has an 82 inch wingspan and throws over 100 punches a round. He was - somehow - upset in one fight (in the re-match Williams avenged his loss with a devastating 1st round knockout). But that fluke aside, this guy should beat everyone at 147 and 154 and possibly even 160 (although Kelly Pavlik could be a tough matchup). Look for Williams and light-heavyweight Chad Dawson (with honorable mention to welterweight Andre Berto) to be the next great American boxing stars.
I purposely did not mention Chris Arreola. I am a Chris Arreola fan - he has an aggressive and fan-friendly style in the ring and star quality (complete with amazing interviews) outside of it. But before Arreola can convince me that he is ready to be the Mexican Tyson, he will have to show up for big fights in better shape. Additionally, Arreola takes a lot of hits. It is unclear how he would fare against a Klitschko were the fight to go into the late rounds and stamina became a factor.
Third, is there any sports show better than 24/7? The new series, of course, is about Hatton and Pacquioa's May 2nd fight. My view: I would short Pacman. I think Pacman's value is a bit inflated because of his domination of a frail Oscar De La Hoya. And because of exaggerated odds, Hatton might be the better bet. Look for odds to narrow closer to fight night.
In conclusion, I could out-box most economists.
Tuesday, April 7, 2009
Financial Crisis Ombudsman: Accountability
Don't look at me.
Today this video is all over the internets. Its a Harvard student asking Barney Frank, current House Representative from Massachusetts and former Harvard graduate and professor, what responsibility he feels for the current economic crisis. Frank essentially mocks the student, claims conservative conspiracy and then humbly concedes that he does, in fact, regret writing a bill to regulate hedge funds but then not trying hard enough to get it passed. This last statement, of course, is the equivalent of being on a job interview and saying that your biggest fault is working too hard and caring too much about the company.
Lets take a step back. The basic role of government, at its very core, is to provide services for the people that the people could not readily provide for themselves, either individually or with non-governmental civic organization. These sorts of essential government services tend to be areas that are crucial to all citizens but require massive amounts of money, organization and/or oversight that ordinary citizens or groups of citizens could not take on by themselves. Examples include security (intelligence gathering, training, organization of large-scale military operations) and infrastructure (interstate highways, ports, air safety, energy, water). Also clearly falling into this category of basic goverment functions is financial oversight. While nearly all 300 million Americans have been effected by the fall out from the financial crisis, ordinary citizens for the most part would have no way of understanding the factors leading up to the crisis, let alone be able to take steps to remedy the problems.
It is for this reason that Americans entrust power and money to elected officials. Barney Frank was paid $169,000 and his staff was paid a total of $1.2 million in 2008, figures that are on-par with the other 435 members of the house. The understanding between elected officials and the people that elect them and pay their salaries is that they will look out for the people's interests particularly in the areas mentioned above, that are important but beyond the control of the constituents. In that sense, all elected officials have dropped the ball when it comes to the financial crisis.
But Barney Frank, in particular, had a special position that makes his tenure as an elected official even more negligent and his failure to take any responsibility even more disgraceful. Since 2003 Barney Frank has been on the House Financial Services Committee, and since 2007 has been the chairman of that committee. In its own words, "[t]he Committee oversees all components of the nation's housing and financial services sectors, including banking, insurance, real estate, public and assisted housing, and securities." This could be shortened to "the Committee is in charge of making sure a financial meltdown doesn't happen."
And yet Frank feels no responsibility. Some selected highlights of Frank's performance:
- In this 2003 hearing, Barney Frank concludes that Fannie Mae and Freddie Mac are sufficiently regulated because Fannie Mae and Freddie Mac say they are. Clearly exhausted from that rigorous line of questioning, Frank concludes that there is no impending financial crisis. (see page 110).
Mr. FRANK. Let me ask Mr. Gould and Mr. Raines on behalf of Freddie Mac and Fannie Mae, do you feel that over the past years you have been substantially under-regulated?
Mr. Raines?
Mr. RAINES. No, sir.
Mr. FRANK. Mr. Gould?
Mr. GOULD. No, sir.
Mr. FRANK. And let me ask now the gentleman from the Federal Home Loan Bank, do you believe that the Federal Home Loan Bank System has been substantially under-regulated?
Mr. HEHMAN. No, sir.
Mr. FRANK. Mr. Schultz?
Mr. SCHULTZ. No, sir.
Mr. FRANK. Okay. Then I am not entirely sure why we are here, but we killed the afternoon anyway, so we might as well go forward.
I must say, I am inclined to agree with that. I don't see any financial crisis. You can always make things better, but I do think we should dispel the notion that we are here because there is something rotten that has gone on.
Incidentally, Franklin Raines was fired in 2004 for grossly overstating earnings and, along with two others, charged with 101 civil counts related to the manipulation in 2006.
- In this 2004 hearing on the safety of Fannie Mae and Freddie Mac, Frank insists that serious issues with their financial statements and internal controls don't effect their safety and soundness, since they won't go immediately insolvent. (see pages 108-110).
(edited)
Mr. FALCON. Just the very fact that we have serious doubts about the accuracy of the financial statements and their books and records, the very fact that we have identified very serious internal controls——
Mr. FRANK. Well, let me ask a question.....Does any accuracy threaten the safety and soundness? That is what bothers me. There is a quality and a quantity issue here.......To throw ''safety and soundness'' around in that thing I think really is, for a regulator, irresponsible.
Mr. FALCON. Well, I think internal controls are a very serious safety and soundness concern. A breakdown or a lack of internal controls——
Mr. FRANK. Do you think the safety and soundness is at risk right now?
Mr. FALCON. Are they at risk of becoming insolvent right now? No. We have an agreement with the board in place that will address these problems, provide an adequate capital cushion. We think we——
Mr. FRANK. That is the answer. The rest is just rhetoric.
Fannie Mae and Freddie Mac, after losing $14.9 billion and facing potential insolvency, were placed under government control in 2008.
- In 2005 and 2006, Frank sponsored 34 bills. Only 2 had anything to do with subjects related to the current financial crisis (H.R. 4291 and H.R. 5712) and neither became law. Frank did find time to pass House Resolution 86, a congratulations to the New England Patriots for winning the Super Bowl.
- In 2007 and 2008, while the economy fell apart and millions lost their jobs, Frank, now chairman of the Financial Services Committee, sponsored 70 bills, 6 having to do with relevant economic issues, (HR. 1257, HR 3526, HR3838, HR 1427, HR 7321 and HR 3915). None of the six became law, but 4 did at least pass the House. Meanwhile, his Financial Services Committee saw 521 bills and 109 were passed by the house. Of those 109, maybe 4 (HR 698, HR 890, HR 5140 and HR 6312) in addition to Frank's 4 (mentioned above) were on topics at all pertinent to the financial meltdown. Other than H.R. 5140 - the 2008 Economic Stimulus (not written by Frank or anyone in the Financial Services Committee), none became law.
While the Finacial Services Committee, under Frank's guidance, could not seem to pass anything that would have saved the people of this country from economic catastrophe, they were a tour de force when it came to minting coins. TWO would like to commend the House Financial Services Committee for being instrumental in minting coins to commemorate the centennial of Mothers Day, the contributions of Indian tribes, the 50th anniversary of NASA, the contributions of singer Eddie Money, the founding of the US Army in 1775, the bicentennial of the Star Spangled Banner, the semicentennial of the Civil Rights Act, the Boy Scouts and the legacy of the US Infantry. I made up the one about Eddie Money, but he probably deserves one too.
- And now its 2009. Barney Frank and other elected officials - Republican and Democrat - are trying to cover themselves. They are pointing fingers, talking about committees they're on, how they attended important hearings and sponsored important bills.
But nothing can undo the fact that an economic disaster occurred and all we got from the Financial Services Committee were commemorative coins. And its not an accident. Voting on commemorative coins is easy. It requires no difficult due diligence. It doesn't entail understanding complex concepts, upsetting powerful institutions or risking campaign funding. And, most importantly, if the people aren't calling for it, why risk getting involved in anything that could upset the chances of reelection?
And therein lies the disconnect. The people weren't calling for oversight on banks, credit derivatives, government sponsored entities etc from 2003 - 2007 because most of them didn't realize there was a problem. Most people are working 9-5, taking their kids to school, paying bills and living their lives. They don't have the time or the means to investigate, understand or have an impact on these issues. They pay their taxes with the understanding that elected officials and their staffs will be the ones spending time asking the serious questions, doing unglamorous and painstaking research and fighting to pass bills that matter.
This is not a partisan issue. Blame lies on the Bush Administration, the Fed (particularly Allen Greenspan) and members in both houses of Congress in addition to obvious culpability (at least for recklessness) on the part of many financial institutions.
But I find it particularly disheartening, and, indeed, insulting, when an elected official specifically charged with financial oversight not only does not do his job, but, upon challenge from a constituent, has the audacity to mock and deride the questioner while at the same time accepting no accountability for his failures - as if the financial crisis were some independent, unforeseeable act of God.
In conclusion, this is further evidence that we'd be better off governed "by the first 2000 names in the Boston telephone book than by the faculty at Harvard."
Thursday, April 2, 2009
Cinema Ombudsman: Paul Blart Observes & Reports
All the good ideas have been used up.
Thats the only explanation as to why Observe & Report, a comedy about an overweight mall security guard facing a threat to his mall, would be coming out next Friday, approximately three months after the opening of Paul Blart: Mall Cop, a comedy about an overweight mall security guard facing a threat to his mall.
Both films contain silly clips of fat people running and some obligatory ethnic humor (they don't speak like us - HA!).
Here is, then, the second installment (first installment here) of our wildly popular series of little known but incredible factual events that should definitely have movies made about them.
1) Elijah Lovejoy. Reverend Elijah Lovejoy was an ostracized but unwavering abolitionist who preached and wrote anti-slavery articles in Alton, Illinois. He was widely despised for his views, and in November, 1837, Reverend Lovejoy was finally killed by an angry mob who attacked him in his printing warehouse and threw his printing press in the Mississippi River. He is considered a martyr and symbolicly the "first casualty of the Civil War." Reverend Elijah Lovejoy is played brilliantly by Reverend Timothy Lovejoy in this animated film for the whole family.
2) The Forgotten War. In 1942 the Japanese invaded the Alleutian Islands, a small but strategically crucial island chain near Alaska. The U.S. took nearly a year to drive the Japanese out, in mountainous, snowy battles that were bloody and frequently hand-to-hand. A last gasp Japanese counterattack saw one of the largest bonzai charges of the entire war. Thousands were killed. Will Ferrell is miscast as Sergeant Sidney Sweet with Jackie Chan as a tightly wound Colonel Yamasaki in this action thriller.
3) Oh - how about maniac anarchist meth-head rednecks living in bizarre compounds in the northern California forest? Its true. Its happening right now. Here's a picture TWO's friend took last week of signs just inside one of the fenced in compounds while traveling near Oroville, California.
This horror flick stars Billy Bob Thornton and Parker Posey as strung out, flesh eating zombie sect leaders and Seth Rogen as Ranger Tom, whose first day as a park ranger after years as a mall cop is more than he bargained for. Tom must save terrified camper Sissy Bergans (Paris Hilton) who is chased through the woods by the sect's winged-monkeys, played by the Olsen twins. Spoiler alert! The sect devours Sissy and Ranger Tom.
4) Alaric, conflicted warrior. Alaric was a Visigoth leader in the early 5th century and launched an aggressive campaign against Rome, who he felt had betrayed him. Over the next 10 years, he travelled all over Europe, was spoken to by a voice from the sky, had his wife captured, and launched several sieges. On the one hand, some of his methods were brutal. On the other, when he finally took Rome, the first to do so in nearly a thousand years, he and his army apparently made unheard of attempts to spare lives and preserve many of the buildings and sacred places in the city. In the performances of his life, Joaquin Phoenix is Alaric and Joaquin Phoenix is Flavius Stilicho. Brilliant!
5) Is this the most unbelievable true story of the past 5 years? A young husband shoots himself, committing suicide. His heart is donated to an old man, far away, giving the old man a second chance at life. The young widow begins receiving letters from the old man with her ex-husband's heart, thanking her for extending his life. They finally decide to meet, fall instantly in love and marry. 12 years later the old man kills himself as well. Jennifer Aniston, Adam Sandler and Larry David shine in this uproarious comedy.
In conclusion, TWO is full of interesting facts.
Thats the only explanation as to why Observe & Report, a comedy about an overweight mall security guard facing a threat to his mall, would be coming out next Friday, approximately three months after the opening of Paul Blart: Mall Cop, a comedy about an overweight mall security guard facing a threat to his mall.
Both films contain silly clips of fat people running and some obligatory ethnic humor (they don't speak like us - HA!).
Here is, then, the second installment (first installment here) of our wildly popular series of little known but incredible factual events that should definitely have movies made about them.
1) Elijah Lovejoy. Reverend Elijah Lovejoy was an ostracized but unwavering abolitionist who preached and wrote anti-slavery articles in Alton, Illinois. He was widely despised for his views, and in November, 1837, Reverend Lovejoy was finally killed by an angry mob who attacked him in his printing warehouse and threw his printing press in the Mississippi River. He is considered a martyr and symbolicly the "first casualty of the Civil War." Reverend Elijah Lovejoy is played brilliantly by Reverend Timothy Lovejoy in this animated film for the whole family.
2) The Forgotten War. In 1942 the Japanese invaded the Alleutian Islands, a small but strategically crucial island chain near Alaska. The U.S. took nearly a year to drive the Japanese out, in mountainous, snowy battles that were bloody and frequently hand-to-hand. A last gasp Japanese counterattack saw one of the largest bonzai charges of the entire war. Thousands were killed. Will Ferrell is miscast as Sergeant Sidney Sweet with Jackie Chan as a tightly wound Colonel Yamasaki in this action thriller.
3) Oh - how about maniac anarchist meth-head rednecks living in bizarre compounds in the northern California forest? Its true. Its happening right now. Here's a picture TWO's friend took last week of signs just inside one of the fenced in compounds while traveling near Oroville, California.
This horror flick stars Billy Bob Thornton and Parker Posey as strung out, flesh eating zombie sect leaders and Seth Rogen as Ranger Tom, whose first day as a park ranger after years as a mall cop is more than he bargained for. Tom must save terrified camper Sissy Bergans (Paris Hilton) who is chased through the woods by the sect's winged-monkeys, played by the Olsen twins. Spoiler alert! The sect devours Sissy and Ranger Tom.
4) Alaric, conflicted warrior. Alaric was a Visigoth leader in the early 5th century and launched an aggressive campaign against Rome, who he felt had betrayed him. Over the next 10 years, he travelled all over Europe, was spoken to by a voice from the sky, had his wife captured, and launched several sieges. On the one hand, some of his methods were brutal. On the other, when he finally took Rome, the first to do so in nearly a thousand years, he and his army apparently made unheard of attempts to spare lives and preserve many of the buildings and sacred places in the city. In the performances of his life, Joaquin Phoenix is Alaric and Joaquin Phoenix is Flavius Stilicho. Brilliant!
5) Is this the most unbelievable true story of the past 5 years? A young husband shoots himself, committing suicide. His heart is donated to an old man, far away, giving the old man a second chance at life. The young widow begins receiving letters from the old man with her ex-husband's heart, thanking her for extending his life. They finally decide to meet, fall instantly in love and marry. 12 years later the old man kills himself as well. Jennifer Aniston, Adam Sandler and Larry David shine in this uproarious comedy.
In conclusion, TWO is full of interesting facts.
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