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August 31, 2007

On the Billable Hour

A couple of interesting posts recently on the scourge of the business community -- the billable hour -- gives me the opportunity to pass along the cartoon on the left from the always-insightful Stuart M. Rees of Stu's Views.

First, local law school blawger Luke Gilman provides a compendium of links and analysis to his comprehensive review of the state of the billable hour. Meanwhile, Peter Lattman over at the WSJ Law Blog provides this post on the breaking of the heretofore sacrosanct $1,000-an-hour billing rate, which includes local attorney Steve Susman's classic observation that he charges in excess of a grand per hour "to discourage anyone hiring me" on an hourly basis.

Me, I continue to subscribe to the theory that I won't charge an hourly rate that is higher than I could afford to pay if I need to hire an attorney. ;^)

Posted by Tom at 12:15 AM | Comments (0) | TrackBack (0)

The Katrina legacy

The "News-Hurricane" category of this blog began with Hurricane Katrina in 2005. The second post in that blog was this one in the early afternoon of Saturday, August 27, 2005, which was one of the first in the blogosphere warning of Katrina's potential danger to the New Orleans area and urging citizens to evacuate immediately. Unfortunately, most of the folks who stayed and lost their lives in Katrina probably had no way to read the recommendation passed along in the final sentence of that post.

Over the past two years, the "News-Hurricanes" category has developed into a cross-section of articles and blog posts on the various legal, economic and political issues involved in the rebuilding of New Orleans. On the two year anniversary of the storm, here are several more good ones:

Reason Magazine's Daniel Rothschild has traveled to New Orleans twenty times over the past two years reporting on the reconstruction. Here is the first installment of a three part series that is a must-read for anyone interested in the reconstruction of New Orleans;

The NY Times' Adam Nossiter, who has also reported extensively on New Orleans over the past two years, provides this article entitled "Commemorations for a City 2 Years After Storm;"

Moneyball's Michael Lewis writes about the risk of Hurricane Katrina;

Nicole Gelinas of City Journal writes on how the breakdown in law and order continues to hamper the rebuilding of New Orleans;

Ben C. Toledano argues that New Orleans effectively died long before the hurricane struck; and

This Associated Press story describes the difficult task of re-establishing New Orleans' small businesses, which were a major source of job loss after Katrina (a point made at the time). One of the most interesting aspects of the story is one small businessman's view on immigration:

"Trying to find workers, that's the toughest thing," [small businessman Robert] Thompson recalled. "The people we dealt with — craftsmen, carpenters, electricians, roofers — weren't home and if they were, they were decimated themselves."

Help did come in the first few weeks and months, in the form of workers from Honduras and Mexico who arrived in New Orleans to work in the rebuilding.

"Thank God for them, they were the work force for many, many months," Thompson said.

Posted by Tom at 12:10 AM | Comments (0) | TrackBack (0)

Property rights, economics and AIDS

Peter F. Schaefer explains how economics and property rights in African nations combine to facilitate the proliferation of the AIDs virus:

However no one in the US government and few in the anti-AIDS community are dealing with a major issue in the transmission of AIDS called "property stripping." Since the cure for property stripping is cheap, technically quite easy and would have an enormous secondary impact on economic growth (poverty is a hidden vector of AIDS) it would seem like a sure thing for attention. But it is virtually ignored.

On World AIDS Day two years earlier Dr. Jim Yong Kim - [head of World Health Organization's HIV Division, Kevin] De Cock's predecessor - said,

"In sub-Saharan Africa almost 60 percent of AIDS sufferers are women [and] in some settings ... we are finding ... that the number one risk factor for women in becoming infected with HIV is marriage. [And] married women have the highest rates of HIV infection. We have to take on some of the most fundamental and difficult cultural and social issues that are definitely affecting the way this epidemic is spreading. And ... if we can take on things like for example, property rights [so] women can inherit the property of their husband if [he] dies, that really reduces the likelihood of them getting into sex work for example. If we can ... change laws, change fundamental beliefs and culture by [getting] people the right kinds of prevention messages we will have done a lot not just for HIV AIDS but for issues like gender equity that have been with us forever."

In the scholarly literature, the traditional practice of the husband's family inheriting all his property after he dies is called "property stripping." In normal times, this had some logic; the husband's family had responsibility for the widow and her children, a brother often taking her as a second wife and so assuming responsibility for his nieces and nephews.

But things have changed. In the time of AIDS, the widow is likely also infected with the HIV virus, though not yet sick since her husband often gets it first and the disease is less advanced in her when her husband dies. So even if her brother-in-law hasn't died from AIDS himself, he is not willing to marry someone infected with HIV. And often the brother-in-law himself is sick or dead. Nevertheless, the family often still follows custom and seizes her house and farm and so she has no recourse but to turn to menial jobs, begging or prostitution. And since she was infected later, she may have years to spread her illness to her sex partners which are commonly many a day.

[A] Washington Post editorial by Richard Holbrooke . . . noted that increased testing and detection efforts was the "only effective prevention strategies can stop the spread of AIDS." He goes on to point out that "...monogamous women [are] thrown out of their homes for a disease they got from their husbands."

Read the entire article, which is another reminder that there are few simple solutions to this terrible disease.

Posted by Tom at 12:05 AM | Comments (1) | TrackBack (0)

August 30, 2007

Legal ethics -- an oxymoron?

The discussion began last week when the New York Times ethicist, Randy Cohen, ran the following question in his column:

I am a lawyer. During a first date with another lawyer, we had sex, and I wore a condom. Days later, when I came down with a bad fever and couldn’t determine the cause, she revealed that she had genital herpes. A judgeship will soon open up in her county, and she’s a near lock for it. But if I report her lapse of sexual ethics, I doubt that the selection committee will pick her. Should I? — NAME WITHHELD

Cohen replied as follows:

You should not. No doubt your paramour acted dreadfully. She should have told you that she had herpes and let you decide whether you wished to accept that risk. But the selection committee is not choosing a role model for the kids or someone to ride the express elevator to heaven; it seeks a person who will excel at a particular job. I do not believe that this sort of sexual misconduct correlates with an inability to be a good judge. [. . .]

Some private conduct does bespeak an inability to do a job. A would-be jurist who belonged to the Klan or even one who regularly used racist slurs would not inspire confidence in his or her ability to dispense equal justice to all. You should come forward with relevant information like that. But being unscrupulous in bed does not presage being inept on the bench, and so you should keep this demoralizing episode to yourself. And your doctor.

So, then Peter Lattman over at the WSJ Law Blog ran a post on Cohen's column and all hell broke loose in the comment section to Lattman's post. A few choice ones:

"Who cares! Sue the condom maker!"

"Great question! I am posing it to my Professional Responsibility students immediately. Thanks for the help."

"Leave it up to bunch of lawyers to discuss medicine. Totally absurd. The law profession is essentially an STD of society, recurring pain and not curable. As far as I am concerned, this is medically inaccurate and you all deserve the real disease."

Posted by Tom at 12:10 AM | Comments (2) | TrackBack (0)

And you thought your profession is stressful?

This earlier post about budding British tenor Paul Potts generated quite a bit of interest, particularly the difficulties that the humble Potts has had in overcoming a lack of confidence to perform on stage. This link from that earlier post discusses how common such insecurity is among opera singers, and this International Herald Tribune article reports that even established opera stars struggle mightily with the manifestations of insecurity:

[Opera] insiders agree that heightened competition, unyielding sponsor demands and the weight of stardom are leading to excesses that invite comparisons of opera to sports tarnished by doping scandals.

Some attempts to stay on top are relatively harmless, like popping a beta blocker to soothe the butterflies before stepping on stage. But others are more alarming.

Singers often overuse steroids in the form of cortisone to control inflamed vocal cords — sometimes in amounts that can permanently impair their abilities, say performers and their doctors. Others drink too much. Still others snort cocaine, according to insiders.

Inability to cope sometimes turns into tragedy — as in the case of American tenor Jerry Hadley, who killed himself last month after what friends said was a prolonged bout of depression and reported financial and drinking problems. [. . .]

To deal with the pressures, "soloists are taking beta blockers to control their angst, some tenors take cortisone to push their voice high, and alcohol is everywhere," [Tenor Endrik Wottrich] said. "The real pressure is no longer good old stage fright but comes from a new dimension that has penetrated opera — it now lives from glamour, and normal human mistakes are a disruption in such an environment." [. . .]

In the past 50 years, stages have grown in size, orchestral instruments accompanying singers have become stronger and opera seasons have lengthened. Adding to the pressure, singers get paid by the performance — no money for no shows.

Good singers are now in demand all year round, globe-trotting from one hemisphere to another. And even those who avoid long-distance travel often have little time between the late spring end of the subscription season, the start of rehearsals for summer festivals, and tours promoting their own recordings. [. . .]

Still, physicians who treat singers urge them to resist the temptation to perform at any cost. Some, they say, overdose without knowing it, as they travel from gig to gig in one city after the another without keeping track of cortisone treatments that — if overdone — can destroy a voice.

Read the entire article. Along the same lines, see "It wouldn't by Opera without an outrage."

Posted by Tom at 12:02 AM | Comments (0) | TrackBack (0)

The NCAA sinks to a new low

As regular readers of this blog know, I maintain that the NCAA's administration of big-time intercollegiate athletics has outlived its usefulness for a long while. On the heels of a shooting incident in Houston over this past weekend that killed one of the area's most promising high school football players, the NCAA once again proved that it has taken over-regulation to new heights of absurdity:

Just hours after Oklahoma football recruit Herman Mitchell was shot to death Friday in Houston, Adam Fineberg started raising money for Mitchell's family.

But after raising $4,500, enough to cover almost half the cost of Mitchell's funeral, Fineberg stopped. An OU compliance officer told him his actions would constitute an NCAA rules violation against the Sooners.

Now, Mitchell's mother likely will never receive that money.

That money is considered illegal financial assistance under NCAA rules because Mitchell's brother is a sophomore fullback at Westfield High School in Spring, Texas, and because Fineberg is an OU fan who attends Sooner football games and solicited donations through an OU fan Web site. [. . .]

OU spokesman Kenny Mossman said the an official with the university's compliance office contacted Fineberg on Monday asking to him halt his fundraising efforts until the OU received a rules interpretation from the NCAA. That interpretation came Tuesday.

"This is not a permissible expense for OU or someone who could be construed as an OU supporter,” said Mossman, an associate athletic director for communications. "We're not trying to be the bad guys, but we have to play by their rules.”

OU could apply for a waiver that would allow Fineberg to resume his fundraising and allow the Mitchell's family to receive the money, an NCAA official said late Tuesday.

"We would consider that if the university chose to go down that avenue,” NCAA spokesman Erik Christianson said.

All heart, those NCAA folks, eh?

Update: After a public outcry, the NCAA comes to its senses.

Posted by Tom at 12:00 AM | Comments (5) | TrackBack (0)

August 29, 2007

The Great Embarrassment of the 2007 season?

I am not as sure as most that Drayton McLane made the right move in firing General Manager Tim Purpura the other day. However, there is no doubt that Baseball Prospectus' Joe Sheehan thinks that McLane screwed the pooch in canning Purpura. In this article ($) entitled "Tim Purpura Gets Screwed," Sheehan lays into McLane's management of the Stros:

Firing Purpura, as McLane did yesterday, is an act of incompetence. Not only was it Purpura’s work—he ran the Astros’ player-development operations for seven years prior to becoming GM—that built the pennant winner, but with the expensive problems he inherited and the meddling of McLane, it was impossible for him to move the Astros in the direction they needed to go. He was essentially a caretaker, needing to preside over a rebuilding process and never being allowed to do so, and he’s now out of a job largely because his employer has returned to being completely irrational about what his team is.

Purpura’s performance as a GM was a mixed bag. He made his share of missteps, such as the [Jason Jennings] trade and the Woody Williams contract. However, he showed a terrific ability for making the smaller moves that add value at very little cost. In three seasons, Purpura made something-for-nothing pickups such as Mike Lamb, Aubrey Huff, and Mark Loretta. The player-development program he built continues to generate contributors such as Luke Scott, Wandy Rodriguez (check out his peripherals this year), Chad Qualls, and Troy Patton. If left to his own devices, I have no doubt that Purpura would have limited the Astros’ rebuilding process to a few short seasons, and come out on the other side with a team prepared for a long run of success.

Instead, he’s out of a job. Tim Purpura isn’t to blame for the Astros’ disappointing 2007 season, and that he’s being fired for it is ridiculous. Drayton McLane set these events in motion by abandoning what had worked for close to a decade—staying out of the baseball staff’s way—and instead making his own bad decisions about what the Astros needed. McLane wanted a year-long coronation of Craig Biggio, and he got it. He couldn’t have that and a contending baseball team, however, and his refusal to see that—and his subsequent dismissal of Purpura and Phil Garner as scapegoats for his own mistakes—ranks as one of the game’s great embarrassments of 2007.

Tim Purpura was one of the game’s top GM candidates when he landed the Astros’ job, and standing on the unemployment line today, he regains that description. If he’s out of work for longer than a couple of days, the industry is making a terrible mistake. Purpura is a better GM than a dozen guys who hold that title at the moment, and I sincerely hope he gets an opportunity to do the job correctly, an opportunity that was denied him in Houston.

Here's a counter-perspective.

Posted by Tom at 12:16 AM | Comments (1) | TrackBack (0)

U.S. District Judge Sam Kent takes a leave

This Mary Floor/Harvey Rice-Chronicle article (related blog post here) reports tha U.S. District Judge Sam Kent of Galveston is taking a four month leave from his bench. Judge Kent, who runs a tight ship, was recently in the news as the judge in the lawsuit that Houston based Landry's Restaurants, Inc filed and then settled with the holders of most of its bond debt. Interestingly, one of Landry's attorneys in that case reportedly has advocated forum shopping for certain of his cases in the past. The Chronicle article clearly suggests that Judge Kent's leave is not voluntary, but there is no suggestion that the leave has anything to do with the Landry's case or any other case, for that matter. Such a leave is a bit unusual, though, so stay tuned.

Posted by Tom at 12:05 AM | Comments (0) | TrackBack (0)

Viewing the Tiger Chasm

I don't think that PGA Tour officials had the following in mind when they devised the new season-ending series of tournaments called the Fed Ex Cup:

Before the FedEx Cup can run with the big guns at the NFL and major league baseball, it's going to first have to crawl better than Little Leaguers.

On both Saturday and Sunday, the Woods-free Barclays on CBS was beaten by the Little League World Series on ABC. The World Series final Sunday between Georgia and Japan drew a 3.5 overnight rating, while the golf got a 2.1. On Saturday, both the International (1.8) and U.S. (2.2) finals bested The Barclays (1.7).

The Barclays did fare better than a tournament of few stars the week before, the Wyndham Championship. The Wyndham drew a 1.0 on Saturday and 1.3 on Sunday.

Posted by Tom at 12:00 AM | Comments (0) | TrackBack (0)

August 28, 2007

Drayton cleans house

Stros owner Drayton McLane finally pulled the plug and fired General Manager Tim Purpura and Manager Phil Garner on Monday as the Stros continue their spiral downward into last place in the National League Central. Although the timing of the firings was somewhat surprising, the fact that McLane let Purpura and Garner go was not.

The decision to fire Garner was actually the easier decision. As noted several times earlier, Garner is not a particularly good manager, although he is far from the worst that the Stros have had (for example, Jimy Williams). Inasmuch as a new general manager will likely want to hire his own manager and Garner is nothing special in that role, letting him go at the same time as firing the GM is a logical move.

Curiously, the tougher decision was on whether to let Purpura go. Although the Stros are enduring their worst season since 2000, this is only the second season over the past 16 in which the club will finish with a losing record. In fact, Purpura has been a key part of a management team for the past 14 years that helped construct the most successful era in the club's history. He was a part of the player development division of Stros management that produced such star players as Lance Berkman, Richard Hidalgo, Carlos Guillen and Freddy Garcia, and developed a starting pitching staff early this decade that looked at the time as the best young staff in MLB (Roy Oswalt, Carlos Hernandez, Wade Miller and Tim Redding). It certainly wasn't Purpura's fault that that potentially fine staff was undermined by injury (Hernandez and Miller) and stunted progress (Redding).

Moreover, Purpura's GM tenure certainly started out with a bang. In his first season after replacing Gerry Hunsicker, the Stros improbably won their first National League pennant and went to their first World Series. But that World Series season masked a gradual decline in the Stros' performance level that had been taking place since 2001, and the results of that decline started to appear the following season -- the Stros had to finish fast just to eke out a winning record (82-80). Similarly, the 2007 club has deteriorated further as it has struggled all season behind one of the worst performances by a pitching staff in Stros history.

Thus, to a certain extent, Purpura is bearing the fallout from a trend that began long before he replaced Hunsicker as GM. Along those same lines, Purpura probably had nothing to do with the club's decision to indulge Craig Biggio's quest for 3,000 hits, an indulgence that has negatively affected the development of younger players such as Chris Burke and Jason Lane (see here and here).

But that's not to suggest McLane didn't have any reasons to cut Purpura loose. It appears that Purpura bungled the due diligence on the Jason Jennings trade, and the Woody Williams deal has turned out badly. After giving up the club's top two picks in this season's draft in the Williams and Carlos Lee deals, Purpura failed to sign the Stros two top choices (third and fourth round draft choices), further depleting a farm system that has been in decline since 1997. Finally, with this season's club going nowhere, Purpura was unable to swing a meaningful trade before this season's trading deadline, which further cemented the perception locally that he was in over his head in the GM's post.

Despite all this, Purpura leaves the Stros in decent, if not pristine, shape. Yes, the farm system is a mess as far as position players go, but there still are a decent number of pitching prospects who have the potential to contribute to the major league club. Moreover, Purpura locked up stars Oswalt, Berkman and Lee to long-term contracts that, with the possible exception of Lee's, are well-under current market conditions. Purpura also resisted the temptation to dedicate enormous resources to re-sign fading superstars Andy Pettitte and Roger Clemens, so the club's payroll is positioned for a new GM to bid for a couple of free agent pitchers this winter to shore up the pitching staff. The free agent pitchers available after this season are not particularly talented, but at least Purpura leaves the Stros with the financial flexibility to get involved in the market if they so choose.

So, who will McLane hire as the new GM? I don't have a clue, but my sense is that it will be someone with a strong background in player evaluation and development. McLane realizes by now that the Stros' current decline is the inevitable result of poor draft choices during the period from 1997-2002. Moreover, the lack of class "A" prospects in the current farm system does not bode well for the selections made in the 2003-2006 drafts, although it is still a big early to evaluate those drafts completely. The Stros franchise has increased in value considerably during the Biggio-Bagwell era and its GM job is now among the more attractive in MLB, but the club is unlikely ever to be the type of franchise that will be able to compete year in and year out with the big-market clubs for free agent talent.

Thus, the lifeblood of the Stros is their farm system, and my bet is that McLane will hire a baseball executive who has the background and expertise to turnaround the erosion in player evaluation and development that has led to this year's bad season. With a nucleus of Berkman, Oswalt, Lee and Pence, the good news is that it's not going to take a major overhaul to make the Stros competitive again for the National League Central title.

Posted by Tom at 12:15 AM | Comments (9) | TrackBack (0)

What's ailing you?

Have you had a symptom of an illness or an injury that has bothering you for awhile? Medgle allows you to click on the body part that's bothering you and select the specific symptom from a list of possible options. Then, Medgle asks how long the symptom has been apparent, as well as th inquirer's sex and age. Medgle then returns a listing of possible matches for the symptoms.

Moreover, you can then take the result that Medgle generates and, on the following page, provides you with a brief summary of the condition and a Google search relating to treatment, prevention, drugs, tests, research, diet, alternative medicine, and fitness. You can even refine the search by changing the age or gender.

This is never going to replace a visit to your doctor, but it sure provides a handy way to increase the patient's knowledge and understanding regarding diagnosis and treatment. Check it out.

Posted by Tom at 12:05 AM | Comments (0) | TrackBack (0)

Another wonderful thing about the blogosphere

Is that you can find far better previews of college football teams than are served up in the mainstream media. A case in point -- TAMABINPO's 2007 Aggie Football Preview. Check it out to find out everything you need to know about the 2007 Aggie football team.

Posted by Tom at 12:00 AM | Comments (0) | TrackBack (0)

August 27, 2007

In Dr. Pou's words

Dr. Anna Pou (previous posts here), the former faculty member of the University of Texas Medical Branch in Galveston, performed heroically in the horrific aftermath of Hurricane Katrina. For her heroism, she became the main subject of one of the most egregious examples of prosecutorial misconduct in recent memory. In this extensive Newsweek article, Dr. Pou finally tells her side of the story and it magnifies the enormity of the injustice that a few irresponsible Louisiana state officials have put her through. The following are a few tidbits:

What was it like after the levees broke?

Monday after the storm passed, we figured, ‘OK, minimal damage; we began organizing how we were going to evacuate the hospital.’ We didn’t have full power so we needed to move patients. Tuesday morning we were planning our day and one of the nurses called me to the window and said you’ve got to come see this. Water was gushing from the street. So we all kind of looked in disbelief. What is this? We could tell the city was flooding, you could see water down Claiborne Street. It was rising about a foot an hour. Then the whole mood at the hospital changed and what we were doing changed. We were in hurricane mode and we had to go into survival mode because we knew we had to be there for some time.

How did things change on Wednesday?

Tuesday night, we lost generator power, and that changed things a lot. ‘Til then we were on generator power so we did have some lights, and we did have some water. Water wasn’t clean, but it was running. But then we didn’t have water, we didn’t have any electricity, commodes were backing up everywhere. Conditions in the hospital started to deteriorate Tuesday night and early Wednesday. When that happens it makes care a lot more difficult. I was called to help suction a patient who had a tracheotomy but we had no suction running. We were going down to very, very basic care. You try every old-time method you can … [P]eople in charge were trying to get helicopters to come, [but] at that time we were told we were low priority. There were people on rooftops [who were going to get rescued first]. They said … there’s not going to be a lot of help coming, [so] what we decided [was] if helicopters were going to show up sporadically, we have to have patients ready and waiting to go. [. . .]

The conditions were unbearable. Inside the hospital it was pitch black, with odors, smell, human waste everywhere. It was very rancid. You would take a breath in and it would burn the back of your throat. The patients were very sick. That’s when we had to go from triage to reverse triage because we came to realize if patients aren’t being evacuated, [we had to deal with what we had]. Basically it was a general consensus that we’re not going to be able to save everybody. We hope that we can, but we realize everybody may not make it out. [. . .]

By the time Wednesday evening came around, if you can imagine in our mind, there is a central area that is a sea of people. A lot of very sick patients in that central triage area. It’s grossly backed up. Few patients had been evacuated. So there was just enough space to walk between the stretchers. It is extremely dark. We’re having to care for patients by flashlight. There were patients that were moaning, patients that are crying. We’re trying to cool them off. We had some dirty water we could use, some ice. We were sponging them down, giving them sips of bottled water, those who could drink. The heat was—there is no way to describe that heat. I was in it and I can’t believe how hot it was. There are people fanning patients with cardboard, nurses everywhere, a few doctors and wall-to-wall patients. Patients are so frightened and we’re saying prayers with them. We kind of looked around at each other and said, “You know there’s not a whole lot we can really do for those people.” We’re waiting [for help]. The people in that area could have [been evacuated] by boat but no boats were coming. I would do what I could with the nurses: changing diapers, cooling patients down with fanning. It wasn’t like, “I’m a doctor, you’re a nurse.” We were all human beings trying to help another human being, whatever it took.

What happened Thursday?

On Thursday morning we were told nobody was coming and we had to fend for ourselves. Everybody was kind of like at a loss here. What is plan B? Or plan C?

How did you come to be the one administering the injections? Louisiana Attorney General Charles Foti made a point of saying you had administered medication to people who were not your patients.

This was an emergency situation. There were no LifeCare doctors. In an emergency situation, the patients become everybody’s patients. What are you supposed to do if a patient needs to be cleaned and have IV fluids, say, “You’re not my patient, good luck”? That’s absurd. If that’s the case I dare say three-fourths of the population of Memorial Hospital would have been left without a doctor. We’re in medicine because we care about people. This is what we do. We don’t run around murdering people. That’s why what he said is so ludicrous.

When did you leave the hospital and who was still there when you left?

I left Thursday around 6 p.m. in a helicopter. When I left no one was in the hospital. There were a handful of patients on the helipad. I went to [another hospital and then] on a bus to Baton Rouge because my family was there.

How did you feel?

I was tired but I was more in total disbelief that the sick and the poor could be abandoned the way that they were in the United States of America. I never thought I would ever live to see that day. I was sad, heartbroken, kind of amazed and shocked at the lack of organization—the fact that there was no type of coordination. I have friends who practice in the third world and this was less than third world.

What was it like to be arrested in 2006?

I had [performed] surgery that Monday. It was bedlam in the medical community after Katrina. I had surgery Monday, Tuesday, Wednesday, Thursday and clinic on Friday. And the attorney general’s office knew that. I was taking care of indigent patients. He put my patients at risk. I am still angry about that. And then I was basically sitting by myself eating a salad, still in scrubs. I was starving and really dehydrated because I had been on call the weekend and been up 48 hours before. There was a knock on the door. It was four agents from the attorney general’s office.

The whole way [to jail] I was asking God to help my family get through this. I have nieces and nephews, and my hospitalized patients, who found out about this on the 10 o’clock news, which was heinous. Had I known [about the arrest], I could have spoken to my patients. Instead I just don’t show up and they see me on the news. There were cancer surgeries that had to be rescheduled. These patients’ treatments were delayed because of what happened. I am still furious about it. It just really makes me mad.

There is much more, so read the entire article. Again, I ask -- where is the investigation of the public officials who are responsible for attempting to organize this lynch mob against this hero?

Posted by Tom at 12:15 AM | Comments (0) | TrackBack (0)

Not your typical highway robbery

Carrying too much cash is now probable cause of a crime?:

Anastasio Prieto of El Paso gave a state police officer at the weigh station permission to search the truck to see if it contained "needles or cash in excess of $10,000," according to the American Civil Liberties Union, which filed the federal lawsuit Thursday.

Prieto told the officer he didn't have any needles but did have $23,700.

Officers took the money and turned it over to the DEA. DEA agents photographed and fingerprinted Prieto over his objections, then released him without charging him with anything.

Border Patrol agents searched his truck with drug-sniffing dogs, but found no evidence of illegal substances, the ACLU said. [...]

DEA agents told Prieto he would receive a notice of federal proceedings to permanently forfeit the money within 30 days and that to get it back, he'd have to prove it was his and did not come from illegal drug sales.

They told him the process probably would take a year, the ACLU said.

H'mm. I didn't realize that one of the dangers of carrying a large amount of cash is now the federal government.

Posted by Tom at 12:05 AM | Comments (1) | TrackBack (0)

Big downtown building deal

The Bank of America Center in downtown Houston -- the distinctive Phillip Johnson and John Burgee-designed building that graces this blog's heading -- is changing hands in a record-setting deal:

Bank of America Center has just sold for about $370 million, a record-setting price for a Houston office building.

Novati Group, a new Dallas-based real estate player, and the General Electric Pension Trust, which was advised by Stamford, Conn.-based GE Asset Management, paid about $295 a square foot for the building at 700 Louisiana, according to sources familiar with the deal. The seller was Houston-based Hines, which developed the 56-story, 1.3 million-square-foot skyscraper in 1983.

. . . the reported total price is record-breaking, as well as the price per square foot. The deal edges out the $286 per square foot record set in December 2005 when the 581,000-square-foot 5 Houston Center was purchased by Wells Real Estate Investment Trust II Inc. for $166 million.

This building, which is at 700 Louisiana in downtown Houston, has always been special to me. My old firm was one of the original tenants in the building and we occupied the 51st and 48th floors for 18 years. Known for its unique architecture, the building has three major setbacks tha tmke it appear to be three adjoining buildings. The exterior is made from deep russet-colored granite, known as Napolean Red, which was quarried in Sweden and finished in Italy. Since it was built, the building has always had the highest occupancy of any building in downtown Houston and is currently 93% leased.

Posted by Tom at 12:00 AM | Comments (0) | TrackBack (0)

August 26, 2007

Are you ready for some college football?

The college football season kicks off this week, so take a look at this clever table containing the schedules of most major college teams utilizing the logos of each team and opponent. And here is an interesting pre-season analysis of the major conferences.

Posted by Tom at 12:25 AM | Comments (1) | TrackBack (0)

August 25, 2007

The charm of capitalism

Scott Adams figures out the essential charm of capitalism:

I understand the math of capitalism, and how the few successes are so large they pay for all the failures and then some. But at any given moment, the majority of resources in a capitalist system are being pushed over a cliff by morons. This fascinates me. And it’s clearly the reason that humans rule the earth. We found a system to harness the power of stupid.

Read the entire post.

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August 24, 2007

Copland on Stoneridge v. Scientific-Atlanta

Jim Copland, the director of the Center for Legal Policy at the Manhattan Institute, provides this particularly lucid analysis of the important legal and public policy issues involved in the pending Supreme Court case of Stoneridge Investment v. Scientific-Atlanta, which could seriously erode the longstanding Central Bank rule against holding financial institutions secondarily liable for damages in providing financing for a company that defrauds its investors:

Nothing in the securities laws as written enables private investors to file lawsuits over alleged frauds. Courts have inferred such “private rights of action” stemming from section 10(b)(5) of the Securities Exchange Act of 1934, but the Supreme Court limited such private suits to “primary” violators in 1994 in a case called Central Bank of Denver v. First Interstate Bank of Denver. The court expressly declined to embrace liability for companies “aiding and abetting” frauds that injured shareholders.

After Central Bank, Congress quickly jumped in to clarify that the Securities and Exchange Commission itself had authority over an entity that “knowingly provides substantial assistance to another” in securities-related frauds. But Congress wisely decided not to extend such authority to private lawsuits.

If the Supreme Court decides to endorse such suits notwithstanding congressional inaction, the implications for U.S. competitiveness could be profound. Anyone doing business with a publicly listed American company would be subject to a potential lawsuit should that company’s stock price tank — and would thus have to hire extra auditors and take out insurance policies to protect against such lawsuits. The disadvantages for listing on American stock market, already significant, would be that much more substantial.

And if you want an example of the absurdity of what would happen if the Central Bank rule is overturned or eroded, read this.

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The Slade trial begins

The criminal trial of former Texas Southern University President Priscilla Slade on charges of misappropirating TSU property begins today at the county criminal courthouse in downtown Houston (previous posts here). Harris County prosecutors and Mike DeGeurin, Ms. Slade's defense counsel, spent the last several days picking the jury.

Meanwhile, life goes on as usual over at TSU:

Texas Southern University's accrediting agency is taking a deeper — and unscheduled — look into financial accountability and leadership at the state's largest historically black university.

In an extraordinary move, the Southern Association of Colleges and Schools, the regional accrediting body for 780 colleges and universities in 11 Southern states, has ordered TSU to provide audits, rehabilitation plans and other documents by Oct. 1. [. . .]

The worst-case scenario for TSU is the loss of its accreditation. Without it, the federal government would stop providing financial aid to students.

Nearly two-thirds of TSU's 11,000 students receive Pell Grants, which are awarded to low-income students.

There are many sad aspects to this entire affair, but one of the saddest is that Ms. Slade's trial will almost certainly garner far more of the public's attention than the continuing failure of local and state officials to take any meaningful steps to begin solving the chronic problems at TSU.

Posted by Tom at 12:09 AM | Comments (0) | TrackBack (0)

Cheerleading the Cowboys?

We already know that the Chronicle sportswriters lead the nation in pre-season puff pieces about local professional football team. But now the Chron sportswriters are expanding the reach of their incessant cheerleading to Dallas with this soft toss about new Cowboys head coach, Wade Phillips, who happens to be the son of the still hugely popular former Houston Oilers head coach, Bum Phillips:

So after all these years, Wade is who he is, something of a rumpled, unprepossessing presence on the sideline and not the most silver-tongued of news conference orators. The only thing overtly sexy about him is his latest job title: head coach of the Dallas Cowboys, one of sport's most lustrous brands. [. . .]

Funny thing. If you ask the Cowboys about their new coach, they're wont to speak about how Wade also sees stuff. For that reason, quarterback Tony Romo calls him the smartest coach he has ever been around.

Let's just say that there is a slight difference of opinion about Wade's head coaching abilities at one of his previous stops, Buffalo, New York. The Buffalo News' Jerry Sullivan laid out the case against Phillips as a head coach in a column (not available online) at the time the Cowboys hired Phillips last February:

When I heard that Jerry Jones had hired Wade Phillips to be the Dallas Cowboys' new head coach, I had the same reaction as when Jones signed Drew Bledsoe two years ago:

Good luck, fella.

Is this what it's come to for the once-great Dallas franchise? When times get tough, go out and grab a castoff from the Buffalo Bills' recent, sorry past? Maybe Jones' next move will be luring Rob Johnson out of retirement to compete with Tony Romo for the quarterback job.

Ralph Wilson has to be smiling. Maybe he can't get Jones and the other rich NFL owners to give him a bigger share of the revenue pie. But at least Wilson gets the satisfaction of seeing the Cowboys picking through his table scraps -- you know, the way the Bills did with Patriots discards during the Donahoe era.

Jones can spin it any way he likes. But it's clear that the Cowboys owner, who has the title of general manager, decided it was time to meddle again and wanted a puppet as coach. Jones gave Bill Parcells control for four years and didn't get a single playoff win for his trouble. That makes 10 years without a playoff win for the storied Cowboys -- nearly as long as Buffalo's playoff drought.

Phillips was the ideal candidate, a retread who is close to 60 and was desperate for one last shot at a top job. Phillips is a nice, self-deprecating guy, a native Texan who wore ostrich-skin boots to his introductory news conference.

"Wade wanted it so bad," Jones said when he announced Phillips' hiring.

Phillips wanted it badly enough to accept Jason Garrett as Jones' hand-picked offensive coordinator. He didn't get to pick his offensive staff. I suppose he'd have taken the Cowboys cheerleaders as coaches if Jones had required it.

Jones favors the 3-4 defense. Phillips is a 3-4 guy, a good defensive coach. Some would say great, but it's funny how his defenses have failed to rise to the ultimate test over the years. The Chargers' playoff collapse against the Pats last month was the most recent example.

Of course, the Cowboys aren't hiring Phillips to run a defense. They're hiring him to be the head coach. As Bills fans have discovered to their horror (Gregg Williams, Mike Mularkey), it's a huge step from coordinator to head man. All too often, owners elevate men beyond their intellect and abilities.

Why would Jones expect great things from Phillips in his third go-round? Phillips is a proven mediocrity as a head coach. His supporters point to his 29-21 record with the Bills. I'm sorry, those teams were loaded. It didn't take a Vince Lombardi to produce a winning record.

Phillips isn't big on detail. A former assistant told me Phillips didn't account for a short practice week before the Music City Miracle, which was played on a Saturday. He wasn't a stickler for conditioning. He was not a commanding presence on the sideline.

Phillips didn't win a playoff game in Buffalo and made some classic blunders along the way. He made Johnson his starting QB before a playoff game, after Doug Flutie got the team to 10-5. He made Bruce DeHaven the scapegoat for the playoff loss. Then he brought in Ronnie Jones, an unqualified crony, to coach the special teams. It was a disaster.

Before a Monday night game late in the 2000 season, Phillips went on national TV and said the Bills and Colts (who were tied at the time) were essentially out of playoff contention. The Colts won and found a way into the playoffs.

My mind throbs at the memory of Phillips fumbling his way through the Flutie-Johnson flap. He was in over his head as the spokesman for a franchise. If he thought he had it tough here, wait until the Texas media gets hold of him.

They'll chew the guy up and spit him out, ostrich skin boots and all.

Funny how none of the foregoing made it into the Chron article. Everything remains peaches and cream at the Chron during the pre-season.

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August 23, 2007

Good enough for government work?

This post from last year addressed the jury misconduct issues that former Governor George Ryan and his aide, Lawrence Warner, raised in the trial court after they had been convicted criminal charges that they had improperly steered state contracts for their own benefit. That post-trial motion was denied, so Ryan and Warner made the jury misconduct during the trial and deliberations a central issue in their appeal to the Seventh Circuit Court of Appeals.

Well, as you probably have heard by now, a divided Seventh Circuit panel rejected Ryan and Warner's appeal earlier this week (the decision is here), concluding that while the trial "may not have been picture perfect," it was fair enough to uphold the convictions. That comment did not sit well with dissenting Judge Michael Kanne, who called the majority's "not pretty perfect" comment "a whopping understatement by any measure." Judge Kanne proceeded to lay out over three pages what went wrong in the trial:

"In a case that was tried over a six month period, the jurors entered and exited the courthouse every day past scores of television and still cameras and reporters."

"The jurors used public elevators and brushed elbows with anyone who happened to be in them. Although the court’s intent was not to make the jurors’ names public, that effort was compromised when the jurors’ names were used in the in-court voir dire."

"When jury deliberations were ready to commence in the most high profile case in Chicago in recent memory, there was no thought of sequestering the jury."

"During the initial eight days of deliberations an apparent holdout juror was purportedly threatened by other jurors with a charge of bribery."

"Legal research gained by a juror from the internet was – contrary to the court’s instruction – brought into the jury room in an effort to persuade the recalcitrant juror to change her position."

"A reporter for the Chicago Tribune advised the district court during jury deliberations that the newspaper’s search had disclosed major inconsistencies between answers in a jury questionnaire and public records. Based on the information provided by the Chicago Tribune, the district judge, in concurrence with all parties, requested the U.S. Attorney’s Office to conduct a background check on all jurors."

"Jury deliberations were halted following the Chicago Tribune disclosure and the hiatus continued during the investigation of the jurors by the U.S. Attorney’s Office."

"During the five-day hiatus in jury deliberations, the exposé by the Chicago Tribune was published revealing that, indeed, false answers had been given on a jury questionnaire and that the sitting jurors were now under investigation."

"Amidst questions raised by the district judge concerning the necessity of advising the jurors of their constitutional rights and their right to counsel, the individual examination of six sitting and three alternate jurors was begun."

"Through the judge’s examination it was determined that a majority of jurors had provided false answers under oath and could face criminal prosecution. Many jurors who were interrogated told the district judge that they were scared, intimidated or sorry for what had occurred."

"During the course of the interrogations, the jurors were granted immunity from prosecution by the U.S. Attorney. Some jurors later hired lawyers in order to represent their own independent interests arising from their participation in the trial."

"Two jurors who provided untruthful answers were excused from further service while others so situated were retained."

"Before the hiatus in deliberation, jurors informed the court that they were having a conflict and yet after the interrogations the judge dismissed one of the jurors in the conflict without determining whether she was a holdout juror."

"Alternate jurors were seated, but not in the order required by Rule 24."

"After eight days of deliberation by the original jury, and five days in hiatus, a reconstituted jury deliberated for ten days and returned the verdicts in this case."

Incredibly, even the foregoing does not fully describe just how dysfunctional this jury had become. Shouting and apparently pushing and shoving went on during jury deliberations. The majority opinion explains that the apparent holdout juror sent out a note to the trial judge saying "that other jurors were calling her derogatory names and shouting profanities." That was followed by a note from other jurors asking the trial judge to remove the holdout juror because "she was refusing to engage in meaningful discourse and was behaving in a physically aggressive manner."

But things get even worse. Not only was the jury out of control, the trial judge was ineffectual in bringing order to the proceedings. Judge Kanne observes as follows:

At oral argument before this court, Prosecutor Collins stated that “Judge Pallmeyer is a consensus builder.” . . . This insightful comment is the key to understanding the non-structural juror errors. Consensus building can help in finding common ground in disputes. It can also help to expose decision makers to alternative points of view. But consensus building can have negative consequences as this case demonstrates.

Consensus building by the district judge allowed a continual round robin of discussions between the attorneys and the court especially during the critical period of March 27th and 28th when the parties and the court were addressing the juror related issues. Transcripts from this period reveal a very conscientious but irresolute judge who is willing to contribute her views and concerns to the conversation involving contested issues, but is reluctant to provide firm rulings that end the court’s consideration of those issues. The record from this period is full of conversations but lacks definitive rulings. Consensus building does not always lead to the resolution of difficult issues.

Judge Kanne succiently sums up the proceedings in the following manner:

In the final analysis, this case was inexorably driven to a defective conclusion by the natural human desire to bring an end to the massive expenditure of time and resources occasioned by this trial – to the detriment of the defendants. Given the breadth and depth of both structural and nonstructural errors, I have no doubt that if this case had been a six-day trial, rather than a six-month trial, a mistrial would have been swiftly declared. It should have been here.

What possible public or judicial policy is furthered by allowing such juror misconduct to undermine a trial that could send two men to prison for most of the rest of their lives? As usual, Ellen Podgor has insight comments on the decision here and here, and the Volokh Conspiracy is also all over the decision.

Posted by Tom at 12:18 AM | Comments (0) | TrackBack (0)

Officially neutralizing a scandal

As noted earlier here, I doubted from the beginning that the NBA's latest point-shaving scandal would have much of an impact on the NBA enterprise. Consistent with that prediction, the NBA just announced that it has just taken the standard step of pushing a scandal into the background:

The National Basketball Association has selected a former United States attorney to review its antigambling policies and the league’s overall officiating program.

Lawrence B. Pedowitz, a partner at the New York firm of Wachtell, Lipton, Rosen and Katz, will conduct the review, which comes in response to the recent scandal surrounding a referee who conspired with professional gamblers.

“There is nothing as important as the integrity of our game and the covenant we have with our fans,” Commissioner David Stern said in a statement. “In order to preserve their trust, we will make every effort possible to ensure that our processes and procedures are the best they can be.”

Translation: "We're going to investigate this matter for a long time and hope you all just forget about it."

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Senior football?

It's safe to say that the fellow described in this ESPN.com article is not your typical 59-year old:

Mike Flynt was drinking beer and swapping stories with some old football buddies a few months ago when he brought up the biggest regret of his life: getting kicked off the college team before his senior year.

So, one of his pals said, why not do something about it?

Most 59-year-olds would have laughed. Flynt's only concern was if he was eligible.

Finding out he was, Flynt returned to Sul Ross State this month, 37 years after he left and six years before he goes on Medicare. His comeback peaked Wednesday with the coach saying he's made the Division III team's roster. He could be in action as soon as Sept. 1. [. . .]

A longtime strength and conditioning coach at Nebraska, Oregon and Texas A&M, he's spent the last several years selling the Powerbase training system he invented. Clients include school systems and the military. His colorful life story includes being the son of a Battle of the Bulge survivor and having dabbled in gold mines and oil wells -- successfully. [. . .]

Flynt's position is still being determined, but he used to play linebacker. Wherever he lines up, he'll likely become the oldest player in college football history. Neither the NCAA or NAIA keeps such a statistic, but research hasn't turned up anyone older than their mid-40s. And even those are rare, for obvious reasons. [. . .]

. . . his wife wasn't as fired up by the idea.

"I feel like I'm married to Peter Pan," she said. . .

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August 22, 2007

The Fed Ex Cup enters the Tiger Chasm

Chronicle golf columnist Steve Campbell reports that the Fed Ex Cup -- the PGA Tour's new series of tournaments intended to breath life into the lifeless end of the golf season -- has entered the dreaded Tiger Chasm even before the first tournament of the new series has commenced:

They haven't yet hit a shot that counts in the FedEx Cup playoff series, and the whole thing is beginning to look like the kind of idea that got Ishtar, Gigli and The Adventures of Pluto Nash on the big screen.

Woods doomed the FedEx Cup, which was a risky proposition in the first place, to irrelevancy by opting to skip the first round of the so-called playoffs. At a time when the PGA Tour desperately needs to drum up interest in a radical overhaul of its season structure, Woods invited massive disinterest by passing on this week's The Barclays at Westchester Country Club. Not so fresh off victories at the WGC-Bridgestone Invitational and the PGA Championship, Woods insists he needs another week of rest and relaxation. [. . .]

. . . what kind of playoff system allows a competitor to duck either an opponent or a site and still win the championship? Answer: not a legitimate one. The tour is damned if Woods wins the Cup, because it exposes the playoff system in place as a sham. The tour is damned if Woods doesn't win the Cup, or at least stay in contention until the very end, because he's head, shoulders, knees and toes above the rest of the players in accomplishments and fan appeal.

Meanwhile, PGA Tour member Jeff Maggert of The Woodlands lays the blame for the Fed Ex mess squarely on PGA Tour headquarters and Commissioner Tim Finchem:

Maggert . . . says none of the touring pros are enthusiastic about the tour's playoff.

"Probably half the players out here couldn't care less about [the FedEx Cup]," he told Hardin. "The other half are indifferent."

Maggert said tour commissioner Tim Finchem should take the blame for the indifference in the clubhouse.

"I hear a lot being written, but I don't see anybody writing anything about Finchem," Maggert said. "I mean, this was his idea. He really didn't consult any of the players. He kind of shoved it down our throats and said, 'This is what we're going to do.'"

But dispositive confirmation that the Fed Ex Cup is in serious trouble is the fact that The Onion is already making fun of the concept. Note the following statement at the end of this article spoofing that Tiger Woods was annoyed that his three month old daughter was "looking the other way when he won" the recent PGA Championship:

Woods later stated, however, that he couldn't find fault with his daughter's apathetic feelings towards the upcoming FedEx Cup events, saying that he himself thinks of it as a forced and unoriginal attempt to inject excitement into the final part of the golf season.

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One of downtown Houston's charms

The New York Times discovers one of the literally coolest characteristics of downtown Houston -- the pedestrian tunnel system:

Where is everybody?

Seared by triple-digit heat and drenched by tropical storms, midday downtown Houston appears eerily deserted, the nation’s fourth-largest city passing for a ghost town.

On the street, that is.

But below, there are tunnels at the end of the light — nearly seven color-coded miles of them connecting 77 buildings — aswarm with Houstonians lunching, shopping and power-walking in dry, air-chilled comfort. [. . .]

Other cities, notably Montreal, Toronto and Minneapolis, are renowned for their extensive tunnel and skyway networks. But Houston may be alone in the extent and nature of its pedestrian circulation system of tunnels and skywalks that become particularly popular on days like Aug. 12, 13 and 14 when temperatures hit 102 and 101, or last Thursday, when Tropical Storm Erin flooded many streets.

It was not centrally planned; it just grew, inspired by Rockefeller Center in New York. But it is not connected to a transit network. And, befitting Texans’ distrust of government, most of it is private; each segment is controlled by the individual building owner who deigns to allow the public access during business hours — and then locks the doors on nights and weekends. Some parts, like those belonging to the former Enron buildings now leased by Chevron, are closed to outsiders altogether.

Few claim mastery of the labyrinth.

“It’s one of Houston’s best-kept secrets,” said Sandra Lord, widely known as the Tunnel Lady, a Yankee transplant who dispels the mysteries for $10 a head and roams the downtown underworld with proprietary aplomb, sometimes stopping strangers to ask, “And you are?” Corporations pay Ms. Lord to orient new employees below ground, and nearly 45,000 natives and visitors have taken her Discover Houston Tours since 1988. [. . .]

The tunnels are remarkably diverse, lined with restaurants and coffee bars, boutiques, florists, shoe-repair shops, jewelers, dry cleaners, dental clinics, optometrists, pharmacies, beauty salons, barbers, copy and printing services, banks and post offices.

And they are clearly amenities. “It’s extremely difficult to be a Class A building without being on a tunnel,” said Laura Van Ness, business development director of Central Houston Inc., the nonprofit downtown organization. . . .

As the article notes, the tunnel system is largely the product of private enterprise. Sort of makes you wish that the decision on whether to invest in this to private enterprise, as well.

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Sports talk radio overload

Why on earth are there now four sports talk radio stations in Houston? Chronicle sports media columnist David Barron reports (related blog post here) on the rather rocky first day of the city's newest sports talk radio station:

KGOW (1560 AM), the city's fourth sports-talk station, launched Monday with the usual shakedown issues that accompany any new venture, plus a new glitch that prevented the station's signal from being heard in parts of metropolitan Houston.

David Gow, the station's president, said equipment called an exciter failed last weekend at the station's 50,000-watt transmitter southwest of Houston. The station signed on Monday at 1,000 watts from a backup transmitter on the city's south side.

"We anticipate the situation being remedied shortly," said Richard Topper, KGOW's general manager. "We hope to be at full strength as soon as possible."

Listeners commenting at the Sports Media blog at www.chron.com reported hearing KGOW's signal in Pearland, Kemah and Cypress, but others reported problems listening in downtown Houston, the Heights, Kingwood, Spring and northwest Harris County. [. . .]

Some hosts struggled with telephone problems. Chronicle columnist Richard Justice, the station's late-morning host, began an interview with a greeting from Oklahoma football coach Bob Stoops, but Stoops was off the line by the time Justice finished asking his first question.

After a break for a station promotion, Justice returned with a telephone interview with baseball commissioner Bud Selig. [. . .]

After its last local talk show ended at 6 p.m. Monday, the station went to automated music rather than a syndicated sports talk show because it has not received the satellite equipment needed to download the program.

Having Richard Justice talk about sports is bad enough. But does anyone else have the sense that this latest venture in local sports talk radio sounds a bit like a junior high science project?

By the way, in other sports media news, Houston Chronicle sports columnist John Lopez announced yesterday that he is leaving the Chronicle after almost 20 years as a reporter and columnist.

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August 21, 2007

Landry's cuts a deal with its bondholders

Houston-based Landry's Restaurants Inc cut a deal with its main group of bondholders on Monday afternoon, resolving litigation that had consumed the company over the past month (prior posts here). Essentially, the bondholders gave Landry's an 18 month window to refinance the $400 million in debt in return for Landry's agreeing to bump the interest rate on the bonds from 7.5% to 9.5%.

Although the deal allows Landry's to avoid refinancing the debt now at an even higher rate of interest, my sense is that the entire episode has been fairly disastrous for Landry's. First, as noted here awhile back and as Loren Steffy recently pointed out, Landry's has not been doing all that well in a brutally competitive restaurant market even before this dustup with its bondholders. A couple of weeks ago, Landry's CEO Tilman Fertitta publicly claimed that refinancing of the bond debt "was no big deal," but then testified during the injunction hearing this past Friday that forcing Landry's to refinance the bond debt now would irreparably harm the company. That sounds like a pretty big deal to me. Meanwhile, Landry's will now be looking to refinance a large chunk of junk debt in a shaky credit market that knows that the company just got done acrimoniously suing the holders of the debt. That approach generally does not induce favorable terms from debt refinanciers.

Landry's looks as if it is heading for some very choppy waters.

Posted by Tom at 12:10 AM | Comments (0) | TrackBack (0)

Judge Hughes finalizes his Hyde Act ruling

These earlier posts reported on U.S. District Judge Lynn Hughes' decision to sanction the Department of Justice under the Hyde Act for its sloppy indictment and handling of a criminal fraud prosecution of Oklahoma lawyer John Claro. The always alert Ellen Podgor passes along that Judge Hughes has issued his formal ruling on the Hyde Act sanctions, in which he observes:

The United States Attorney indicted an Oklahoma businessman in conscious indifference to the legal and factual basis of the charges that they brought against him. The fifty-four-count indictment was a jumble of claims and stray facts – a garbled press release about working men who cannot get insurance. The court dismissed all counts of the indictment. The businessman seeks defense costs. He will be repaid because the prosecution was not substantially justified. [. . .]

Criminal prosecution casts a shadow on defendants that can linger even after an acquittal. The discretion the government has to prosecute those it thinks guilty of crimes must be grounded in a sound facts and articulated law. The Hyde Amendment was passed to give some recompense to those prosecuted without this most basic discretionary safeguard from prosecutorial oppression. The case against [this individual] lacked even a semblance of responsible work by the government. His attorneys had to work with a jumbled array of facts and theories, a mountain of documentary evidence, and unresponsive government lawyers.

Sort of makes you wonder what Judge Hughes would have done with a number of the Enron-related prosecutions, doesn't it? Here's a hint.

Posted by Tom at 12:05 AM | Comments (0) | TrackBack (0)

Looking for wide-outs

Amidst the Chronicle's incessant pre-season cheerleading for the Texans, most objective observers concede that the team is thin at the wide receiver position after Pro Bowl WR Andre Johnson.

Sort of makes you wonder why one of the team's top draft choices at the wide receiver position is excelling with one of the top teams in the NFL rather than the Texans? And the guy who the Texans brought in to replace him is no longer with the team?

Count me as still skeptical of the Kubiak regime.

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August 20, 2007

Making subprime sense

The New York Times continues to do a reasonably thorough job of reporting on the downturn in the subprime mortgage business and its impact on the recent crunch in the credit markets (see here and here), although it's not at all clear that the reporters and columnists understand how markets will adjust and resolve these problems. A case in point is this Paul Krugman column in which he decries the impact of securitization of mortages on the willingness of lenders to engage in workouts with financially-strapped borrowers:

In the past, as Gretchen Morgenson recently pointed out in The Times, the bank that made the loan would often have been willing to offer a workout, modifying the loan’s terms to make it affordable, because what the borrower was able to pay would be worth more to the bank than its incurring the costs of foreclosure and trying to resell the home. That would have been especially likely in the face of a depressed housing market.

Today, however, the mortgage broker who made the loan is usually, as Ms. Morgenson says, “the first link in a financial merry-go-round.” The mortgage was bundled with others and sold to investment banks . . .

My guess is that [the solution] would involve federal agencies buying mortgages — not the securities conjured up from these mortgages, but the original loans — at a steep discount, then renegotiating the terms. But I’m happy to listen to better ideas.

Here's a better idea -- how about allowing the parties that took the risk of the mortgages to endure the consequences of that risk-taking? Krugman is correct that one of the disadvantages of securitization (which is far outweighed by its many benefits) is that the rules for servicing the loans are established when the loans are pooled and cannot be changed without providing legal problems for the seller of the securitized mortgage pool. For example, if a pooled loan were sold at a discount, then the proceeds of the sale would be treated as a prepayment of the loan, which would benefit certain investors and disadvantage other investors. Inasmuch as the disadvantaged investors would seek damages from the seller of the securitized mortgage pool, that's why the sellers of the security don't allow the servicing terms of the mortgage to be changed after the loan is contributed to the pool.

Krugman's proposal is essentially that borrowers should be allowed to remain in their houses on renegotiated terms and that the investors in the securitized pools should absorb the cost of such a modified arrangement. But borrowers can already file a bankruptcy case and attempt to extend the payment terms of the loan under either a chapter 11 or 13 plan so long as their income and the value of the collateral for the mortgage support such terms. However, if the borrower's income or the value of the underlying asset will not support extension of the loan terms, it's far better that the lenders be allowed to exercise their contractual right to conduct a foreclosure sale of the collateral for the loan. That way, the investors who bought the securitized mortgages absorb the losses, which is precisely the risk of investing in a securitized mortgage pool.

By the way, one of the Times articles linked above starts by passing along the following story, which is testimony to the creativity and resilience of American markets:

All through last year, Jim Melcher saw the signs of a rapidly deteriorating American housing market — riskier mortgages, rising delinquencies and more homes falling into foreclosure. And with $100 million in assets at his hedge fund, Balestra Capital, he was in a position to do something about it.

So in October, as mortgage-backed bonds were still flying high, he bet $10 million that these bonds would plunge in value, using complex derivatives available to any institutional investor. As his gamble began to pay off in the first months of 2007, Mr. Melcher, a money manager based in New York, plowed the profits into ever bigger wagers that the mortgage crisis would worsen further, eventually risking some $60 million of the fund’s money.

“We saw the opportunity of a lifetime, and since then events have unfolded on schedule,” he said. Mr. Melcher’s flagship fund has since doubled in value, even as this summer’s market turmoil cost other investors billions, forced the closing of several major hedge funds and pushed the stock market down 7 percent since mid-July. This week, Mr. Melcher is heading to Paris for a vacation with his wife.

Posted by Tom at 12:10 AM | Comments (0) | TrackBack (0)

What does the investment of a billion dollars in New Orleans generate?

According to this NY Times article, apparently not much:

Six inches.

After two years and more than a billion dollars spent by the Army Corps of Engineers to rebuild New Orleans’s hurricane protection system, that is how much the water level is likely to be reduced if a big 1-in-100 flood hits Leah Pratcher’s Gentilly neighborhood.

Looking over the maps that showed other possible water levels around the city, Ms. Pratcher grew increasingly furious. Her house got four feet of water after Hurricane Katrina, and still stands to get almost as much from a 1-in-100 flood. [ . . .]

New Orleans was swamped by Hurricane Katrina; now it is awash in data, studied obsessively in homes all over town. And the simple message conveyed by that data is that while parts of the city are substantially safer, others have changed little. New Orleans remains a very risky place to live.

The entire flood system still provides much less protection than New Orleans needs, and the pre-Katrina patchwork of levees, floodwalls and gates that a Corps of Engineers investigation called “a system in name only” is still just that.

The corps has strengthened miles of floodwalls, but not always in places where people live. It has built up breached walls on the east side of one major canal, but left the west side, which stood up to Hurricane Katrina, lower and thus more vulnerable. It has not closed the canals that have often been described as funnels for floodwaters into the city. [. . .]

As a result, the city still lacks a system that can stand up to that 1-in-100 storm, let alone one like Hurricane Katrina, which the corps calls a 1-in-396 storm. The work that could build the more robust system — originally estimated at $7 billion, and now at least twice that — will not be completed until 2011 at the earliest, and experts agree that even that level of protection will be less than the city needs.

The corps is working on a two-year, $20 million study to find ways of providing even more protection, but it will not even be released until December.

Read the entire article. As noted in many posts over the past two years in the hurricane category of this blog, the performance of the various federal, state and local governmental entities in rebuilding New Orleans has been generally abysmal, at best.

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A vexing question about women's golf

The Scotsman.com's John Huggan tackles a question about women professional golfers that has perplexed me for a long time:

. . . [W]omen, typically, own short games that simply do not bear close comparison with their male counterparts. Whether pitching, chipping, blasting from bunkers or putting, the ladies are markedly inferior.

Which is odd, when you think about it. In the areas of the game where innate touch and feel should have obvious advantages over pure strength, men still manage to make the women look inadequate.[ . . .]

Look at the stats. A 29 putts per round average barely gets you into the top 100 on the PGA Tour; on the LPGA Tour, that number has you in the top 30.

As Huggan notes, practice makes perfect and, for some reason, the women pros don't like practicing the short game as much as other areas of the game. Who'd a thunk it?

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August 19, 2007

The risk of demagoguery

Democratic presidential candidate John Edwards' demagoguery has been a frequent topic on this blog, so I read with interest this Larry Ribstein post that analyzes Edwards' latest hypocrisy -- lambasting the actions of subprime lenders on the campaign trail while profiting from a company that invests substantial amounts in subprime lenders.

Meanwhile, the Onion brilliantly captures the essence of Edwards' vacuity in this article with the headline "John Edwards Vows To End All Bad Things By 2011."

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August 18, 2007

A job well done

University of Houston student-athlete and football player Jerrod Butler was stricken by sudden cardiac arrest on Monday during a weightlifting session at the University of Houston. Butler passed out and stopped breathing.

Members of the UH athletic training staff, led by Mike O'Shea and John Houston, immediately revived Butler, performing CPR and using an automatic external defibrillator. Butler was then rushed the short drive to the Methodist Hospital emergency room at the Texas Medical Center, where he was put on a ventilator and placed in the intensive care unit.

On Thursday, Butler was moved out of the ICU and into a regular room.

It's easy in our busy lives to take professionals such as O'Shea and Houston for granted, but they are the type of dedicated people who make Houston such a special place to live. A tip of the hat to these two fine professionals on a job well done.

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August 17, 2007

Stros 2007 Season Review, Part Six

As the Stros (54-67) close in on the three-quarters pole of the season, I can't decide whether it's more of a reflection of the sad state of baseball analysis in local mainstream media outlets, or simply the remarkably mediocre nature of the other National League Central Division teams, that some media pundits believe that the Stros are still in the race for a playoff spot after posting a 10-10 record over their sixth 20 game segment of the season (prior periodic reports are here).

The reality is that the Stros' playoff goose was cooked for this season long ago when club management decided to indulge Craig Biggio's (-11 RCAA) quest for 3,000 hits and to continue playing as regulars such unproductive players as Brad Ausmus (-14 RCAA), Adam Everett (-12 RCAA) and recently Mark Loretta (-7 RCAA). Although it's fun to try and make it more complicated than it is, baseball is a simple game in which successful teams have hitters who create more runs than opposing hitters and pitchers who save more runs than the opposition's pitchers. Thus, by adding a club's runs created against average ("RCAA") and runs saved against average ("RSAA"), you can quite quickly determine which team is most likely to prevail in a pennant race.

Taking the NL Central as an example, the top four teams all have major deficiencies. The Brewers (62-59) hit well (61 RCAA), but their pitching has fallen off badly (-31 RSAA), so their net 30 RCAA/RSAA score has allowed the other teams in the division to stay close despite playing even worse than the Brew Crew (a precisely average National League team would have an RCAA/RSAA score of 0). The Cubs (61-59) cannot hit a lick (-39 RCAA), but have one of the better pitching staffs in the National League (64 RSAA) for a 25 RCAA/RSAA. The third place Cardinals (58-60) and the fourth place Stros (54-67) are almost precisely the same, average hitting teams (Stros: -3 RCAA; Cards: 5 RCAA) and simply dreadful pitching overall (Stros: -73 RSAA; Cards -76 RSAA) for RCAA/RSAA scores of -76 and -71. That the Cards have won a few more games than the Stros is attributable mainly to luck and the generally poor game management skills of Stros skipper, Phil Garner.

So, what does this all mean? At this point, the Brewers and the Cubs continue to be the favorites to win the NL Central, with the Cubs having the edge because of their superior pitching. Unless the Cardinals' pitching improves dramatically, their hot streak of late will probably cool off quickly, while the Stros have shown no dramatic improvement in either hitting or pitching performance that would indicate that they are capable of vaulting into contention for the NL Central lead. If Soriano can come back off his injury and nudge the Cubs hitting back toward NL average and the Cubs' pitching remains strong, my sense is that they will win the playoff spot from the NL Central. If the Cubs don't win it, the Brewers blend of hard hitting and below-average pitching almost certainly will.

Alas, what the foregoing analysis shows with regard to the Stros is that they have become a far below-average National League club overall. With a minor league system almost devoid of position player prospects at the upper levels, and for a club that is not doing a particularly good job of drafting and signing minor league prospects, the Stros are going to have to look to the free agent market to attempt to salvage another few title runs out of the Berkman-Oswalt-Carlos Lee era. And attempting to rebuild through free agent acquisitions is an expensive and highly risky proposition.

Will Drayton McLane let General Manager Tim Purpura open the pocketbook over this coming offseason and buy the free agent pitching talent that the Stros need to compete for a playoff spot next season? No one but McLane knows the answer to that question. Thankfully, the Stros are no longer burdened with huge financial obligations to Bagwell, Clemens and Pettitte, so McLane is in a financial position to make some moves. But whether he has the confidence to do so is another question entirely. And if he does not, the Stros are going to waste another season or more of Berkman, Oswalt and Lee's most productive years without having any meaningful shot at playing in the post-season.

As an aside, in the "do you have confidence in Purpura's transactions" category, former Stros 3B Morgan Ensberg (3 RCAA/.314 OBA/.636 SLG/.951 OPS) and new Stros 3B Ty Wigginton (3 RCAA/.407 OBA/.489 SLG/.896 OPS) have produced at almost precisely the same level since the Stros made the trade for Wigginton and cut Ensberg loose to the Padres? What was the reason for that trade again?

After a weekend in San Diego (64-55), the Stros return home for a ten game homestand against the Nationals (55-66), the Pirates (50-69) and the Cardinals (58-60). With school beginning next week and the football season beginning shortly thereafter, Stros management is about ready to see the smallest crowds of the season as the Stros play out the string. There are simply not enough retirement ceremonies on the horizon to maintain the public's interest in this edition of the Stros.

The season statistics for the Stros to date are below, courtesy of Lee Sinins' sabermetric Complete Baseball Encyclopedia. The abbreviations for the hitting stats are defined here and the same for the pitching stats are here. The Stros active roster is here with links to each individual player's statistics:

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Threatening where it hurts

When managing my former law firm, I never resorted to the tactic depicted in the cartoon on the left. But I wish I had thought of it. ;^)

The delightful Stuart M. Rees of Stu's Views nails it again.

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The UT brand prevails again

For the second straight year, the University of Texas finished no. 1 in an all-important rating -- collections on royalties from the sale of merchandise.

Maybe image is everything?

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Slam dunk?

So, sanity prevails and U.S. District Judge Paul L. Friedman of the Federal District Court in Washington, D.C. ruled in favor of the proposed Whole Foods Markets acquisition of Wild Oats Markets and against the Federal Trade Commission's complaint to enjoin the merger (previous posts here).

But in the NY Times article on the court ruling, William J. Baer, a Washington antitrust lawyer and a former director of the FTC's Bureau of Competition, observed the following:

“This obviously has got to be a setback for the F.T.C. I think they thought this was a slam-dunk.”

If Baer is correct in his assessment of how the FTC viewed the case, then that is even better proof that the agency is utterly devoid of adult supervision than this.

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August 16, 2007

The Shark duck hooks his divorce

It looks as if the final stages of the Great White Shark's divorce are not going swimmingly:

What months ago was characterized as a nearly resolved divorce settlement between golf great Greg Norman and his wife, Laura, has now turned into the most contentious aspect of their split to date - one that has Laura Norman accusing Greg of changing the locks to the couple's Jupiter Island home and cutting off her credit cards. [. . .]

Laura says Greg, who in the golf world in nicknamed "The Great White Shark," has . . . refused to pay her attorneys' fees and "is attempting to starve (her) out so she has no choice but to surrender to his positions," Laura's attorneys Jack Scarola and Russell J. Ferraro wrote.

Greg's lawyers, in a letter to Scarola, said he has already paid them about $725,000 to fund the litigation, including a half-million dollar payout in April. The money, according to Laura's lawyers, has been used to pay attorneys' fees and hire a number of expert witnesses who pored over the couple's finances to come up with the settlement.

Attempts by Laura's lawyers to get more money was met earlier this month with a refusal from New York attorney Howard Sharfstein, part of Greg's legal team. In addition, according to Laura's lawyers, Greg fired the couple's housekeeper and changed the locks on their $21 million Jupiter Island estate.

Changing locks and cutting off credit cards? Well, at least Norman still has a ways to go in the divorce department before he catches Nick Faldo.

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Biased referees and umpires

So, former NBA referee Tim Donaghy finally pleaded guilty to two felonies during a hearing at the United States District Court in Brooklyn yesterday in connection with the NBA gambling scandal that appears to have mostly blown over. As noted earlier here, that NBA insiders engage in gambling is about as surprising as gambling taking place in Rick's Cafe in Casablanca.

At the same time, Skip Sauer passes along this post about research that indicates that baseball umpires are not as pristine as the driven snow, either:

Calling strikes & discrimination in baseball

Here is the main finding from a working paper by Parsons, Sulaeman, Yates and Hamermesh:

What are the main results of the study?

There are three. First, umpires are more likely to call strikes for pitchers who share their race/ethnicity. The second result is an extension of the first: Umpires are more likely to express a preference for their own race/ethnicity only when their behavior is less closely scrutinized: 1) in parks where QuesTec (a computerized system set up to monitor and review an umpire’s ball and strike calls) is not installed, 2) in poorly attended games, and 3) on pitches where the umpire’s call cannot determine the outcome of the at-bat. Finally, game outcomes are influenced by the race/ethnicity match between starting pitchers and home-plate umpires. Home teams are more (less) likely to win a game when their starting pitcher and home plate umpire have the same (a different) race/ethnicity.

Skip's post has links to the study and various related information.

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The Imus settlement

As noted earlier here and here, CBS settling up with Don Imus for a substantial portion of the compensation remaining under his terminated contract was inevitable. My sense is that, based on favorable market conditions, there is a good chance that Imus will end up making more money as a result of the CBS settlement and the new contrat that he enters into with another media outlet than he would have received had he worked through the term of the CBS contract.

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August 15, 2007

Hugh Laurie sings my kind of protest song

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Criminalizing the Dean's Office

The seemingly insatiable desire of American prosecutors to criminalize as many ordinary and law-abiding citizens as possible has now reached the Dean's office:

A pair of schools officials, including the dean of students, and three students from Rider University have the campus community stunned after being charged with “aggravated hazing” in the death of a freshman student that died following a night of binge drinking at a fraternity house late last March, authorities said Friday. [. . .]

"The ramifications of this for colleges and universities in New Jersey, and across the country, is that it will send some kind of message that the standards of college life, when it relates to alcohol, need to be policed carefully," Mercer County Prosecutor Joseph Bocchini Jr. told the Associated Press.

Bocchini didn't mention that he could have also obtained the indictment of a ham sandwich if he had asked the grand jury for one. I'm looking forward to hearing about the "evidence" that the Dean had anything to do whatsoever with the alleged hazing incident that led to this young man's unfortunate death. If, as I suspect, there isn't any, then what exactly is the message that Bocchini is sending?

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The Tiger Chasm widens

Gee, I thought the fields for the Shell Houston Open Golf Tournament had slipped badly over the past several years. But those depleted fields are nothing compared to the experience of this week's Greater Greensboro Open (now called the "Wyndham" or some such thing). The PGA Tour's final tournament before the season-ending series of "playoff" tournaments known as the Fed Ex Cup is having a bit of a problem getting any leading Tour player to show up:

The Wyndham is the final regular-season tournament of the PGA Tour’s FedEx Cup, and only the top 144 players in the points race advance to the playoffs, which will start next week.

There is no shortage of players hovering around the 144th spot on the points list, but those already secure for the playoffs are taking the week off. Only two of the top 50 in the updated world rankings are in the field - Davis Love III, the defending champion and ranked 43rd, and Carl Pettersson, ranked 48th. Pettersson, a former player at N.C. State, lives near Raleigh and played his high-school golf at Greensboro Grimlsey.

And after publication of the foregoing, Love withdrew from the tournament to undergo a medical procedure for kidney stones. The Tiger Chasm widens.

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August 14, 2007

A chip off the old block sizes up Tiger Woods

Clear Thinkers favorite Dan Jenkins is the best writer on golf of our times, but his daughter Sally is a darn good golf writer in her own right (previous posts here). In this column after Tiger Woods' Saturday round this past weekend in preparing to win the PGA Championship, Sally Jenkins does as good a job as I've seen of capturing Woods' special talent:

Woods is the only player who matters in this PGA, and frankly, he's the only player who consistently matters in all of golf. To properly appreciate Woods's performance here, you better enjoy dictatorships because that's what his reign as the best player in the world has turned into. Woods has reached the point where he can apparently quell an entire field with an imperious look. He has never lost a major championship when leading after three rounds, and his career record when holding a lead entering the final round of any tournament is 39-3, . . .

All Woods had to do to extend his lead in this PGA was stand there and lash a series of steady iron shots. His strategy was to hit the center of the green and lag his putts on an afternoon when scoring was difficult and only five players finished 54 holes under par. His round of 1-under 69 was hardly dominant, but it was enough to stretch the lead over an array of opponents who showed the resistance of Farina. Woods's average score in the third round of majors is 69; the average score of his partners is 73. [. . .]

If Woods's legacy lacks one thing at this point, it's a sense of the dramatic. At his best, his game is lulling, a matter of swing planes straight as the creases in his clothes, and perfect parabolas. It's difficult to render what he does so well, precisely because it's so modulated and well regulated. [. . .]

His genius comes without emotional torture; he's not especially revealing and demonstrative, like Sergio Garcia, or an emotional conduit for his audience, like Phil Mickelson. He's all about chilly excellence. Greatness is his most definable quality. It's a peculiar fact that Woods is actually more spectacular to watch when he's struggling a little, when he has to hit creative recovery shots, and is forced to give up a bit of control.

The par 70 of Southern Hills has at once brought out the very best and yet most unspectacular aspects of Woods's game. The doglegging layout is like a series of intricate locks. But Woods's genius here is that he has turned a difficult puzzle of a course into an assembly line. He hits 4-irons off the tee to the middle of the fairway, plays his approaches below the hole and then either makes the putt or doesn't.

His strategy has been, in his words, "just try to keep hitting fairways and put the ball in the center of the greens and lag-putt well."

Even his 63 in Friday's second round, which tied the record for low round in a major championship, was oddly unexciting. The score itself was probably the most interesting about it. His boldest shots of the day were a 35-foot putt to save par on the 12th hole, and his missed horseshoe putt on the 18th. There was no pin-seeking and bouncing it off the flagsticks, or driving 350-yard bombs.

The only drawback to any of this -- and it's not a criticism -- is that Woods's victories aren't always especially memorable. They might be memorable for his margin of victory, but not for his Arnold Palmer-like Sunday charges, with whooping galleries at his back. This is not his fault, but frankly the fault of his opponents, who have failed to challenge him.

There is a handful of players capable of making noise on a course, who can capture the attention of the golf world for an instant, or maybe even part of a weekend. But when they quiet down -- and they always do -- there remains the relentless Woods, poised, with his hands finishing high over his shoulder, then twirling the club and letting it slide back down, as he watches the ball descend to another green.

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Taking cheerleading to the next level

I enjoy the football season as much as anyone, but I absolutely abhor the football pre-season.

For weeks, we are forced to endure literally hundreds of glowing newspaper articles and media reports regarding football practice, which happens to be one of the most boring exercises in organized human activity ever invented. Prior to the Texans' 2006 season, I noted a couple of times (here and here) how the Chronicle sportswriters have elevated the pre-season cheerleading about the local NFL team to absurd levels, which means that we will then be treated to dozens of more inane articles and media reports after the season begins on how disappointing the Texans are performing.

The sheer amount of over-analysis is overwhelming. Today, while flipping the radio dial in my car, I happened upon two radio show hosts analyzing for about five minutes two incompletions from Saturday night's Texans-Bears pre-season game. Here is a typical Chronicle entry regarding Monday's Texans' practice:

The offense looked strong Monday with Bethel Johnson making some big catches. He may have earned himself a little more playing time this weekend. He saw the field Saturday, but didn't record a reception.

Pretty earth shattering stuff, don't you think? The amount of time expended on all of this is really absurd.

At any rate, from the looks of this article (pdf here), the Chronicle sportswriters are off and running again this pre-season in their role as the primary Texans cheerleaders:

A cornerback by trade in the NFL, Von Hutchins is getting a serious look from the Texans at free safety, and that's where he was playing Saturday when he intercepted a Rex Grossman pass late in the first quarter.

Hutchins stepped in front of intended receiver Mark Bradley and made the pick at the Chicago 36, then returned it 20 yards before being run out of bounds at the 16.

The heads-up play, which set up the second of Kris Brown's four field goals in the Texans' 19-17 victory, . . .

First, the interception was thrown by backup Bears QB, Brian Griese, not Grossman. And, of yeah, it would be nice if the Chronicle reporter noticed that the Texans actually lost the game, 20-19.

It's going to be a long season enduring media reports about the local football team.

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The Futures at Minute Maid

Drayton McLane may have allowed the Stros franchise to decline steadily on the field over the past couple of seasons, but he rarely misses an opportunity to make a buck with his baseball franchise. That's why I'm a bit surprised that he has not picked up on this idea. Looks like a natural, particularly given the proximity of the Corpus Christi and Round Rock minor league clubs.

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August 13, 2007

Speculating on divorce

I swear, you cannot make this stuff up:

A little-noted side effect of the property boom of the past decade has been the real-estate-enabled divorce. Home values might have slid in some markets, but in the New York City region, where prices remain high, divorce professionals like therapists and lawyers, along with real estate brokers, say unhappily married couples are cashing in appreciated homes to underwrite a split.

“The equity that there is in real estate is one of the impetuses why there are so many divorces,” said Nancy Chemtob, a Manhattan divorce lawyer, adding that the net worth of her clients has doubled in the past three years mainly thanks to real estate. The price of the average Manhattan apartment was $1.3 million as of June, up 7 percent from a year ago, . . . [. . .]

Economists are familiar with this phenomenon. Even though divorce rates are declining over all, as far back as 1977 the economist Gary Becker showed that couples experiencing any unexpected, drastic rise in net worth are at risk of divorce. (The same holds true for a drastic decline in net worth.) [. . .]

And then there are cases in which couples decide a divorce settlement would ultimately be too costly because of the on-paper appreciation of their property.

One New York real estate executive, who has separated from his wife and would not speak on the record because he is unsure if he will divorce, said most of his peers in the industry who are unhappily wed seem to be staying put. They don’t want to carve up the real estate portfolios they bought or built during the boom.

“I know plenty of people who are enormously wealthy and just don’t want to cut it up,” he said. “They find it hard to divide the real estate.”

Decisions, decisions, decisions! ;^)

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Let me get this straight

So, Republican Texas Supreme Court Justice Nathan Hecht obtains a discount on his legal fees from Chip Babcock of Jackson & Walker for his successful defense of Hecht last year in the dispute with the Commission on Judicial Conduct over his endorsement of then U.S. Supreme Court nominee, Harriet Miers. That gets Justice Hecht an ethics complaint and a possible criminal investigation by the Travis County District Attorney's office.

Meanwhile, Democrat Bill White, the Mayor of Houston who is almost certainly going to seek a statewide office in a year or two, leans on local law firms to provide free or heavily discounted legal work for the City of Houston, most of which helps Mayor White's political aspirations. That gets Mayor White a glowing article (see Anne Linehan's report here) in the Houston Chronicle.

What am I missing here?

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Uh, Oh

If you thought that Bill O'Reilly's ideas about gasoline prices were screwy, Bryan Caplan surveys the debate responses of the Democratic Party presidential candidates on the subject.

I don't know what's more troubling. The candidates' answers or the fact that those inane answers are formulated because they help get the candidates elected to office?

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August 12, 2007

Best Houston Golf Clubs

If you find yourself watching Tiger Woods waltz to his 13th major tournament championship this afternoon, then take a moment to check out this Mark Button/Avid Golfer article on the best private golf clubs and courses in the Houston metropolitan area. Avid Golfer rates the following as the best private courses in the Houston area:

1. Walden on Lake Conroe
2. Bentwater Golf Club, Grand Pines
T3. The Club at Carlton Woods, Fazio Course
T3. The Club at Carlton Woods, Nicklaus Course
5. Deerwood Golf Club
6. Shadow Hawk Golf Club
7. River Oaks Country Club
8. Champions Golf Club, Cypress Creek Course
9. The Clubs of Kingwood, Island Course
T10. The Woodlands Country Club, East Course
T10. Royal Oaks Country Club
T12. Lakeside Country Club
T12. Lochinvar Golf Club
14. The Woodlands Country Club, Player Course
15. Bentwater Country Club, Weiskopf Course

Here are my previous posts (with pictures) of the Fazio Course at Carlton Woods, Lochinvar Golf Club and the Tournament Course at Redstone Golf Club. For what it's worth (i.e., very little), the following is my top 15 of Houston's best private golf courses:

1. Grand Pines at Bentwater Country Club
2. Walden on Lake Conroe
3. The Fazio Course at Carlton Woods in The Woodlands
4. Whispering Pines Golf Club (Trinity, Tx)
5. Deerwood Golf Club
6. Champions Golf Club (Cypress Creek)
7. The Nicklaus Course at Carlton Woods in The Woodlands
8. Lochinvar Golf Club
9. River Oaks Country Club
10. Shadow Hawk Golf Club
11. The Woodlands Country Club, East Course (formerly the TPC at The Woodlands)
12. Kingwood Country Club, Island Course
13. The Woodlands Country Club, Gary Player Course
14. Kingwood Country Club, Forest Course
15. Houston Country Club

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August 11, 2007

The Landry's bondholders fight back

One of the most irritating aspects for a plaintiff in an inflammatory lawsuit is that the other side eventually gets to tell its side of the story.

As noted earlier here, here and here, Houston-based Landry's Restaurants, Inc recently made the questionable decision, during a period of tightening credit markets generally, to tee off on and sue the holders of a substantial amount of the company's debt.

Even though Landry's finally filed its long-delayed Forms 10-K and 10-Q on Friday, Round Two in the lawsuit has been taking place over the past couple of days in U.S. District Judge Sam Kent's court and it does not appear to be going well for Landry's. The Indenture Trustee of Landry's bonds filed this emergency motion to vacate or modify the temporary restraining order that Landry's obtained last week, pointing out the following:

Simply put, Landry's has breached its contract, the proper notices have been given, and the time to cure the breach has passed. Landry’s seeks to utilize the ex parte relief in paragraph (a) [of the TRO, which requires the Indenture Trustee to rescind the acceleration of the bonds] in an effort to rewrite the contract, thus prejudicing the rights of the Noteholders. Paragraph (a) serves no legitimate purpose, needlessly alters the status quo to the Trustee’s detriment, and should thus be vacated. [. . .]

On July 24, 2007, 126 days after the Trustee sent the Notice of Default to Landry’s, and 129 days after Landry’s was required to file its 10-K, the Trustee sent Landry’s a Notice of Acceleration that informed Landry’s that the default had ripened into an Event of Default and that “[t]he Indenture Trustee, acting upon a direction of a majority of Note Holders given pursuant to Section 6.05 of the Indenture, hereby declares the unpaid principal of, premium, if any, and accrued and unpaid interest on, all the Notes outstanding to be due and payable immediately, all pursuant to Section 6.02 of the Indenture.” . . . In a Form 8-K filed the next day, Landry's publicly admitted that the Acceleration Notice was effective. As Landry’s put it: “[t]he sum total of the Notes are $400 million, which are now due and payable.” . . . Again, this admission squarely contradicts the representations Landry’s has made in its Complaint and ex parte TRO application in this case.

Meanwhile,a couple of the bondholders weigh in with this opposition to Landry's motion to extend the TRO until the preliminary injunction hearing:

This is far from a technical breach of Landry's obligations. The filing of Forms 10K and 10Q are not elective matters. They are requirements both of federal law and the plain terms of the Indenture. The information Landry's was required to file -- but did not file -- is critical to the Bondholders' ability to evaluate Landry's credit-worthiness, and the likelihood that they will be repaid the $400 million they are owed. Landry's failure to timely file this required financial information violates its duties of candor to the investing public, and violates its contract with the Trustee and the Bondholders. The Bondholders rights -- and the status quo ante --should not be altered irrevocably by the TRO before the Bondholders have an opportunity to be heard. Paragraph (a) is not necessary to preserve the status quo, and Landry's claimed rights can be fully protected and preserved without harming the Bondholders in this manner, and without placing them at risk of tens, if not hundreds, of millions of dollars of losses.

Finally, Landry's announced on Friday that it had obtained refinancing of the debt, albeit on far less attractive terms than the existing bonds before their maturity was accelerated.

Round 3 is next Thursday.

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August 10, 2007

More DeVany on Bonds

As noted here earlier this week, Art DeVany has written extensively on the specious basis of the conventional wisdom that Barry Bonds' steroid use allowed him to break the Major League Baseball home run records. DeVany responds again here:

[The conventional wisdom that Bonds' steroid use allowed him to break the MLB home run records] does not fit into any standard model or argument that has been offered as an explanation for his "departure" from the norm. There is no norm, which [the conventional wisdom] and most others advances.

Genius does not follow a process that can be normed. My argument is simple and is in the paper. Basically, most people are using an implicit normal distribution model of HRs and they claim that his performance cannot come from the model. Hence, he must have taken something. This is wrong. His performance is within the natural variation of HR hitting, but the model is not a normal distribution. Why should it be? A normal distribution applies when most people are close to the average. This has nothing to do with HRs. If you role snake eyes three times in a row, do you think there has to be an explanation? No, it is in the variation. Just chance. The dice are not on steroids.

What is worse is that people who claim "he did it and it worked" don't know much about the physiology of steroids. They weaken connective tissue and interfere with concentration when they are taken in large doses. They primarily increase protein synthesis is ST muscle fibers, which are no good for hitting HRs. Lastly, most people who formulate the argument do not have a falsifiable hypothesis, and this is not science. They take his performance, which no one else has ever done, and claim that you cannot prove that it was not due to steroids. "He took steroids and therefore hit 73 HRs" cannot be falsified. Because the conclusion is true, the statement is vacuous. It is true no matter what the premise.

Read the entire post.

Update: Professor DeVany compares Bonds and Hank Aaron's home run-hitting prowess to that of an average MLB player here, and provides additional comments regarding Bonds here. Professor DeVany's paper on home-run hitting is here (pdf).

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Kling's Iron Trilemma

Following on this post from ealier this week in regard to American's currently failed system of health care finance, Arnold Kling follows with another one:

. . . Kling's Iron Trilemma. We want:

--what I call insulation, where consumers enjoy the peace of mind of having their medical services paid for by a third party;

--unrestricted access, where consumers and doctors can choose medical procedures without bureaucratic interference or government budget limits;

--less stress over rising health care costs.

The trilemma is that we can have at most two out of three. Much of the "reality-based community" (an Orwellian label if there ever was one) denies that the trilemma exists. [Jonathon] Gruber [the M.I.T. economist who helped design the universal health insurance plan in Massachusetts] does not deny its existence, but he prefers restricting access to reducing insulation. I prefer the latter.

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Spitzer channels Dr. Phil

Has the mainstream media sentenced the Lord of Regulation to sensitivity training?

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August 9, 2007

Solzhenitsyn speaks

When you have a few minutes, don't miss this Speigel Online interview with prominent Russian writer and Nobel laureate Alexander Solzhenitsyn. Check out Solzhenitsyn's overview of Russia's political leaders since the fall of Communism:

Gorbachev's administration was amazingly politically naïve, inexperienced and irresponsible towards the country. It was not governance but a thoughtless renunciation of power. The admiration of the West in return only strengthened his conviction that his approach was right. But let us be clear that it was Gorbachev, and not Yeltsin, as is now widely being claimed, who first gave freedom of speech and movement to the citizens of our country.

Yeltsin's period was characterized by a no less irresponsible attitude to people's lives, but in other ways. In his haste to have private rather than state ownership as quickly as possible, Yeltsin started a mass, multi-billion-dollar fire sale of the national patrimony. Wanting to gain the support of regional leaders, Yeltsin called directly for separatism and passed laws that encouraged and empowered the collapse of the Russian state. This, of course, deprived Russia of its historical role for which it had worked so hard, and lowered its standing in the international community. All this met with even more hearty Western applause.

Putin inherited a ransacked and bewildered country, with a poor and demoralized people. And he started to do what was possible -- a slow and gradual restoration. These efforts were not noticed, nor appreciated, immediately. In any case, one is hard pressed to find examples in history when steps by one country to restore its strength were met favorably by other governments.

Read the entire interview.

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An easy prediction

Buried in the Chronicle's article on the Metropolitan Transit Authority's latest propaganda release regarding the proposed University light rail line is the following snippet:

The study estimates say the Cummins-Wheeler-Elgin combination is the least expensive of the routes considered, at $715 million, compared with $836 million for the Southwest Freeway-Alabama combination.

Prediction: Both routes will cost substantially more than the estimates and the revenue generated from the ridership will not come close to meeting the operating expenses of the line.

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Gretchen Morgenson's recurring nightmare

Larry Ribstein used to be NY Times business columnist Gretchen Morgenson's worst nightmare, but the nightmares receded a bit when Professor Ribstein tired of exposing the vacuous nature of her weekly columns after a year or so. Nevertheless, Morgenson's nightmare has not gone away completely:

[Kevin J.] Murphy and [Jan] Zaojnik attribute the rise in the relative value of managerial ability to a variety of factors. Most interestingly, these include the need for public relations skills in dealing with external constituencies and increased media coverage. Other factors include the need to be conversant with other disciplines -- economics, management science, accounting, finance. The authors argue that firm-specific skills are becoming less important because data are no longer "buried in the bowels of the organization," but are easily accessible by computers.

The authors conclude that the importance of general rather than firm-specific human capital means that:

CEOs can capture the whole marginal product created by their transferable ability, but the lack of alternative use for their firm-specific skills means that they can only extract a fraction of the rents created by this part of their human capital. Therefore, a shift in the relative importance of general managerial ability will lead to higher wages even if overall managerial marginal productivity declines.

. . .Most importantly, I love the irony here. Murphy and Zaojnik are saying that part of what is driving executive pay up is the skill in dealing with Gretchen Morgenson and her ilk – the very people who are complaining about that pay.

Read the entire post.

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August 8, 2007

Bonds does it

Barry Bonds finally broke Hank Aaron's all-time home run record last night, dooming all of us to several days of inane and simplistic arguments on talk radio shows as to whether Bonds' record should include an asterisk because of his use of steroids during the latter stages of his career.

For a more balanced view regarding Bonds and his steroid use, take a look at previous posts here, here, here, here, here and here over the past several years. In the end, Bonds is a product of his environment.

Update: Kuff agrees with me, and sabermetrician JC Bradbury provides a reasoned view on Bonds. Lee Sinins provides this statistical analysis (pdf) of Bonds' career. And here is the video on no. 756:

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The Universal Distraction

As noted in these earlier posts, Arnold Kling continues to provide an enormous amount of lucid analysis on what ails America's health care finance system. In this TCS Daily op-ed, Kling makes two excellent points, the first regarding tax treatment of health insurance premiums:

I would like to see the abolition of the tax break for company-provided health benefits as well as the tax break for Medical Savings Accounts. Company-provided health benefits ought to be included with personal income and taxed at the personal income rate. There should be no special benefits for savings accounts labeled "medical." (I think that all saving ought to be tax-free, but that's another topic.)

. . . Although I prefer real health insurance to insulation, I do not want to impose my preferences on others. All I ask is that we reform our tax code so that it is neutral.

Second, Kling makes an important point regarding the freedom to buy health insurance and the health care limits that society needs to accept if a person chooses not to do so:

[M]ost of the people who are uninsured today are reasonably healthy. They just do not want to pay for their own health insurance. In my view, they ought to be allowed to make that choice, but they should face the consequences. If they require health care, the cost should not be shifted onto other people who have insurance.

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The cultural legacy of politicizing religion

The pastor of the local church that my family and I attend has used the pulpit from time to time to advocate political positions and certain politicians, which I have always viewed as a dubious practice. I was reminded of my pastor's sermons as I read this Cathy Young/ReasonOnline article on the questionable cultural legacy of the late Jerry Falwell:

Though the movement Falwell helped launch was unable to enact much of its agenda into law, there is no question that it transformed the American political landscape. Even the battles it hasn’t won, such as the effort to teach “intelligent design” in schools on a par with evolution, are still battles it was able to force on its opponents.

More broadly, it helped create a climate in which the language of politics is saturated with references to God, a political culture in which a major political magazine (Newsweek) can ask a presidential candidate (Howard Dean) whether he believes in Jesus Christ as the son of God and the path to eternal life.

Despite these political inroads, Falwell’s brand of religious conservatism has suffered losses in the culture wars. Feminism, its radical excesses mostly discarded, has become firmly integrated into America’s cultural mainstream. (Even, apparently, in Falwell’s own family: His daughter is a surgeon.) Acceptance of gays is now at a level that would have been unthinkable in 1980. Sexual content in mainstream entertainment has steadily increased, and adults-only material is more available than ever thanks to new technologies. While divorce rates have dropped somewhat, so have marriage rates; in much of America, sex between single adults is widely accepted as a social norm.

Along those same lines, this CNN article reports on a Kentucky church's "Court Watch" program in which volunteers attend court hearings to monitor how judges are handling drug-related cases. It's clear that the members of the church group are not interested in facilitating leniency in sentencing in such cases.

Several years ago, while sweating a jury in a civil case at the courthouse, I attended the daily initial appearance docket call in the juvenile criminal court next door. It was a heartbreaking experience and prompted me to begin doing pro bono work in the local juvenile criminal justice system. Since then, I've attended numerous such initial appearance dockets in the juvenile criminal justice system. I have never seen a member of any Christian organization attending one of those dockets.

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In Cold Blood

As noted earlier here, I oppose the death penalty because of the way in which our criminal justice system administers it, but I have no philosophical opposition to it. Here is why.

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August 7, 2007

Book'em Horns

As noted last week here, it's been a tough off-season for University of Oklahoma Sooner football program, what with more NCAA sanctions and all. But it was only a matter of time before the Sooner faithful would be in a position to fight back. A flurry of Texas Longhorn players getting arrested during the off-season has given Sooner fans their opportunity. The Mack Brown-Longhorn "All-Character" team below is the result:

Posted by Tom at 12:43 AM | Comments (1) | TrackBack (0)

The DOJ's bumbling Enron Broadband case

As noted here and here, the Enron Broadband trials were not the Enron Task Force's finest hour. Now that the Task Force has been disbanded, Justice Department attorneys are left to pick up the pieces of the Task Force's shattered cases and, as the Chronicle's Kristen Hays reports from the Fifth Circuit, it's not an easy task.

Sort of what you would expect from cases in which the government asserted an unwarranted expansion of a criminal law intended to punish kickbacks and bribes against businessmen who did no such thing. Criminal convictions based primarily on juror resentment of wealthy businessmen tend not to hold up well under the bright light of appellate scrutiny.

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Swing to the Music

Does this mean that I should be listening to Le Nozze Di Figaro, K.492: "Che Soave Zeffiretto" while practicing my golf swing?:

[Yale University physics professor Robert] Grober has created an instrument that gives a player an immediate response to the golf swing. A smooth, rhythmic swing with Grober’s sensor emits a pleasing tone. A herky-jerky motion lets out a wail.

To create the sound of a golf swing, Grober used Musical Instrument Digital Interface technology that combined instruments like the piccolo, the oboe and the French horn. The music — an audio interpretation of the swing itself — is transmitted wirelessly to the golfer through a headset.

“This dimension that they can access while they’re hitting the golf club opens up a whole world of information that they hadn’t otherwise had,” he said. “Getting it in this format, in a real-time basis, helps people to change on time scales which are much shorter than traditionally. It used to be if you wanted to make a mechanical change in your golf swing, it could take months to do that. But if you can hear what’s going on, you can change the sound space almost instantly.”

Grober said by having players focus on tempo instead of swing mechanics, the mechanics often followed anyway. “Really quickly they understand it’s about tempo and they forget all these complicated thoughts about position,” he said. “When the motion becomes dynamic and smooth, there are some good physics behind that.”

Grober, whose product is scheduled for release in January, said he has worked with 200 golfers and teachers on his invention. While the technology is new, the idea of using physics to teach a golf swing has been around for decades.

Ben Doyle, who wrote the foreword to Homer Kelley’s popular instruction book, “The Golfing Machine,” said he could see benefits in a golfer being able to listen to the sound of the golf swing.

“You hear the thrust of centrifugal force,” said Doyle, the golf instructor at the Golf Club at Quail Lodge in Carmel, Calif. “If a student can hear that sound, it’s very important feedback.”

Read the entire article. Also, check out this video segment demonstrating the technology narrated by the author of the article, NY Times golf columnist, Damon Hack.

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August 6, 2007

In praise of credit snobs

Earlier posts here and here noted Alex Tabarrok's clever characterization of folks who criticized development of new lending vehicles for folks with low incomes or bad credit. Thus, this Economist article about a recent study on making loans to the poor caught my eye. Check out the conclusion of the study:

Contrary to the fears of the credit snobs, the readier access to credit did not tempt the new customers into a debt trap. Over 15-27 months, those reconsidered for a loan were more likely to have a formal credit score. And this score suffered no harm as a result of their easier borrowing.

Overall, the study suggests that profit-seeking lenders do not deserve the fate Dante reserved for them. Far from tempting the poor into unpayable debt, they help them keep their jobs, put food on the table, and build up a credit history. The authors show that poor people can make good use of borrowed money, even if they sometimes struggle to demonstrate this creditworthiness to lenders. If not hell, that is a kind of purgatory.

Read the entire article.

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Next episode of Dallas Swat?

Earlier posts here, here and here focused on the danger of local police forces use of highly-armed SWAT teams for routine, non-violent police work, a phenomenom that spawned A&E Network's Dallas SWAT reality show. Well, according to this Dallas Morning News article (h/t Radley Balko), one of the "stars" of the Dallas SWAT show -- Senior Cpl. Johnny Baker -- was recently fired from the police force. What for, you ask? DPD internal investigators concluded that Baker had sex in a Garland motel room with a prostitute while working an off-duty job in February.

By the way, Baker was not busted by Dallas SWAT. ;^)

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It's PGA Golf Tournament Week

The 89th PGA Golf Tournament is being played this week at the Southern Hills Country Club Course in Tulsa, Oklahoma. Although the least prestigious of the four major tournaments, the PGA generally fields the strongest field of any of the majors. This year, each of the top 100 players in the world rankings is playing.

The tournament website is here, but if you really want to get a flavor of the golf course, check out this detailed Jay Flemma blog post and this Geoff Shackelford/Golf World article (see also here) on the venerable Percy Maxwell-designed Southern Hills course. Take it from one who has played it several times, it is a beaut, although this anonymous PGA Tour player doesn't agree.

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August 5, 2007

The Cocktail Party Nightmare

My wife contends that she has endured precisely the same experience as the woman depicted in the cartoon on the left by the incomparable Stuart M. Rees of Stu's Views.

By the way, from several years ago, here is a short bio on Stu, who is a talented -- and very clever -- fellow.

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August 4, 2007

Latest on the Las Vegas Monofail

With the crunch worsening over the past several weeks in the credit markets, the bankruptcy reorganization forces are gearing up and eyeing potential debtors. Well, in this Heartland blog post, Thomas A. Rubin predicts one of the probable debtors that will need serious reorganization -- the Las Vegas Monorail Company (prior posts here):

In short, the Las Vegas Monorail appears headed straight down the path to bankruptcy by approximately the year 2010 with nothing on the horizon that could prevent it – other than, perhaps, an ill-conceived government bailout or the absolute dumbest group of investors/suckers in recent financial history.

This result should come as a surprise to no one. Over the last several decades, I know of only one U.S. rail transit system, or quasi-transit system, that has come remotely close to covering its operating costs out of fares and other operating revenues (the Seattle Monorail), and none that have made any contribution what-so-ever to capital costs. However, the Las Vegas Monorail promoters assured everyone that operating revenues would not only cover operating costs, but would also cover all the debt service costs of the bonds sold to pay for the construction of the Monorail. [. . .]

One hopes that someone, somewhere, in a public sector decision-making capacity will tell the various casinos along the right of way that, if they want to see it continue to operate, well, it is all theirs.

Read the entire post, which lays out the public risks involved in even a privately-financed boondoggle of this nature. Meanwhile, this clever Political Calculations post comes up with an entertaining solution to achieving the same benefits of a light rail system at a far cheaper cost.

Posted by Tom at 12:26 AM | Comments (0) | TrackBack (0)

August 3, 2007

Landry's goes nuclear

As noted earlier here and here, the crunch in the credit markets has Houston-based Landry's Restaurants Inc scrambling to refinance about $400 million in bond debt this week.

Well, that scramble took an interesting turn on Wednesday of this week as Landry's sued the bondholders. Based on that lawsuit, U.S. District Judge Sam Kent of Galveston approved a temporary restraining order against the representatives of the bondholders that ordered the Indenture Trustee of the bonds to withdraw the notice of acceleration of the maturity of the bonds and not to take any action based on that acceleration pending a preliminary injunction hearing on August 16. The following is the alleged basis for the TRO and proposed injunctive relief straight from Landry's complaint:

This action arises from an attempt by opportunistic hedge funds to distort the plain language of Landry's Indenture to manufacture grounds for a technical default that would allow them to reap an extraordinary and umnerited windfall from Landry's good faith effort to provide its stockholders and noteholders with accurate financial information.

From the outset, [the bondholders] have embarked on a scheme designed solely to maximize their short-term financial gain at the expense of Landry's, its stockholders, and the investing public. [The bondholders'] plan appears to be an effort to improperly accelerate the Senior Notes so that they and those working with them could ultimately sell their Senior Notes at a substantial profit in the open market, once they extort "renegotiated" interest payments and other concessions from the Company.

The Trustee's defective notices of default and acceleration notwithstanding, Landry's has made every required payment due under the Indenture. There has been no material breach of any of Landry's obligations under the Indenture. Despite this fact, the Trustee, apparently at the urging of [the bondholders], served a notice claiming that Landry's was in default because Landry's allegedly failed to provide reports that are required for "information purposes only."

The Indenture requires that Landry's furnish to the Trustee-within the time periods specified by the Securities and Exchange Commission's (the "SEC" or the "Commission") rules and regulations-all quarterly and annual financial information required to be contained on Forms 10-Q, 10-K, and 8-K. The Indenture does not impose on Landry's any independent requirement that it file those reports or abstain from seeking additional time to file its financial reports.

Landry's properly delayed the filing of its Form 10-K by submitting a Form 12b-25 with the SEC on March 16,2007. Form 12b-25 bestows an automatic 15-day extension on filers who would not otherwise be capable of filing without unreasonable effort or expense. Accordingly, while a delayed SEC filing may have consequences for Landry's under SEC rules, it would not comprise a default under the Indenture.

Despite the fact that Landry's had neither missed a single payment nor committed any material breach of the Indenture, and despite the further fact that the 15-day extension period allowed by the filing of the Form 12b-25 had not expired, the Trustee, by letter agreement dated March 20, 2007, issued a Notice of Default. The Trustee's basis for asserting a default was that Landry's had failed to timely file its Form 10-K annual report for the fiscal year 2006 (the "10-K"). This Notice of Default was defective, however, because it was sent during the time period allowed by the Rule 12b-25 extension. Nevertheless, relying on its defective Notice of Default, the Trustee purported to accelerate the entire debt by notice dated July 24, 2007.

On information and belief, the Trustee has taken this unreasonable position at the behest of [certain bondholders], eager to void the bargain struck with Landry's in the 2004 Indenture so as to take advantage of tightening credit market conditions.

To get to this result, Defendants have intentionally and materially breached the terms of the Indenture or, in the alternative, tortiously interfered with Landry's business relations, disparaged the Company, and attempted to saddle the Company with new obligations in violation of the Trust Indenture Act of 1939.

As a result, Landry's continues to suffer irreparable economic harm from Defendants' continuing threats of future improper actions. Therefore, Landry's respectfully seeks immediate and temporary injunctive relief to preserve the status quo while this litigation ensues. Among other things, the requested injunction would afford the Company a measure of relief from the uncertainty and controversy that presently exist with respect to the parties' respective rights and obligations under the Indenture.

A copy of the TRO is here and a copy of the complaint (sans exhibits) is here.

Meanwhile, the filing of the case in the Galveston Division of the Southern District is raising more than a few eyebrows, particularly given that the lead lawyer for Landry's in obtaining the TRO was plaintiffs' lawyer Anthony Buzbee, who knows a thing or two about filing cases in favorable forums. Landry's and most of its other lawyers involved in the case (the firms of Andrews & Kurth and Haynes & Boone) are Houston-based. Also, Landry's general counsel, Steven Scheinthal, gave an interview to the Houston Chronicle earlier this week that resulted in this rather interesting article in which he was quoted as saying that "We do not believe the bondholders are nice people. We're a Houston-based company, and the bondholders have no regard for anybody other than themselves. They strictly see this as an economic opportunity to take advantage of." Nevertheless, the Chronicle's business columnist, Loren Steffy, thinks that Landry's lawsuit is a loser.

Round 2 is coming up shortly.

Posted by Tom at 12:15 AM | Comments (1) | TrackBack (0)

Golf snits

For pure entertainment value, there is nothing quite like an eruption between a PGA Tour player and his caddie during the heat of competition. This Jeff Rude/GolfWorld commentary reports on the latest such incident was between PGA Tour member Jay Williamson and his caddie, Mike Mollet, during the first round of last week's Canadian Open:

Both agree that Mollet, on the tee of the par 3, said the wind was blowing right to left. Both agree that Williamson hit a 9-iron over the green long left. Both agree that Williamson hit a weak chip from a bad lie to about 30 feet from the hole. Both agree a frustrated Williamson told Mollet he thought the wind was blowing downwind, not across, and that Mollet disagreed. Both agree that Williamson fired Mollet after an ensuing heated argument on the green. Both agree that Mollet threw a few of Williamson’s golf balls into a pond after getting canned. Both agree that Williamson used a spectator as his caddie the last four holes. [. . .]

What they disagree on is what ignited the explosion. Williamson said Mollet lost his cool first and embarrassed him with too much emotional talk and Williamson reacted. Mollet said Williamson lost his cool first and embarrassed him with too much emotional talk and Mollet reacted.

Williamson said the caddie kept yelling at him loudly, calling him a “whiner” among other personal insults, and used the F-word. Mollet said he got riled because Williamson directed the F-word and A-word toward him after the bad chip and while disagreeing about the wind direction. Williamson said he can’t recall swearing.

Read the entire article about the spat, which is about par for the course in such matters. But Chris Lewis reminds us of my favorite player-caddie tiff, which occurred about 10 years ago between the volatile PGA Tour member Fulton Allem and his caddie, "Bullet" Burns. During the second round of the Heritage tournament at Hilton Head, Allem was struggling badly with his swing on the front nine and, while waiting to tee off on the 8th hole, had this exchange with his caddie:

"I feel like breaking something," observed Allem

Burns didn't miss a beat: "How about breaking par?"

“Very funny," Fultie replied. "You’re fired.”

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WSJ subscriber reaction to the Murdoch takeover

So, all of 170 out of the Wall Street Journal's 1.7 million subscribers terminated their subscription as a result of Rupert Murdoch's successful bid to acquire the WSJ?

What the heck. Felix Salmon makes a good case that Murdoch should turn the WSJ into a free service:

The potential readership of the WSJ . . . is enormous. Right now, there is no one-stop-shop on the World Wide Web for comprehensive, global businesss and finance news and analysis. A free WSJ.com would overnight become the global authority on such matters. WSJ.com is never going to make much money selling subscriptions in India or Brazil or Russia or even Mexico – but if it became a regular read among the business classes in those countries, local ad reps could make a fortune for News Corp. (Technology nowadays makes it very easy to target ads to readers in specific countries.)

The reason I'm hopeful about Murdoch buying the WSJ is that Murdoch has a truly global outlook, while the WSJ has always seemed to be a bit on the parochial side. And no one with a global outlook thinks that trying to sell subscriptions to WSJ.com makes any sense. Free is clearly the way to go.

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August 2, 2007

The Incarceration Nation

Following on this post from yesterday on a troubling growth sector in the burgeoning prison industry, Doug Berman points to this daunting Boston Review piece by Glenn C. Loury, the Merton P. Stoltz Professor of the Social Sciences in the Department of Economics at Brown University. Loury reviews the increasingly brutal nature of punishment in American society:

Crime rates peaked in 1992 and have dropped sharply since. Even as crime rates fell, however, imprisonment rates remained high and continued their upward march. The result, the current American prison system, is a leviathan unmatched in human history.

According to a 2005 report of the International Centre for Prison Studies in London, the United States—with five percent of the world’s population—houses 25 percent of the world’s inmates. Our incarceration rate (714 per 100,000 residents) is almost 40 percent greater than those of our nearest competitors (the Bahamas, Belarus, and Russia). Other industrial democracies, even those with significant crime problems of their own, are much less punitive: our incarceration rate is 6.2 times that of Canada, 7.8 times that of France, and 12.3 times that of Japan. We have a corrections sector that employs more Americans than the combined work forces of General Motors, Ford, and Wal-Mart, the three largest corporate employers in the country, and we are spending some $200 billion annually on law enforcement and corrections at all levels of government, a fourfold increase (in constant dollars) over the past quarter century.

Never before has a supposedly free country denied basic liberty to so many of its citizens. In December 2006, some 2.25 million persons were being held in the nearly 5,000 prisons and jails that are scattered across America’s urban and rural landscapes. One third of inmates in state prisons are violent criminals, convicted of homicide, rape, or robbery. But the other two thirds consist mainly of property and drug offenders. Inmates are disproportionately drawn from the most disadvantaged parts of society. On average, state inmates have fewer than 11 years of schooling. They are also vastly disproportionately black and brown. [. . .]

Despite a sharp national decline in crime, American criminal justice has become crueler and less caring than it has been at any other time in our modern history. Why? [. . .]

My recitation of the brutal facts about punishment in today’s America may sound to some like a primal scream at this monstrous social machine that is grinding poor black communities to dust. And I confess that these brutal facts do at times incline me to cry out in despair. But my argument is analytical, not existential. Its principal thesis is this: we law-abiding, middle-class Americans have made decisions about social policy and incarceration, and we benefit from those decisions, and that means from a system of suffering, rooted in state violence, meted out at our request. We had choices and we decided to be more punitive. Our society — the society we have made — creates criminogenic conditions in our sprawling urban ghettos, and then acts out rituals of punishment against them as some awful form of human sacrifice.

This situation raises a moral problem that we cannot avoid. We cannot pretend that there are more important problems in our society, or that this circumstance is the necessary solution to other, more pressing problems—unless we are also prepared to say that we have turned our backs on the ideal of equality for all citizens and abandoned the principles of justice. We ought to ask ourselves two questions: Just what manner of people are we Americans? And in light of this, what are our obligations to our fellow citizens—even those who break our laws?

There is much, much more. Take the time to read the entire piece.

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Who was that guy who used to wear no. 8?

With the opening of the Texans' pre-season training camp, the players are being asked about what it's like not to have David Carr quarterbacking the Texans for the first time in the team's history. Carr is already on record as saying that he's glad to be away from the Texans' sieve-like offensive line, which prompted some mild barbs back at Carr from his former main target.

But as this Stephanie Stradley post reports, more of Carr's former teammates are "diplomatically" letting it be known publicly that they are not sorry that Carr is gone. Even Bob McNair goes on record as saying that the team had bent over backward to accomodate his slow development as an NFL QB, but finally just had to move on.

My, how times change.

Posted by Tom at 12:10 AM | Comments (1) | TrackBack (0)

The Walsh Era

Former San Francisco 49er's coach Bill Walsh died earlier this week, so the WSJ's Allen Barra provides this wonderful tribute to Coach Walsh that, among other things, reminds us of his most special legacy:

It was as a teacher, though, that Mr. Walsh had his greatest and most lasting influence on football. Unlike Lombardi, who left worshippers but no disciples, Mr. Walsh spawned an entire generation of acolytes. His defensive coordinator George Seifert won two Super Bowls with San Francisco; his offensive coordinator Mike Holmgren won one with Green Bay. Mr. Seifert's pupil Mike Shanahan, schooled in Mr. Walsh's methods, won two more with Denver.

Mr. Walsh's influence on football today is so pervasive that nearly 20 years after his final game, the Super Bowl has practically become an annual showcase for his adherents. This past February, Indianapolis coach Tony Dungy, a former player under Mr. Walsh, squared off against the Chicago Bears' Lovie Smith, who trained as an assistant to Dennis Green, once a Walsh receiver's coach.

That Messrs. Dungy and Smith were the first African-American coaches to reach the Super Bowl highlights perhaps Mr. Walsh's greatest legacy: In 1987, he helped create the Minority Coaching Fellowship Program. "I can tell you this," says Mr. Dungy, "his life was about much more than just X's and O's."

Meanwhile, Jean Bramel reminds long-suffering Cincinnati Bengals fans (including my nephew, Josh) that Walsh was once an up and coming assistant coach with the Bengals, and actually began developing the West Coast offense while with the Bengals. Alas, Walsh was the subject of one of the more egregious "pass-overs" in NFL history:

[While with the Bengals, Coach Walsh] found a way to modify his passing attack with short, precise passes and mulitple wide receiving options putting pressure on the defense with timing routes — what is now known as the West Coast offense but could rightly be called the Cincinnati offense. Walsh again found a near perfect fit for his new playbook in Ken Anderson, a smart, calm, precise passer. Walsh’s offense was clicking for the Bengals in the early 1970s. By the end of the 1975 season, Anderson was running the offense to perfection with a 60% plus completion rate and 8 yards plus per passing attempt. Curtis had been to three consecutive Pro Bowls and was a star. The Bengals had made the playoffs in 1973 and 1975. The future was ridiculously bright.

Then Bengal head coach and patriarch Paul Brown retired and handed the reins to long time offensive assistant Tiger Johnson instead of Walsh, who resigned in disappointment. The rest, as they say, is history. Walsh spent a season in San Diego as an assistant and coached Stanford for two seasons before taking the head coaching job in San Francisco where his offense flourished under Joe Montana. Johnson’s Bengal teams steadily declined and he was fired in 1978. Cincinnati made two Super Bowls in the 1980s, only to lose both to the franchise Bill Walsh built.

Rest in peace, Bill Walsh. This Bengal fan still longs for what could’ve been.

Tiger Johnson over Bill Walsh? That sounds almost Oileresque, don't you think?

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August 1, 2007

A disturbing growth industry

This New York Times article reports on one of the expensive consequences of the increasing criminalization of everything -- already overcrowded state prisons looking to export inmates:

Chronic prison overcrowding has corrections officials in Hawaii and at least seven other states looking increasingly across state lines for scarce prison beds, usually in prisons run by private companies. Facing a court mandate, California last week transferred 40 inmates to Mississippi and has plans for at least 8,000 to be sent out of state.

The long-distance arrangements account for a small fraction of the country’s total prison population — about 10,000 inmates, federal officials estimate — but corrections officials in states with the most crowded prisons say the numbers are growing. One private prison company that houses inmates both in-state and out of state, the Corrections Corporation of America, announced last year that it would spend $213 million on construction and renovation projects for 5,000 prisoners by next year. [. . .]

But while the out-of-state transfers are helping states that have been unwilling, or too slow, to build enough prisons of their own, they have also raised concerns among some corrections officials about excessive prisoner churn, consistency among the private vendors and safety in some prisons.

Moving inmates from prison to prison disrupts training and rehabilitation programs and puts stress on tenuous family bonds, corrections officials say, making it more difficult to break the cycle of inmates committing new crimes after their release. Several recidivism studies have found that convicts who keep in touch with family members through visits and phone privileges are less likely to violate their parole or commit new offenses. There have been no studies that focused specifically on out-of-state placements.

See related earlier posts here and here. By the way, if you are interested in understanding the main reason why we are dealing with this seemingly endless cycle of criminalization and imprisonment, then check out the clever minute and a half video below for the answer:

Scott Henson, the Texas blogger-expert on prison overcrowding, has more here.

Update: Has America become the Incarceration Nation?

Posted by Tom at 12:15 AM | Comments (0) | TrackBack (0)

John Edwards, demagogue

Democratic Party presidential candidate John Edwards has been a frequent topic on this blog, but it's rare that his special style of demagoguery is captured as succiently as in this video of a bit over a minute. I don't know what's more disturbing -- Edwards' rantings, the audience's unquestioning acceptance of them, or the fact that the Edwards campaign is promoting the video as an example of Edwards' charm.

Posted by Tom at 12:10 AM | Comments (0) | TrackBack (0)

Silverman pans the iPhone

Chronicle technology columnist Dwight Silverman is one of the best in the business, so when he pans the trendy iPhone, it's time to sit and listen:

I lived with the iPhone for about a month, and as an experiment, I carried both it and my Samsung BlackJack, my own PDA. My goal was to see which device I preferred for which tasks. For example, when I wanted to access the Web online, or check e-mail, which would I reach for first?

I started out using the iPhone more, because using it was an adventure. But by the end of my experiment, I was back to using the BlackJack for most serious tasks.

While the iPhone is indeed a very cool device, and there's a lot about it to like — see the aforementioned earlier reviews for a litany of them — I think its shortcomings are major.

Read Silverman's entire review, whcih pretty much concludes that the iPhone elevates style over substance. Meanwhile, the WSJ's Carl Bialik breaks down the initial sales numbers for the iPhone and concludes that the pre-release hype definitely exceeded the actual sale numbers.

Posted by Tom at 12:00 AM | Comments (1) | TrackBack (0)