Couldn’t you arrange for some false testimony or something?

EBS2.jpgAfter last week’s fireworks in the ongoing Enron Broadband criminal trial noted here and here, the Chronicle’s Mary Flood reports that the attorneys in the trial have reverted to the dubious tactic of chloroforming the jury with mind-numbing techno-jargon:

On the stand Tuesday was jargon-dependent computer specialist John Bloomer. It was his third day of testimony, and for most of morning he was questioned by Enron Task Force prosecutor Ben Campbell.
Campbell took Bloomer through statement after statement made at a critical January 2000 Enron conference for stock analysts to ask about the truth of what was said.
It was no more exciting in the afternoon when defense attorney Per Ramfjord took over. Ramfjord is so well-versed in technology that the courtroom can become Silicon Valley when he gets going with a geeky witness. Bloomer sometimes answered enthusiastically with something like: “We were late. Whether it be MPLS over ATM, whether it be precedent bit over IP.” Don’t ask.

So the jurors and alternates, if they’ve stayed fully awake, know what a hop and a POP are in the tech world, may know the difference between quality of service and quality of stream delivery, and likely know what media cast and media transport are.

Meanwhile, Ms. Flood also reports that some of Mr. Bloomer’s testimony yesterday on behalf of the prosecution in the Broadband trial was helpful to the defense of former Enron CEO, Jeff Skilling, whose criminal trial with former Enron chairman Ken Lay and former Enron chief accountant Richard Causey on securities fraud and related charges is scheduled for January 2006.

Stros 2005 Review: Checking in on the Stros

bidg3.jpgOkay, so it appears that I was wrong in my prediction about the Stros this season.
The Stros (12-19) are already 8 games behind the Cards in the National League Central race and struggling to stay out of last place in the division. The club is 2-14 on the road so far this season, and have already endured two six game losing streaks. Last season’s playoff run seems like a distant memory.
Placing all of this in perspective is the Baseball Prospectus’ Jonah Keri:

Here is the Astros Lineup for this past Sunday’s game against the Braves:
CF Willy Taveras
2B Eric Bruntlett
3B Morgan Ensberg
LF Mike Lamb
1B Jose Vizcaino
RF Jason Lane
SS Adam Everett
C Raul Chavez
P Ezequiel Astacio
With no other information, what would you deduce from that lineup?

A) The over/under for runs scored by this lineup is 1.
B) The Astros have been demoted to the Texas League.
C) They’re about to get whupped by a National League opponent.
D) All of the above.

If you picked D), you’re correct. The lineup the Astros ran out for Sunday’s game against the Atlanta Braves isn’t much better than a Double-A squad, and a top-tier NL team like the Braves will likely chop them to bits.

Final score: Braves 16 Stros 0. It’s going to be a long season.
By the way, after Monday night’s game in which the Rocket won his 330th game, here’s how Clemens’ batting statistics compare to backup infielder Eric Bruntlett‘s so far this season:

Clemens: 5 hits in 15 plate appearances, .357 Ave./.400 OBP/.357 SLG
Bruntlett: 0 hits in 15 plate appearances, .000/.200/.000

After 3.91 ERA/10 RSAA (RSAA explained here) in the 2003 season and 2.98 ERA/32 RSAA in the 2004 season, Clemens is off to a 1.10 ERA/18 RSAA start in his first 7 starts this season. He has a 3.16 career ERA, compared to his league average of 4.38, and 663 RSAA in 647 games. Clemens is now just 5 RSAA behind Lefty Grove‘s modern major league career RSAA record.
Clemens is truly a once-in-a-lifetime pitcher.
In other Stros news, after he missed the last six games with an arthritic right shoulder, the Stros finally placed Bags on the disabled list today. My sense is that this move is a necessary first step toward the Stros working out a settlement with the disability insurer on Bags’ contract. Such a settlement would assist the Stros financially in paying off the balance of the $39 million that the club owes Bags so that he can to retire gracefully. Inasmuch as Bags should be a shoo-in Hall of Famer unless his stats are diluted by playing while hurt at the end of his career, here’s hoping that the Stros can make those arrangements quickly.
The Stros called up OF/1B Todd Self from AAA Round Rock to replace Bags on the 25 man roster. The 26 year old Self, who is a rangy left-handed hitter, has been tearing up the Pacific Coast League so far this season (.391/.491/.565). Here’s what Baseball Prospectus 2005 says about him:

Self is just a marginal prospect – not hitting in the 2004 Arizona Fall League didn’t help him – but it’s worth noting that the Astros are going to pay Jeff Bagwell a billion jillion dollars for not much more performance than they’d get by handing Self the first base job. His plate discipline is real and he could be good for 40 doubles and 15 homers, maybe a bit more, through his peak. A Mark Grace/Wally Joyner hitter with average defense will let you spend money elsewhere. You could even platoon Self with Royce Huffman, a comparable player who bats right-handed and has been stuck at AAA for two years.

Did you remember the Doctor’s note?

Doctor's Note1.gifMichael Alcott was charged with bank fraud in September 2004 relating to a $2.5 million line of credit for his now defunct employment placement firm. The indictment alleges that he submitted a fraudulent audit opinion to the bank on the letterhead of a local auditing firm with the name of a fake partner.
Nevertheless, Mr. Alcott was free on bail pending trial. A couple of weeks ago, Mr. Alcott submitted a letter to the court in his case from a doctor at Masschusetts General Hospital. The doctor’s note stated that Mr. Alcott was being treated at the hospital for terminal cancer.
Yesterday, Mr. Alcott was arrested pending trial because the letter is a fake and he is not suffering from cancer.
H’mm, I don’t think Mr. Alcott should testify at his upcoming trial on that fake audit opinion. ;^)
Hat tip to the White Collar Prof Blog for the link.

Low expectations

Delta new logo.jpgThe headline to this USA Today article about Delta Airlines‘ quarterly earnings report speaks volumes regarding what is considered positive news these days for legacy airlines.

The Allies’ tainted triumph

WW2 plaque.jpgV-E Day – the day on which the Allies remember their victory over Nazi Germany during World War II – fell on Mother’s Day this year, so the 60th anniversary celebrations seemed somewhat muted. In that regard, British historian Niall Ferguson reminds us in this LA Times op-ed that, despite the courage of the Allied forces in ridding the world of the monstrous Axis powers, we should not forget the moral compromises that were part of the price of winning the war:

Most historians today would give the lion’s share of the credit for the Allied victory to the Soviet Union. It was, after all, the Soviets who suffered the largest number of wartime casualties (about 25 million). That reflected in large measure the appalling barbarity with which the Germans waged the war on the Eastern Front. Yet it also reflected the indifference of Stalin’s totalitarian regime to the lives and rights of its own citizens. It might have been expected that in the crisis of war, Stalin would suspend the terror that had characterized his regime in the 1930s. On the contrary. The lowest estimates for the period (1942-1945) indicate that 7 million Soviet citizens lost their lives via political executions, deportations or death in the gulag system. All of this reminds us that to defeat an enemy they routinely denounced as barbaric, the Western powers made common cause with an ally that was morally little better.

At Potsdam and in the subsequent Nuremberg trials the victors also struck splendidly sanctimonious poses. The leaders of Germany and Japan had “set in motion evils which [left] no home in the world untouched.” Yet the Soviet Union had been on Hitler’s side in 1939, something the Baltic states invaded by Stalin have not forgotten.
As for the rest of Central and Eastern Europe, it suffered a similar fate in 1945. Britain had gone to war with Germany ostensibly to prevent Poland from being overrun by Germany, as Czechoslovakia had been. Yet within a few years of the war’s end, the whole of Eastern and Central Europe up to the River Elbe was firmly under Stalin’s iron fist.

While noting that the Allied bombing campaigns restricted German’s ability to mobilize its war economy, diverted key German resources from the Eastern Front and ended the war with Japan, Mr. Ferguson notes that the campaigns also raise serious moral questions:

[T]he destruction caused by the British and American air forces in their bombing campaigns against civilian populations in Germany and Japan is hardly something we can look back on with pride. Hamburg was destroyed in a firestorm code-named Operation Gomorrah; about 45,000 people died. Similar numbers perished when Dresden was bombed. Tokyo was literally incinerated in a raid that killed between 83,000 and 100,000 people, maybe more.
Such bombing was precisely what the U.S. State Department had denounced as “unwarranted and contrary to principles of law and humanity” in 1937, when the Japanese bombed Chinese cities. And it was precisely what Neville Chamberlain, Winston Churchill’s predecessor as prime minister, had dismissed as “mere terrorism,” to which “His Majesty’s government [would] never resort.”

After the war, the charges against the Japanese leaders who stood trial included “the wholesale destruction of human lives, not alone on the field of battle, but in the homes, hospitals, and orphanages, in factories and fields.” Yet this had been the very essence of the Allied policy of strategic bombing.

Mr. Ferguson is no half-baked historian who fails to recognize the moral superiority of the Allied cause during WWII, so he concludes in the following measured manner:

None of this is intended to detract from the valor of the millions of Allied service personnel who lost or risked their lives in World War II. Nor is it to deny that the war had to be fought to rid the world of two of the most evil empires in all history. There is a moral difference between Auschwitz and Hiroshima. The Axis cities would never have been bombed if the Axis powers had not launched their war of aggression. And the Axis powers would have killed even more innocent people had it not been for the determination of the Allied powers to prevail.
Nevertheless, we would do well, this V-E Day, to face some harsh realities about the nature of the Allied victory, if only to remind ourselves about the nature of all wars. To win World War II, we joined forces with a despot who was every bit as brutal a tyrant as Hitler; we adopted tactics that we ourselves had said were depraved; and we left too many of those we set out to liberate firmly in the grip of totalitarianism.

Hat tip to Professor Bainbridge for the link to Mr. Ferguson’s piece.
Also, Deutsche Welle has this outstanding collection of photo essays that show then-and-now pictures of World War II.

Chevron ditches the “Texaco” name

chevrontexaco.jpg.jpgChevronTexaco Corp. announced today that it is dropping the venerable “Texaco” part of its corporate name and shortening its name to Chevron Corp., which was the name of the company before before the company merged with Texaco three and a half years ago. Don’t worry, though. That bright Texaco star will still grace the local gas station as Chevron plans on continuing to use the Texaco brand to market gasoline.
Chevron has been in the news recently with its proposed acquisition of Unocal Corp for about $17 billion, which is subject to shareholder and regulatory approval. Chevron’s stock will continue to trade on the New York Stock Exchange under the “CVX” ticker symbol that was adopted after the Texaco takeover.

The Lord of Regulation’s latest abuse of power

SpitzerGov5.jpgJay Bryant writes this Tech Station Central piece in which he criticizes New York Aspiring Governor Eliot Spitzer‘s latest abuse of power — i.e., his investigation of some of the nation’s biggest banks to determine whether they had discriminated against minority groups in setting mortgage rates and fees in the sub-prime mortgage market.
The sub-prime lending industry provides the valuable service of lending money for home loans at higher interest rates to those who cannot qualify for a conventional mortgage because of insufficient income, lack of assets or credit problems. Of Mr. Spitzer’s latest foray into political image-making, Mr. Bryant warns:

[I]f Spitzer’s ominous letters are any indication, he is about to insert himself and his publicity-seeking machine into the sub-prime lending industry, and if he’s not careful, he could destroy it. [His investigation will likely] damage the industry, reduce the number of people it can profitably serve and scale back the growth rate in home-ownership.
As former Senator Sam Hayakawa famously observed, you can’t expect people to climb the ladder of success if you kick out the bottom rungs. That’s the central point about home ownership: that it provides, for people of modest means, the best opportunity they will ever have to build equity. For a great many of them, this equity will mean that before long they will be able to refinance their mortgage at a better rate, their newfound equity having served to improve their creditworthiness. They will, in other words, have moved up the ladder a few rungs. This sort of movement happens all the time.
The threat Spitzer represents is very real, but its victims are not the ones he pretends to threaten. If the bankers who got Spitzer’s letters don’t make money by sub-prime lending, you may be sure they will find another way to make it. But whether the low-income family trying to climb the ladder to prosperity through home ownership can find another way to make it — that is a much less likely proposition.

New NASA chief is shaking things up

NASA_logo.gifThis Washington Post article reports on new NASA Administrator Michael D. Griffin‘s ambitious plan to shave four years off the timetable for building a next-generation spaceship to replace the obsolescent space shuttle. Dr. Griffin’s accelerated plan is to launch the new spaceship by 2010.
As noted in this previous post, Dr. Griffin faces entrenched opposition within the federal government and from government contractors to his efforts to revitalize NASA. This is story worth following closely, for its outcome will have a dramatic impact on the future of U.S. spaceflight, NASA, and the local Houston economy.
Update: Aerospace engineer Rand Simberg comments on Mr. Griffin’s initiatives in this TCS piece.

United Airlines takes another blow

ual240.gifAs United Airlines continues to flounder in its nearly two and a half year old chapter 11 case amidst union strike threats and troubling pension obligations, an even bigger problem is emerging — that is, keeping its jetliners.
As noted in this earlier post from last November, the Bankruptcy Court in the United Airlines chapter 11 case made a clearly erroneous ruling regarding the rights of airplane lessors to repossess their planes because of UAL’s failure to make timely payments under the leases covering those planes. In this strongly-worded Judge Easterbrook opinion issued this past Friday, the Seventh Circuit Court of Appeals reversed the earlier Bankruptcy Court order barring repossessions of 14 of United’s 460 jetliners and ruled that the repossessions can proceed unless United makes the full rental payments as required under section 1110 of the Bankruptcy Code. The ruling raises the distinct possibility that lessors will repossess a number of United’s jetliners, which would be an unprecedented occurrence for a major American airline.
Over the weekend, United attempted to play down the Seventh Circuit’s ruling by disclosing that the number of planes in the dispute is now down to eight because the airline previously rejected leases on the other six. However, the ruling means that United still must negotiate terms on all of its 175 leased planes, and the ruling does not exactly provide United much leverage in those negotiations.
Meanwhile, other aspects of the United chapter 11 case are just as messy. The Bankruptcy Judge in the case is expected to rule later this week on a proposed settlement between United and the Pension Benefit Guaranty Corp., the federal pension insurer, that would allow United to turnover to the PBGC its four underfunded pension plans in the largest corporate-pension default in U.S. history. The proposed settlement is essentially a debt for equity swap between United and the PGBC in which the PBGC would receive up to $1.5 billion in notes and convertible stock in the reorganized United. Unions representing flight attendants, mechanics and other ground workers have objected to the deal, although the United pilot’s union previously approved the proposed settlement.
Also this week, a trial in the United chapter 11 case commences on whether United can establish that the labor contracts of the flight attendants, mechanics and other ground workers should be annulled so the airline can impose new terms on the workers. For its part, the flight attendants have already announced that they will implement a series of work stoppages that target specific flights or routes without warning if United goes through with its action to annul the union’s labor contract.
What a first class mess.

The Oracle’s sacrificial lamb?

General Re.gifBerkshire Hathaway used the tried-and-true tactic of a late Friday afternoon news release in an attempt to generate the least amount of notice possible for its most recent quarterly earnings report.
However, in doing so, Berkshire raised eyebrows by disclosing that a current VP at its General Reinsurance Corp unit had received a “Wells” notice from the Securities and Exchange Commission, which means that the SEC is planning on filing civil charges alleging violations of federal securities laws. The Wall Street Journal ($) disclosed later in the weekend that the General Re VP is Rick Napier, and that the SEC is considering filing a complaint against Mr. Napier for assisting American International Group Inc. in allegedly accounting for a highly-publicized reinsurance transaction improperly. Moreover, inasmuch as Wells notices are usually sent out to all potential defendants to an SEC civil action, more General Re and AIG executives who were involved in the reinsurance transaction will probably receive such a notice soon.
Berkshire also disclosed that General Re and its former CEO, Ronald Ferguson, were sued along with AIG and several AIG executives in a recent class-action civil lawsuit filed in federal court in New York City. Mr. Ferguson was the CEO of General Re when Berkshire purchased the company in 1998. After several years of poor results, Mr. Ferguson stepped down as chief executive in 2001 and has been a consultant to Berkshire’s reinsurance businesses ever since. AIG’s former CEO Maurice “Hank” Greenberg allegedly contacted Mr. Ferguson in 2000 to arrange the reinsurance transaction that is now the subject of the multiple investigations.