Author Archives: Tom

The trick in drafting NFL players

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nfldraft042707.jpgToday is the beginning of the annual two-day media feeding frenzy known as the National Football League Draft, which I’m beginning to think is becoming more popular than the NFL games themselves. Channeling research about the draft that was addressed in this earlier post, the WSJ’s ($) Allen St. John notes that football fans should not be as concerned with what star players take in the first couple of rounds, but rather should focus on the hidden gems that their team takes in the later rounds:

So, in general, how well does the NFL draft do in finding future stars? A look at the All-Pro teams of the past five years reveals some surprises. Of the 80 position players who made the All-Pro teams since 2002, 35, or 44%, were not drafted in the first round. That means that practically every NFL team passed on them at least once. And 21 All-Pros weren’t picked until the third round — or later.
How many No. 1 draft picks were All-Pros over that period? One: Peyton Manning of the Indianapolis Colts. Five players who went totally undrafted — running back Priest Holmes, tight end Antonio Gates, fullback Mack Strong, center Jeff Saturday and offensive lineman Brian Waters — earned that honor. [. . .]
Even more important than spending first-round picks wisely is being able to tab superstars in the later rounds. To measure that we’ll use APDA, or All-Pro Draft Average, which averages the overall draft slot for a team’s All-Pros. (Undrafted players are ranked as if they were taken after the last player drafted that year.)
Which team found the most diamonds in the rough? The San Diego Chargers — with an 80.3 ranking. They selected four All-Pros after round two, including Mr. Gates, a three-time All-Pro. The Ravens were next at 70.9, thanks largely to drafting linebacker Adalius Thomas in the sixth round and signing undrafted running back Priest Holmes (who would achieve fame with the Kansas City Chiefs). The NFC leader: the Panthers (40.8), followed by the New York Giants (36.5). [. . .]
So if your favorite team doesn’t have a top pick, don’t sweat it. APDA reveals that in today’s NFL, potential superstars are available in the second round — or second day of the draft. The trick, as the league’s most successful teams know, is to find them.

Although the Texans drafts are routinely trashed in the mainstream media, the Texans drafted All-Pros in WR Andre Johnson, KR Jerome Mathis, and LB DeMeco Ryans, a potentially All-Pro caliber CB in Dunta Robinson, and have had a reasonable degree of success in picking decent players in the later rounds. On the other hand, the Texans’ non-draft acquisitions (think Tony Boselli and Philip Buchanan) have been unproductive, which has a lot more to do with the team’s relative lack of success than the team’s draft picks.
Finally, if you still think that the Texans’ first round draft picks have been bad, take a look at this hilarious video of the announcements over the years pertaining to the New York Jets draft picks:

Stros 2007 Season Review, Part One

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lidge%20and%20another%20home%20run.jpegThe first 21 games of the season of the Stros’ (9-12) season has been one of streaks — they started out the season by losing 5 of their first 6 games, rebounded momentarily by winning 8 of their next 9, only to blow that comeback by losing their next 6. As a result, the excuses of the club’s spotty performance are already in full bloom:

“Berkman and Lee haven’t started hitting yet.”
“If Jennings comes back strong, the starting pitching will be fine.”
“Burke is a good athlete who will find his way in centerfield.”
“Biggio is such an inspiration.”

Well, maybe all those statements are true. But the harsh reality is that this is not a good baseball team right now.
As noted in the 2007 season preview, none of this is particularlry surprising. Despite catching lightning in a bottle in the post-season during 2004 and 2005, the Stros have been trending downward for most of this decade into the current mediocre edition of the club. During most of that time, reasonably strong pitching tended to mask the decline in the club’s overall hitting.
However, through the first eighth of this season, both the hitting and the pitching on this Stros club have serious questions. The Stros’ hitters have already generated 13 fewer runs than an average National League club would have scored using the same number of outs at this stage of the season (RCAA, explained here), which ranks 10th out of the 16 National League teams (the NL Central-leading Brewers are at +18 RCAA). The pitching staff has been about as bad, saving 7 fewer runs already than an average National League staff would have saved so far this season (RSAA, explained here), which ranks 13th among National League clubs.
The season statistics through 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:

Continue reading →

Baker Hughes settles Kazakhstan bribery case

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bakerhughes.gifHouston-based oil field services provider Baker Hughes Inc. on Thursday announced that it has agreed to pay $44.1 million to settle the Department of Justice and the SEC’s long-standing allegations that a unit of the company had violated the Foreign Corrupt Practices Act.
Under the terms of deal, a subsidiary of the company pleaded guilty to violations of the FCPA regarding payments made to a commercial agent in Kazakhstan between 2001 and 2003, the company entered into a deferred prosecution agreement with the Department of Justice that provides that federal government will not prosecute the company if it meets the conditions of the agreement for two years (including a government-approved monitor to oversee its compliance efforts), and the company agreed to a consent judgment with the SEC, which charged violations of the anti-bribery provisions of the FCPA related to the Kazakhstan deal.
The company announced the govenment probes publicly almost five years ago and the probe was well-known within the Houston legal community even before that. Sometimes delay really is the best strategy.

What was Dr. Hurwitz’s motive?

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Hurwitz042707.jpgThe NY Times’ John Tierney, who has done an outstanding job of covering the sad case of Dr. William Hurwitz, provides this insightful post on the utter lack of a motive for Dr. Hurwitz to commit the crime for which he is being prosecuted — i.e., violating America’s drug prohibition policy:

Prosecutors charged that Dr. William Hurwitz was in a conspiracy with some of his patients to illegally distribute drugs, but there was no evidence that the patients had shared the profits when they resold the painkillers he prescribed. The only money he got was from the medical fees he charged. The prosecutors tried to portray his practice as a lucrative operation, and him as a doctor motivated by greed. This is a bit hard to square with what the jury heard about his background. which included stints in the Peace Corps and the Veterans Administration. And itís really hard to square with his bank account.
In 2003, before the charges in this case had even been brought against him, authorities seized Dr. Hurwitzís assets. (Thatís standard procedure in drug cases like this, and one more reason why doctors have such a hard time mounting a defense.) There wasnít much to seize. They took all his retirement savings ó which amounted to less than $250,000. He was at that point 58 years old and had been practicing medicine for decades. . . .
ìItís so ridiculous to hear the prosecutor talk about this rich doctor,î Mrs. [Nilse] Quercia [Dr. Hurwitz’s former wife] told me. ìExcept for that Keough account they seized, he had nothing but debts and a 1990 Subaru.î His subsequent legal expenses, she said, were paid by friends and relatives and by the law firms now representing him pro bono.

In my experience, when a prosecutor must fabricate a motive for the white collar criminal act that is being prosecuted, it’s a pretty darn good indication that a lack of prosecutorial discretion is behind the decision to pursue the charges in the first place.

Not your typical obituary

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boris%20yeltsin.gifBased on this Rolling Stone obituary, it’s a safe bet that the family of Boris Yeltsin will not be hiring Matt Tabbi to write the official biography of the late former Russian premier:

Boris Yeltsin was literally born in mud and raised in shit. He was descended from a long line of drunken peasants who in hundreds of years of non-trying had failed to escape the stinky-ass backwater of the Talitsky region, a barren landscape of mud and weeds whose history is so undistinguished that even the most talented Russian historians struggle to find mention of it in imperial documents. They did find Yeltsins here and there in the Czarist censuses, but until the 20th century none made any mark in history. The best of the lot turned out to be Boris’s grandfather, a legendarily mean and greedy old prick named Ignatiy Yeltsin, who achieved what was considered great wealth by village standards, owning a mill and a horse. Naturally, the flesh-devouring Soviet government, the government that would later make Boris Yeltsin one of its favored and feared vampires, liquidated Ignatiy for the crime of affluence, for the crime of having a mill and a horse. [. . .]
The communist government found its leaders among the meanest and greediest of the children who survived and thrived in places like this. Boris Yeltsin was such a child. As a teenager he only knew two things; how to drink vodka and smash people in the face. At the very first opportunity he joined up with the communists who had liquidated his grandfather and persecuted his father and became a professional thief and face-smasher, rising quickly through the communist ranks to become a boss of the Sverdlovsk region, where he was again famous for two things: his heroic drinking and his keen political sense in looting and distributing the booty from Soviet highway and construction contracts. If Boris Yeltsin ever had a soul, it was not observable in his early biography. He sold out as soon as he could and was his whole life a human appendage of a rotting, corrupt state, a crook who would emerge even from the hottest bath still stinking of booze, concrete and sausage.

There is much more.

Applying the Apple Rule

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My, what a flurry of activity with regard to Apple.

First, the San Jose Mercury News reports last weekend that Apple CEO Steve Jobs appeared to be in the clear of the risk of criminal charges in regard to the investigation into backdating of stock options at Apple.

Next, on Tuesday, Dealbreaker’s John Carney noted that two former Apple executives in the crosshairs of the SEC’s parallel investigation — general counsel Nancy Heinen and CFO Fred Anderson — are taking very different approaches to dealing with the investigation.

On one hand, Heinen is fighting the SEC charges, while Anderson has settled up with the SEC.

But then, in a somewhat unusual development in such matters, Anderson proceeded to issue a public statement that appears to contradict Jobs’ story that he didn’t really understand the implications of this whole backdating thing.

Finally, after all this, Apple’s stock price went through the roof on Wednesday on the heels of strong second quarter earnings.

So, leave it to the originator of the Apple Rule to size up the possible implications of these events:

Indeed, it may be that all this backdating stuff really is all about stock price. When the alleged backdating was going on at Apple, the stock was hovering at around 20. Under several more years of Jobs leadership, it’s up over 90. Backdating could bring it back to 20.

No free speech in Beaumont?

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brentcoon.gif
In this WSJ Law Blog post, Paul Davies of the WSJ Law Blog passes along this Chronicle article about Beaumont plaintiff’s attorney Brent Coon issuing a subpoena to the editor and a reporter of a new weekly paper called the Southeast Texas Record, which is bankrolled by the U.S. Chamber of Commerce Institute for Legal Reform in Washington to promote an tort reform agenda (the Chronicle’s Mary Flood has more). Coon’s purpose in issuing the subpoena is that he believes that the editor and the reporter of the newspaper were attempting to taint jurors in one of his pending asbestos cases with regard to the newspaper’s April 2 inaugural issue. “This shameful propaganda machine is deceptive and demonstrates a willingness to misrepresent fact,” Coon complained as he was charging that the editor and reporter might have committed a “criminal act.”
Sounds as if Mr. Coon is better at pursuing plaintiff’s cases than Constitutional Law. The editor and the reporter’s writings are clearly protected free speech under the First Amendment. Not even a close call. Even in Beaumont.

Making sense of the subprime markets

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subprime%20042607.jpgIn this WSJ ($) op-ed, American Enterprise Institute fellow Ted Frank provides a particularly lucid explanation of the many benefits of the markets relating to subprime mortgages and the absurd nature of the attempt by some plaintiffs’ firms to extract some ransom from some institutional investors in those markets. While reviewing how certain members of Congress refuse to allow their ignorance to stop them from attempting to make matters worse, Ted asks:

“Shouldn’t at least one of the two political parties have someone heading up the House Financial Services Committee who understands financial services?”

Meanwhile, Michael Lewis asks three common sense questions in regard to the allegations of wrongdoing in regard to subprime mortgages:

1) If the subprime home-loan market was a cynical conspiracy, why did so many of the putative conspirators wind up taking so much of the risk? [. . .]
2) Why does the most financially obsessed and presumably well-informed character on earth, the American Investor, insist on playing the fool? [. . .]
3) Why in this new drama is it so easy to imagine borrowers in a different role, other than the one in which they are currently cast: The Victim? [. . .]

Messrs. Frank and Lewis both hit on an important characteristic of American markets in general and the subprime markets, in particular. The U.S. mortgage market is the most efficient in the world largely because it is the most securitized. Banks don’t need to take the risk that doomed many of them back in 1980’s when they commonly held on to home mortgages that they originated. Now, banks sell them into the bond market to institutional investors who disperse the risk to those who can afford to take it.
Interestingly, a strong case can be made that the mortgage-backed securities markets is a descendant of the liquidity crunch in home mortgage lending that resulted from the savings and loan crisis of the 1980’s, Just as Congress had a big hand in causing the S&L debacle, the current Congressional crusaders are threatening the markets that corrected the 1980’s downturn in home mortgage lending.

Go Barney Go!

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barney_frank042507.jpgBarney Frank, that conflicted anti-business Congressional crusader (see here and here) who is nevertheless challenging the federal government’s ludicrous prohibition of internet gambling, has decided to introduce legislation to overturn the prohibition, and he thinks it has a chance of passing.
Good for Barney. But how sad is it that Rep. Frank — who is essentially a socialist with regard to economics, business and big government issues — is one of the only national politicians who is willing to advocate reasonable and common sense restraints on the federal government’s prosecutorial power against business interests?

This is not going to look good on TV

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sandgolf1.jpgI buzzed up to Ft. Worth for a hearing yesterday and the golfers in the crowd were all talking about the EDS Byron Nelson Golf Tournament, which already has a less than inspiring field. Now, it turns out that several greens at the Tournament Players Course at Los Colinas are not going to be particularly picturesque on television:

One after another, competitors at the EDS Byron Nelson Championship struggled Monday to describe the patchwork greens that greeted them at the TPC Las Colinas course.
Riddled with bare patches and marked by evidence of multiple grasses growing on selected greens, the bumpy surfaces triggered a mea culpa from officials at the Four Seasons Resort, who own and oversee maintenance on both courses used at the Nelson tournament. [. . .]
Players who competed in Monday’s pro-am at the Cottonwood Valley course reported thin fairways on selected holes but praised the greens. Competitors at TPC, on the other hand, wondered if PGA Tour officials could find three viable pin placements during tournament week at selected holes.