Friday, April 30, 2004

Back in January 2003, I read Ron Chernow’s Titan: The Life of John D. Rockefeller, Sr. What I found most profound about Rockefeller was the way he monopolized everything in the oil industry. Even those competitors who were not part of Standard Oil were shown to be so. The pervasiveness was stunning.

At the same time I was reading this account, the build-up to the enforcement of the Security Council resolutions against Saddam Hussein’s Iraq was being debated. One issue being argued was the connection between Saddam and terrorism (often simplistically proxied as 9/11). My gut feeling was not the argument of the Left that a secular regime would never ally with theological extremists but the more common-sensical one of my enemies’ enemies are my friends. In this way, I could see a logical connection between Saddam and terrorism, and, by applying the lesson of pervasity from the Standard Oil example, I concluded that the secular/theological example was sophistry. All terrorists were connected. This position is not widely held. Heck, I don’t know if anyone other than myself even holds it.

In January 2004, documents in the recently freed Iraq exposed an oil voucher program in which Saddam dispensed vouchers that could be redeemed for barrels of Iraqi oil. Most notable on this list was the U.N. official and executive director in charge of the Oil-for-Food program, Benon Savan. In addition to the U.N. official, French, German and Russian politicians and business entities were included. At least, I found the reason for the opposition to the enforcement of the Security Council resolutions against Saddam Hussein’s Iraq.

The has grown into a greater examination of the U.N. Oil-for-Food program which set-up in 1996 to help Iraq feed its people while the Hussein Regime was sanctioned by the international community for its actions in Kuwait. We have learned that Saddam was kicked back funds of $4 billion (estimate provided by the office of the U.N. Secretary general. Kofi Anan to you.) to $10 billion (provided by Claudia Rosset, the bulldog journalist on the case, and, surprise, she does not work for the liberal media complex.)

The kicker, no pun intended, is the number of trading companies established to facilitate the corruption of the program. Some were just shell companies. Others did not exist. Two firms doing business with Saddam through Oil-for-Food were linked to financier Ahmed Idris Nasreddin, now on the UN’s own watchlist of individuals "belonging to or associated with" al Qaeda.

Bingo! The common sense of enemies’ enemies and the unobvious lesson of Standard Oil pervasiveness are coming together to show the connection between Saddam Hussein and terrorism. And who thought John D. Rockefeller could have taught us anything about terrorism?

Tuesday, April 20, 2004

Not Quite

This weekend’s The New York Times Magazine ran an article titled “Now Can We Talk about Health Care?” Its author was none other than one half (the better or worse?) of my Senatorial representative, HRC (Her Royalness Clinton).

Normally, I dismiss with great prejudice anything she says that does not pertain to the War on Terror. (After all, given her husband’s belief in the same intelligence the Democrats and mass media have faulted the current President for taking as true, she doesn’t want to throw stone within the glass walls of Chappaqua.)

But on healthcare, one must listen to the self-anointed policy “expert”, Senator Hillary Rodham Clinton. The article is rife with hyperbole (“…the system, already buckling under the pressures…will collapse….” “The way we finance care is so seriously flawed…face fiscal disaster…”), inconsistent definitions (“…skyrocketing costs and skyrocketing numbers of uninsured…” Is “skyrocketing” the same for both costs and numbers of uninsured?) fuzzily defined terms such as “underinsured” and “many” as in “Many of us will become uninsurable,” and correlation masking as causation (Long Island cancer clusters. Also debunked.)

And no Democratic screed would not be complete without reference to the dire effects of globalization (“…payback for decades of shunning…desperate needs of the poor world”) and to racial disparity of care (“…a Hispanics child…far less likely than a non-Hispanic white child to get needed medication…African-Americans are systematically less likely…get state of the art cardiac care…” Never mind that that AA study was based on hypothetical cases presented to physicians.)

Of course, an advocate must use statistics to proof the direness of their position. “In 1993, 46% of >500 employee firms offered some type of retiree health benefit. In 2001, it declined to 29%.” No indication of what “some type of retiree health benefit” is. What the reader is to do is assume their own definition. The trickery put forth by the advocate is to allow the reader to guess and run with it.

As a politician HRC serves platitudes to the US Healthcare system as “the best healthcare system” but from the other side of her mouth she claims we improve it by copying inferior plans. Which is it? How does the best become bester by emulating the worse?

This sums up the argument for nationalized healthcare, but what we must remember is that nowhere do the advocates mention the health of the uninsured or whether they are voluntarily uninsured. However, with a discernful eye, I did grab a nugget from a NYT article on Maryland’s attempt to impel the uninsured to buy health insurance. The Administrator in charge of the state’s health department says 70% of the uninsured (@450,000) in his state elect to be so!

And here is the trap! He claims it their civic responsibility to buy health insurance they have chosen not to have! It is only by forcing more healthy people into the system to pay premiums will the State be able to afford, and I use that term very loosely, coverage to the uninsured who get sick and do not qualify for Medicaid or Medicare.

See for any insurance to work, it has to spread the risk of catastrophic costs across many people who do not use the insurance; hence Maryland’s desire to impel the uninsured to buy health insurance. It is also the true meaning behind HRC’s imploration to “…develop a new social contract premised on joint responsibility…”

So do not expect those who have not asked for help (the healthy uninsured) to present a same case that the Road Pavers (as in the road to Hell is paved with good intentions) present for them.

Remember that it is your civic duty and part of the new social contract that impels the State to force insurance upon you

For the inaugural Baseball column, I will begin with a reference to one of the best books I have read in recent memory, Moneyball by Michael Lewis.

It is a paean to the genius of Oakland A’s general manager (GM), Billy Beane. In it, we learn how he mines the statistics of various draft-eligible players to identify those diamonds in the rough that will allow him to stay at the top of the heap of major league baseball while operating on a, relatively-speaking, shoe-string budget.

In it, we learn that the A’s GM, and by extension the organization, focuses on not making outs as opposed to traditionalist measures of “speed”, “power”, “defense” “projectability” when evaluating players. On-base percentage (OBP) is used as a proxy for the number of times a player does not make an out. Since there are only two places a player can be following an at-bat, on the bench or on base, the percent of time he is on base is a good proxy. (I know a homerun would place the player on the bench but not after successfully being on-base, no matter how brief the interval, as he touches each base in procession on his way back to home plate and from there to the bench.)

As a result of this focus, the A’s will focus on players with high OBP such as Moneyball lottery ticket, Nick Swisher, or CF Steve Stanley or C Jeremy Brown. While Swisher was a consensus 1st round pick, the other two were reaches where the A’s drafted them. It is this emphasis on hidden value, and the possibility of exorbitant returns that hidden value can unleash, that has made this book such a hit on Wall Street.

And it is from Wall Street that I get into a column on fantasy baseball. On Wall St., there is the theory of market efficiency. It posits that the value of a security reflects all the information available about such security and, if there is new information, it is quickly, if not instantaneously, incorporated into the security’s price.

If this holds true, then there is no need for security analyses, and this threatens the lucrative positions of those employed on Wall Street. Hence, Moneyball serves to reinforce Wall Street’s belief that it is valuable for the analysis it provides. (“See there are always new ways to discover inefficiency. If Billy Beane has found a new way after 150 years of baseball doing things one way, then we can, too. Now pay us the big bucks!”)

So what does this have to do with fantasy baseball? Everything. See if I talk about strategies that have led to a modicum of success in fantasy baseball, then I will have put them out into the “fantasy market” where they will quickly be incorporated into the strategies of my competitors (If you accept that a theory in finance can be correctly applied to that of an unrelated discipline.) And if my competitors use the same strategies that I do, then we will be at a stalemate in our inability to take advantage of asymmetrical knowledge since we would both possess the same frameworks for player evaluation.

As much as my ego relishes the thought of being coronated as an expert, my competitiveness restrains me from disgorging every piece of ego-enhancing wisdom. It is this battle between ego glorification and winning that will be fought with each installment of this column. So stay tuned and on your toes, you never know which side will come out victorious. (For this column, Winning has won. By warning you that I am conflicted, I will have given my competitors a seed of doubt as to whether I am disseminating false information. Even this has the flavor of Wall Street. See Martha Stewart’s proclamations of innocence to MSO shareholders and the government accusation that she did so to protect his stakes in MSO.)

Wednesday, April 14, 2004


The Bush Administration officially declassified the August 6th Presidential Daily Briefing (PDB) memo entitled “ Bin Laden Determined to Strike in US”. (Never mind its “outing” earlier in the week during the Condi Rice testimony.)

After years of insinuations about its contents and the subsequent conveniently-partisan conspiracy it spawned (The Bushies knew the 9/11 attack was going to occur and did nothing. See the failed candidacy of the former governor of a state whose residents sell their garbage to tourists as “antiques”.), we now know the PDB contained nothing that had not already been disseminated over the past 2 ½ years.

What it did mention where several years (1993 once, 1997 twice, 1998 five times, 1999 once and the mid-1990s once.) in the prior decade. These dates should lead a good investigation to the PDBs from those years.
Reviewing each of them would be a not-to-difficult task given there would only be 365 for each year with the exception of 1998 where there would be 366. After all former Democratic congressman and current National Commission on Terrorist Attacks upon the United States commissioner, Timothy J. Roemer has claimed the Commission has reviewed “millions of pieces of paper”. What are a few thousand more?
Given the current Administration’s description of the August 6th PDB as “historical” (not in the making history sense but in the presenting history one), there should have been plenty of clues as to the cleared-up-via-hindsight threat of simultaneous airplanes-as-missiles attacks on the World Trade Center, the Pentagon, and a field in Western Pennsylvania (subsequently determined to have been destined for 1600 Pennsylvania Avenue.)
I wonder why there hasn’t been an uproar by the press and the Democratic Party, as there has been around the August 6th PDB. Could it be that there is a BFD hiding in the PDBs of the prior Administration?

Friday, April 02, 2004

I Got Mine!

In a ballsy move, Troy chose Kwame to go into the boardroom with him last night on The Apprentice. Ballsy not only because both competitors have forged a friendship during the 12 weeks of the show but also because Kwame’s resume was a MBA’s dream – Harvard MBA and Goldman Sachs employee. Troy’s resume included a high school education and a self-professed reliance upon Trump: The Art of the Deal by none other than…. Donald Trump! (Never mind the suck-uppedness of this. Does anyone doubt that Trump’s ego is voracious for confirmation of its greatness?)

This looked like David taking on Goliath despite its inevitability. (Assuming Bill would have been fired if he were chosen, Troy and Kwame would have still faced-off one week later.) This looked like a leader making the tough choice when an easier one was available. This looked like exactly the kind of decision-making a firm would look for when striving for the competitive edge!

Its one only fool would have taken. Reading Trump’s paean to himself was the biggest error. In it, Trump puts forth his recipe for success. It is one for those who want not those who have. Trump may have been aggressive as he built his empire, but once he got it, he no longer would need to take risks, and this is what Troy failed to discern.

Kwame was non-descript beyond the resume, but he is exactly what firms who have built the reputations want – a credentialed individual who will looks good in the company demographics. Donald Trump is no longer looking to grow aggressively via high-reward risks That type of behavior is for those who don’t-have-yet. What he needs is someone to Sheppard his holdings along safe and reliable pathways. There is no one better than an academically benumbed automaton.

The question is whether those of us who strive to build without the sureties a “proper” education and the handouts of a good “network” (read: A relative gives you a tit job because he or she can vouch for your benumbedness and inability to rock the boat.) will remain true to our beginnings as risk-takers and not become the business equivalent of Al Bundy’s basking in the glory of our high school football days.

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