Check out this interesting story of how a young woman’s bus ride to Houston in the 1960’s led to a better life. A redeeming quality of Houston is that it attracts folks who are looking to improve their lot in life. I hope that quality never changes.
The nature of the problems that confront Texans and law enforcement officers who live near the Texas-Mexico border have been a frequent topic on this blog (see here, here, and here). Those problems are exacerbated by the archaic nature of U.S. drug laws (see here and here).
This must-read Scott Henson post does an excellent job of defining the parameters of the increasingly serious problems on the Texas-Mexico border.
No Country for Old Men may be fiction, but the story it tells is very real.
It’s been comforting that John Edwards’ demagoguery has not generated the type of buzz and political support that would make him a top contender for the Democratic Party’s presidential nomination. However, this Robert Novak/Rasmussen blurb ended my sense of comfort:
Illinois Democrats close to Sen. Barack Obama are quietly passing the word that John Edwards will be named attorney general in an Obama administration.
Installation at the Justice Department of multimillionaire trial lawyer Edwards would please not only the union leaders supporting him for president but organized labor in general. The unions relish the prospect of an unequivocal labor partisan as the nation’s top legal officer.
What would an anti-business demagogue be like as attorney general? Here’s a preview (another one here). That’s not the way to encourage risk-taking for job and wealth creation.
Cato Institute’s Alan Reynolds passes along some interesting observations regarding his review of subprime mortgages (see previous posts here). Among them are the following:
Most current foreclosures are on prime mortgages, not subprime.
Half of subprime mortgages are fixed, not ARMs.
Most recent subprime loans were for refinancing, not buying. As appraised values on houses increased, many homeowners just borrowed on the phantom equity and spent it.
About 96% of all mortgages are paid on time. Of the remaining 4%, most are late, but not in default.
Much of the misinformation about mortgages in the mainstream media has come from the Center for Responsible Lending. That’s the outfit that received large financial backing from John Paulson, who just made $3-4 billion by shorting mortgage-backed securities during the recent panic in the subprime securities market.
The big Enron-related news this week was the U.S. Supreme Court’s refusal to hear the appeal of the Fifth Circuit’s decision to dismiss securities fraud claims against several of Enron’s banks (Ted Frank explains the decision).
In light of the Supreme Court’s recent Stoneridge decision, the denial of the Enron-related appeal was not surprising, although I agree with Larry Ribstein that the Supreme Court should have been clearer in defining the rule against holding third parties liable for another company’s alleged securities fraud. Oh well.
Meanwhile, continuing to fly under the mainstream media’s radar screen is the growing scandal relating to the Department of Justice’s failure to turnover potentially exculpatory evidence to the defense teams in two major Enron-related criminal prosecutions (see previous posts here and here). The DOJ has a long legacy of misconduct in the Enron-related criminal cases that is mirrored by the mainstream media’s refusal to cover it.
A motion filed recently in the Enron-related Nigerian Barge criminal case describes the DOJ’s non-disclosure of hundreds of pages of notes of FBI and DOJ interviews of Andrew Fastow, the former Enron CFO who was a key prosecution witness in the Lay-Skilling trial and a key figure in the Nigerian Barge trial.
Enron Task Force prosecutors withheld the notes of the Fastow interviews from the defense teams prior to the trials in the Lay-Skilling and Nigerian Barge cases.
If the Fastow notes turn out to reflect that prosecutors withheld exculpatory evidence or induced Fastow to change his story over time, then that would be strong grounds for reversal of Skilling’s conviction and dismissal of the remaining charges against the Merrill Lynch bankers in the Nigerian Barge case.
The recent motion underscores the impact of the DOJ’s non-disclosure of the Fastow notes in both trials:
The circumstances surrounding the debriefing of Andrew Fastow by the FBI are extraordinary and suspicious. Normally, when the FBI interviews a witness, it creates a 302 contemporaneously with each interview. Here, the government held scores of interviews with Mr. Fastow over 18 months, yet compiled only one composite 302 after apparently destroying any individual 302s or prior drafts of the composite 302 that were created. This does not comport with FBI policy and is highly unusual. . . . Skilling’s Opposition [to the United Statesà Motion for Reconsideration by a Three-Judge Panel of Order Requiring it to Produce FBI Raw Notes] sheds light on this troubling and highly unusual practice:
One of Skilling’s claims on appeal is that the government impermissibly thwarted his ability to cross-examine Fastow. It did so by violating FBI policy and Brady, Giglio, and their progeny, inter alia, in (1) failing to prepare an FBI form 302 memoranda for each interview it conducted with Fastow; (b) scripting a 200-plus page composite Form 302 that masked inconsistencies, contradictions, and the evolution of Fastow’s story; (c) destroying all drafts of the composite 302s; and (d) refusing to provide Skilling with copies of the underlying raw notes from its more than 1,000 hours of interviews with Fastow.
Moreover, defense counsel in Barge I were never informed by the government that the FBI, contrary to its customary policy, had prepared only one composite 302, rather than a separate 302 for each Fastow interview. This troubling practice of compiling a single 302 to encompass thousands of hours of interviews with Fastow has effectively denied the defendants the benefit of gauging the evolution of Fastow’s story over time, and the shaping by the government of his story. It is not surprising that given these unusual circumstances, and the critical nature of Fastow’s involvement in Enron prosecutions, the Fifth Circuit took the unusual step of ordering the release of the Binders even before final briefing or oral argument in the Skilling appeal.
The motion goes on to describe the DOJ’s continued resistance to turning over the Fastow notes, even in the face of the Fifth Circuit order to do so in the Skilling appeal and the DOJ’s agreement to do so in open court in the Nigerian Barge case.
So, why is the mainstream media ignoring this scandal? Enron fatigue? Or does it not fit neatly into the media and prosecution-fueled myth that Enron was merely a financial house of cards that its managers knew would ultimately fail? Truth and justice doesn’t depend on adherence with such a myth, now does it?
This earlier post on my internist’s decision to adopt a concierge health care model for his practice noted that the economic crisis faced by most primary care physicians was one of the primary reasons for the change in his practice. In this recent post, Kevin Pho passes along the story of yet another internist hanging up the stethoscope as a result of not being able to make ends meet within the frazzled U.S. health care finance system:
“I am an Internist for over 20 years, and I recently closed my primary care practice as I cannot make a living at it. I made $23K in the last 11 months. And, my departure from practice is only the beginning of a tsunami of closures of primary care practices . . .
Primary care is unraveling around us. Indeed, all of the articles about the inordinate strain & crowding of emergency departments across the U.S., overlook the obvious – the impending failure of primary care is going to completely overwhelm emergency rooms. There is no way to prepare for this other than to save primary care.
The whole house of cards has begun to collapse, and all the articles and discussions fail to put it in terms with sufficient emphasis. All of the ‘universal’ systems that actually work are built on very strong and well-funded foundations of primary care. Everything else in health care is built upon that foundation, and that is precisely what is failing across the country. Why are emergency rooms overcrowded? Why are the wait times increasing even for the seriously ill? Because primary care is failing!
Just remember, I told you so.”
And here is another primary care physician’s analysis of why he turned to the concierge model.
The chronically-troubled airline industry is a common topic on this blog, as is the generally abysmal state of air travel. For good measure, this post by a former air traffic controller explains how air travel isn’t particularly safe, either.
Just what I needed to know.
Anne Linehan, Kevin Whited and Cory Crow note this week’s “are you kidding me?” moment from City Hall — two Nancy Sarnoff/Chronicle articles reporting on the trial balloon that Mayor White floated about building a second large convention hotel in downtown Houston next to the George R. Brown Convention Center and the existing 1,200 room, city-owned Hilton Americas Hotel.
Another large downtown convention center hotel is surprising to anyone who has been following the Harris County government’s fits and starts in regard to the proposed Astrodome hotel redevelopment project. However, Mayor White recently engineered the hiring of a new leader (Greg Ortale) for the local convention bureau and it looks as if the prospect of elevating Houston to the small tier of U.S. cities with adequate facilities to handle the largest conventions was part of the pitch in that hire.
Does building another big downtown hotel make sense? In and of itself, the answer is clearly no. Private equity interests have no interest in risking their money on such a project, just as they have no interest in doing the same in regard to the Astrodome hotel redevelopment. Thus, the deal only begins to make sense because of the prospect of public financing, which is how the City financed the first downtown convention center hotel.
Despite the lack of any meaningful analysis in the Sarnoff/Chronicle articles, the first hotel has been anything but an unqualified success. The Mayor suggests that the City spent $300 million on it (that seems way low to me) and that its presently worth “at least $350 million” (yeah, but who’s buying?). There are a bunch of less risky investments that the City could have made with that $300 million that would have generated more than the speculative $50 million equity that Mayor White thinks the City has in the Hilton Americas.
But the larger question is whether the City ought to be in the business of building convention center hotels in the first place? As Cory points out, the rationale for the investment is that, with the larger number of convention center hotel rooms, Houston could compete with the small number of cities (Las Vegas, Orlando and San Antonio) for the really big conventions that need the concentrated mass of hotel rooms that only those cities offer. Although transit is an issue in getting from the downtown convention area to Houston’s cultural areas and attractions, I can see how Houston would be a viable alternative to those other cities. For example, Houston’s restaurants, theater district and museum district are better and more diverse than any of the other three alternatives. And Vegas is not every large convention’s cup of tea.
But given the alternatives, is another large investment in a second convention center hotel really a prudent allocation of the City of Houston’s financial resources? Here is where I have my doubts. As I’ve noted many times in regard to Houston’s light rail boondoggle, allocating $300-$500 million on another downtown convention center hotel has real consequences, such as leaving inadequate resources to make improvements to Houston’s infrastructure (flood control and fixing of traffic hotspots, to name just two) that would dramatically decrease the risk of death and property damage. Stated simply, does it make sense for the City to be investing that kind of money in a downtown convention hotel when convention attendees won’t be able to get to it from Hobby Airport? The main drag to the Gulf Freeway and downtown from Hobby Airport — Broadway Street — is already virtually impassable during even moderate rainstorms.
Maybe taking a flyer on a second downtown convention center hotel would make more sense but for the billions blown on the light rail system. But the size of that boondoggle leaves a very small margin for error in regard to allocation of the City’s remaining resources. At this point, a large investment in a second convention center hotel appears to fall well outside that small margin.
By the way, speaking of the Astrodome hotel project, it appears now that even Harris County officials believe that the deal is dead. However, the proposed alternative is to turn it into a horse barn?:
Meanwhile, there could be three or four groups prepared to present plans to transform the Dome.
The Houston Livestock Show and Rodeo may be one contender, said Leroy Shafer, the rodeo’s chief operating officer. The rodeo and partners are looking into whether the Dome could serve as a replacement facility for aging Reliant Arena.
Astroturf and tiered stadium seats would give way to more than 1,000 horse stalls and an arena with a capacity of at least 6,000. The vast open area where former Astros stars Jimmy Wynn and Jeff Bagwell hit towering drives would be turned into a three-story exhibition and stalling space, Shafer said.
Bowie Bonds hit baseball. Or is this a case of a player having an IPO on himself? (H/T Alex Tabarrok)!
You have to give markets credit — they have created a way for prospects to buy a form of insurance on their careers.
And, as usual, Larry Ribstein asks the essential legal question.
As noted earlier here, it’s not easy being a fan of Houston sports teams. But as difficult as that may be, it’s nothing compared to the angst that long-suffering New York Jets fans are enduring as a result of having their two most-hated rivals in Super Bowl XLII:
Perhaps the only thing worse for Jets fans than watching their team finish 4-12 this season, is knowing the historic Feb. 3 matchup pits their big-brother co-tenants, the Giants, against Bill Belichick and the ever-villainous Patriots.
“I can’t wait for this to be over,” said [longtime Jets fan Ira] Lieberfarb, a 53-year-old auto-parts wholesaler and a regular caller on local sports-talk radio who attends virtually every Jets game, home and away. “Whichever team wins it, I’m going to suffer. I grew up in Sheepshead Bay getting abused by Giants fans and mostly everyone at my party will be Giants fans. I can’t escape that. But I don’t know a single Jets fan that could root for the Patriots and Belichick.”
Which reminds me of the funny video below that chronicles the reaction of Jets fans to their team’s horrible draft picks from over the years: