This NY Times article describes the increased competition that Dallas-based Southwest Airlines is facing from other low-cost airlines and the steps that Southwest is contemplating to combat that competition.
A word to wise investors in airline stocks: Don’t bet against Southwest.
Dr. Keith Poole is a bright political science professor at the University of Houston. Daniel Drezner points us today to this Chicago Tribune article by Assistant Professor Jeffrey A. Jenkins of Northwestern University that concludes, based upon this methodology developed by Dr. Poole, that President Bush and Senator Kerry are both more moderate than their respective opponents represent. Professor Jenkins notes:
As it turns out, Bush is positioned near the dividing line between the center-right and right quartiles of the party. So, while clearly right of center, he is not part of the most conservative segment of the party, anchored historically by the likes of Sens. Phil Gramm and Jesse Helms. He is considerably more conservative than Dwight Eisenhower and Gerald Ford, somewhat more conservative than Richard Nixon, slightly more conservative than his father, George H.W. Bush, but less conservative than Reagan.
What about Kerry, the would-be president? Should he become president, what should we expect? How does this left-leaning moderate compare to other recent Democratic presidents? In fact, only Lyndon Johnson appears more conservative than Kerry; Jimmy Carter and Bill Clinton appear slightly more liberal; and John F. Kennedy, to whom Kerry is often compared, appears considerably more liberal than the Massachusetts senator trying to follow in his footsteps.
Since The Daubert trilogy of Untied States Supreme Court decisions -? Daubert, Joiner, and Kumho Tire, codified in Federal Rule of Evidence 702 — established new rules for the admissibility of expert witness evidence in federal court, appellate decisions have been rare that overrule a federal district court’s exclusion of expert witness testimony on Daubert grounds. However, in this decision emanating from an appeal in a legal malpractice case, the Seventh Circuit Court of Appeals has reversed the district court’s Daubert-based exclusion of testimony from a civil engineering and human factors expert who contended that Cook County failed to maintain a road appropriately and that such failure caused the accident at issue in the litigation underlying the malpractice case. Although the Seventh Circuit remanded the Daubert issue for the district court to resolve, the Court criticized the district court’s failure to explain how it applied the Daubert factors to exclude the expert’s testimony and strongly intimated that the testimony was well-defended and should be admissible.
Here is the link. Here a few pearls of Buffet wisdom from the letter:
Mr. Buffett, the chairman of Berkshire Hathaway Inc., said he was finding it difficult to identify undervalued investments to add to Berkshire’s portfolio. Mr. Buffett suggested both stocks and bonds are overvalued, and he expressed regret about not dumping some of his holdings several years ago when the market peaked. “I made a big mistake not selling several of our large holdings during The Great Bubble.”
“Overall, we are certain Berkshire’s performance in the future will fall far short of what it has been in the past,” wrote Mr. Buffett. “Nonetheless, [Vice Chairman Charlie Munger] and I remain hopeful that we can deliver results that are modestly above average.”
Mr. Buffett criticized both excessive pay packages for corporate executives and compensation committees for not paying enough attention to the interests of shareholders. According to Mr. Buffett, directors of public companies and mutual funds need to have their interests aligned with rank-and-file shareholders “in a big way.” He pointed out that all 11 directors at Berkshire are required to hold substantial amounts of the company’s stock to keep their own financial interests consistent with with those of shareholders. Each of the directors purchased their stock in the open market because Mr. Buffett does not allow Berkshire to grant stock options or any other incentive-based compensation.
“The bottom line for our directors: You win, they win big; you lose, they lose big. We know of no better way to engender true independence,” Mr. Buffett observed. However, Mr. Buffett admitted that the Berkshire approach does not always work, even conceding that he has sat on boards of companies in which Berkshire had invested and has “remained silent as questionable proposals were rubber-stamped” by the boards.
Finally, Mr. Buffett used his letter to accuse the Bush administration of pursuing tax cuts that favor large corporations and wealthy individuals. “If class warfare is being waged in America, my class is clearly winning,” he observed. Mr. Buffett also pointed out that too few corporations and corporate executives were paying close to the 35% federal tax rate they should be. Aside from 1983, Mr. Buffett observed that the percentage of federal receipts from corporate income taxes last year was the lowest since data was first published in 1934. Mr. Buffett went on to contend that Berkshire pays its taxes and is almost certainly among the country’s top 10 taxpayers, paying $3.3 billion in 2003 income taxes, 2.5% of the total 2003 U.S. corporate income tax.
An old joke among insolvency lawyers is that hotels are such a bad investment that no owner makes any money on it until at least three prior owners have gone bust. This Portland Tribune article indicates that basketball arenas may have the same problem.
Dallas-based Jenkens & Gilchrist reached a $75 million settlement yesterday with investors who had filed lawsuits accusing it of designing and selling questionable tax shelters. As noted earlier here, the firm and its clients remain subject to a Justice Department investigation into alleged fraud involved in the promotion of the tax shelters.
Some 140 Iranian and Iraqi Shiite pilgrims died earlier this week in suicide bombings in Baghdad and Karbala, and another 43 Pakistani Shiites were killed in Quetta, Pakistan. Moreover, yesterday, Shiite Muslims in Iraq refused to sign the U.S. sponsored Iraqi Constitution unless changes are made to strengthen Shiite power. These developments highlight a grave problem that confronts American foreign policy — i.e., the conflict between Shiite Muslims and Sunni Muslims in Iraq threatens a religious war throughout Muslim regions of the Middle East and Asia. In this David Warren piece and in this Vali Nasr piece, Mr. Warren and Professor Nasr examine Wahhabi Sunni Muslim antipathy toward Shiite Muslims, and the growth of the conflict between those two factions of Islam over the past decade. These are excellent analyses of this primary barrier to stability in Islamic countries.
As noted earlier here, the decision of Martha Stewart’s defense team not to have Ms. Stewart testify was a risky one. This NY Times story confirms the downside of such a strategy, reflected best by this quote from one of the jurors:
One juror called the decision to not put the defendants on the stand “a serious mistake.” “How could we tell anything about how smart either of them was if they never took the stand?” asked Amos Matthew Mellinger, 55, a freelance market researcher from Riverdale, the Bronx, who was Juror No. 4 in the trial.
Similarly, this Reuters article refers to another juror’s remarks:
Chappelle Hartridge, 47, a computer technician from New York’s Bronx borough, said he and fellow jurors saw the domestic style-setter, who built a fortune on homemaking advice and interior decor, as a corporate bigwig. “Maybe she thought she was above everything and didn’t have to do things other people have to do,” he said.
Again, particularly in white collar criminal cases, jurors want to hear from the defendant. Accordingly, exercise the right not to testify with great care.
Tony Blair is the clearest communicator on the international political stage right now. This is his most recent speech defending the Iraq War.
Victor Davis Hanson‘s weekly column takes a look at the big picture and calls for steady leadership in the face of change. Mr. Hanson will also be the guest on Book TV’s March 7 In Depth program.