Daily Archives: August 28, 2006

The Coen Brothers do Marfa

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Marfa.gifThis NY Times story reports on the culture shock that film directors Joel and Ethan Coen (“Raising Arizona,” ìFargo,î ìThe Big Lebowskiî and ìO Brother, Where Art Thou?î) and their Hollywood cast are experiencing in the far west Texas tourist enclave of Marfa while filming the Coen Brothers’ adaptation of Cormac McCarthyís 2005 novel No Country for Old Men. The Coen Brothers movie is one of two films currently being shot in Marfa, which is not exactly Palm Springs, if you know what I mean. The moviemakers are also discovering that folks in West Texas are not inclined to change their ways to accomodate a couple of film crews:

[I]n some ways Marfaís shrugging attitude baffled the film crews. There are only a handful of restaurants in town, and if youíre hungry past 9 p.m., you have to settle for the local gas stationsí dizzying array of fried food. Both crews asked local restaurants to either open earlier or stay open later, and most declined. ìThatís frustrating,î [one of the producers] acknowledged. ìWeíve been working six-day weeks, and on our one day off ó Sunday ó nothingís open. Everybodyís been very welcoming, but theyíre like, ëWeíre not going to change our ways.í î
Even though both crews brought in hundreds of people, many local business owners found their stay to be prohibitive to their businesses, since Marfaís economy is based on tourism. ìThe movies filled up all the hotels, and they work late and are fed through their caterer,î said Ms. [Maiya] Keck, [a Marfa] restaurateur. ìThis is the first week the hotels havenít been full of movie people, and weíve been so busy. Iím so glad itís back to normal. Now we can go to our coffee shop and not have to wait 45 minutes to get our cappuccino.î

A disturbing growth industry

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swat teams.jpgThis Newspaper.com story summarizes several articles and resources that examine a troubling growth industry among Texas municipalities:

Red light cameras and cash seizures are taking money from motorists and funding uncontrolled spending sprees in small Texas cities. . . . In the South Texas city of San Juan, population 26,200, police have begun seizing ever greater amounts by taking both cash and vehicles from motorists. In 2005, officers collected $4400. This year, however, the force has collected $67,000. Pharr, with a population of 47,000, collected $422,000 last year. McAllen, a bigger city with 106,000 residents, collected $484,000. A federal appeals court ruling this week concluded that driving with a large amount of cash is sufficient justification for police to confiscate it, even if there is no evidence that a crime has been committed.
Each South Texas city has said its priority is to use the money to fund or expand a SWAT team, . . .

As Cato Institute policy analyst Radley Balko shows in this Cato study, small municipalities frequently misuse SWAT squads for routine police work, which has led to an increasing number of botched raids resulting in injury or even death to innocent citizens. And local politicians of small Texas cities are encouraging liberal confiscation policies by police as a convenient means to funding this type of questionable activity?

Muddling the understanding of insider trading

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insider trading.jpgThe NY Times business columnist Gretchen Morgenson — who regularly writes with a curious anti-business agenda — weighs in again in the Sunday Times with this frontpage article about trading in anticipation of merger announcements that begins with this proclamation:

“The boom in corporate mergers is creating concern that illicit trading ahead of deal announcements is becoming a systemic problem.”

Morgenson then goes on to report on a recent study that confirms the particularly unsurprising news that trading frequently increases in the stock of companies immediately before public announcements concerning deals involving the companies.
Morgenson’s article is so disingenuous I struggled to know where to start. She doesn’t explain cogently why insider trading is illegal — just that honest investors are victims of the practice — but even her argument in that regard makes little sense. She contends that sellers of stock are injured by insider trading because they could have held their stock until after the merger announcement and received more value, but that argument assumes that the seller would only sell at the higher price generated by the insider trading and not at the lower price that existed before the insider sales. This is strained, to say the least, as sellers generally sell at the market price (whatever it is at the time of the sale) and take the risk that they are selling the bird in the hand instead of the potentially more valuable one in the bush if they were to wait and sell later.
With such basic flaws in Morgenson’s analysis of insider trading, I was shuddering at the thought of how long it would take me to critique Morgenson entire piece. Thus, I was heartened to discover that Larry Ribstein had already done so, in which he concludes with the following observation:

In sum, this page 1 story on one of America’s leading papers is a particularly egregious example of shoddy and slanted reporting by, perhaps, America’s leading practitioner of shoddy and slanted reporting. No doubt Morgenson’s influence will lead to misguided regulatory and legislative activity, which will impose additional costs on American business. Shame on Morgenson, and even more importantly, shame on her editors for failing to see the dangers of mixing news and commentary, for propogating these phony scandals to sell newspapers.