< January 2009 | Main | March 2009 >
February 28, 2009
The Price of Progress
As noted here last fall, one of the key dynamics that is delaying the recovery of financial markets is the resistance of many societal forces to allow the markets to allocate the risk of loss among the various investors in failed businesses.
Inasmuch as private capital will not invest in even a potentially viable business until that company's financial condition is likely to reward such an investment, the liquidation of unviable companies is an essential part of the process that has allowed market-based economies to generate the most wealth and jobs throughout modern history.
Despite the foregoing, the beneficial aspects of liquidating unprofitable businesses remains often unappreciated. A scene from the 1991 Norman Jewison film "Other's People Money" illustrates this truth wonderfully, first as Gregory Peck's character demonizes the forces of liquidation and then as Danny DeVito's "Larry the Liquidator" shatters the myths upon which such demonizing rests. Enjoy.
Posted by Tom at 12:01 AM
| Comments (2)
|
February 27, 2009
He's back
Tiger Woods returned from major knee surgery to make his first appearance of the PGA Tour season this week, although Tim Clark made it a brief initial appearance.
Meanwhile, Woods' major sponsor Nike rolled out this commercial to celebrate Woods' return. It continues the trend of commercials representing some of the most creative product on television. Watch through the end and enjoy.
Posted by Tom at 12:01 AM
| Comments (0)
|
February 26, 2009
The Making of the Godfather
Don't miss Mark Seal's wonderful Vanity Fair piece on the making -- and particularly the war over casting -- of The Godfather:
With The Godfather, the era of the $100 million blockbuster had begun, and its creator was the last to know.
“I had been so conditioned to think the film was bad—too dark, too long, too boring—that I didn’t think it would have any success,” says Francis Ford Coppola.
“In fact, the reason I took the job to write [a screenplay for the 1974 remake of] The Great Gatsby was because I had no money and three kids and was sure I’d need the money. I heard about the success of The Godfather from my wife, who called me while I was writing Gatsby. I wasn’t even there."
"Masterpiece, ha! I was not even confident it would be a mild success.”
Posted by Tom at 12:01 AM
| Comments (0)
|
February 25, 2009
Greed in perspective
In market economies, people who create jobs and wealth often generate great wealth personally. During periods of market unrest, those wealthy folks are often demonized as being greedy.
During a period of economic malaise in1979, the late Milton Friedman counsels Phil Donahue on the vacuity of demonizing greed. Enjoy.
Posted by Tom at 12:01 AM
| Comments (5)
|
February 24, 2009
Judge Kent cops a plea
As most local lawyers expected, U.S. District Judge Sam Kent entered into a plea bargain on the courthouse steps today. The deal derailed what would have been an extremely ugly trial on sexual abuse and obstruction of justice charges, and ended Judge Kent's 18-year career as a federal judge. Here is the factual basis for the plea deal and also the plea agreement. Earlier posts on the case against Judge Kent are here.
As noted, Judge Kent's plea deal was not a surprise, although the courthouse steps nature of it was. It looks as if defense attorney Dick DeGuerin -- one of Houston's best criminal defense attorneys for this type of case -- pushed the case to the brink in an attempt to gain the best possible deal, which it appears he did.
In the factual basis for the plea, Judge Kent admitted only to lying to the Fifth Circuit Judicial Council about unwanted sexual advances that he made toward a subordinate. That leaves out any admissions regarding the serious sexual abuse charges that the prosecution dismissed as a part of the plea deal. Those non-admissions have to be considered a victory for the defense in a case such as this.
Moreover, Judge Kent's retirement will likely avoid impeachment. If so, then Judge Kent he will be able to collect his federal pension.
However, those victories probably won't prevent Judge Kent from being sentenced to do some serious prison time. The prosecution agreed only not to recommend any more than a three-year sentence in regard to the maximum 20-year sentence that Judge Kent could receive on the obstruction charge, and visiting U.S. District Judge Roger Vinson has a reputation of handing down relatively harsh sentences. I'm no expert on sentencing, but my initial sense is that Judge Kent is looking at between a 3-5 year sentence.
That's probably lighter than the sentence that Judge Kent would have assessed to a defendant convicted of the same charge in a similar case in his court.
But it's not going to be a picnic, either.
Posted by Tom at 12:01 AM
| Comments (4)
|
February 23, 2009
The Journal's curious case of myopia
Bully for the Wall Street Journal for running this editorial last week decrying the prosecutorial misconduct of the Justice Department in obtaining the conviction of former Alaska Senator Ted Stevens on ethics charges (Mike over at the Crime and Federalism blog has posted a copy of the defense motion describing the prosecutorial misconduct here).
However, where was the nation's leading business newspaper when even more egregious prosecutorial misconduct was involved in criminal cases that the DOJ brought in regard to Enron, particularly the prosecution of Jeff Skilling?
Could it be that the Journal was invested in the DOJ's myth regarding Enron?
How ironic that the WSJ condemns prosecutorial misconduct with regard to the case against a politician, but largely ignores it in cases against businesspeople.
Posted by Tom at 12:01 AM
| Comments (0)
|
February 22, 2009
A civilized routine
Check out Winston Churchill's entirely wonderful daily routine from the quite interesting blog, Daily Routines:
Despite all this activity Churchill’s daily routine changed little during these years. He awoke about 7:30 a.m. and remained in bed for a substantial breakfast and reading of mail and all the national newspapers. For the next couple of hours, still in bed, he worked, dictating to his secretaries.
At 11:00 a.m., he arose, bathed, and perhaps took a walk around the garden, and took a weak whisky and soda to his study.
At 1:00 p.m. he joined guests and family for a three-course lunch. Clementine drank claret, Winston champagne, preferable Pol Roger served at a specific temperature, port brandy and cigars. When lunch ended, about 3:30 p.m. he returned to his study to work, or supervised work on his estate, or played cards or backgammon with Clementine.
At 5:00 p.m., after another weak whisky and soda, he went to be for an hour and a half. He said this siesta, a habit gained in Cuba, allowed him to work 1 1/2 days in every 24 hours. At 6:30 p.m. he awoke, bathed again, and dressed for dinner at 8:00 p.m.
Dinner was the focal-point and highlight of Churchill’s day. Table talk, dominated by Churchill, was as important as the meal. Sometimes, depending on the company, drinks and cigars extended the event well past midnight. The guests retired, Churchill returned to his study for another hour or so of work.
Posted by Tom at 12:01 AM
| Comments (0)
|
February 21, 2009
Quotes of the Week
"The market wants Churchill and they keep tossing it Chamberlains."
John Nash (via David Henderson) on his progress out of mental illness in the late 1980's:
"Then gradually I began to intellectually reject some of the delusionally influenced lines of thinking which had been characteristic of my orientation. This began, most recognizably, with the rejection of politically-oriented thinking as essentially a hopeless waste of intellectual effort."
"In reality, no one spends someone else's money better than they spend their own. The charade of the current stimulus package, chockablock with earmarks to favored pet constituencies and virtually devoid of national policy considerations, is the logical consequence of Keynesianism in action. It is about politics and power, not sound economics, and I believe that the American people will reject it."
Posted by Tom at 12:01 AM
| Comments (0)
|
February 20, 2009
IMG's bad week
The late Mark McCormack must be spinning in his grave. His baby has had a very bad week.
McCormack was the attorney who parleyed his friendship with PGA Tour star Arnold Palmer to create the world's leading management firm for professional athletes and celebrities, International Management Group, now known as IMG. In addition to Palmer, McCormack represented such icons as Jack Nicklaus, Tiger Woods, Margaret Thatcher, Mikhail Gorbachev and Pope John Paul II, to name just a few.
McCormack died in 2003 after suffering a major heart attack and his shares in IMG were sold in connection with the administration of his estate. With his death, the oversight of IMG passed on to a new generation of managers led by über-agent, Ted Forstmann.
Well, that new generation of managers just hit a serious bump in the road.
First, although a relatively small deal, IMG suffered a disproportionate amount of horrendous national publicity over its handling of the contract negotiations of eccentric but successful Texas Tech football coach, Mike Leach.
Not only did IMG alienate the decision-makers at Tech to the point that the university seriously considered firing Leach, IMG's handling of the matter forced Leach to resolve the contract impasse himself in a face-to-face meeting with Tech's chancellor yesterday afternoon. What is Leach paying IMG for, anyway?
At any rate, Leach's resolution of the impasse over his contract at least saved IMG from facing the prospect of a $10 million-plus malpractice damage claim from Leach for fouling up the negotiations.
But it appears that IMG may not be as fortunate with regard to its relationship with the major business fraud of this week, Stanford Financial Group.
Check out this NY Post article (H/T Joe Weisenthal at Clusterstock):
The Post has learned that IMG quietly agreed to steer clients looking for investment advice to Stanford Financial Group, potentially exposing them to millions of dollars in losses resulting from the financial firm's alleged fraud.
According to three sources with knowledge of the situation, IMG and Stanford have a quid-pro-quo agreement under which Stanford Financial pays IMG a low- to mid-seven-figure consulting fee in exchange for IMG advising its clients - which include golfers Tiger Woods, Arnold Palmer, David Toms, Sergio Garcia and others - to have their money managed by Stanford.
The backroom bargaining has exposed IMG to charges of double-dealing, and is raising questions about where the firm's allegiances lay: with Stanford Financial or its athlete clients. [. . .]
IMG's deal with Stanford Financial involved the management firm advising the now-tarnished financial firm on where to spend sponsorship money, particularly related to golf tournaments.
Stanford's alleged fraud could cost IMG north of $10 million in fees, as well as any clients who got burned in the scandal.
For the time being, IMG is denying that it parked some of its clients' funds at Stanford in return for Stanford hiring IMG as a consultant. But IMG's denial raises as many questions as it answers, such as how did IMG's clients find Stanford if IMG didn't point them in that direction? You can rest assured that, if IMG was in fact consulting for Stanford while recommending that its clients invest money with the firm, IMG will probably just open up its pocketbook and reimburse those clients for any losses attributable to Stanford's demise.
Any other approach to the Stanford problem would be an even bigger public relations fiasco than what IMG has suffered over the Leach-Tech contract negotiations.
Frankly, regardless of whether IMG had a consulting deal with Stanford, that IMG may have recommended that at least some of its clients invest funds with Stanford raises serious questions about the firm's judgment. As noted earlier here, the Houston business community widely-knew for years that any investment in Stanford was an extremely risky bet.
IMG's immediate and vehement denial of any conflict of interest in regard to Stanford and its other clients reflects that it is taking this problem seriously. We all know what happens when a trust-based business loses the trust of the market.
Posted by Tom at 12:01 AM
| Comments (1)
|
February 19, 2009
Hope in the battle against the fire ants!
Posted by Tom at 12:01 AM
| Comments (0)
|
February 18, 2009
Stanford blows up
Well, that certainly didn't take long, now did it?
As noted here this past Sunday, R. Allen Stanford's Stanford Financial Group has been well-known around Houston as a smoke-and-mirrors investment outfit for quite awhile. Joe Weisenthal over at Clusterstock has the best overview of Stanford's collapse, while Felix Salmon does a good job of summarizing the SEC complaint and asking the right questions about the principals of the firm. The Chron's Kristen Hays and Tom Fowler provide the local angle here.
Meanwhile, the Chronicle's business columnist Loren Steffy bemoans the fact that government regulators -- who have been investigating Stanford for at least the past four years -- were again behind the knowledge curve in protecting investors from Stanford's apparent investment fraud.
However, Steffy's expectations are simply misplaced. A government regulatory body will rarely be as effective or efficient as the information marketplace in preventing or mitigating investment fraud loss. Had the investors in Stanford relied on Houston's information market in deciding on whether to invest in the company, they wouldn't have needed the "protection" of government regulation.
Posted by Tom at 12:01 AM
| Comments (1)
|
February 17, 2009
It's tough following sports in Houston
As noted earlier here, given all of the incredible disappointments over the years, there must be a special place in Heaven for folks who continue to follow Houston sports teams.
The latest example The Stros haven't even held their first full team workout in Spring Training yet, but the news is already . . . well, . . not so good.
First, Baseball Prospectus lists precisely one Stros farmhand -- catcher Jason Castro -- in its Top 100 baseball prospects, and Castro is no. 76 on that list. I guess that new "build from within" program is going to take some time.
Or course, this comes on the heels of an extremely quiet winter for the Stros, who didn't make any major moves in a depressed free agent market. They aren't admitting it, but Stros management apparently realizes that this club's window for competing for a playoff spot is closed.
Although an improbable 36-18 second-half record allowed last season's Stros to win 86 games and at least con some naive fans into thinking that they actually had a chance for the NL wild-card spot, Baseball Prospectus' PECOTA prediction system projects this season's Stros to contend for the league's worst team. PECOTA has the Stros topping the woeful Pirates by only one win, 65 to 64.
In view of that, it probably makes sense that the Stros spent most of the off-season cutting costs. In one of their key moves, the Stros withdrew a $27 million three-year offer to reasonably effective pitcher Randy Wolf in favor of a relatively cheap, one-year, $2 million deal with 36 year-old lefty Mike Hampton, who has pitched a total of 147 innings over the past four seasons.
Granted, that's not much production over that stretch. But that means chances are he'll break out and be more productive this season, right?
Well, so much for that theory.
Finally, to put a punctuation mark on another dismal day of following Houston sports teams, I flicked on the car radio to a local sports talk show Monday afternoon while driving between meetings.
The two hosts and a caller were addressing Michael Lewis' NY Sunday Times Magazine article about Rockets forward Shane Battier.
In the article, Lewis provides an in-depth analysis of how the Rockets are on the cutting-edge of modifying traditional statistical analysis to find undervalued players such as Battier. It is clearly one of the most interesting, erudite, well-researched and important articles written about sports so far this year.
Despite that, Here is how the conversation went between the two sports talk radio hosts and their caller:
Caller: "Have you guys read the Michael Lewis article in the New York Times about Shane Battier and the Rockets?"
Host One: "I've heard about it, but I haven't gotten around to reading it yet."
Host Two: "Oh yeah, I also heard about it, but I haven't read it yet, either. What's it all about?"
Caller: "Well, I haven't read the article, either. I was hoping you guys had read it and could tell me about it."
Mercifully, I turned off the radio.
Chalk it up to just another episode in the continuing sordid story of following Houston sports teams.
Posted by Tom at 12:01 AM
| Comments (2)
|
February 16, 2009
What are Leach and IMG thinking?
This earlier post noted the fascinating contract dispute that has arisen between Texas Tech University and the most successful coach in the school's history, Mike Leach.
Now, with the university and Leach at loggerheads, and a university-imposed February 17th deadline looming to get a deal done on a proposed modification and extension of Leach's contract, the real issue ought to be this -- why has IMG, Leach's agent in these negotiations, allowed the negotiations to reach impasse?
Well, it probably is not all IMG's fault because Leach has a law degree and is likely highly-involved in the negotiations. But one has to wonder about the judgment of the agent and the coach who would allow a five-year, $12.7 million contract go up in smoke over a few contractual details that simply should not be deal breakers.
To put this in perspective, the contract that Tech has offered Leach is one of most lucrative in big-time college football, almost certainly one of the top 10 or 15 contracts in terms of compensation. What makes that all the more remarkable is that Tech -- with a relatively modest athletic budget of a bit less than $50 million a year -- is not close to being one of the most lucrative football programs in college football. By way of comparison, Texas' annual athletic budget is over $100 million and Oklahoma's is about $75 million.
In short, a distinct possibility exists that the eccentric Leach will never receive another offer as lucrative as Tech's current one in his coaching career. How on earth is Leach -- who is a good but not great coach -- thumbing his nose at that kind of scratch?
In short, because IMG and Leach don't like several contractual details of the university's proposed contract. For example, IMG and Leach want it to be relatively inexpensive for another program to swoop in and hire Leach away from Tech. Not surprisingly, Tech wants it to be relatively expensive for another program -- at least during the first three years of the new deal -- to hire Leach away from Tech.
Similarly, Tech doesn't want to have to pay an arm and a leg to buyout Leach's contract if it wants to make a change, while IMG wants Tech to pay Leach a buyout equal to 40% of the remaining compensation due Leach under the contract at the time Tech elects to fire him.
The other two issues are so minor that they barely merit mentioning. First, Tech wants Leach to pay a penalty of $1.5 million if he interviews with another school during the term of the contract without Tech's consent. The other issue is that Tech wants to have any outside income that Leach arranges approved by Tech and run through the athletic department.
Having been involved in a few of these rodeos, here's why I think IMG and Leach are foolish if they allow this potentially lucrative deal to evaporate on Tuesday.
First, it's simply not unreasonable for Tech -- which does not have a particularly wealthy football program -- to hedge its risk of losing Leach to another program by requiring a substantial buyout of the contract. The purpose of such a buyout is to allow Tech to mitigate its loss by using the buyout funds to hire a good coach to replace Leach. Moreover, the amount of Tech's proposed buyout will not deter a bigger program that really wants Leach. IMG and Leach ought to recognize this reality, negotiate the least amount of buyout that they can, and move on.
The buyout of Leach is the toughest issue, but not all that difficult to resolve. IMG's 40% proposal, particularly during the early years of the contract, is unrealistic given the size of Tech's resources, so they should come off those amounts. On the other hand, Tech's proposal for the buyout in the later years of the contract is relatively paltry, so Tech should come up considerably on those amounts. By both sides giving a bit in those areas, a deal can be reached.
The other two problem provisions are easily resolvable. On the outside compensation issue, Tech has to regulate that income under NCAA regulations, so requiring Leach to obtain Tech's approval is not an unusual or unreasonable demand. Leach and Tech should simply agree that Tech will have the right to approve any such outside comp and that such approval will not be withheld unreasonably. For his part, Leach should agree that he will report and account to Tech for all such outside income so that Tech can comply with its obligations under NCAA regulations.
Finally, Tech would probably waive the proposed $1.5 million penalty if Leach would simply agree that he won't interview for another job during the term of the contract without Tech's approval, which Tech should agree would not be unreasonably withheld. Then, if Leach were to do so anyway, Tech could elect to fire Leach for cause, which means that it wouldn't have to pay him anything further under the contract. That would resolve that issue.
So, if the foregoing is all that it would take for Leach to become a multi-millionaire, then why are IMG and Leach thumbing their noses at Tech's attractive offer?
The only answer I can come up with is that sometimes pride and emotion really can overwhelm good judgment during the heat of negotiations.
Having said that, I still think cooler heads prevail and a deal gets done. There is simply too much for Leach to lose by not doing so. Leach may be eccentric, but he is not stupid.
And IMG didn't become the world's most successful agents by recommending that their clients reject very lucrative contracts.
Posted by Tom at 12:01 AM
| Comments (2)
|
February 15, 2009
Houston's Madoff?
The mainstream media has finally begun to notice the unusual circumstances surrounding R. Allen Stanford and his Houston-based investment firm, Stanford Financial Group (the latest Chronicle story is here).
Although the firm characterized the various investigations as "routine" in news reports, believe me -- it's never "routine" when the FBI starts nosing around. This is doubtful to end well for Stanford and its investors.
But what's most remarkable about all this is how long it has taken for the media and regulators to catch on to Stanford. It took blogger Alex Dalmody less than 30 minutes to size up the situation, and it didn't take Felix Salmon (update here) much longer.
Meanwhile, this Business Week article reports that the SEC has been investigating Stanford for the past three years!
Interestingly, I've asked dozens of folks in Houston investment community about Stanford over the years and have never once heard one vouch that an investment in the firm would be a good idea except as an absolute flyer. Nevertheless, I cannot recall even one media article over the years examining how Stanford was supposedly paying its lucrative returns to investors. Sure, the firm advertised well and contributed money to a number of powerful politicians. But I kept hearing from competent investment folks -- exactly how is the firm paying those kinds of returns on CD's again? And then there was that whole false association thing with the late Leland Stanford of Stanford University. How could anyone really take this outfit seriously?
Well, as recent news reports indicate, apparently about 30,000 investors did just that.
Now, it appears that many of these investors are from Central and South America, so maybe those investors didn't have ready access to the information about Stanford that was available in Houston. But the important point here is that -- as with Bernard Madoff -- no regulatory agency is ever going to do a better job than the information market in preventing or mitigating fraud loss. I mean really, can you imagine how an investor who bought a Stanford CD during the past three years is feeling toward the SEC right now?
Thinking that the government can prevent a slick con man from fleecing investors is about as rational as investing one's life savings with Stanford Financial Group.
Posted by Tom at 12:01 AM
| Comments (16)
|
February 14, 2009
An unintended consequence of drug prohibition
While this post from earlier in the week highlighted the historical backdrop to the United States' failed drug prohibition policy, this Telegraph.co.uk article passes along an unintended consequence of that policy that should put to rest any concerns about reconsidering it:
The Home Office has admitted that the street price of both cocaine and heroin has fallen by nearly half in the last ten years, making the most dangerous illegal drugs cheaper than they have ever been.
That means a line of cocaine can cost as little as £1, with an average price per line of between £2 and £4.
The average price of a pint of lager is around £2.75, although some pub chains have reacted to the credit crunch by cutting the price of a pint as low as 99p. A glass of wine typically costs £3.50. . . .
Posted by Tom at 12:01 AM
| Comments (3)
|
February 13, 2009
Can't the NY Times get anything right?
Posted by Tom at 12:00 AM
| Comments (0)
|
February 12, 2009
What Not to Wear, PGA Tour-style
Golf Digest fashion director Marty Hackel takes Phil Mickelson to task for wearing a white belt with his otherwise all-black oufit at the PGA Tour stop last weekend at Torrey Pines in San Diego:
OK, I have had a look at it and it's not ideal. You are correct in that if you wear a white belt and have a big waist you should select trousers that have less contrast.
White belts are fine, but, and this is a big BUT, if your waist is big, DO NOT HAVE CONTRAST. The white belt with the black trousers called your eye and attention on his waist. Save the white belt for beige trousers and a white golf shirt!!
Golf Digest writer John Strege observes that Mickelson’s outfit might spur a new fashion rule:
One press tent wag suggested a Rule 32 apply, that if you're older than 32 or have a waist size larger than 32 you should not wear a white belt.
Meanwhile, while enduring less encouraging news about professional athletes, take a moment to check out this nice story about PGA Tour veteran J.P. Hayes, who is finding a welcome market for sponsor’s exemptions into Tour events after he disqualified himself over a technical rules violation during the PGA Tour Q-School last fall.
Sometimes, good guys really do win.
Posted by Tom at 12:01 AM
| Comments (0)
|
February 11, 2009
Interesting historical perspectives
Cato Unbound points us to a couple of articles that provide insightful observations on two of the crises that are swirling around us these days.
First, William Niskanen cautions us regarding the fear-mongering that supporters of the Obama Administration's fiscal stimulus plan are using to justify emergency passage of the plan:
This is the fifth time in my adult life that the president has asked for or asserted unprecedented authority on an expedited basis with little or no congressional review. Each of the prior occasions turned out to be a disaster. [. . .]
The only coherence in this plan is political, not whether it is an effective or efficient method to stimulate the economy. . . . Again, as in the four prior episodes, there is every reason not to rush to approve a program of such magnitude.
The primary reason for the current financial crisis is that many banks cannot evaluate their own solvency or that of their current or potential counter-parties, primarily because of the difficulty of valuing mortgage-backed securities and other complex derivatives, and neither TARP nor the fiscal stimulus plan addresses this problem.
Our political system, unfortunately, is strongly biased to try to protect people against the effects of a crisis without addressing the causes of the crisis. To Congress: Slow down. Make sure you understand the causes of the financial crisis and the potential solutions before you burden your children and your grandchildren with another trillion dollars of federal debt.
Your present course is best described as fiscal child abuse.
Meanwhile, as Texans continue to watch nervously to the south as the Mexican government teeters on the brink of losing control of large sectors of the country to drug kingpins, Dale Gieringer reminds us that the main cause of this crisis -- U.S. drug prohibition -- is the result of dubious public policy:
This week marks the centennial of a fateful landmark in U.S. history, the nation's first drug prohibition law. On February 9, 1909, Congress passed the Opium Exclusion Act, barring the importation of opium for smoking as of April 1. Thus began a hundred-year crusade that has unleashed unprecedented crime, violence and corruption around the world —a war with no victory in sight.
Long accustomed to federal drug control, most Americans are unaware that there was once a time when people were free to buy any drug, including opium, cocaine, and cannabis, at the pharmacy. In that bygone era, drug-related crime and violence were largely unknown, and drug use was not a major public concern. [. . .]
Early 20th-century Americans would be astounded to see what a problem drugs have become since the establishment of drug prohibition. Every year, two million Americans are arrested and 400,000 imprisoned for drug offenses that did not exist in their time. Drug laws are now the number-one source of crime in the U.S., with one-half of the entire adult population having violated them.
Long gone are the days when Americans were free to keep opium in their closet; today, even gravely suffering patients are denied pain-killing narcotics by their doctors out of fear of federal prosecution. While smoking opium has faded from the scene, the country is now rife with more potent and lethal narcotics, which are widely sold on the illegal market.
Seen in retrospect, drug prohibition ranks as one of the great man-made disasters of the 20th century. . . .
Posted by Tom at 12:01 AM
| Comments (1)
|
February 10, 2009
The real A-Rod tragedy
As predicted here last year, the names of the MLB players who tested positive for steroids or other performance-enhancing drug use in MLB's 2003 survey test of 240 players are finally being leaked to the media (previous posts on PED use in sports are here).
That survey test was done under a deal between MLB and the MLB Players' Association for the purpose of encouraging voluntary and confidential disclosure of PED use by players so that MLB and the Players' Association could develop a productive program for helping the players get off the juice and monitor future use.
With the leaking of A-Rod's name and the ensuing public outcry, so much for the notion of encouraging players to get help by assuring confidentiality.
Predictably, the mainstream media and much of the public are castigating Rodriguez, who is an easy target.
Of course, much of that same mainstream media and public contribute to the pathologically competitive MLB culture by regularly reveling in players who risk career-threatening disability by taking painkilling drugs so that they can play through injuries.
But players who used PED's in in an effort to strengthen their bodies to avoid or minimize the inevitable injuries of the physically-brutal MLB season are pariahs. Go figure.
Meanwhile, the fact that MLB players have been using PED's for at least the past two generations to enhance their performance is not even mentioned in the mind-numbingly superficial analysis of the PED issue that is being trotted out by most media outlets. Sure, Barry Bonds hit quite a few home runs during a time in which he was apparently using PED's. But should Pete Rose be denied the record for breaking Ty Cobb's total base hits standard simply because he used performance-enhancing amphetamines throughout his MLB career?
As noted here last year in connection with release of the Mitchell Commission report, witch hunts, investigations, criminal indictments, morality plays and public shaming episodes are not advancing a dispassionate debate regarding the complex issues that are at the heart of the use of PED's in baseball and other sports. On a very basic level, it is not even clear that the controlled use of PED's to enhance athletic performance is as dangerous to health as many of the sports in which the users compete.
A truly civilized society would find a better way to address these issues.
Posted by Tom at 12:01 AM
| Comments (1)
|
February 9, 2009
A couple of questions regarding the proposed soccer stadium
The always-entertaining Houston real estate blog, Swamplot, provided this post last week with typically pretty pictures from a KHOU-TV video of the long-proposed soccer stadium for the Houston Dynamo MLS soccer team.
Have we really been talking about this for almost two years now?
At any rate, now that the City of Houston and Harris County have committed a total of $25-30 million to the deal, and the City is on the hook for millions more in infrastructure improvements, Dynamo management is publicly representing that it is prepared to contribute another $80 million to build the stadium.
Now, I'm never seen the Dynamo's financial statement, but my guess is that it generates between $10-15 million in revenues. Maybe that increases by 30-40% if the club gets its own stadium. A nice small business, but . . .
In these lean economic times, what bank is going to take the lead in loaning $80 million to a business that would have to dedicate a substantial amount of its revenue base just to pay debt service on the loan?
Is this a bankable deal? Or just pie-in-the-sky absent the local governments coughing up substantially more dough?
Inquiring minds want to know.
Posted by Tom at 12:01 AM
| Comments (2)
|
February 8, 2009
Is Leach worth it for Tech?
A fascinating dispute between Texas Tech football coach Mike Leach and Texas Tech University highlights the tension in the relationship between the business of big-time college football and academia.
According to this Examiner.com article (a more-detailed Don Williams/Avalanche Journal article is here and a Double-T Nation blog post is here), Leach and Tech have agreed on the financial terms of an extended contract, but are hung up over several issues relating to termination and buyout of the contract, including Tech's demand that Leach agree to pay the school $1.5 million if he interviews for another head coaching job without Tech's permission.
Thus, despite Leach being Tech's most successful football coach, Tech isn't all that secure about Leach. And despite Leach's success at Tech, Leach isn't all that thrilled about being at Tech, which is evidenced by his continually seeking other head coaching jobs. Tech apparently thinks that Leach's wanderlust makes Tech look bad, so Tech is seeking to restrain Leach's efforts to obtain another job by making it expensive for him to do so. However, by making such a demand, Tech reinforces to Leach that he really would prefer to be somewhere else.
So, Tech is caught in a conundrum. On one hand, Leach has generated profitable attention for Tech; thus, it makes sense to pay big money to keep him. However, on the other hand, Leach turns around and disparages Tech in the coach marketplace by continually trying to leave. Why pay big money to someone who is diminishing the value of your product?
Nevertheless, Tech is probably over-thinking this issue. Leach is a good coach, but not the best diplomat. Pay him a salary commensurate with Tech's financial capability and Tech's position in the Big 12, and then require a hefty buyout to compensate Tech if another program hires Leach. Don't worry much about Leach's wanderlust -- a large buyout will deter most programs from pursuing Leach. Trying to restrict Leach's wanderlust by imposing a penalty is counterproductive in that it forces Tech to endure a coach who really does not want to be there while reducing the chance that Tech will realize a windfall from another program hiring Leach and paying Tech the buyout.
Having said all that, is Leach really worth it for Tech? Could Tech's program do about as well with another (and likely, far less expensive) coach who is truly content with his position at Tech?
It sure would be refreshing to see Tech decide to find out.
Posted by Tom at 12:01 AM
| Comments (0)
|
February 7, 2009
A good partner is hard to find
Posted by Tom at 12:01 AM
| Comments (0)
|
February 6, 2009
What the Tour players really think
Golf Digest is running in this month's issue the results of an interesting survey that the magazine recently took of 25 of the top PGA Tour players.
Clear Thinkers favorite and longtime Houstonian Steve Elkington scores highly in one of the most important questions:
WHO'S THE BEST JOKE-TELLER ON TOUR?
Todd Hamilton: 17%
Steve Elkington: 13%
Harrison Frazar: 8%
Neal Lancaster: 8%
OTHERS RECEIVING VOTES: Paul Azinger, Rich Beem, Tim Clark, Carlos Franco, Paul Goydos, Peter Jacobsen, Peter Lonard, Nick Price, Chris Riley, Boo Weekley
And you have to like the answers to the question "Who would you rather have dinner with, Phil Mickelson or Vijay Singh?"
Phil: 50%
Vijay: 50%
COMMENTS: "What are we eating?" ... "So either I listen to Phil tell me everything he thinks he knows, or I sit with Vijay while he says nothing." ... "Give me a choice!"
Moreover, in response to the "What's the worst course you play on Tour?" question, La Cantera in San Antonio was the runaway winner (good thing that tournament is moving to a new course next year), while the Shell Houston Open's Tournament Course at Redstone is one of a half-dozen courses in the "Others Receiving Votes" category for that question. That will go over like a lead balloon at Houston Golf Association's offices.
But my favorite answer came in the "Others Receiving Votes" category to the question "Who's the Slowest Player on Tour?"
"Any Swede."
Posted by Tom at 12:01 AM
| Comments (2)
|
February 5, 2009
Thinking about Cheney's remarks
Many Americans were repulsed by the methods former Vice-President Dick Cheney used to consolidate and exercise war powers in the Executive Branch during the administration of George W. Bush.
Unfortunately, that controversy clouds many people's judgment on Cheney's many noteworthy accomplishments during his 30-year career in public service. He has been an extraordinary public servant.
My sense is that Cheney based his aggressive exercise of war powers during the Bush Administration in large part on classified information regarding the risk of more attacks on U.S. citizens after the attacks of September 11, 2001, a point that Barton Gellman notes in his seminal but generally critical book on the Cheney vice-presidency, Angler: The Cheney Vice-Presidency (Penguin 2008).
Cheney's public comments from earlier this week appear to be consistent with my impression regarding his assessment of the risk of further attacks.
Given that, when you have 25 minutes or so, take the time to watch the video below of Irwin Redlener's recent TED lecture on how the nature of a nuclear attack threat on the United States has changed, but our generally deficient approach to preparing for one has not.
As Dick Cheney says, fighting those who would levy such an attack on the U.S. is “a tough, mean, dirty, nasty business.”
Here's hoping that the Obama Administration is up to the task.
Posted by Tom at 12:01 AM
| Comments (5)
|
February 4, 2009
Blogging NASA
One of my favorite new blogs is Wayne Hale's blog in which he discusses working at NASA generally and on the Space Shuttle program specifically. Despite being a political football from time-to-time, NASA remains a fascinating place.
Every one of Hale's blog posts is interesting, and most of them are downright capitvating. His most recent post -- "Don't Call Him Willy Any More" -- is representative:
Back when the world was much younger than it is now, I was a young shuttle flight controller working in the MCC on several early flights. We were all learning about the shuttle in those days, and one fellow I knew actually saved the shuttle because he knew what to do when the unexpected happened. [. . .]
Willy was an up and coming Captain in the USAF and made a great GNC. He knew the guidance, navigation, and flight control systems forwards and backwards. We worked together a lot in those days since the PROP console (mine) was responsible for the attitude control thrusters, their plumbing, etc., while the GNC console was responsible for the Auto Pilot that called on those thrusters to maintain attitude. Even in those days, Willy demonstrated what military men call "command presence".
But almost as important, Willy could do the most devastatingly funny imitation of our legendary boss, Gene Kranz. Willy had the mannerisms down exactly right, could put the gruff intonation into the right pitch, and deliver a comedy routine that had all of us in the trench in stitches. Always during LOS or debrief between sim runs, of course. Never during the training runs, and especially not during a real flight. Hmm. [. . .]
After the shuttle main engines cut off and the External Tank is jettisoned, there is still a lot of the main propulsion system propellant -- liquid hydrogen and liquid oxygen - trapped in the large pipes in the orbiter aft compartment. . . . Not really a safety issue, but a nuisance and something that could cause interruptions later on.
The booster guys came up with a dandy plan to get rid of these propellants faster. . . . those actions would cause a more thorough dump and eliminate the pesky vacuum inerting procedures that interrupted later activities.
So we tried it. Worked great in the simulator. Hmm. In flight, . . . .well . ..
Ascent is always a tense time. Willy, I, and all the other flight controllers were glued to the data. Everything went nominally all through mainstage. No systems issues. MECO, ET sep, dump start, OOOPS!
The increased propellant dump flow out the side of the orbiter caused it to bank sharply -- the wing headed for the jettisoned but not distant ET. Willy, calm as could be, relayed the instructions to the crew to regain attitude control. The wing missed the tank, by how much I don't know, but not by much.
It was all over in just a couple of minutes. We took a deep breath and got about the business of flying the orbiter in space.
After Challenger, all the USAF "detailees" were pulled out of flight control. I haven't seen Willy in probably two decades until I ran into him recently. He has done well in his USAF career, has stars on his epaulets now. I wouldn't recommend you call him Willy these days.
But then, I haven't called him that since the day he saved the shuttle.
And I bet you didn't even know.
Posted by Tom at 12:01 AM
| Comments (0)
|
February 3, 2009
The Rockets at mid-season
The Rockets narrative-- i.e., "Tracy McGrady is a superstar and the Rockets can't win in the playoffs without him, but he's not the type of clutch superstar who can win in the playoffs, blah, blah blah." -- continues to be the dominant theme among most of the mainstream media in regard to the local NBA team.
In reality, McGrady is long past being a bona fide NBA superstar and really is not much more than a bit above-average NBA player at this point in his career.
However, despite McGrady's and newcomer Ron Artest's relative mediocrity this season, the Rockets are muddling along with a 29-19 record and -- barring further injuries -- are in the thick of the race for an upper division Western Conference playoff spot.
Given the Rockets' narrative, how is that possible? Let's take a look at the numbers.
Dave Berri doesn't rely on subjective narratives and instead continues to provide some of the best objective analysis of what is really happening in the NBA over at his Wages of Wins blog. Here are his mid-season player rankings (organized by team here), which are much more revealing than the Rockets narrative.
Berri's ratings, which he calls the "Wins Produced Model," begins with a player’s statistics -- his points scored, shot attempts, rebounds, steals, turnovers, etc.. -- and translates them into how many wins those statistics create over the course of a season.
Under Berri's system, players who do many things well -- such as former stars Oscar Robertson, Bill Russell, Wilt Chamberlain, Magic Johnson, Larry Bird, Michael Jordan and Hakeem Olajuwon, as well as current stars LeBron James, Shaquille O’Neal, Tim Duncan, and Kevin Garnett -- are among the most productive players, just as most of us know intuitively.
On the other hand, players who only score a lot of points but who have deficiencies such as low shooting efficiency, high turnover rates, and poor rebounding skills are not as productive as many folks believe based on their high scoring. Current examples of that type of player are Allen Iverson, Antoine Walker, and Carmelo Anthony.
Finally, players who are excellent rebounders -- such as the aforementioned Russell or Dennis Rodman, or current players Ben Wallace and Marcus Camby -- are usually much more productive than most folks give them credit for.
So, players who do not shoot efficiently, or who turn the ball over frequently, do not help their team win many games. On the other hand, players who generate large numbers of rebounds, or who score consistently and efficiently, or who create steals -- they generally help their teams win more games than average.
Thus, Berri's Wins Produced statistic tells us how productive a player has been. What it does not tell us is why a player shoots inefficiently, commits turnovers, rebounds well or creates steals. That's a question for team management and coaches to figure out.
Having said all that, the following are few observations on the mid-season statistics:
The most productive players by position are as follows:
The Rockets most productive player so far this season is Yao Ming, who is the NBA's 17th most productive player at 7.1 WP, which is only three spots below the Lakers' Kobe Bryant (7.4 WP).
The Rockets second most-productive player this season is not McGrady, or Artest (120th-ranked at 2.0 WP), or PG Rafer Alston. It's PF Luis Scola (62nd most productive at 3.8 WP).
Even with all his physical problems, McGrady (73rd-ranked at 3.2 WP) is the third most productive player on the team. Having said that, the Rockets aren't any more productive by playing McGrady than SF Carl Landry (74th-ranked at 3.2 WP).
Are the Rockets ever going to have a highly productive point guard again (Alston -- 134th-ranked at 1.6 WP; Aaron Brooks -- 196th-ranked at .7 WP)?
Also, SF Shane Battier (157th-ranked at 1.3 WP) is a marginal starter at this point in time, although fan favorite Von Wafer (173rd-ranked at 1.1 WP) really isn't a better alternative.
Although the Rockets do not have many highly-productive players, they also do not have any players who are actually counter-productive -- i.e., who have a negative WP. Most teams have at least a few counter-productive players.
If McGrady and Artest ever get healthy, then the Rockets' best chance of finally winning a playoff series (it has been 12 years now) may well be playing a lineup of McGrady at the point with Artest at shooting guard, Landry at SF with Scola at PF, and of course Yao at C.
By the way, in view of all this, why do so many folks continue to expect so much from McGrady?
Call it the curse of the big contract -- McGrady is pulling down a total of $40 million guaranteed over this season and next. Many folks just can't come to terms with the fact that sometimes the player gets the better of management in contact negotiations.
Me, I just think McGrady has a good agent. ;^)
Posted by Tom at 3:48 AM
| Comments (2)
|
February 2, 2009
Sound thoughts to start the week
It may or may not be true that we would have avoided much of this crisis had credit default swaps never been invented. I suspect it's not true, and that the CDS market, in allowing people to short the credit market, actually helped at the margin to stop the credit bubble from expanding. But even if it is true, that doesn't mean that the solution is to ban or unwind the CDS market which now exists. It was foolish to sell protection too cheaply on risky debt; it was sensible to buy that protection when it was cheap. So let's not punish the sensible people and bail out the foolish ones by abrogating those contracts.
"Animal spirits", Keynes' view of capitalists, reeks of detachment and some condescension. Trouble is no one really knows how to incite the barnyard or rattle the cage. The past six months of ad hoccery have not helped and I am pessimistic about the next chapter, guessing that whatever comes out of the Washington sausage factory will do more harm than good. Bad times do breed bad policy. And there is now very little sympathy for getting the taxman (and the politician) out of the way.
There are some very smart people who claim that desperate measures are called for. But desperate measures can also make matters worse. Printing money to finance questionable projects that enrich lobbyists, empower bureaucrats and entrench politicians is surely not a promising signal to investors here or abroad.
Posted by Tom at 12:01 AM
| Comments (0)
|
February 1, 2009
A solid Super Bowl Ad
Posted by Tom at 12:01 AM
| Comments (0)
|