Daily Archives: February 8, 2009

Period piece from Tom Wolfe circa 2007

I just stumbled across this article written by Tom Wolfe for Portfolio Magazine’s May 2007 issue.It’s a snapshot of hedge funders as they were less than two years ago: attaching $100,000 checks to their kid’s Country Day admissions application, being snubbed by the boards of Greenwich Hospital and the Boys and Girls Club (Bruce Museum has no such prejudice against new money so you’ll find the disconsolate dears there, trying to pretend that their money is just as good as anybody else’s) and in general being rude, obnoxious souls accompanied by wives who are even worse. I don’t think Tom Wolfe likes them.

But if they even still exist, will they still be here two years from now? And if not, who and what will take their place? Nature and high society both abhor vacuums – it will be fascinating to see what fills the void this class’s disappearance will create.


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The two most expensive letters in the English language

These New York Times Op-Ed contributors aren’t impressed with Head Start nor the Democrats’plan to shower it with still more billions.

In 1998, Congress required the Department of Health and Human Services to conduct the first rigorous national evaluation of the program. The Clinton administration took this mandate seriously and initiated a 383-site randomized experiment involving about 4,600 children. Confirming previous research, the study found that the current program had little meaningful impact.

For example, even after spending six months in Head Start, 4-year-olds on average could identify only two more letters than children from similar backgrounds not in the program; 3-year-olds could identify one and a half more letters. More important, no gains at all were detected in more vital measures like early math learning, oral comprehension (very indicative of later reading comprehension), motivation to learn or “social competencies” like the ability to interact with peers and teachers.


Lack of money is not the problem: to keep a child in Head Start full-time, year-round, costs about $22,600, as opposed to an average cost of $9,500 in a day care center. And that’s the big failing of the stimulus bill. In area after area, it does not require any real change in return for vast piles of money.

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Cool site

The reader who pointed out to me that Schwinn bikes are no longer made in the US turns out to have a pretty nifty-looking website with subjects ranging from mountain biking (he’s in the mountain biking hall of fame which I, at least, am willing to admit I didn’t know existed) piano moving (his current occupation, I guess) and pictures taken while he was a roadie for a band in the late 60s. As us old hippies need to stick together, I’m linking him here, then going back to dig deeper.

Update: Oh geeze, you’ve got to check this site out – vintage photos of the first, crazed, out-of-their-friggin minds mountain bike racers from the 1970s, with 30-year old Schwinns, no real protective gear and possibly a good supply of drugs (I may be maligning the guys but it was the 70’s) careening down California mountains. Neato. Here’s the mountain biking page.


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A correction


A commentator writes to point out, inaccurately, that John Kerry and George Bush both ride $4,000 Trek bicycles, made in the United States. In fact, our fun-loving Frenchie tools around on a custom, $8,000  bike. According to the New York Times, “Mr. Kerry reportedly pedals an $8,000 Serotta Ottrott, as high-tech and skittish as a sports car. It is made of space-age carbon tubing and comes equipped with the patented ST rear triangle, whatever that is.”

Here’s what Kerry owns:


Seratta Nantucket

Seratta Nantucket

 And here’s a Soviet Union- era people’s bike:

Which one do you think you’ll be waiting 10 years to buy in New Paradise?


The Little People's Bicycle

The Little People's Bicycle

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What took them so long?

It took a full twelve hours after the brush fires in Australia cooled before the culprit was announced: Global warming, of course! No mention of the arsonists who spread the fires because they were in the employ of Dick Cheney and thus a part of the whole scheme.

By the way, notice this bit of self-flagellation from an Aussie:

  ‘The deliberate lighting of bushfires is essentially an Australian phenomenon,’ said former justice minister Chris Ellison.

We hear the same line when California is set ablaze by our home-grown kooks but of course in that case, the phenomenon is “uniquely American”. Shoot ’em all, says I, and don’t worry about their nationality. Think of them as kangaroos, if that helps.

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Zero Hedge – setting us up for yet another bank bailout

The blogger ZeroHedge sees Monday’s bad bank announcement as affording just another opportunity to front run on the government’s dime. When, he predicts, the commercial mortgage market implodes, it will set off a new round of financial crisis, more calls for more money, and on and on. This is getting discouraging.

UPDATE: Maybe not so bad. The Bad Bank announcement is being postponed from tomorrow until later in the week as new ideas are worked on. There are lots of proposed course of action being floated in Washington right now that could probably benefit from a few more days of deep thinking, despite my wisdom of the old adage my dad taught me, “when in danger, when in doubt, run in circles, scream and shout”.


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Barney Frank – Obama will stem foreclosures

I understand the natural political reaction to trouble and sorrow is to throw money at it to cure it, but the cure for housing lies, from my very limited perspective, in streamlining foreclosures, not stemming them. As soon as we can get property out of the possession of people who can’t afford it and need a subsidy to stay in it and into the hands of people with the capability of paying for it (admittedly, at painfully reduced prices), the sooner we’ll get back on track. In Greenwich alone, I wouldn’t be surprised to see fifty new spec houses in various stages of foreclosure in the next six months. These will hang around and drag down the price of everything around them. Foreclose them, sell them off, get rid of the inventory and let’s start again. The current plan will prolong the agony but do nothing to address the cause, which is too many over-priced houses and too few buyers.

That’s just my opinion and I am more than willing to admit that maybe the economists in Washington know far more than I do. They’ve hidden that knowledge so far, but perhaps they’re jut getting ready to spring it on us, dazzling us all.

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John J. McCloy

A reader asks from Vermont if the John J. McCloy who is a friend of Walter Noel is the same person who led such a distinguished life. The “real McCloy ” was the father, born in 1895 and who ran everything from WWII (one of the few civilians to know about the Manhattan Project) post-war reconstruction (the predecessor to the World Bank) and adviser to presidents from Truman to Reagan. He died in 1989. Good, short biography here. His son may not have had quite the same illustrious career but (a) he did just fine and (b)what son, speaking as a son myself, ever lived up to at least the image of his father? It’s the son who is the friend of Noel and that is the beginning and end of his involvement with the whole sorry mess. Not an investor, not a participant in any way, just a friend. And as I’ve noted before, friends who stand up for friends, even if they think their friend is a naive fool, shouldn’t be faulted. Not by me, anyway.


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Walter Noel checks in

I’ve been fortunate enough to start receiving a number of comments from Walter Noel. This one makes an excellent point:

And Chris, please think about this.  If you invested $500k with a “legitimate” hedge fund, you probably lost at least half, if not more, in 2008.  The Dow was down 45% for Pete’s sake.  Instead, you gave it to me, and I gave it to Bernie (after painstaking due diligence, I might add).  So Bernie blows it.  But the SIPC makes you whole.  So the guy who invested with Citadel, or Fidelity, or anbody else is down $250k.  The guy who invested with me gets his $500k back.  Brilliant? I think so.  Which is why I deserve the big bucks.  And  I deserve to keep them. I may have Alzheimers, but I can still do 2 & 20 math.  With my eyes closed. I need to run to the store for carrots.  Where is the nearest store around here?  I can’t remember.

The guy makes sense. I know of a Madoff investor who, to her sorrow (at the time), cashed in her account and put it into waterfront here in town. The value of that may have gone down – probably not – but the value of her “investment” is, and actually always was, zero. Happened long enough ago that she’ll likely escape any claw-back, too.


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I’ll take Nantucket

Thanks to Instapundit,  I was led to this Weekly Standard post on the man who wanted to be King’s speech on the Senate floor, explaining why the stimulus bill must pass:


John Kerry: You Know What’s the Problem With Stimulus Tax Cuts? All That Freedom.

Sen. John Kerry took to the Senate floor today to pace, rant, and raise his voice in a monotone simulation of human passion as he spoke up for the massive spending bill the Democrats want to pass today under the guise of “stimulus.”

During his speech, he addressed the argument made by fellow senators and many economists that tax cuts might be more helpful to stimulating the economy than long-term government spending:

I’ve supported many tax cuts over the years, and there are tax cuts in this proposal. But a tax cut is non-targeted.

If you put a tax cut into the hands of a business or family, there’s no guarantee that they’re going to invest that or invest it in America.

They’re free to go invest anywhere that they want if they choose to invest.


Indeed, people with their own hard-earned money in their own pockets are free to spend, save, invest, or not wherever they please. Kerry betrays the fear that haunts every good liberal— that the American people won’t spend their money on exactly what good liberals would spend it on. Good liberals must, therefore, advocate for forcibly relieving the American people of the better part of a trillion dollars of their own money to fund things like STD education, welfare programs, and water parks.

This, in a nutshell, illustrates the difference between Democrats and the (few remaining) rest of us. If I were permitted to keep my own money I might waste it on paying off some of my children’s college tuition loans, freeing them from that crushing financial burden or even – hey, prices are dropping – buying a summer place next to Kerry on Nantucket. Neither is a choice Kerry and his ilk would approve of. Democrats are moving us to a point where they will dole out a lunch money allowance to each of us and take care of spending the rest of our income on their approved plans: they will make us dependent on them for our housing, our mortgages, our jobs, medical care, sick leave and retirement. Did I miss anything that’s not in already in the stimulus bill?

It’s depressing to me to think that the majority of Americans are willing to trade their freedom for a guaranteed living, however drab, if they can only live without any anxiety about the future. My liberal friends, of course, don’t see the danger to themselves in all this because they’re convinced that they will not only make a perfect world once they control everything with their wise, omniscient power, but since they’ll be part of the solution they’ll also be able to ensure that they themselves get cut in for a bigger slice of the cake. They’re not anticipating selling their waterfront property in Greenwich or Nantucket and if the little people can’t join them there, well is that too high a price to pay for the security of the god life, like that afforded a plant manager in Cuba who lives on $25 a month and who is, one of my liberal friends just back from that paradise insisted to me, “perfectly happy”?

I once was invited to fish on the grounds of the old Boss Tweed clubhouse at the mouth of Greenwich Harbor. After failing to teach the bluefish a lesson I went to the cellar and found my friend’s two brothers enjoying a spot of bowling in their own private bowling alley. At the end of the alley was a portrait of Mao Tse Tung, smiling benignly down on the proceedings. When I congratulated the boys on their irony I was met with blank stares. Well surely, I explained, they were thumbing their nose at the dictator, because if he ever showed up to turn the bowling alley and the mansion surrounding it into a people’s palace, the first people to land a bullet behind the ear would be the owner and his sons. More incomprehension. I let it drop and I’m sure that, 30 years on, those boys graduated from Brunswick, went on to successful careers in investment banking and gave a ton of money to Obama last year. Good for them.

Take a look at this picture of Mr. Kerry, the man who doesn’t trust us ordinary folk to spend our income the way he thinks it should be spent:

kerrybikeNotice the helmet, first: made of oil-based plastic, and it’s clearly sacrificed real safety for a streamlined, techno look. A government-designed helmet would be 4X larger and square and made from renewable hemp – given the value of what it would be protecting, that would be a cost effective measure. The shirt and the tighty-whitey spandex shorts are clearly not the product of a unionized American working with American organic cotton in an American factory – Kerry prefers to enjoy feeling the sweat of Vietnamese workers and why not? Didn’t they make him suffer there when he was earning his medals?

As for the carbon-fiber, $3,500 bicycle, wouldn’t a $500 Schwinn, made in America, be just as effective to get him from Nantucket’s waterfront to the organic coffee shop? Of course it would, but again, that’s for the others. John’s on top of the game and his purchasing decisions don’t require a committee’s approval. He can be trusted to make wise choices while we, alas, cannot.

Liberals who delude themselves that they will end up as the most equal of all in our new world remind me of Michael Moore , who was so shocked and befuddled when Obama Osama (oops!) hit New York City. “Don’t they know we voted for Kerry?” he wailed. He still doesn’t understand that the power mad hate the rest of us and aren’t interested in sharing the spoils. Whether it’s mullahs intent on wiping out infidels or politicians determined to rule, there is no room for weak, whining liberals or even strong-voiced opponents. My friends truly don’t understand the game.


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CBO: Stimulus harmful in the long run

The non-partisan Congressional Budget Office has examined what Reed and Pelosi have cooked up for us and concluded that it will kill private investment and do more damage than it cures, “in the long run”. This just shows what a stunning lack of political savvy the CBO has – for politicians, there is no “long run”. If there were, Social Security would be solvent, our bridges and highways would be maintained and we wouldn’t be running deficits.

A long position for a politician has about the same lifespan as it does for a trader – buy at breakfast, sell before lunch. The stimulus bill’s supporters’ horizon extends as far as next year’s elections, and no further. Warning them that their their actions will jeopardize children who aren’t even old enough to vote yet is futile. It’s also frustrating, so why don’t we just give up?

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