Loyalty without truth
is a trail to tyranny.
|Friday, 6 July 2012 at 8h 39m 1s|
Forgeting 300 years of knowledge
“Though the principles of the banking trade may appear somewhat abstruse, the practice is capable of
being reduced to strict rules. To depart upon any occasion from those rules, in consequence of some
flattering speculation of extraordinary gain, is almost always extremely dangerous and frequently
fatal to the banking company which attempts it.”
-Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, PART III.
Of the Expense of public Works and public Institutions, ARTICLE I.—Of the public Works and
Institutions for facilitating the Commerce of the Society.
|Tuesday, 3 April 2012 at 13h 23m 25s|
Next years MLB changes
In case you don't know, next year Major League Baseball will do two major changes.
In order to have an equal number of teams in each league -- 15 AL teams and 15 NL teams (instead of
14 and 16) -- Houston will move to the NL West. Since each league now has an odd number of teams,
there will have to be an interleague game every single week.
At first sight, this appears horrible. But the more I think about the implications, I actually
think this is a good idea.
The Houston Astros already suck, and they might as well go to the only 4 team division. Now each
division has only 5 teams. And when you think about it, the playing inter-league games every week
doesn't necessarily mean every single team. If it is done well, one team from the AL can play two
other teams from the NL on one week; followed by one team from the NL playing two teams from the AL
another week. And the two teams can be set up so that they play two series against the opposing
league back to back and then wait their turn 14 teams later. It's not really any different then
what is already happening.
However there is one glitch that I see. Since there are twenty-six weeks and 15 teams each league.
26 divided by 15 is less than 2 which basically means some teams will play inter-league less. This
will probably be ameliorated by the fact that a few teams already have natural competitive regions
-- Yanks vs. Mets, Angels vs. Dodgers, Marlins vs. Rays, A's vs. Giants, Reds vs. Indians,
Nationals vs. Orioles, Cardinals vs. Royals. These natural regional competitors could play
twice and the rest of the teams can be rearranged appropriately.
Here's how I would do it. First determine how many teams will be playing. You need 3 teams a week,
or 3 from each league every two weeks, or 6 per two weeks. Half of 26 weeks is 13, and 6 times 13
is 78. So you need 78 teams, 39 per league.
There are 14 (7 per league) natural regional competitors(NRC) and 16 (8 per league) other teams(OTHER).
If the 14 NRC teams play each other 2 times plus 1 other team, that is 42 teams. 72 minus 42 equals
30. So you got 30 more teams necessary from the other 16 teams.
Is it fair to expect the 14 NRC teams to always play the opposite league 3 times? Probably not.
Some teams will play the other league twice. Other teams will play three times.
The 14 NRC teams will always play each other twice, so that leaves 78 minus 28, or 50 teams left.
The other 16 teams play twice, so that leaves 50 minus 32, or 18 teams. These 18 can be determined
randomly every year.
Furthermore, the inter-league games also can only be 3 game series. Which means only 6 games a
week. So that means a Maximum of 9 games and a minimum of 6 games per year.
During the regular season, 162 games are played over 26 weeks. 78 teams times 3 games is 234 team
games. In the regular season you have 162 times 30 team games. This is 4860 team games. Subtract
the 234 inter-league games and you have 4626 that you also need to play in 26 weeks.
Seven times 25 is 175. Six times 25 is 150. Three games plus 24 times six is 147 games.
Teams that play only two opposing league teams will have 162 minus 6, or 156 games left for the
remaining 25 weeks. Teams that play three, will have 162 minus 9, or 151 games left for the
remaining 24.5 weeks left.
The distribution of seven or six game weeks will be up to the league, but you also have to take into
a account the 3/4 day All-Star game stint here. Probably each team will have 7 game weeks about
half of the year.
Anyway, the point is that at a maximum, 9 inter-league games per team is only about 5.5% of the
games. Ten would only be 6.5% of the games. Even assuming a team would play 12 inter-league games,
the percentage is 7.4% of the games.
It isn't going to ruin the game. But it will enhance the finances and in my opinion make the game
|Monday, 2 April 2012 at 19h 23m 15s|
Preseason predictions 2012
Okay. It's that time of the year when I make my World Series prediction. Despite the fact that
I've been correct for 1/2 of the WS teams only twice out of the last decade that I can remember. A
broken clock is right twice in 24 hours, right?
The Angels look good this year but I suspect their pitching will be put to the test. Oh they will
score runs in hordes but that pitching looks not only thin, but an injury away from being a reason
why they don't win in the playoffs. Detroit has the same problem. So I think it will be the
Yankees. Andy Pettitte might not make the bill, but they don't really need to rely on him. They
still got Nova in the bank and Pineda in the wings. Plus, Betances and Phelps looked real good this
spring, and both have had 3 or more years of minor league experience, so either one could be that
mid-to-late season horse to pull up into the rotation. The Yankees have a long recent history of
such a thing. I suspect it will be Phelps.
But hmmm boy do Toronto, Tampa Bay, and Detroit also look scrumptious. And if you want cinderalla,
Seattle is much better stocked this year. They got Noesi in the trade with Pineda, and Noesi looks
better long term. Long term smart if you ask me.
And if your wondering why I haven't mentioned Texas until now ... I just think they will be injury
hobbled this year. Just a gut feeling. I could be wrong. It would be nice to see a three-peat
other then the Yankees and Athletics.
The National League is a real tough call. The Brewers are still strong, and if Matt Gamel and
Carlos Gomez turn a corner with a strong year from Corey Hart, who knows? Their pitching is still
deep. The same can be said of the Phillies as well. The Phils also have Domonic Brown, Mayberry
Jr. along with Howard coming back sometime this year to supplement the Rollins-Pence core of the
offense. I don't think Utley be will be anything this year. I hope he comes back, but, well,
sometimes the glory days are long gone and in the past. Just ask Erik Chavez and Andruw Jones.
Sheesh, and the Diamondbacks and Cardinals still look good.
It's gonna be close. But in the end, I think the Giants have the best chance. Sabean doesn't get
enough credit for the way he has really build up the talent in the minor league system over the last
10 years. There are a lot of youngsters ready to contribute at the MLB level. They looked good
this spring, and even they become mere trade bait, that's a good thing. Shortstop Crawford is really
looking to turn a corner with his bat, and Brandon Belt is looking more like a stud hitter every
day, so that offense is going to be better. Defense would definitely suffer with Aubrey in Right
field, but if every other position is tight, the fit could be good. Their pitching is still better.
I say Vogelsong is just as good as last year. He learned how to pitch in Japan and gained
confidence. Four pitchers who regularly pitch 6 or 7 innings with sub 4 eras are gonna keep the
Giants competitive and keep the bullpen fresh all season long. And once Cain, Lincecum, and
Bumgarner get to the post-season … watch out.
But something tells me that this year's national league team will be some other team. Maybe the
Rockies ride their young arms, Gonzalez and Cuddyer have repeat successes and Fowler achieves some
of his potential. They have a good bullpen and that young catcher is also really good. Remember
the name Wilin Rosario. He will rank with Carlos Santana and Joe Mauer very soon, probably this year.
Anyway, this years pick for the World Series is … Yankees versus Giants. A rematch of the great
Same call as last year. I'm doubling down.
|Monday, 2 April 2012 at 17h 3m 47s|
Is it the preamble of the constitution?
"Life. Liberty. And the pursuit of …
all those who threaten it.
The United States Navy.
A Global force for Good."
-- contemporary TV Commercial for the US Navy.
Hmmm. Good is one more letter than God.
Is this a misspelling?
The United States Navy has replaced the British Navy, who are themselves still not insignificant by
the way. Just how many of these warships are out there patrolling the seas against the …. enemies?
How many enemies are there, I wonder?
Here's a link to
blog about various opinions on the world's largest navies. It is interesting. Turns out the
Indian Navy is a "rising star."
But fret not, another commenter (who gives India an "honorable mention") says "India looks alot
more powerful on paper than in person. The USCG could wip them."
Apparently Italy is packed with naval might. Who'da thunk it?
It's nice to know there's all these ships out there making sure no enemies attack our coastal towns
and rob us when we are on those huge vacation tourist cruise ships.
|Wednesday, 28 March 2012 at 17h 56m 30s|
Q. O. T. D.
They tie our hands and feet, put us in a canvas sack, toss us over the bridge while they drive by
sipping a latte, and then wonder why we drown.
Sent in an email to a fellow staff member about a specific ridiculous issue involving the absolute
necessity to change the name of a course so that it could get State Board Approval. If we didn't
change the name, the board doesn't approve the course.
I. Am. Dead. Serious.
Did I hear millions of people scream?
|Wednesday, 14 March 2012 at 18h 42m 34s|
ex-Goldman Sachs employee tells all
As I've said many times, the financial sector is short-sighted, short-term, and willing to screw
over their own clients.
Lo and behold, Greg Smith writes a letter to the NY York Times.
TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern
while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here
long enough to understand the trajectory of its culture, its people and its identity. And I can
honestly say that the environment now is as toxic and destructive as I have ever seen it.
To put the problem in the simplest terms, the interests of the client continue to be sidelined in
the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest
and most important investment banks and it is too integral to global finance to continue to act this
way. The firm has veered so far from the place I joined right out of college that I can no longer in
good conscience say that I identify with what it stands for.
It might sound surprising to a skeptical public, but culture was always a vital part of Goldman
Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing
right by our clients. The culture was the secret sauce that made this place great and allowed us to
earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not
sustain a firm for so long. It had something to do with pride and belief in the organization. I am
sad to say that I look around today and see virtually no trace of the culture that made me love
working for this firm for many years. I no longer have the pride, or the belief.
But this was not always the case. For more than a decade I recruited and mentored candidates through
our grueling interview process. I was selected as one of 10 people (out of a firm of more than
30,000) to appear on our recruiting video, which is played on every college campus we visit around
the world. In 2006 I managed the summer intern program in sales and trading in New York for the 80
college students who made the cut, out of the thousands who applied.
I knew it was time to leave when I realized I could no longer look students in the eye and tell them
what a great place this was to work.
When the history books are written about Goldman Sachs, they may reflect that the current chief
executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s
culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the
single most serious threat to its long-run survival.
Over the course of my career I have had the privilege of advising two of the largest hedge funds on
the planet, five of the largest asset managers in the United States, and three of the most prominent
sovereign wealth funds in the Middle East and Asia. My clients have a total asset base of more than
a trillion dollars. I have always taken a lot of pride in advising my clients to do what I believe
is right for them, even if it means less money for the firm. This view is becoming increasingly
unpopular at Goldman Sachs. Another sign that it was time to leave.
How did we get here? The firm changed the way it thought about leadership. Leadership used to be
about ideas, setting an example and doing the right thing. Today, if you make enough money for the
firm (and are not currently an ax murderer) you will be promoted into a position of influence.
What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is
Goldman-speak for persuading your clients to invest in the stocks or other products that we are
trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt
Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t —
to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like
selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your
job is to trade any illiquid, opaque product with a three-letter acronym.
Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I
attend derivatives sales meetings where not one single minute is spent asking questions about how we
can help clients. It’s purely about how we can make the most possible money off of them. If you were
an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or
progress was not part of the thought process at all.
It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I
have seen five different managing directors refer to their own clients as “muppets,” sometimes over
internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire
Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal
behavior, but will people push the envelope and pitch lucrative and complicated products to clients
even if they are not the simplest investments or the ones most directly aligned with the client’s
goals? Absolutely. Every day, in fact.
It astounds me how little senior management gets a basic truth: If clients don’t trust you they will
eventually stop doing business with you. It doesn’t matter how smart you are.
These days, the most common question I get from junior analysts about derivatives is, “How much
money did we make off the client?” It bothers me every time I hear it, because it is a clear
reflection of what they are observing from their leaders about the way they should behave. Now
project 10 years into the future: You don’t have to be a rocket scientist to figure out that the
junior analyst sitting quietly in the corner of the room hearing about “muppets,” “ripping eyeballs
out” and “getting paid” doesn’t exactly turn into a model citizen.
When I was a first-year analyst I didn’t know where the bathroom was, or how to tie my shoelaces. I
was taught to be concerned with learning the ropes, finding out what a derivative was, understanding
finance, getting to know our clients and what motivated them, learning how they defined success and
what we could do to help them get there.
My proudest moments in life — getting a full scholarship to go from South Africa to Stanford
University, being selected as a Rhodes Scholar national finalist, winning a bronze medal for table
tennis at the Maccabiah Games in Israel, known as the Jewish Olympics — have all come through hard
work, with no shortcuts. Goldman Sachs today has become too much about shortcuts and not enough
about achievement. It just doesn’t feel right to me anymore.
I hope this can be a wake-up call to the board of directors. Make the client the focal point of your
business again. Without clients you will not make money. In fact, you will not exist. Weed out the
morally bankrupt people, no matter how much money they make for the firm. And get the culture right
again, so people want to work here for the right reasons. People who care only about making money
will not sustain this firm — or the trust of its clients — for very much longer.
Greg Smith is resigning today as a Goldman Sachs executive director and head of the firm’s United
States equity derivatives business in Europe, the Middle East and Africa.
[SOURCE: Greg Smith | NY Times |14 March
|Sunday, 1 January 2012 at 7h 49m 41s|
The US World Bases
The United States has 700 to 1000 bases around the entire world, on every continent, in every corner
of the world.Click the image for very large graphic
|Friday, 16 December 2011 at 15h 41m 7s|
Interest rates since 1831
hat-tip to barry ritholtz at ritholtz.com.
The chart is from Jim Bianco.
|Thursday, 15 December 2011 at 18h 29m 33s|
Reminder: the rich don't create jobs, the economic environment does
Click here for
another in a growing list of reasons about why the notion that "the rich and the entrepreneurs"
are job creators is bunk.
Okay, I'll supplement this topic.
The general availability of purchasing power makes anything beyond the subsistence needs of a
society even possible. Once people are clothed, sheltered, and fed, the surplus income purchases
the products and services of what it is that entrepreneurs provide. A middle class is necessary for
a vibrant capitalist society to functionally exist, or else it will devolve into plutocracy or
dictatorship. The last 4,000 years of human history provides many examples of societies with two
classes, or three, if you include the slaves amongst the rich and the poor.
When the middle class drifts towards impoverishment, or diminishing future returns (an economic term
used by the neo-conservatives) this will have an aggregate effect on the overall demand return
entrepreneurial potential engine. In any economic environment, there is always potential for
reward. Either by connivance or cunning, or sheer luck, there will always be those who can rise
above their original social status. However, these individual efforts do not affect the overall
of the members of the population. Hundreds of success stories do not dispel the reality that 90% of
the population earns less than $50,000 a year, and 98% earns less than $100,000.
Now consider what happens when demand evaporates underneath the malignant priorities of the profit
extraction system, and nothing changes in 4 years, 8 years, 10 years.
I'll leave it at that. Read the link above. Despite the misplaced sarcasm, there is some insight.
Blodget | businessinsider.com | 15 December 2011]
|Thursday, 15 December 2011 at 18h 0m 56s|
My rebuttal to a recent blog commentariati
I love the blithe attempt to massage Libertarianism as the new truth, now that the
Neo-conservative economic belief system has completely fallen apart. The idea that human beings can
exist as hermetically sealed economic units is ridiculous. But I've made that point many times
before, and any additional fodder I'll save for another day.
I thought it might be entertaining to share this "dialogue" (if that's what you call the comment
board of the internet).
Here is what the guy said
I’ve gotten interested in Austrian School economics. I’m reading the Ludwig Von Mises book entitled
Liberalism. He has a quite different account of what’s best for all — he claims free enterprise is
good because it allows for the maximum of exchange which allows a kind of Darwinian fittest to
emerge in terms of products and distribution. One of the problems I have with Marxism is that it
puts kindness first, when of course all of nature is about selfishness. Marxism is unnatural and
usually kills nature (though not usually with kindness). It’s interesting to hear about this author
(I generally like anarchists). There is an anarchistic side in libertarianism of the kind that Ron
Paul espouses (he is also an aficionado of Austrian School economics). I suppose if we’re going to
turn to economics as the set of paradigms that clarifies what else we’re doing in the humanities we
might as well look at all the different schools. I personally like Smith, but he wouldn’t have
accepted slavery as is here said to be the case. I’m certain that Hayek and Von Mises wouldn’t have
accepted slavery. Not so sure about Marxism systems. They seem to accept slavery and even to promote
it as they seek to deny democracy, and to impose the will of a minority on that of the majority. Do
you think that OWS is Marxist? I haven’t been able to determine what they want or what they are saying.
Here is my response :
@Darcy: Yea the elite and their wall street cronies certainly allocated the investment funds in an
efficient manner. Outsourcing all of the production potential of the nation to skim more money off
the top and pay workers less, forcing the middle class to take on more debt when government stops
funding education and starting spending more on war and military contractors. When bankers and
various members of the political elite can break the wall and walk away, where is the moral
rectitude of the economic system? Is this type of corrupt, mismanagement allowing the maximum
production based on the survival of the fittest?
No. It’s about people with power and money being greedy and doing whatever they want — and getting
away with it.
Your knowledge of the names in Economics means nothing. The substance of what they have written is
more important then quoting a few names. Especially given the many different names you don’t
include. I on the other hand, are well versed in the various historic literature — so when you say
that “Smith” is a school of thought, you reveal your ignorance.
Capitalism is amoral. Neither good nor bad. Economics and the hierarchical relations of the society
itself ARE THE SAME THING. All of the economists you stated agree. So please stop saying that an
economic system is “good”. The economic system does not create the social rungs by itself. That is
what community and government do. All of the economists you stated agree.
There are other choices than Marxism. So why are you so fixated with that ancient, defunct product
of an impoverished 19th century writer? What value is it to what the citizens are facing today?
People who are upset with the corruption of our government and our financial system are not
anti-capitalist at all. They do not read Marx for guidance.
This is easy to understand. However, someone like Darcy is a troll who probably works for a company
hired to spew these contrived opinions. They act like they are confused about why people are
protesting and make innuendos that they are socialists, communists, or marxists.
Get real. The OWS movement is an American movement, just like the Farmers movements of the 1880s and
the progressive movements in the early 1900s, the labor movements of the 1930s, and the civil rights
movements of the 1950s-60s.
~ ~ ~
UPDATE: Admittedly I added the labor movement of the 1930s, in the above quotation of my "original"
Ah, but there's the rub. Everything is evolutionary. Given half a chance, all of us will make some
change to what was once a misconception or oversight. Details take time. Nothing is
instantaneously achieved. Only time can percolate the best ideas and the best practices.
GOTO THE NEXT 10 COLUMNS