Au revoir, Mr. Wagoner

Rick Wagoner has resigned as chairman and chief executive of General Motors, under pressure from the Obama administration. That's the polite way to say it.

The slightly less polite way to say is that that President Obama fired the head of General Motors.

I hate to say it, but good for Obama. I have nothing against Rick Wagoner. He seems like a good guy, and he has certainly had an impossible job of late.

But Obama needed to make a decisive move. He needed to make a clear statement about who is in charge. I still think GM is salvageable. I still think there's a huge amount of value there. But someone needs to clean house, and it's not clear that Wagoner was capable of doing it. GM needs to eliminate Saturn, Pontiac, and GMC. It needs to sell Saab and Hummer, and it's not clear that there is a buyer for either. It needs to close hundreds, possibly thousands of dealerships.

All of that is going to be horrendously painful. At a time when unemployment levels are already very high, many more people are going to lose their jobs. Closing dealerships means more vacant real estate when there's already too much of that.

If GM had made the necessary cuts when times were good, it wouldn't have to go through this. The irony, of course, is that when times were good, there was not enough pressure to make these cuts. All of those extra dealerships stayed in business, despite GM's desire to close them, because they were making money. GMC stayed alive, despite making trucks that are basically duplicates of Chevy's.

GM's great problem is that it is not so much a single corporation as it is a bunch of small ones, all competing. Chevy and GMC make very similar trucks. Why? Because Pontiac, Buick, and Cadillac dealers (and Oldsmobile dealers, back when Olds was still around) want to sell trucks, but they don't want to sell Chevy trucks, because then they would have to also sell Chevy sedans and sports cars, which would compete with their Pontiacs, Buicks, and Cadillacs.

GM is the ultimate dysfunctional corporate family. Each division, each dealership has its own interests, and those interests are in direct conflict with the interests of other parts of GM. None of them have enough incentive to sacrifice for the greater good that is known as GM. If GM kills GMC, that will hurt dealers that have GMC and Buick, Cadillac, and Pontiac. But it will help Chevy dealers, because it will eliminate their competition. So Chevy people would love too see GMC disappear. But GMC, Buick, and Pontiac people would love for GMC to stick around. Thus are corporate crises allowed to fester.

In the long run, eliminating GMC will be good for GM. GM wastes lots of good money supporting GMC, advertising it, etc. But in the short term, it's going to be very painful.

This is why Rick Wagoner had to go. He's a product of GM. He couldn't make the tough decisions. He knows he has to kill off several divisions. He just doesn't have the support within GM to do it. All of the GMC people are going to fight like the dickens to keep GMC.

Obama knows all of this. He knows what has to be done, and he knows how hard it is going to be, how painful it is going to be. He also knows that he has the power that Wagoner doesn't.

In the long run, GM will probably be a great company again. Rick Wagoner's problem is that he doesn't have the long term. He needed to show results now, and he can't. Obama does have the long term. He has until 2012.

Obama also needed to make it clear that he was getting something for all of the taxpayer money that he is loaning to GM and Chrysler. General Motors and Chrysler don't have a lot of support in the rest of the country. GM has 18% market share. That means that far more Americans aren't buying GM cars than are buying GM cars.

GM now has a chance to clean the garbage out of its lineup. GM has something like 80+ models of cars. That's absurd. Ford has three domestic brands: Ford, Mercury, and Lincoln, and it might get rid of Mercury. Most other companies have one or two brands. GM has seven.

Cleaning out the garbage would allow the best to shine. GM does make some good cars. The Corvette is an American icon. Cadillac has regained a great deal of its lost luster. Chevy makes good trucks. I'm sure there are some good Buick sedans, but I can't think of them. Herein lies the problem: I can't think of any good Buick cars because GM makes 80+ models of cars, and they blur together. The gold gets lost in the dross. When most Americans think of "GM" they don't think "Corvette." But they should.

The immediate future is still very dark for GM. But the long-term picture just got a little bit better.

This is what accountability looks like.

Obama on Afghanistan: TPMtv's 100 Seconds

Talking Points Memo has a great feature called "The Day in 100 Seconds." They condense the news of the day into 100 seconds of video clips. I could post it several times a week if I wanted to, but I don't want to be that lazy. This one, though, is too good to pass up. This is mostly Obama on his plan for Afghanistan:

HSX: Week of March 27, 2009

Once upon a time there was an organization called the World Wrestling Federation, which used the acronym WWF. But there was also an organization called the World Wildlife Fund, which also used the acronym WWF. The advocates for warm and fuzzy animals sued the hyper-aggressive bizarre guys in spandex for the rights to the acronym, and won. So the WWF in spandex became the WWE, which stands for World Wrestling Entertainment or something. Whatever it is, it's releasing a movie this week called - appropriately enough - 12 rounds, starring some guy named John Cena (12RDS). I've heard the name, couldn't attach it to a face. As for the movie, it is what it is. The stock is trending up nicely, currently at H$19, just barely off its high. The strike price is H$5, about what I expect. The call is trading at H$4, while the put is below a single dollar. All signs point to an opening weekend between $7 and $9 million.
Stock: Long
Call: Long
Put: Short

Moving just slightly up the scale of artistic credibilty, we encounter The Haunting In Connecticut (HAUCT). No, it's not about Chris Dodd's too-cozy relationships with investment bankers, it's about a house with issues. The stock doesn't seem to have too many, moving steadily up to perch at H$35. Strike price is H$10, very expected, with the call at H$4 and the put headed down to where it's expected, to the nether regions, but not quite there yet, hanging in at a buck and a half. Not a great week for the Nutmeg State, although I think the potential recruiting mini-scandal at UCONN doesn't sound serious. Go Huskies!
Stock: Long
Call: Long
Put: Short

Saving the best, hopefully, for last, we have Monsters vs. Aliens, the latest in animated absurdity from DreamWorks. They ain't Pixar, yet, but they're trying really hard to get there. I like the trailer, and I, for one, could really use some comic relief right about now. I have a feeling the rest of the country probably feels the same. One lesson they seemed to have learned: with animation, sell the movie, not the stars. This one features the voices of Seth Rogen, Reese Witherspoon, and Paul Rudd, three hot names, but they are nowhere in the advertising. Good call, Mr. Katzenberg. People don't go to see animated movies because of the voices.
The stock (MVSA)is suffering from overripe overhyping; it's been drifting down from a high of H$161 to H$142. The strike price is H$55, which looks a tad optimistic, but the call is floating nice and high above H$5. The put, however, is also looking up, at H$3+. Mixed signals all the way around. One positive is that's it's being released in 3D, which should drive some traffic, and boost the BO; 3D ticket prices tend to be higher. This is one to keep an eye on. I'm going mostly on faith and a need for comic relief.
Stock: Long
Call: Long:
Put: Short

Note: I am posting this on Wednesday afternoon, because I am going to Disneyland tomorrow, and might not be able to update this tomorrow night. I'm not sure that screencounts and critics' ratings would be accurate tonight, but I will try to check those tomorrow and post whatever I can.

Update Sunday afternoon: I didn't have a chance to check the screencounts or critics' ratings, but I don't think it mattered. I was mostly right. 12 Rounds came in slightly below expectations at $5.3 million, which beat the strike price, but was way below the call. So I got the stock and the call wrong, but the put right. The Haunting in Connecticut was a nice surprise, hauling in $23 million, WAY above predictions, and adjusting up by H$26. Nailed that one. Looks like Monsters v. Aliens will be a hit, possibly a monster one, as it brought in $58 million, and adjusted up H$8. That was slightly below what the call was predicting, but that's pretty close, and if you bought the call at the IPO price of H$2, you made money. So I am going to give myself credit for 7 of 9 this weekend (the wrong ones being the stock and the call for 12RDS).

Bill Richardson signs bill repealing the death penalty

Bill Richard, governor of New Mexico, signed a bill repealing the death penalty. Good for him.

I had two internships in Washington, DC, during college, opposing the death penalty. I interned at Amnesty International and the National Coalition to Abolish the Death Penalty. It was my original political cause.

I have long been of the opinion that contemporary support for the death penalty in America is a historical anomaly, and that it will fade over time. I think it is a response to the 60's, particularly the race riots and the challenge to traditional authority. The 60's were a chaotic time; the death penalty is the ultimate reinstatement of "order." The "war on drugs" has, of course, exacerbated the situation.

The death penalty is not about justice or crime prevention; it's about vengeance and punishment.

One of the things that I had to do during my internship at the NCADP was fact-check the number of executions in the history of America (including before we were the "United States"). At the time, in the late 1980's, it was about 15,000. My guess is that it's above 16,000 now. That's a lot of death.

Props to Bill Richardson for doing the right thing. It's one big step towards a more enlightened America.

Candy is dandy in hard times

The NY Times reports that candy, particularly traditional, cheap stuff like Tootsie Rolls and Necco wafers, is selling well in the recession. Candy stores are reporting booming business. I have to admit that I actually bought a bag of Tootsie Rolls the other day, for the first, and, hopefully, last, time in my life.

That 90% tax on bonuses

The House passed a bill that would tax some of the Wall Street bonuses at 90%. That's a very high tax rate. It's almost as bad as the "There’s one for you, nineteen for me," in the Beatles' "Tax Man." Supposedly the Beatles actually faced a 95% tax rate.

I doubt the 90% tax rate is going to survive. Obama seems a little hesitant. It's definitely punitive, and I don't like legislation that comes out of anger. I think this will be seriously modified in the Senate.

What I am hoping will happen is that raising the top marginal tax rate will suddenly look a very moderate and modest move. You don't like 90% for your bonus? How about 39% on your total income? Much better, no?

And thus, hopefully, we will come a little closer to eliminating the deficit.

Obama's press conference

"I'm a big believer in persistence."

-President Obama, responding to a question about the possibility of achieving peace between the Israelis and Palestinians.

On economic issues, he pounds home the old liberal idea that the best way to ensure economic growth is to make the right investments in human capital, infrastructure, etc. But he makes it sound fresh. Maybe that's because conservatives have thot that they were the ones in charge ideologically for so long. So now being, in some respects, an old-fashioned liberal is new.

Here's the entire press conference, all 56 minutes of it. God bless MSNBC.com

Visit msnbc.com for Breaking News, World News, and News about the Economy

Obama on 60 Minutes

He took up a fair number of those 60 Minutes. Notice when he talks about Cheney, he gets serious, and close to judgmental. Obama does not like passing judgment on people, but he comes close to flat-out denouncing him. I found it interesting that he usually refers to him in this interview as "Vice President Cheney." He's using the formal title for a couple of reasons. First, to make it clear that there is no familiarity between the two of them. Second, although Obama respects the office of the Vice President, he does not necessarily respect the person who held it immediately previously.

Idiotic idea of the day: Geithner = Rumsfeld

Someone had to say it. Turns out it was Kos. Geithner is Obama's Rumsfeld? Apparently he floated that on a Tweet, so it's just that idea, not fleshed out (I didn't see it on Daily Kos). The man is a provocateur.

I'm glad Kos floated this idea, so I can shoot it down. I think this may be the stupidest idea I've heard all year. Let's see where this takes us, shall we?

Rumsfeld: Started a war that has cost thousands of American lives, hundreds of thousands of Iraqi lives, and hundreds of billions of dollars; repeatedly lied to the American public; tortured prisoners; ignored the Constitution when he wasn't shredding it; stained America's reputation around the world; and, last but not least, caused serious damage to the cause of upholding the rule of law, both within this country, and between countries. All of which was totally unnecessary.

Geithner: Missed the political ramifications of a few contracts in one company of the many that are in trouble; did not manage expectations perfectly when proposing how to solve one of the greatest crises in the history of the world.

Rumsfeld: Arrogant, tempermental, disliked even by ideological soulmates. Known to be a vicious bureaucratic fighter.

Geithner: Highly respected for his intelligence, work ethic, integrity, and character. I haven't heard any complaints about how he gets along with the rest of the Obama administration.

Geithner is attracting attention because of his job, not because of who he is. Pretty much anyone other than the reincarnation of Abraham Lincoln would be a lightning rod as Treasury Secretary right now. This is what I call the "problem of unfocused anger." Many, many people are angry about our economic situation. They can blame Bush all day, but he's gone from office. So are Alan Greenspan and Hank Paulson. This unfocused anger needs a target. Desperately. It's like a hungry lion. A very, very hungry lion. It will find a target, regardless of how appropriate that target is. The anger is unfocused because it is combined with confusion. Theories and opinions about the source of this crisis abound; so do solutions. But the topic is so vast that no one person can begin to comprehend it. We need rules of thumb, heuristics, intellectual short cuts. We need something to argue about, and, ideally, someone to argue with. Whoever holds the job of Treasury Secretary is going to be that person for many people involved in the debate.

The comparison of Geithner with Rumsfeld is utterly superficial. Both were controversial and extremely powerful Secretaries. Other than that, they have almost nothing in common. One botched everything, pissed off millions of people, and left office in disgrace. The other is attempting the impossible. Geithner is like a man juggling torches. And knives and chainsaws at the same time.

I do not know if Tim Geithner will solve our financial problems. I do know he is one hell of a lot more qualified than me. There's a reason he has the support of Obama: he deserves it.

Quote of the day

From Megan McArdle, writing about Ben Bernanke's latest effort to save the economy:

[W]hile in theory, theory is the same as practice, in practice, they differ.

Oddly enough, I agree with her both in theory and in practice.

This would be another great time not to panic

I've been thinking about that Rudyard Kipling poem, "If," particularly this line:

"If you can keep your head when all about you
Are losing theirs and blaming it on you;"

What a time to apply an overused line. This is about the clearest example of that idea at work that I have ever seen. Everywhere I look I see and hear panic, frustration, confusion, anger. I also see hope and some optimism. But lots of angst.

Except, of course, in Barack Obama. Or in Michelle Obama. Malia and Sasha are probably reasonably calm, too, but that's to be expected from kids who have incredibly cool parents.

In the WaPo opinion section, slings and arrows are coming from the left and right. William Greider, national correspondent for The Nation, and Baby Boomer liberal relic, is worried about something called the "corporate state," which sounds ominous, and would probably have me trembling in fear if I couldn't dismiss it as a meaningless cliche reminiscient of the worthless blather I read when I was studying the Frankfurt School. What the hell is a "corporate state?" A government controlled by corporations? The relations between government and corporations in this society is incredibly complex and constantly changing. Using the phrase "corporate state" dismisses that complexity as unworthy of discussion, and replaces it with a trivial demogogic appellation. Here's a great example of Greider's stale tactics:

The president is now trapped between these two realms -- the governing elites who decide things and the people who are governed. Which side is he on? If he does not choose wisely, the anger could devour his presidency.

Or it might not. The anger at AIG and their close friends on Wall Street might stay directed at corporate idiots and criminals. Maybe, just maybe, the President of the United States, an incredibly gifted progressive leader, might be able to focus that anger and achieve some kind of real reform. He might decide that he is on the side of the people who elected him. Which would mean that the anger would not devour his presidency.

From the right, Kathleen Parker, one of the nicer conservatives in the punditocracy, writes a pieces titled "The Foundering Father," and spouts just as much random nonsense as Greider, this time accusing Obama of not being in charge. She quotes his response to the AIG mess, "The buck stops with me," and then dismisses it as a cliche. That's an interesting rhetorical device: provide evidence that your political opponent is doing exactly what he should be doing, and then use an almost-clever line to diminish the significance of his achievement.

I think Obama is still doing a fantastic job. I also think a little perspective is in order. I'm going to repeat the oft-repeated line that Obama has been in office just a few weeks, but I am going to add a caveat.

Obama inherited a number of problems. He is tackling many of them. He has started cleaning up some spectacular messes. He and his staff have made some mistakes cleaning them up. But that is to be expected, and Obama warned repeatedly that mistakes would be made.

Obama's big problem right now is not a lack of focus, it's not the random mistakes, it's not the criticism from the right or left. Obama's problem is that he has spent a fair amount of political capital, he's attempting the impossible on several fronts, and, as of right now, Sunday morning, March 22, 2009, he has almost nothing to show for it. But that's just a function of time.

The analogy that I would like to propose is this: imagine a married couple, who have just gotten married. They've just bought a house together. They moved to a new state so that one of them could get a better job, and the other one is unemployed. The honeymoon was a couple of months ago. They're moving in together, merging households, changing addresses, adjusting to lots of new realities. They have a big fight. About something each thinks is important, but really isn't. In the middle of the fight, neither wants to compromise, each may be wondering, "why did I marry this person?" Things look ugly.

But then one of them agrees with something the other one said, and apologizes, and then the other apologizes for something else, and they start to mellow. They get over it. They go out to dinner and a movie. Etc., etc.

That's where our political situation is right now. We're in the middle of the fight. We've got lots of boxes to unpack, and the TV isn't set up, so we can't watch movies, there are plumbing problems we didn't know about, the neighbors aren't as friendly as we had hoped, we miss our old friends, haven't seen family in a while, etc. We know this marriage and this move and the new job were worth it, but we don't see a payoff yet.

We are spending trillions of dollars on things that we don't understand. Will we be able to solve the credit crunch, the recession, etc.? Eventually. Are we doing this the right way? I have no idea. We've pumped $170 billion into AIG, and there are no visible signs that we have gotten anything in return. All those "shovel-ready" programs funded by the stimulus package? Has anyone seen a bridge repaired, a pothole filled? Probably not. Are we going to be wasting billions? Yes. If 1% of the stimulus package vaporizes into thin air, that's about $8 billion down the drain. And that would be a best-case scenario.

But at some point, the fight is over. The boxes are unpacked, the cable TV is working, the new dishwasher is installed. At some point the potholes will start to be filled, the bridges repaired. Troops will start coming home. We'll be making nice with the Iranians and the Syrians and the Cubans. There won't be as many people arrested for using medical marijuana in California and other states that allow it.

And I will be thankful that Barack and Michelle (and Malia and Sasha) and all the people who work for them chose this time as a great time not to panic.

Obama in So Cal

Great photo spread by the LA Times of Obama's trip to Southern California. He spoke at Miguel Contreras Learning Complex (Miguel Contreras was a labor leader in LA who died very suddenly several years ago). I pass that every day on my way to work. It's brand new, so it was a good place for him to stop by. LA has been building new schools for several years, and seems to be doing a good job of it.

Check out the LA Times' photo essay here.

Look! A flying car!

Seriously, a flying car. First ever. Tragically, it didn't come from one of the Big Three, although that's not surprising. I would love to see a flying Mustang or Corvette. That would be cool. This, however, is plenty cool enough.




h/t: LA Times

Michelle Obama in the garden

The new White House garden, that is. I think this is great, but I am really curious to see how conservatives criticize this.

USC beats BC!

USC beat Boston College in the NCAA Men's Tournament, 72-55. Fight on! The almighty Trojans are on a roll! Here's how the LA Times described it:

A jump shot by [Taj] Gibson with 12:50 remaining in the game gave the Trojans the lead for good, 46-44, and USC pulled away by dominating every phase of the game. (emphasis added, because it needed to be)

Gibson was 10-for-10, which is the second best perfect performance in the history of the NCAA tournament with at least 10 attempts.

Remember, what's good for USC is good for America, because all great trends start in Los Angeles, and what is good for USC is good for Los Angeles. For anyone who is looking for some hope in this economic climate, this may be it.

USC vs. Boston College

Big game tonight - the University of Southern California, the almighty Trojans, take on the Boston College Eagles in March Madness! We're hoping for an upset, and Sports Illustrated is, too. USC is on a roll! We won the PAC-10 Tournament! Woo hoo!

Obama on Jay Leno!

President Obama stopped by Jay Leno's show last night to chat with him and explain a few things. He was there for about 25 minutes of TV time. I was a little apprehensive at first, because this doesn't feel all that presidential, but then I read a comment that this was basically a modern version of FDR's fireside chat. Playing to the crowd is what presidents do. One interesting thing to note: the crowd goes wild not necessarily when Obama cracks a joke, but when he makes a statement a principle or says something reassuring.

What's great about watching Obama here is that he clearly just likes being president. This was one of Carter's failings: he didn't seem to like being president. He likes the perks, but he also relishes the challenges. That sure wasn't true of the last occupant.

HSX: Week of March 20, 2009

She's back! Julia Roberts, that is. After taking a break to raise her kids, America's Sweetheart is back with some intrigue on her mind. She stars in Duplicity (DUPLC) with Clive Owen, who recently starred in a similar movie, The International, with Naomi Watts. Hopefully Mr. Owen will have better luck with a more famous star; I can't even remember Naomi Watts in the trailer for The International, and it was not a smash. The signs are not great. The stock is at H$43, up H$2, but that's down from a high of H$51, and the trend is downward. The strike price for the options is H$15, just about dead on. The call is at H$3, but that's down more than H$1 today, really not a good sign. The put, meanwhile is just below H$2, marginally up today. The screen count is 2,575. So the stock, the call, and the put are all suggesting about $15 million. It needs a per screen average (PSA) of about $5,800 to make the stock price. One very good sign is that the critics are giving it props, with a 65% score on rottentomatoes.com. That makes me a little more optimistic. Let's put the prediction in the high teens, around $18 million. There's a reason Julia Roberts is one of the most actresses in the world.
Stock: Long
Call: Long
Put: Short

In the "bromance comedy" category, a new genre, is "I Love You, Man," (ILVUM), a comedy about a guy who needs to find a new best friend for his wedding. One thing bothers me about the trailer: he apparently works in LA, and he wears a tie. That's a true sign of a geek. I don't have much interest in it, but I can see the appeal. The stock is at H$54, down almost H$5 for the day, and down from a high of H$61. We certainly don't like that sign. Strike price is H$20, on target. Call is down more than a buck today to H$3.56. The put is up H$0.75, to H$2. Something similar to Duplicity seems to be happening here: the market is having second thots. Better keep a close eye on this one tomorrow morning. Screen count is 2,711. The stock price is predicting almost exactly a H$20 million opening. Needs a PSA of about $7,400 for that, very possible. Critics are heaping praise on this; it's scoring 77% at rottentomatoes.com. It could be a great excuse for a date movie. I'm going to go with the market and call it at $20-$22 million. Hitting the sweet spot between the call and put means shorting both.
Stock: Long
Call: Short
Put: Short

Next up is "Knowing" (KNOWI) about Nicholas Cage staring - what do you know - in some kind of supernatural thriller. Yawn. I can barely muster the energy to watch the trailer. How many movies like this has Nicholas Cage made? Too many for me to count, that's for damn sure. Just like our other two releases, the stock is down from its high. It's H$46, down from $H51, although it's trending slightly upwards. Strike price is H$15, and the call is, once again, down, to H$4. Quite a little trend we've got going here this weekend. Put is unchanged at H$1.22. It's going out of 3,332 screens, so the studio is optimistic. Critics are not; it's down in the basement at 21% on rottentomatoes.com. Time for a bad pun; I think this will be a "disaster" movie in more ways than one.
Stock: Short
Call: Short
Put: Long

Update Friday morning: All three stocks are down this morning, not a good sign. My gut is telling me that Duplicity is down to about where it will open, so I'm staying long. The reviews have just been too good. I Love You, Man, is down H$1.50, which feels like normal noise. Knowing, on the other hand, looks like a bomb in the making.

Update Sunday night: I was mostly right about DUPLI and ILVUM, slightly too optmistic on both. The market nailed DUPLI, off by a grand total of 42 cents, with a take of $14 million. Predictions were off for ILVUM by about H$4; the take was $18 million. But we all sold Nicholas Cage way too short. KNOWI adjusted north by H$22, with a healthy $24 million for the weekend. Why do I always need reminders that the market can be tragically wrong? I also need to be constantly reminded that the danger in shorting is that there is usually more upside potential than downside. Particularly with an A-list star. My bad.

Obama on AIG: "I'll take responsbility."

President Obama talking today about AIG: "I'll take responsibility."

And the crowd goes wild:

One job I do not want

The one job I would really hate to have right now, even though I am sure it pays very well, is head of marketing at AIG. Really, really happy I don't work in that department today. Just thrilled about that. AIG has spent decades building a reputation as a responsible, sober insurance company. Insurance companies are supposed to be good at evaluating risk. In just a few months they've become a symbol of risk management gone spectacularly bad, and then in just a couple of days they have become a symbol of unchecked greed. Millions of people who had never heard of AIG now associate it with the worst of the crisis.

It's almost too bad AIG isn't paying bonuses right now, because people in the marketing dept. there deserve combat pay just for showing up to work. I'm sure they didn't get AIG into this trouble, but they're sure paying the price.

Those AIG bonuses

So AIG paid some bonuses while they were taking billions of dollars in government money to avoid bankruptcy. Wow.

Like about a gazillion other people, I am pissed off about this, but not too pissed off; in the grand scheme of things, this doesn't surprise me that much or bother me much more. $165 million is not that much money compared to what we're spending to keep AIG afloat, and I think I am just not that surprised any more at the sheer stupidity and greed of people on Wall Street. I'm saving my anger.

What I am surprised at is the stupidity of whoever wrote these contracts. I can understand incentives in a contract: make X amount of money, and we will pay you Y bonus. I have no problem with that. But apparently these people wrote contracts that promised payment of bonuses even when they clearly DID NOT make X amount of money. They must have written contracts that did not take into account the fundamental ability of the company to actually pay the money promised by the contract.

AIG does not have $165 million to kick around. We have lent them tens of billions of dollars. They will make the argument that if they don't pay people, they'll leave. Fine. Let them leave. Then hire someone else and give them incentives to clean up the mess. Right now there are lots of unemployed investment bankers out there. I have no problem incentivizing people to clean up a mess. I have real problems with paying people for failure.

One ancillary question running through this debate has been: can we get the money back? How about taxing the bastards? Megan McArdle asked Laurence Tribe about the technicalities involved in that. I don't think it would be a good idea to target these people particularly. I think Obama is going to wait until the argument swings to whether or not we should raise the capital gains tax, or the top tax rate on the wealthy. He's going to have a fair amount of ammunition. The Republicans argue that the private sector is a better steward of money than the government. Right now, that is just laughable.

Violent claymation chess

Damn do I wish I played chess well enough to really appreciate this.



hat tip: Andrew Sullivan

Happy St. Patrick's Day!

Happy St. Patrick's Day! Erin Go Bragh! Which means, "Ireland Forever!" or, alternatively, "Ireland Until The Day Of Judgment!" Which judgment, presumably, will be positive and in Ireland's favor.

I have actually been to Ireland. I went there because I had read James Joyce's Ulysses in college, and wanted to read it in Dublin. I made it through the first chapter. I forgot one thing: Joyce left.

There weren't many jobs on the Emerald Isle, but there was inspiration aplenty.


An Irish mountain is a Colorado speed bump
blessed and cursed with a leprechaun's arthritic charm


There is a strong demand there for poetry
the land
has a sea-salt lick thirst
for ragefully gorgeous words


Dublin is an antique city
with one foot left in the Middle Ages
a broken kneecap from the Reformation
19th century coal blackening its face
its youth skidding headfirst into the 21st century
and a soul clarified into a green diamond
by a thousand and twenty-one years
of poetry alcohol and warfare


Happy St. Patrick's Day

Cramer v. Stewar: this is what accountability looks like

So Jon Stewart brought Jim Cramer onto his show for the Smackdown Of The Year. Kudos to Cramer for having the guts to go on the show, when he knew that it was not going to a fun, lighthearted interview. I don't really have a strong opinion on Jim Cramer. He seems like a decent guy, but I'm not a fan of the premise of his show, acting crazy about investing. Investing is driven by two emotions: greed and fear. Either can be productive; either can be counterproductive. Successful investors are those who manage to soberly rational about how and why they invest. Emotions cannot be eliminated from investment decisions. But they can be modulated, and they should be understood. Yelling and screaming is not, to my mind, conducive to careful analysis.

This is not to say that Cramer is not a smart guy; he is. He knows his stuff. It's impossible to judge how he has affected markets or individuals specifically.

But Stewart makes a great point: whose side is a network like CNBC on? Are they on the side of the players gaming the system and making millions by being wildly irresponsible, or are they on the side of the masses watching their shows? Cramer is honest enough to admit that he was close enough to some of these people that his familiarity with them may have compromised his judgment. Yeah, just a little, maybe.

One of the great virtues of capitalism is that it occasionally does hold people accountable for their mistakes. This is one of those moments. Jon Stewart represents Jim Cramer's customers, holding him accountable in a very public way. And Cramer knows that he has no choice but to face the music if he is to have any credibility. Small comfort as the markets melt down, but better than nothing.

One thing that Jon Stewart does not point out is that there is always a conundrum in financial reporting: if you are smart enough to understand the financial world well enough to be able to critique it, you probably aren't going to be working for an organization that is truly critical of these financial institutions. This is why I don't read financial analysis in newspapers and magazines like The Nation and Mother Jones. It's why I do read financial analysis in newspapers and magazines like Forbes and The New York Times. It's one reason I have a subscription to The Financial Times. This does not necessarily apply in areas like human rights and civil rights; there are great lawyers working for Amnesty International and the ACLU.

Another part of the problem is the audience. If someone had written a great, penetrating piece in The Nation several years ago criticizing collateralized debt obligations, no one would have been surprised that The Nation was criticizing capitalism. And no one would have been surprised that readers of The Nation were receptive to an argument that was critical of capitalism. On the other hand, if Jim Cramer had been critical of collateralized debt obligations, he would have had more credibility, but it's not clear that it would have made much of a difference. As someone once said, it is difficult to convince someone of something, if their paycheck depends on them believing the opposite. As long as everyone was making money, the most damning questions didn't get asked, answered, or even acknowledged. Except by short sellers.

As for this particular interview. There has been a great deal of discussion of this segment; it made the front page of the FT today. There were some interesting comments about it on Megan McArdle's blog.

Cramer himself dismissed Jon Stewart as just a comedian in the days before he went on the show. That misses the point of comedy like Stewart's entirely. Sure, there are large swaths of comedy that are low-rent, bordering on the imbecilic. But someone like Jon Stewart has to think about the issues he is discussing to be able to make jokes about them. His articulation of the issues in this interview is superb. Comedy at its best offers instant insight.

So this is what accountability looks like. Enjoy. I am posting all three segments of the unedited interview.

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 1

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

Part II:

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 2

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

Part III:

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 3

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The definition of a good day: USC 65, UCLA 55

Miracle of miracles, wonder of wonders, USC beat UCLA in basketball, 65-55 in the semifinals of the Pac 10 tournament. USC is now in the finals of the Pac 10 tournament! We are playing Arizona State today.

Can I get an Amen! USC traditionally dominates football in LA, while UCLA dominates basketball. UCLA was ranked 15, USC was unranked. UCLA is already in March Madness, while USC will get in if they beat Arizona today and clinch the regional championship, and might get in if they come close. The best part of the game was that USC was in the lead for the entire game. It was never even tied. Never even tied. USC must have wanted it real bad. Good for them.

We also beat Cal in this tournament, which is icing on the cake.

I watched the game at a bar in the Valley. I was there with a friend who is a West Virginia fan. We had some hopes that they might beat Syracuse, particularly since the Orangemen were coming off of the second-longest game in NCAA Div. I history, but the Mountaineers went cold in OT, and couldn't defend in the paint. Still, it was a good game.

I only watched the first half of the USC-UCLA game, because we were up at halftime, and I wanted to savor the feeling (I also had to get home). But we won! Now I'm sorry I missed it.

Of course, the true story of basketball in LA is the Lakers, who are steamrolling the West and most of the rest of the league. But last night, it was all about the Trojans.

Good news about Ann Coulter - her book sales are down

From the "Devil In A Little Black Dress" Dept., good news about Ann Coulter, at least good news about her from the liberal perspective: her book sales are down. Oh, can I get an Amen!

I am not even remotely surprised. Her schtick was bound to get old. The fact that she always wears a spaghetti strap black dress doesn't help. I'm sorry, but even the most hardcore, rabid Republican fan of hers is going to get bored of that look.

Neil Young told us that "It's better to burn out/than to fade away."

I am sincerely hoping that Ann Coulter will do both.

"Mr. Amtrak" at work

Joe Biden, aka "Mr. Amtrak," now has a great position from which to fight for rail service in this country. It's working. Good for him. I like Amtrak. Mostly I like Amtrak because I am firm believer in that good old capitalist value of efficiency, and there ain't nothing more efficient than a train for getting people from Point A to Point B. Republicans oppose funding for Amtrak because a lot of their constituents are in rural areas, whereas Amtrak serves all those liberal northeastern intellectual-elitist types between Boston and Washington. Of course, Amtrak also serves the rest of the country, but it's most heavily used in the northeast.

This is one of those things that will be turned around by Obama, and will start to deliver dividends quickly. There are, I am sure, lots of basic things that can be done to improve Amtrak, and spending from the stimulus package will target those. As those improvements start to be implemented, we'll see some positive reinforcement - more people will ride Amtrak, more people will have a better experience riding Amtrak, and therefore more people will be supportive of Amtrak. The numbers will not be dramatic at first, but they will build. More importantly, this is just one area where we will see this effect from the Obama administration.

HSX: Week of March 13, 2009

We've got three movies opening this weekend, a family movie/action movie (always a popular genre), a remake of a movie from the 70's: Race to Witch Mountain (WCMTN). I remember liking the movie way back when I was knee high to Variety. The trailer is funny. It stars Dwayne "The Rock" Johnson, who is becoming a decent movie star; he looks like he might be the next Arnold. The movie is at H$76, down H$4 for today, with a moderately upward trend. The call is just below H$4, but it's down H$1.25 for the day, which is not a good sign. It would have to clear $34 million to make the strike price (H$30), which would mean that it would adjust up to H$102. That's highly unlikely. Meanwhile, the put is moving up. It's on 3,187 screens, a good wide release. It needs to make almost $8,800 per screen (PSA - per screen average) to make the strike price. Last week a movie with nostalgia as its major marketing hook did not do as well as expected. I would like to see this movie, but I'm not rushing out to see it this weekend. It's at 43% on rottentomatoes.com. Finally, the Derby on boxofficemojo.com is predicting an opening of $28 million. Things are not looking good. I'm more comfortable with an opening in the low 20's.
Stock: Short
Call: Short
Put: Long

Then we have another horror movie remake - pretty much required, I suppose, for the second Friday the 13th in two months - The Last House on the Left (LHLFT). I know nothing about it, except that the original is from Wes Craven, who has a great track record in horror. Also, the stock is trading at its high, H$37, and the trend is solidly upward. The call is above H$4, right where it should be for a strike price of H$10. And, as expected, the put is sinking, to below H$1. Boxofficemojo is predicting $14 million, roughly the same as HSX. Not hard to call this one.
Stock: Long
Call: Long
Put: Short

The latest effort to convince the world that young American men are crude, horny beasts takes the form of Miss March (MSMAR), about a guy who wakes up after four years in a coma to find out that his former girlfriend is now a good personal friend of Hugh Hefner, and is the Miss March of the title. Fortunately for all of us with some semblance of taste, it looks like it's bombing, just like Fired Up. The stock is tanking. The strike price is about as low as possible, H$5, but even at that price, the call is not looking good. The put isn't in great shape either - I think it's going to come close to the strike price, so shorting both options is the option I'm going to go with. I'm guessing that it's going to hit about $5-$6 million, then hopefully disappear. Not that I am entirely opposed to Playboy, but this just looks stupid.
Stock: Short
Call: Short
Put: Short

Update Monday morning: My predictions, and those of the market, were very good this weekend. Race to Witch Mountain came in at $25 million, and The Last House on the Left came in at $14 million. The stocks for both adjusted by about H$2, so the market's predictions were very close. I was a little low for WCMTN, right on for LHLFT. Miss March came in below its ridiculously low expectations, at just $2.35 million. Someone's embarrassed.

Obama on education

President Obama gave a speech on education yesterday to the Hispanic Chamber of Commerce. That's an interesting choice of a group to give this speech to. I'm guessing that most, if not all, of the people in attendance have a deep and personal understanding of the phrase "pull yourself up by your bootstraps." A fair number are probably immigrants or the children of immigrants. I think we can safely assume that many were the first in their family to attend college. These are people who understand the value of a good education.

But they are also people who understand the value of innovation. Those two things - the value of education and the value of innovation - have a great deal in common. Most innovations come from people who are educated.

We do have a great deal of educational innovation in this country. Teach For America is an example of an innovative idea that has spawned a great deal of experimentation.

But we also have some persistent problems that seem resistant to change. I'm not going to recite them here. I'm also going to try to restrain myself from rehashing the arguments of either side, including my own.

The problem with education is not teachers unions, as Republicans claim (although I think they make some good points), or not enough money, as Democrats claim (although I would obviously like to see more money going to education).

The problem with education is that we have a 19th century institution in the 21st century. The basic structure of education - students sitting in a classroom, taking notes, doing homework, reading books, solving problem sets, writing papers, taking tests - has not changed in a long, long time. It's a very ordered, highly structured environment, with clearly defined rules, rigid schedules, and carefully laid out expectations.

Very little of which is anything like the real world. Very few jobs have anything like the stability and structure of our current educational system. We have a Newtonian, clockwork educational system in an Einsteinian, relativistic world.

Except of course for the social life of the average high school student. I realize that the concept of "stability" has little meaning in the social life of the average high school student. Been there, done that.

"Stability," "highly structured," and "clockwork" are also words that can be used to describe educational bureaucracies, particularly in large city school systems. Any teacher in a city school from Boston to San Diego has horror stories about dealing with the bureaucracy. That's where lack of innovation starts to become a problem.

Teachers unions are also bureaucratic, and I've heard horror stories about how resistant they can be to innovation, as well. I don't blame teachers unions for becoming bureaucratic - I think they got that way in response to the bureaucracy of of the school districts. The problem is that the school districts and the teachers unions and the supporters of both are frozen in their positions. Neither bureaucracy is going to give up power willingly.

This is where Obama comes in:

“For decades, Washington has been trapped in the same stale debates that have paralyzed progress and perpetuated our educational decline,” Mr. Obama said, in a speech here to the Hispanic Chamber of Commerce. “Too many supporters of my party have resisted the idea of rewarding excellence in teaching with extra pay, even though we know it can make a difference in the classroom. Too many in the Republican Party have opposed new investments in early childhood education, despite compelling evidence of its importance.”

What I said. One of these days I think I am going to have to write about an issue where I strenuously disagree with Obama, just to prove that I can. But not now.

This is classic Obama: challenging the preconceived, stereotypical ideas of both sides, daring each to acknowledge their common ground. The vast majority of Americans understand the value of education. We agree that it is a good thing. We agree that more of it is better. We agree that there are large problems to solve.

This is the second great problem afflicting our educational debate (with the first being the outmoded structures): we do not trust each other. Democrats think Republicans want to sabotage public education, while Republicans think Democrats are beholden to teacher unions. Neither side wants to acknowledge the other side's good intentions.

Again, this is where Obama comes in. He trusts both sides (although he obviously trusts Democrats a bit more). He understands the perspectives of each side.

President Obama is going to force people on both sides of the educational debate to listen to each other and work together. Which is, in itself, is the great innovation that we really need.

Latest bit of nonsense: Obama is "too busy"

A meme that I have been trying to avoid is the idea that Obama is "too busy" these days. The corollary is that, by taking on too many large projects at once, he is distracted from the most important ones. Does he really need to take on health care as he's fixing the economy, getting us out of Iraq, dealing with the Middle East, etc?

Yes, he needs to deal with all of these things. Matt Cooper at TPM has a good takedown on the whole issue.

The problem is not with Obama. He is clearly capable of multitasking. I remember him holding a press conference the day after the election and announcing Rahm Emanuel as his chief of staff. I was prepared to take a couple of days off, but not Obama! I have trouble just blogging about everything.

The problem is with the rest of us, particularly those in the media. They are used to a president with decidedly average intelligence, who not only didn't multitask, he barely unitasked. It was easy to follow Bush's policy innovations, because they were few and far between. Suddenly keeping up with the president is hard work, and they're not used to it. But instead of adjusting properly and figuring out how to deal with the need for more intellectual bandwidth on their part, they're blaming Obama.

Of course, Republicans are playing a part. They're having the same problem as the media: they're even more used to defending a president with not much going on. All they had to do was repeat the same talking points. Attacking a president with lots of initiatives is a completely different story. They don't want Obama to juggle juggle juggle, because that makes their jobs much, much harder. They actually have to think.

Obama is also in very good shape physically, which gives him another advantage, because he has lots of energy. He's also extremely disciplined, which is very different from not only Bush, but Clinton, George H. W. Bush, and Reagan, for that matter.

We haven't had a president this smart, focused, and disciplined, taking on this many problems, since, well, I don't know when. Johnson had a huge war on his hands, and he shook up large chunks of society, but the economy was basically in good shape. Roosevelt had to deal with the Great Depression, but he didn't have to deal with war until his third term.

So if you hear Republicans or commentators questioning Obama's ability to handle many things at once, remember that defense mechanisms come in lots of different shapes and sizes.

Pellegrino Traveler

The pastor of my church, Pastor Mark Rasbach, is working on a TV series about the historical Jesus. My church is Hope Lutheran in Hollywood. If you're looking for a great progressive church in Hollywood, this would be it. Check out the trailer:

Obama on signing statements

From the NY Times:

"WASHINGTON — Calling into question the legitimacy of all the signing statements that former President George W. Bush used to challenge new laws, President Obama ordered executive officials on Monday to consult with Attorney General Eric H. Holder Jr. before relying on any of them to bypass a statute."

No comment necessary, except a big sigh of relief.

Send Rush Limbaugh a message!

The Democratic Party is planning to set up a billboard in Rush Limbaugh's hometown with a message to him. Woo-hoo! Good times! They are considering a number of different messages, and are soliciting input from intelligent, enlightened people everywhere. Vote to send the Republican Party's demagogue du jour a message! I voted for the sign "Rush: Say "Yes" to America," because I believe in being positive and respectful towards your political opponents. Even idiots like Limbaugh.

I would recommend that you vote early and vote often, but you have to sign in to vote, so I think the Democrats may be trying to maintain high standards of electoral integrity on this one. Which, of course, I strongly support. So vote once and tell your friends!

Quote of the day

"The worsening economic situation is your [Republicans'] fault and your fault alone. The Republicans created this mess through 8 years of backing the worst president in our history and now, because you put partisan ideology ahead of the good of our country, you have blown your last chance to redeem yourselves. You deserve the banishment to the political wilderness that awaits all traitors."

Frank Schaeffer, in the HuffPost. And this guy used to be a Republican. He campaigned for McCain in 2000.

Barbie Turns 50

Barbie turned 50 today. Which is amazing, if you think about it, because she doesn't look a day over 23. I read one article about it, an Op-Ed piece in the LA Times. I read it because it was staring at me as I was eating dinner. Although, I have to admit, I have been aware of Barbie's impending anniversary for a while. I'm not sure if I have ever actually touched a Barbie. Pretty sure I've never held a Ken doll in my hands. I am quite sure that I never wanted to be Ken, or, in fact, to have anything whatsoever to do with him. I think I've spent more time thinking about Ken just now than I have in the rest of my life.

I have heard a lot of criticism of Barbie over the years - mostly that she has an unrealistic figure, and that little girls develop unhealthy body images because of her. I never really understood this. Of course she's unrealistic - she's a doll. When I was a little boy, I wanted to be an astronaut and a fireman. I survived my youthful delusions. Well, those youthful delusions, anyways. Like boys only have down-to-earth role models. Um, no. Can you say "James Bond?"

This is an excellent excuse to post Aqua's video of "Barbie Girl." It's a classic.

Brancy: Brad Pitt meets Nancy Pelosi

Brad Pitt traveled to Capitol Hill today, and met with Nancy Pelosi. They held a joint press conference, with Pelosi just gushing. Dana Milbank, WaPo columnist, let his imagination run wild, and came up with a couple of alternative takes on Brad Pitt movies: What if it was Nancy Pelosi in Mr. and Mrs. Smith, instead of Angelina Jolie? This is hysterical.

Stopping Junk Mail

A friend just emailed me a petition to sign in support of legislation to stop junk mail, by creating a Do Not Mail registry, like the Do Not Call registry. I signed it as fast as I could click on the link.

Sounds like a great idea. I'm not even stopping to think about the politcal, legal, or constitutional ramifications. Just get it done. Please please please, Nancy Pelosi and Harry Reid, please just eliminate this foul byproduct of our consumer-driven, materialist society.

You can sign (and watch some funny videos about helping out this campaign) the petition here.

Obama on Stem Cells

President Obama has issued an executive order changing the Bush administration's position on stem cell research. Check off another idiotic decision consigned to the dustbin of history. The folks at Daily Kos are, of course, thrilled, and offer some good background.

This should drive a nice fat wedge between three Republican constituents: the pro-life crowd, on the one hand, and, on the other hand, people who have been affected by diseases like Parkinson's and Alzheimer's, and businesspeople who stand to benefit from the research that will now be allowed.

Conservative opposition to science has always confused me. I can understand opposition to stem-cell research, based on opposition to abortion. But these people are also supposed to be capitalists. Don't they know that advances in science are an absolutely essential part of increasing productivity, and therefore driving economic growth? Pick any company on the planet - there's about a 99.999% chance that its success is based on science. The internal combustion engine. Microprocessors. Radios. Televsions. Heck, electricity, without which our modern economy would not be possible, required scientific discovery.

So Obama has just given capitalists another reason to believe that Democrats are more in tune with their needs than Republicans. Works for me!

Political humor - First week in March, 2009

Some good clips from HuffPost: Bill Maher explains the role of government to conservatives. Jon Stewart, Stephen Colbert, and a couple of other late night guys take down Rush Limbaugh and some of his friends. Enjoy.

Hillary in the Middle East

Hillary Clinton just toured the Middle East. I have to say that I was somewhat impressed. I think she and Obama are taking the right steps. Talking to Syria is a big deal, even if it's been done before. She proposed a conference on Afghanistan, and mentioned possibly inviting Iran. Which would make sense, since they are neighbors. She brought some aid to the Palestinians, which can't hurt.


I call this the Great Potential Thaw. One good thing about coming after the Bush administration is that there are a lot of things the Obama administration can do to just repair relations and ease tensions. Talking to Syria may lead to a breakthrough on the Golan Heights, which would bolster America's credibility in the region. Syria is closely tied to Iran, and will put Iranian interests ahead of American concerns. The Iranians may try to sabotage American-Syrian relations. But if America talks to Iran as well, that makes talking to Syria easier.


Speaking of Iran, Russia may be somewhat helpful here. The Russians hate the missile defense system in Eastern (or Central) Europe, because they believe that it is aimed at them. Which they have every reason to believe. Obama, during the campaign, supported the missile defense system. Initially, I was disappointed by that, because I think missile defense is a stupid idea, but then I realized that Obama will treat it as a bargaining chip with Russia. Which is exactly what he is doing. Obama is offering to engage in diplomacy about missile defense if Russia puts pressure on Iran. Good call linking those two.


All in all, a great deal of progress has been made very quickly. Opening up to Syria could help with both the Palestinian and Iranian problems; opening up to Russia on missile defense helps on Iran; opening up with Iran has its own benefits, as well as possibly helping with Afghanistan. The fact that oil prices are low helps all the way around, because many of these countries have lost a great deal of their leverage, particularly Iran.


Two unanswered questions so far are Hamas in Gaza and Egypt. If Obama can loosen the blockade, that would be immensely helpful.

What's just insanely refreshing is being able to look at this tangled web, all of these forces pulling in different directions, and start to understand it because you know that the President of the United States actually is making the same effort.

Run, Newt, run!

Newt Gingrich is thinking of running for president in 2012. Oh, please, God, let it happen. The answer to every liberal's prayers. An incredibly obnoxious, fantastically egotistical, deeply polarizing old white guy from the South. Wow, he would be the perfect candidate for Obama to run against.

Just to prove that he is as deluded as ever about his abilities, this is how Newt describes himself:

“I think I’m closer to Benjamin Franklin than to George Washington.”

I normally try to respect my political opponents, and I have to admit that every now and then Gingrich says something interesting. As a political strategist, the man deserves a fair degree of respect: he accomplished what noone else thot was possible when the Republicans took over the House in 1994.

But the best possible thing about Newt Gingrich running for president - apart from the sheer entertainment value of making the kind of bizarre pronouncements above - would be the opportunity to thoroughly humiliate him. There are many Republicans I respect and try to treat with decency.

Newt Gingrich is not one of them.

Elections in LA: Not a great day for Antonio V

Antonio Villaraigosa won reelection as Mayor of Los Angeles yesterday. Good news for him, but bad news in the results - he only won 55% of the vote. I was joking yesterday that the only question in this election was whether he was going to get 70, 80, or 85% of the vote. Ooops. He had nine opponents, but none of them were serious candidates. One of them was listed on the ballot as having the nickname "Zuma Dogg." That was actually on the ballot, with two "g's" in "Dogg" (only in LA, really - Zuma is the name of a beach in Malibu). Only 15% of the electorate turned out. That ain't much of a mandate. He pushed hard for Measure B, a proposal for solar energy in LA, but it looks like it might not pass. Which would be a good thing - I voted against it.

I still like Antonio, I still think he's doing a good job as mayor. But I agree with the LA Times that Antonio and his allies need to do some deep thinking. Democrats run LA with virtually no interference from Republicans. That can be good and bad; good, because there isn't much opposition. Bad, because there isn't much opposition. That's good because it makes it easier to get things done, but bad because getting things done easily sometimes means you start to get sloppy without someone asking hard questions.

It is entirely possible that the lack of serious opposition is starting to go to Antonio's head. And the heads of those around him. Power corrupts, guys. Hopefully, this will be a wakeup call. Antonio has done a lot of good things, and he hasn't made any horrendous mistakes. Most of what he has done has been largely invisible; from what I can tell, he's appointed very good people. He has gotten a lot of good things going, and there are many things going well under him that started out under people before him; the subway is one, cleaning up the ports is another. Let's hope he learns the lesson of this election quickly, and let's hope this is one trend that starts and stops in LA - thank goodness there are enough Republicans in Congress to at least pretend to be the loyal opposition. Antonio has hit a lot of singles, maybe a few doubles, but no home runs. He needs to hit something out of the park.

My suggestion would be LAX. Something needs to be done with the major entry point for millions of people to LA. It needs to be seriously redesigned, and there needs to be good public transportation there, ideally light rail. There were some good proposals floating around several years ago, but I haven't heard anything basically since Antonio took office. My impression is that there have been many minor changes at the airport, but nothing major. Even if he proposes a sweeping overhaul tomorrow, nothing will be visibly different by the time he's running for his next office, whatever that is. Antonio opposed the last major overhaul of the airport; that was one of my points of disagreement with him. Reviving that proposal - or any proposal - would be a good way to generate the kind of attention he wants and needs to be governor. Someone get this man a cup of coffee so he can smell it.

Jon Stewart vs. CNBC

Jon Stewart rips CNBC a new one. Richly deserved (pun intendend). The humiliation has just begun.

The Daily Show With Jon StewartM - Th 11p / 10c

CNBC Gives Financial Advice

Daily Show Full Episodes
Important Things With Demetri Martin

Political Humor
Joke of the Day

HSX: Week of March 6, 2009

There's only one movie opening in wide release this weekend, but it's a doozy: Watchmen. It's based on the groundbreaking graphic novel from 1985. The title comes from the phrase "Who will watch the watchmen?" I've never read the book, but I know some comic book fans who have loved it ever since it came out. This is one of the most anticipated movies not just of this year, but of any year.

First, let's get the basics out of the way. The stock is trading around H$175, not too far off its high of H$186. It's been trading around there for months. This is not surprising; the stock IPO'd in November 2001, and hype has been building for literally years. That price predicts an opening weekend of around $65 million, which, coincidentally, is the strike price for the options. It's been up around H$4-$5 today, a good sign. The price on the call is in the stratosphere, almost H$10. That's nosebleed territory. The put is at H$2, which is actually higher than I expected; I was thinking it would be below a buck.

I checked the screen count, which I am now going to be doing religiously. It's 3,611, which is good a wide release, but not immensely wide. To hit $75 million with that many screens, it would have to have a per screen average (PSA) of $20,770. That's entirely possible. Zack Snyder's other comic book movie, 300, opened on 3,103 screens, with a PSA of $22,844, with a gross of almost $71 million. Dark Knight opened on 4,366 screens and averaged $36,283, for a gross of $158 million.

So $65 million is at the low end of possibility. If Watchmen averages $30,000 per screen, roughly between 300 and Dark Knight, it will pull in $108 million. No wonder the call is trading above any call I can remember.

Some critics have grumbled about the complexity of the plot, but it's scoring 65% on rottentomatoes.com, so not too many worries there.

I had the foresight (patting myself on the back here) to buy the stock when it was at H$0.66. Yes that's right, 66 cents. So I have a profit so far of over H$8,700,000, with a return on my investment of 26,363%. Not bad.

Should be a good weekend for geeks and dysfunctional superheroes!

Stock: Way long
Call: Even longer
Put: Short

Update Monday afternoon: Oops. It was a good weekend for geeks and dysfunctional superheroes, but not a good weekend for making predictions about how well Watchmen was going to perform, particularly me. It came in at $55.7 million, a solid performance, but nowhere near even the strike price. I should have known; the stock was down more than H$4 on Friday morning, and I ignored my years of experience telling me to bail. Damn! I feel stupid.

I think my mistake was buying too much into the hype. This is one problem with living in LA; it's entirely possible that I occasionally identify a little too personally with the movie industry, so I am biased in favor of major releases wanting to do well, because those are my peeps making that movie. That's another thing to remember. This might explain why I was so wrong the other way with Madea Goes To Jail - Tyler Perry is not a product of Hollywood (his studio is in Atlanta).

I did see the movie on Saturday night, and I completely understand why it didn't do quite as well as anticipated. First, it's very long, which cuts into the number of screenings available. I knew that was a possibility, but discounted it. But it's also a very violent movie, more so than I was expecting. I got it, but I can see why reading the comic book would have been helpful. There was a huge amount of exposition, all of it necessary, but it felt like the story could have filled at least one more movie.

Also, I strongly suspect that the story was much more relevant in 1985 than it is today. It takes place in an alternate reality, in which Richard Nixon is still president, in his fifth term, and nuclear war with the Russians is a very real possibility. Back then, I'm sure it was a great political statement. Today, it's more of a pure comic book.

Vouchers in DC schools

The debate about vouchers in schools is taking an interesting turn in Washington, DC. The District currently has a voucher program, which was started at the behest of a Republican, back when they were in power in Congress. Now that Democrats are back in power, they would like to end it. Except one Democrat, but one very important Democrat in this debate: Arne Duncan, Obama's Secretary of Education. He's in favor of letting kids stay in schools that they are already attending. As someone who attended elementary schools in three states, I'm strongly in favor of continuity.


I'm also one of the only Democrats in favor of vouchers. I'm a big fan of public education. My mother taught elementary school, my brother teaches high school English, and my public high school education in suburban Detroit was one of the best things that ever happened to me.


But I'm also a fan of innovation. One reason my high school education was so good was that I was in a program called "Flex" (short for Flexible Scheduling) that allowed teachers a great deal of freedom to teach unusual topics in interesting ways. We watched movies like "Ran" and "The Seventh Seal." I actually graduated from high school with a better knowledge of foreign film than American movies.


I am also of the opinion that we already have an incredibly successful voucher program in this country. It's just that we have it at the college level. Think about it: the Federal government subsidizes private higher education in a number of ways: Pell grants, student loans, grants from the NEH, NIH, etc. For me, there is very little difference between Pell grants and vouchers. Both of them are payments from the government that allow students to study at private schools. Pell grants are basically vouchers for college students. The only difference between Pell grants and vouchers is the age of the student.


One argument against vouchers is that they subsidize religious education. But a fair number of colleges and universities in this country are religious in nature, and we have no issues subsidizing those. Georgetown, Notre Dame, and Boston College are all Jesuit. There are dozens more, associated with a wide variety of religions.

So I say we keep vouchers. Americans are constantly complaining about the state of our educational system. But our higher educational system is the envy of the world. We have a great model for how vouchers can work to encourage innovation and promote excellence in education. We just haven't realized it yet.