Stros storm on

Mike Lamb hit the go-ahead RBI double in the seventh inning and strong relief pitching propelled the Stros to extend their season-high winning streak to eight games with a 6-5 victory over the Pirates on Saturday night at the Juice Box. The Stros have now won 10 of their last 11 gaves and 16 out of their last 19 to pull within two games of the Cubs in the race for the National League Wild Card playooff spot.
Houston starter Carlos Hernandez struggled through three innings, giving up four earned runs on four hits, including Jason Bay‘s three run yak. However, Kirk Bullinger, Chad Harville, Chad Qualls, Russ Springer, and Brad Lidge gave up just one more run the rest of the way to secure the win. Lidge pitched the ninth for his 20th save in 23 opportunities.
The Stros’ Pete Munro tries to keep the momentum going in Sunday’s matinee against Baylor-ex Kip Wells. The Reds come to the Juice Box on Monday to provide more batting practice for the Stros’ hitters during a three game set.

Observations on Bush’s convention speech

Arnold Kling has this excellent analysis of President Bush’s acceptance speech at the Republican National Convention.
And Professor Maule has some insightful comments on the President’s proposals regarding income tax simplification.
Sigh.

Cantor Fitzgerald sues Saudi Arabia

New York-based bond trading firm Cantor Fitzgerald Securities, which lost two-thirds of its workers in the World Trade Center attack of September 11, 2001, has sued Saudi Arabia and dozens of other defendants — including numerous banks and Islamic charities — in U.S. District Court in New York for a mere $7 billion for allegedly supporting al Qaeda before the attack through financing, safe houses, weapons and money laundering.
Saudi Arabia is the birthplace of al Qaeda leader Osama bin Laden and 15 of the 19 Sept. 11 hijackers.
The lawsuit involves many of the same defendants, transactions, events and questions of law as an earlier $300 billion lawsuit that various insurance companies have brought against Saudi Arabia, terrorist groups, companies and other countries supporting terrorism. That lawsuit is still pending.
The Cantor Fitzgerald lawsuit takes dead aim at Saudi Arabia, saying the kingdom “knew and intended that these Saudi-based charity and relief organization defendants would provide financial and material support and substantial assistance to al Qaeda.” The lawsuit alleges that Saudi Arabia engaged in a pattern of racketeering as it participated directly and indirectly in al Qaeda’s work through funding and controllings its “alter-ego” charities and relief organizations. In addition, Cantor Fitzgerald alleges that Saudi Arabia materially supported al Qaeda by helping to raise money for it, by intentionally employing al Qaeda operatives, by laundering its money and by providing al Qaeda with safe houses, false documents and ways to obtain weapons and military equipment.
Interestingly, the U.S. federal government has generally opposed this type of lawsuit on the grounds that it interferes with the government’s exclusive power to conduct foreign policy. No word yet on the government’s stance toward the Cantor Fitzgerald lawsuit.

Stros remain smokin’

Jeff Bagwell, Carlos Beltran, Craig Biggio and Jose Vizcaino homered and the Rocket won his 325th career win as the Stros beat the Pirates in the first game of their weekend series at the Juice Box, 8-6.
The Stros are in the midst of a major winning trend. They have now won seven straight, 15 of their last 18 games, and 10 of their last 11. They have closed to within 2Ω games of the Hurricane Frances-idled Cubs, who are the leader in the race for the NL wild-card playoff spot.
Clemens (15-4) won his third straight start, and moved into sole possession of 12th place on the career wins list. He took a 7-0 lead into the seventh inning but tired and wound up allowing four runs and six hits in 6 2/3 innings. The Rocket even added an run-scoring single in the sixth for his seventh RBI of the season. Dan Wheeler pitched a perfect eighth and Brad Lidge worked the ninth for his 19th save in 22 chances.
By the way, General Richard Myers, chairman of the Joint Chiefs of Staff, threw out the ceremonial first pitch as part of the Astros’ Military Appreciation Night. Turns out that General Myers is a former high school classmate Alan Hendricks, who represents Clemens along with his brother, Randy.
Carlos Hernandez takes the pill in Saturday night’s game against the Pirates Josh Fogg as the Stros attempt to pull within two games of the still idle Cubs.

A separate crime for reckless sex?

Ian Ayres of Yale Law School and Katherine K. Baker of the Illinois Institute of Technology have posted this rather interesting article on SSRN, which is described in the following abstract:

This article attempts to make progress on both the problems of sexually transmitted disease and acquaintance rape by proposing a new crime of reckless sexual conduct. A defendant would be guilty of reckless sexual conduct if, in a first sexual encounter with another particular person, the defendant had sexual intercourse without using a condom. Consent to unprotected intercourse would be an affirmative defense, to be established by the defendant with a preponderance of the evidence. As an empirical matter, first-encounter unprotected sex greatly increases the epidemiological force of sexually transmitted disease and a substantial proportion of acquaintance rape occurs in unprotected first encounters.
The new law, by increasing condom use and the quality of communication in first sexual encounters, can reduce the spread of sexually transmitted disease and decrease the incidence of acquaintance rape.

Merrill Lynch invests in energy trading business

This NY Times article reports that Merrill Lynch & Co. jumped back into the energy-trading business with an agreement to buy Entergy-Koch, LP — the Houston-based joint-venture trading unit of Entergy Corp. and closely held Koch Industries — for an undisclosed sum.
Merrill is acquiring a trading staff of about 300 people in Houston and London who primarily buy and sell contracts for electricity, natural gas and weather products. Entergy-Koch valued the business unit at approximately $2 billion.
Merrill’s move back into energy trading highlights the emerging role of Wall Street firms with strong credit ratings in the energy trading industry, which was devastated following the demise of Enron Corp.’s dominant online trading business in late 2001. Merrill joins several Wall Street firms that have recently bought substantial trading operations, including Goldman Sachs Group Inc and Morgan Stanley. Generally, the firms are betting on opportunities that recent volatility in energy prices present, such as big energy users hedging their risk on energy prices. Moreover, the energy books often allow the owners to pick up distressed energy-related assets — such as power plants and pipelines — at bargain prices. Those assets can form the basis of hard assets around which energy traders can sell products.

Enron’s feed trough

The Wall Street Journal ($) is reporting that Stephen F. Cooper, the independent chief executive officer of Enron Corp. during its chapter 11 case, is preparing to request approval of a $25 million bonus for his and his firm’s (Kroll Zolfo Cooper, a unit of Marsh & McLennan Cos.) work in connection with Enron’s nearly three year old reorganization. The request is in addition to $63.4 million in fees that Mr. Cooper and his firm have already collected from Enron during the chapter 11 case.
Not bad work if you can get it.
Enron’s Chapter 11 disclosure statement estimates that fees to all of the bankruptcy professionals involved in the Enron chapter 11 case will eventually reach nearly $1 billion. Although arguably outrageous, the amount needs to be kept in perspective. Enron’s reorganization plan is a “going concern” liquidation plan that the company believes will generate about $12 billion for distribution to creditors. That translates to a recovery of about 17 cents on the dollar for the largest group of creditors holding unsecured claims. If Enron had simply liquidated immediately after filing bankruptcy, the company estimates that the amount available for distribution to creditors would have likely have been only about $6 billion. So, the reorganization professionals have been at least partly responsible for preserving value for creditors.
But that’s still some serious scratch.

Latest chapter in Baylor-Methodist divorce

This Chronicle article reports on the the latest dustup between longtime partners Baylor College of Medicine and the Methodist Hospital — Baylor has started moving residents to St. Luke’s Episcopal Hospital, which is generating even more acrimoney in the already chippy split with between Baylor and Methodist. Here are earlier posts on the Baylor-Methodist divorce.
Executives at Methodist claim to be “dumbfounded” at th e move and claim that the transfer reneges on a previous agreement between the two institutions regarding involving the allotment of residents.
This latest dispute is only the latest in a series of disputes that have arise after Baylor and Methodist’s decision to part ways in April ended an historic 50-year Texas Medical Center relationship during which the hospital was Baylor’s primary teaching hospital for its medical students and residents. St. Luke’s is Baylor’s new teaching hospital and Methodist’s new primary partner is Cornell University’s medical school, which is located in New York.
In other Medical Center news, this Chronicle article reports that Memorial Hermann Hospital System and The University of Texas Health Science Center at Houston renewed their agreement in which Memorial Hermann serves as the school’s primary teaching hospital. UT-Houston and Hermann — which have been partners since 1968 — agreed to continue their partnership for 15 more years.
Under the renewal, UT-Houston purchased the Hermann Professional Building and adjacent garage for $31 million and renamed the building the University of Texas Health Science Center Professional Building. It will be UT-Houston’s first outpatient clinic, and its location (across the street from UT-Houston) will be convenient for UT-Houston faculty and students.

Continental announces jobs cut

Continental Airlines — one of Houston’s largest employers — announced plans to cut 425 jobs today in a move that the company says will save it $125 million before taxes in 2005 and $200 million a year before taxes by 2007.
In its news release, Continental said that the move, along with other recent efforts to boost revenue and cut costs, should generate a total of about $1.1 billion in pretax benefits. Continental posted a second-quarter loss of $17 million on revenue of $2.51 billion, which the company said was primarily the result of high fuel prices, weak domestic fares, and costs attributable to the early retirement of leased aircraft. The company also warned that existing employees would be asked to take wage and benefit reductions “unless the revenue environment improves dramatically.”
Most of 425 job cuts would be in management and clerical staff, although the exact number of layoffs was not disclosed. Some of the positions that Continental plans to eliminate are already empty and some of the other job cuts will come from normal attrition. The latest round of cuts, most of which are effective immediately, are in addition to the previously announced reduction of 253 reservation positions. After the latest reductions, Continental will have cut its management and clerical work force by almost 25% from levels before the attacks of Sept. 11, 2001 on New York and Washington, D.C.

Another trial in an Enron criminal case gets pushed back

Remarkably, almost three years after Enron‘s descent into bankruptcy amid wide-ranging allegations of corporate fraud, the Enron Task Force still has not taken a criminal indictment against a former Enron executive to trial.
And one of the first Enron-related criminal cases scheduled to go to trial this fall — the indictment against five former officers of Enron’s telecommunications unit, Enron Broadband — has been pushed back to March of next year. Yesterday, U.S. District Judge Vanessa D. Gilmore in Houston postponed the trial of the Enron Broadband criminal case to March 1, 2005.
Former Enron Broadband CEO Ken Rice pleaded guilty to one charge in July, while former Chief Operating Officer Kevin Hannon pleaded guilty to one charge earlier this week.
The first trial involving former Enron executives is scheduled to begin on September 20 in U.S. District Judge Ewing Werlein‘s court in Houston in the case that is known as the Nigerian Barge case. Now that the Enron Broadband case has been pushed back to March of next year, there is a decent chance that Ken Lay‘s request for a speedy trial may result in his case being the second trial to occur of a former Enron executive.
Under normal circumstances, the Government’s cases in both the Nigerian Barge case and the Lay case appear to be weak. However, anything related to Enron is atypical. Given the public bias against Enron, the Government has a decent shot at convictions in even their weak Enron-related cases.