Posted 3:08 PM by Robert

Climate Of Fear III

Claims by the Man Without Qualities that a growing number of liberal Democrats are creating a climate of fear with their willingness to engage in political vandalism and physically threatening language (here and here) have yielded a fair number of e-mails from liberals vigorously demanding examples of such behavior. Of course, the issue cannot be allowed to devolve into a "battle of the anecdotes," with liberals citing their own examples of conservative thuggery (which does exist). Indeed, it is a common political trick for activists to claim that their opponents have engaged in inappropriate behavior. That's one reason the police tend not to treat such claims very seriously in many cases. The telling point is not anyone's ability to tender self-serving anecdotes, but, rather, the objective existence of the sentiment this liberal behavior is engendering: Conservatives increasingly expect a high risk of being vandalized for expression of their political sentiments and liberals do not. But examples are useful - indeed, critical - in so far as they suggest what to look for and because the aggregation of examples creates the sentiments. So I want to thank OpinionJournal for this item about a Seattle Weekly article that includes some interesting, repulsive examples from that city:

Sandy Beeman of the Central District's Squire Park, 49, is a physician's assistant who assists cardiovascular surgeons at Swedish Hospital. She arrived in Seattle from Texas a year ago and is still adapting. At a neighborhood picnic, she asked which party a voter registration worker represented. The answer: "What other party is there?" Beeman made a point of saying she was a Republican. Listserve e-mails from members of her neighborhood group have often been filled with strident invective against President George W. Bush. During last fall's presidential campaign, Beeman was replacing the Bush-Cheney signs outside her home up to four times daily. The night before the election, she left some signs visible in the backseat of her car, parked on the street. The next morning, one of her tires had a key in it and was flat. "Moving to Seattle is like moving to a Soviet-bloc country, reading the stuff on the utility poles, hearing your neighbors compare Bush to Hitler. For the tolerant party, I find my Democratic neighbors to be very intolerant of anything Republican," she says.

• Mary Segesta, 40, of Fremont, is a Microsoft program manager who moved here after working for Apple Computer and Sun Microsystems in the San Francisco Bay Area. She had a "W" sticker on her car last fall and was driving to Office Depot in Ballard. "This old beat-up car made a turnaround. The guy followed me toward the store. In the lot he was screaming, 'How does it feel to be a communist?' He pointed to my car and the sticker, said something about Hitler, and then repeated his question." Segesta brushed him off, but says she found the incident both comical and sad.

• Warren Peterson of Pinehurst, in the city's North End, served one term as a Republican state representative from Seattle's 43rd District in the mid-'70s. More recently, the soft-spoken, circumspect Boeing retiree, 65, was the Bush-Cheney campaign chair in the 46th. At a North Seattle sandwich shop, he shares some war stories. Out with several other volunteers waving Bush-Cheney signs at motorists in Ballard last fall, he says one man leaped up through his open sun roof, flipped him off, and yelled, "GUY! YOU FAGGOT REPUBLICAN!" Another driver lunged over his son in the front passenger seat, who looked all of 10, to flip off a Bush supporter.

• Ross Marzolf, 50, lives in the Central District. He's the executive director of the King County Republican Party. Last fall, he says, he was shopping—as some urban Republicans do, actually—at an organic foods store, the Madison Market. "I was standing in line and heard one clerk say to another, 'I just saw my first Bush supporter.' I said, 'I guess I'm No. 2, then.' He looked at me like I was from Mars and, as I was leaving, said something about the president dying and having a good funeral." Disturbed, Marzolf later contacted the management and got an apology, but no longer shops there.

The Bush death meme has come up before. Last summer, I was at the Seattle home of a good friend, a card-carrying Democrat with whom I've always had spirited but friendly political disagreements. This time, things were a little different. Another guest—a guy I know and have always liked, in fact—began musing out loud. He had the perfect plan, he said, to kill Republicans and President Bush. Hide in trees at golf courses with a specially developed gun that shoots golf balls at their heads. It would always look like a golfing accident, he explained. Lots of laughs all around.

If such episodes had been less frequent or the feelings underlying them had at least subsided after the election, perhaps it would be a bit easier to minimize their effect on political participation in Seattle. But on Inauguration Day this year, students at Seattle Central Community College surrounded an on-campus military recruiter at his table, heckling and shouting at him and ripping up his pamphlets. He had to be escorted away by campus security. Then 36th District Democrats issued a resolution supporting the students and urging the banning of recruiters at SCCC. Not to be outdone, the Garfield High School PTSA passed a much-publicized resolution to bar recruiters there, though it couldn't be implemented. At Caffe Ladro in West Seattle, one regular is a short, burly, work-booted guy who pulls up right in front, in a Ford pickup bearing a pro-labor bumper sticker, and then another—from JailBush.org—that says, "George W. Bush Is a Lying Sack of Shit." No one blinks an eye.

Posted 10:08 AM by Robert

Understanding The Business?

Andy Kessler scribes an interesting item on what's left at Morgan Stanley following the demise of its problematic CEO. Mr. Kessler's article seems to include some real insights. But then there's this:

Morgan Stanley is still Morgan Stanley: ... it owes $1.45 billion to Ronald Perelman for bad advice on Sunbeam grills and Coleman coolers. .... I spent five years of my life at Morgan Stanley ....

One of the most profitable businesses on Wall Street is investment banking, which is not terribly complicated. A few folks in gray flannel Armani suits help corporations tap the stock and bond market for expansion capital or to buy other companies whole, and charge exorbitant fees of tens of millions of dollars. ...

Then a jury in Florida went and awarded Mr. Perelman $1.45 billion for bad advice he received from Morgan Stanley. All of a sudden, this great business is a huge liability. Billions for bad advice . . . where do I note that on the balance sheet?

Mr. Kessler says he worked at Morgan Stanley for five years, and I believe him (and the Journal). And lots of people snicker that investment bankers are under talented and over paid - their own lawyers are particularly prone to saying such things behind the bankers' backs, for example. But how the heck to explain Mr. Kessler's misidentifying Morgan Stanley's client and the entire nature of Mr. Perelman's action against the firm? Contrary to what Mr. Kessler writes, no jury in Florida went and awarded Mr. Perelman $1.45 billion for bad advice he received from Morgan Stanley. Morgan Stanley did not advise the seller (Mr. Perelman) or what was then his company, Coleman, in Subeam's acquisition of Coleman. Morgan Stanley advised the buyer - Sunbeam. And the Florida jury didn't award damages against Morgan Stanley for "bad advice" - it awarded those damages for facilitating Sunbeam's actual fraud in misrepresenting its own condition. That condition mattered because Mr. Perelman received over valued Sunbeam stock for Colemen.

As noted in the Journal's own article of April 20, 2005:

Mr. Perelman is suing Morgan Stanley for its role in the 1998 transaction. The big firm advised Sunbeam on the deal, and Mr. Perelman is alleging Morgan Stanley hid from him and other investors Sunbeam's accounting woes in pursuit of big investment-banking fees. Not long after Mr. Perelman sold his stake in Coleman for approximately $1.5 billion, including $680 million in stock, Sunbeam became engulfed in an accounting scandal, driving down the value of Mr. Perelman's stock. His suit cuts to the heart of a key issue facing Wall Street: What is the responsibility of an investment banker in identifying problems at a client, and to whom is the underwriter responsible.

What am I missing? How could Mr. Kessler make such mistakes? How could his editor at an excellent paper like the Journal let him make such mistakes?

Posted 12:10 AM by Robert

Big Loser In Omaha And Laguna? II

As noted in a prior post,the biggest individual short-term loser from the ongoing near-crisis in the EU may by Warren Buffett. As Forbes has reported:

Warren Buffett['s] ... Berkshire Hathaway has a $20 billion bet in favor of the euro, the pound and six other foreign currencies.... [H]e is not about to cover his short position on the dollar. Buffett said that he began buying foreign currency forward contracts when the euro was worth 86 U.S. cents, and kept buying until the price reached $1.20. ... Buffett said he is not adding new positions now but has been rolling over contracts as they mature.... Now some of [his] assets are antidollar assets. Example: In 2002 he bought bonds of Level 3, a telecom company, that were denominated in euros. In 2000 Berkshire picked up MidAmerican Energy, a gas pipeline company. ... But here's a long-term perspective. He says he may hold foreign currencies "for years and years."

If Mr. Buffett was "rolling over" his positions prior to the French rejection of the EU Constitution, then he must have acquired euro positions for prices far beyond $1.20. And those older $0.86 positions expired a long, long time ago - or were rolled over into much pricier positions. And he says that he has acquired no cover for those short positions.

Now today there's this from the Financial Times:

“Any kind of shift in direction from the ECB is important because they have been extremely reluctant to acknowledge any possibility of an easing move,” said Jens Nordvig at Goldman Sachs, which on Monday revised its euro forecast downwards for the second time in two weeks, putting the euro at $1.15 in three months’ time.

Dear me. At anywhere near $1.15 and without any cover, the euro may deliver to Berkshire-Hathaway the biggest quarterly loss the company has ever seen.

That should get some attention.

Posted 12:54 PM by Robert

On Dope IV

Anyone with any doubt that the California "medical marijuana" law upheld in Raich seriously and intentionally undermined federal drug policy should read this article from today's New York Times:

I'm a 31-year-old marathon runner who's generally in peak health ... But two months ago, I decided to ... find out just how sick you had to be to obtain marijuana legally. I made a startling discovery. The state health code listing the conditions for which marijuana can be recommended by a doctor includes migraine right after AIDS, cancer and glaucoma. ... In the previous few years, some three dozen Amsterdam-style marijuana markets had opened up in San Francisco ... I had a perverse desire to sample the wares of my local marijuana shop .... To judge by the laissez-faire attitudes that I encountered - from the health department, to sympathetic doctors, to the marijuana emporiums - little seems likely to change for those seeking access to medical marijuana in San Francisco. And gaining access was remarkably easy.

To get in the door of my local marijuana store, the Green Cross, you need a city-issued identification card showing you have a doctor's recommendation for marijuana use. .... I called Medicann, a clinic I'd seen advertised in one of the city's alternative newspapers. I was told I needed to come in for a doctor's evaluation, pay $120 and have a copy of the records describing my migraines. ... The doctor who called me in had a hoop earring in each ear. In his windowless office, he asked me if I'd tried prescription migraine drugs, and heartily agreed when I complained they felt "too chemical." "Most of those drugs are garbage," he declared. He was once a traditional doctor working in a hospital, he said, until he clashed with his supervisor over recommending medical marijuana. He'd recommended medical marijuana to his patients, he told me, after seeing them become dependent on prescription opiates.

"I didn't want to be responsible for turning people into drug addicts," he said passionately, handing me a written recommendation for marijuana. He scoffed at the federal laws and never asked to see my records.

All I needed to do now, the Medicann receptionist told me, was to take my doctor-signed marijuana recommendation to the city's Department of Public Health, and they would issue me my cannabis club card.

I checked the health department Web site and learned that I could take along three people to act as my "primary caregivers." They would get cards entitling them to the same rights and privileges , even though they're not sick. That way, in case I was too infirm to buy my medicine, they could pick it up for me. My real-life primary caregiver, my husband, had failed to grasp the point of my whole experiment, insisting that "pot is basically legal anyway and isn't hard to get." So I took along two good friends instead.

The three of us stood in line inside the health department building for a half hour. When we were eventually called into the back office, a city worker photographed us with a camera festooned with a toy gray mouse wearing a top hat, and said festively, "Look at Smokey!"

A few minutes later, our laminated cards were in our hands. Next to our pictures, they simply read "Patient" and "Caregiver." Our names were left off, to protect us from being identified by federal authorities, it was explained to me at a city government hearing.

Now, in my opinion federal drug policy is a matter on which reasonable people may differ. But can any reasonable person read this Times article and not understand that the effect of the California law on federal policy is substantial - and was intended to be that way? Reading this article with Justice O'Connor's dissent in mind just has to make one wonder what she was smoking when she wrote it.

And it makes one wonder anew how any thoughtful person could think that Raich was an approriate case with which to challenge the existing over-broad construction of the Interstate Commerce Clause.