New Sisyphus: "Irish Republic Mourned the Death of Hitler
It's been known for years--well, actually, now that I think about it--it's been known since 1945: the government of the Irish Republic officially mourned the death of Adolph Hitler.
That's right. You read that right. Remember that the next St. Patrick's Day when some Irish-American gets all weepy about Ireland."
Saturday, December 31, 2005
Thursday, December 29, 2005
Monday, December 26, 2005
Power Line: What Kuttner could learn from Lincoln
Power Line: What Kuttner could learn from LincolnI am naturally anti-slavery. If slavery is not wrong, nothing is wrong. I can not remember when I did not so think, and feel. And yet I have never understood that the Presidency conferred upon me an unrestricted right to act official upon this judgment and feeling. It was in the oath I took that I would, to the best of my ability, preserve, protect, and defend the Constitution of the United States. I could not take the office without taking the oath. Nor was it my view that I might take an oath to get power, and break the oath in using the power. I understood, too, that in ordinary civil administration this oath even forbade me to practically indulge my primary abstract judgment on the moral question of slavery. I had publicly declared this many times, and in many ways. And I aver that, to this day, I have done no official act in mere deference to my abstract judgment and feeling on slavery. I did understand however, that my oath to preserve the constitution to the best of my ability, imposed upon me the duty of preserving, by every indispensable means, that government – that nation – of which that constitution was the organic law. Was it possible to lose the nation, and yet preserve the constitution? By general law life and limb must be protected; yet often a limb must be amputated to save a life; but a life is never wisely given to save a limb. I felt that measures, otherwise unconstitutional, might become lawful, by becoming indispensable to the preservation of the constitution, through the preservation of the nation. Right or wrong, I assumed this ground, and now avow it. I could not feel that, to the best of my ability, I had even tried to preserve the constitution, if, to save slavery, or any minor matter, I should permit the wreck of government, country, and Constitution all together.
Thursday, December 22, 2005
Monday, December 19, 2005
Power Line: A Really Obvious Point
Power Line: A Really Obvious PointA Really Obvious Point
I haven't had time yet to study the legal arguments surrounding the NSA intercepts of international communications; Hugh Hewitt, for one, has addressed some of the technical issues. But there are a couple of fundamental points that, while obvious, haven't been made often enough.
First, those who leap to the conclusion that the intercepts must be unconstitutional seem to assume that all searches require a warrant. That is not correct. The Fourth Amendment prohibits "unreasonable" searches and seizures. Warrantless searches are legal, and appropriately so, in a number of circumstances.
Second, the issue of speed is critical. When we capture a cell phone or laptop being used by a terrorist, it is usually because we captured or killed the terrorist. The amount of time we have to exploit the capture is very short. The terrorists will soon figure out that their confederate is out of business, and stop using his cell phone numbers and email addresses. So if we are to benefit from the capture, we must begin obtaining information right now. A delay of even a few days may render the information useless, as the terrorists will have realized that their colleague has been neutralized. And it is likely that the first hours or even minutes after we obtain a cell phone number or email address are most apt to yield helpful new information. So it is easy to see why going through the process needed to obtain a warrant from the FISA court would undermine the effectiveness of our anti-terror operations.
This is entirely different from the situation we are all familiar with, where wiretaps are authorized against organized crime figures. Such wiretaps are not executed in connection with an arrest. They often continue for months or even years. There is ordinarily nothing about the context to suggest that the utility of the wiretap will expire in a matter of days, if not hours. Hence the delay required to obtain a warrant is usually immaterial.
Under the circumstances we face in dealing with the terrorist threat, is it unreasonable--the Constitutional standard--to begin immediately intercepting calls being made to a captured terrorist cell phone, whether those calls originate in the U.S. or another country? Of course not.
I'm just guessing here, but I suspect that we have technology in place that allows us to begin intercepting phone calls within a matter of minutes after we learn of a phone number being used by an al Qaeda operative overseas. My guess is that there is a system into which our military can plug a new phone number, and begin receiving intercepts almost immediately. I hope so, anyway; and I'm guessing that the disclosure of this system to al Qaeda is one of the reasons why President Bush is so unhappy with the New York Times. If we do have such a technology, it certainly would help to explain the remarkable fact that the terrorists haven't executed a successful attack on our soil since September 2001. And the disclosure of such a system, by leaking Democrats in the federal bureaucracy and the New York Times, makes it more likely, by an unknowable percentage, that al Qaeda and other terrrorist organizations will launch successful attacks in the future.
I haven't had time yet to study the legal arguments surrounding the NSA intercepts of international communications; Hugh Hewitt, for one, has addressed some of the technical issues. But there are a couple of fundamental points that, while obvious, haven't been made often enough.
First, those who leap to the conclusion that the intercepts must be unconstitutional seem to assume that all searches require a warrant. That is not correct. The Fourth Amendment prohibits "unreasonable" searches and seizures. Warrantless searches are legal, and appropriately so, in a number of circumstances.
Second, the issue of speed is critical. When we capture a cell phone or laptop being used by a terrorist, it is usually because we captured or killed the terrorist. The amount of time we have to exploit the capture is very short. The terrorists will soon figure out that their confederate is out of business, and stop using his cell phone numbers and email addresses. So if we are to benefit from the capture, we must begin obtaining information right now. A delay of even a few days may render the information useless, as the terrorists will have realized that their colleague has been neutralized. And it is likely that the first hours or even minutes after we obtain a cell phone number or email address are most apt to yield helpful new information. So it is easy to see why going through the process needed to obtain a warrant from the FISA court would undermine the effectiveness of our anti-terror operations.
This is entirely different from the situation we are all familiar with, where wiretaps are authorized against organized crime figures. Such wiretaps are not executed in connection with an arrest. They often continue for months or even years. There is ordinarily nothing about the context to suggest that the utility of the wiretap will expire in a matter of days, if not hours. Hence the delay required to obtain a warrant is usually immaterial.
Under the circumstances we face in dealing with the terrorist threat, is it unreasonable--the Constitutional standard--to begin immediately intercepting calls being made to a captured terrorist cell phone, whether those calls originate in the U.S. or another country? Of course not.
I'm just guessing here, but I suspect that we have technology in place that allows us to begin intercepting phone calls within a matter of minutes after we learn of a phone number being used by an al Qaeda operative overseas. My guess is that there is a system into which our military can plug a new phone number, and begin receiving intercepts almost immediately. I hope so, anyway; and I'm guessing that the disclosure of this system to al Qaeda is one of the reasons why President Bush is so unhappy with the New York Times. If we do have such a technology, it certainly would help to explain the remarkable fact that the terrorists haven't executed a successful attack on our soil since September 2001. And the disclosure of such a system, by leaking Democrats in the federal bureaucracy and the New York Times, makes it more likely, by an unknowable percentage, that al Qaeda and other terrrorist organizations will launch successful attacks in the future.
New Sisyphus
New Sisyphus: "Back to 'Tookie's' execution: I can understand being against the death penalty. I almost am against it myself. But rallying in defense of a killer? Crying when he is executed? What is that about? And for the life of me I do not understand why Black 'leaders' get so personally invested in stories like this. What is the NAACP saying by zealously representing Williams and pleading for his life? That the cause of Stanley Williams is central to Black people as a whole? There are only two possible answers to that: 1) if no, then the NAACP is wasting precious time, resources and it's still somewhat good name, 2) if yes, then it's a sad statement of where the NAACP thinks Black people are in this country and one I don't buy."
Sunday, December 18, 2005
Wonderful advice
Bill Cara Technical
The fact is you will never be perfect. At the end of the day, if you can be 60% or 70% right in your decisions and keep your average percentage loss below your average percentage gain, you’ll become a highly effective and successful securities trader.
It’s nice to have big dollar wins but it’s more important not to have big dollar losses. A 90% loss in a position requires a gain of 1000% in that holding to recover. Think about that!
If you lose as much as you win, as often and in percentage terms, you soon will not have any assets left. If you don't believe me, start with $100,000; then take a 50 percent loss (leaving $50,000); then earn a 50 percent profit (leaving $75,000); then take a 50 percent loss (leaving $37,500); then earn a 50 percent profit (leaving $56,250); then take a 50 percent loss (leaving $28,125); then earn a 50 percent profit (leaving $42,188); then take a 50 percent loss (leaving $21,094); then earn a 50 percent profit (leaving $31,641); then take a 50 percent loss (leaving $15,820)... you get the point.
So, traders have to be defensive before they go on the offensive.
More than anything, I feel that technical tools can really help you take that necessary defensive posture.
The fact is you will never be perfect. At the end of the day, if you can be 60% or 70% right in your decisions and keep your average percentage loss below your average percentage gain, you’ll become a highly effective and successful securities trader.
It’s nice to have big dollar wins but it’s more important not to have big dollar losses. A 90% loss in a position requires a gain of 1000% in that holding to recover. Think about that!
If you lose as much as you win, as often and in percentage terms, you soon will not have any assets left. If you don't believe me, start with $100,000; then take a 50 percent loss (leaving $50,000); then earn a 50 percent profit (leaving $75,000); then take a 50 percent loss (leaving $37,500); then earn a 50 percent profit (leaving $56,250); then take a 50 percent loss (leaving $28,125); then earn a 50 percent profit (leaving $42,188); then take a 50 percent loss (leaving $21,094); then earn a 50 percent profit (leaving $31,641); then take a 50 percent loss (leaving $15,820)... you get the point.
So, traders have to be defensive before they go on the offensive.
More than anything, I feel that technical tools can really help you take that necessary defensive posture.
One Hand Clapping
One Hand Clapping: "Three days ago was a landmark day for Iraq – and the rest of the Arab world. Strategy Page explains,
This relentless progress of democracy is causing quite a commotion throughout the Arab world. While it is fashionable to denounce the American presence in Iraq, and what the Americans were doing, the Arab language buzz on the net is going in unexpected directions. Because of al Jazeera and the Internet, young Arabs everywhere are not only able to observe what it happening in Iraq, but to discuss it with young Iraqis. These discussions are not noted much in the West, because they generally take place in Arabic, and often via email and listservs. The non-Iraqi Arabs are impressed at the proliferation of media in Iraq, and the eagerness of Iraqis to vote, and make democracy work. The economic growth in Iraq is admired, and is already attracting entrepreneurs from other Arab countries.
Remember, though – Iraq is a quagmire! As Mark Steyn observes, “Well, that old Iraqi quagmire just keeps getting worse and worse … .” The question is, for whom? Well, Steyn answers.
Yesterday my wife and I attended the December luncheon of Tennessee Marine Families. One of the moms there mentioned that she emails a young Iraqi woman, Bana, of about the same age as the first-term Marines serving there. The Marine mom sent me the email she had received Friday from Bana about election day:
The election day was terrific,we all walked to the poll (my parents & I, our next door neighbor the parents & their 2 daughters & another neighbor; only the parents as their boys can`t vote cuz they are in the same age with my brother) to vote at 4:00 Pm. We spend the morning in baking cake & preparing ourselves as as if we had a party, we wore the best clothes we have,wore make up ..when we came back, they came to our home & celebrate till 10:00 pm. We hope the new coming year comes with peace. Thank you for make dream come true.
As Steyn writyes, “Bush lied, people dyed. Their fingers.” That dream is one that men and women of other Arab countries are starting to wonder when they will realize."
This relentless progress of democracy is causing quite a commotion throughout the Arab world. While it is fashionable to denounce the American presence in Iraq, and what the Americans were doing, the Arab language buzz on the net is going in unexpected directions. Because of al Jazeera and the Internet, young Arabs everywhere are not only able to observe what it happening in Iraq, but to discuss it with young Iraqis. These discussions are not noted much in the West, because they generally take place in Arabic, and often via email and listservs. The non-Iraqi Arabs are impressed at the proliferation of media in Iraq, and the eagerness of Iraqis to vote, and make democracy work. The economic growth in Iraq is admired, and is already attracting entrepreneurs from other Arab countries.
Remember, though – Iraq is a quagmire! As Mark Steyn observes, “Well, that old Iraqi quagmire just keeps getting worse and worse … .” The question is, for whom? Well, Steyn answers.
Yesterday my wife and I attended the December luncheon of Tennessee Marine Families. One of the moms there mentioned that she emails a young Iraqi woman, Bana, of about the same age as the first-term Marines serving there. The Marine mom sent me the email she had received Friday from Bana about election day:
The election day was terrific,we all walked to the poll (my parents & I, our next door neighbor the parents & their 2 daughters & another neighbor; only the parents as their boys can`t vote cuz they are in the same age with my brother) to vote at 4:00 Pm. We spend the morning in baking cake & preparing ourselves as as if we had a party, we wore the best clothes we have,wore make up ..when we came back, they came to our home & celebrate till 10:00 pm. We hope the new coming year comes with peace. Thank you for make dream come true.
As Steyn writyes, “Bush lied, people dyed. Their fingers.” That dream is one that men and women of other Arab countries are starting to wonder when they will realize."
Friday, December 16, 2005
Michelle Malkin
Michelle Malkin: "Paying tribute to Rick Rescorla
http://www.NewsAndOpinion.com -- IF politicians can find it in their hearts to give away government aid to illegal alien relatives of the victims of Sept. 11, isn't it time to reward a naturalized American hero who sacrificed his life to save hundreds, if not thousands, of lives on that day?
Rick Rescorla was born in England and came to the U.S. to enlist in the Army in 1963. He was a key figure in the ground-breaking Vietnam War book, 'We Were Soldiers Once.and Young,' which was turned into a movie starring Mel Gibson that debuts nationwide next weekend. A photo of Rescorla, haggard but fierce with his bayonet fixed, graces the cover of the true-life military thriller co-authored by Lt. Gen. Harold G. Moore and former UPI reporter Joe Galloway.
Lt. Rescorla's bravery and good humor were infectious. In the midst of battle, the fierce anti-Communist sang old Cornish tunes to boost morale. The men of the 2nd Battalion, 7th Cavalry nicknamed him 'Hard Core' for his daring exploits. But beneath this platoon leader's steel exterior lay soulful introspection. Rescorla, who later became a military instructor, construction firm owner, writer, lawyer, and professor, shared with Moore and Galloway his recollections after the infamous battle at Landing Zone X-Ray in Vietnam's Ia Drang Valley:
'We were flown away, but the stench of the dead would stay with me for years after the battle. Below us the pockmarked earth was dotted with enemy dead. Most of the platoon were smiling. Suddenly a grenadier next to me threw up on my lap. I understood how he felt. He was, like many, a man who had fought bravely even though he had no stomach for bloodletting.'
Rescorla earned a Silver Star, a Purple Heart and Bronze Stars for Valor and Meritorious Service. He became a U.S. citizen in 1967, got married, had children, divorced, remarried, and found mid-life success on Wall Street as vice president of security at Morgan Stanley Dean Witter. His office was on the 44th floor of the south tower. Rescorla brought military precision, preparation, and intensity to the job. He drilled employees regularly and gave prescient warnings to Port Authority officials that the Twin Towers were extremely vulnerable to a terrorist attack. His advice was ignored. During the 1993 World Trade Center garage bombing, Rescorla ensured that every one of his firm's employees was safely evacuated. He was the last man out of the building.
Again, he offered his expertise and advice to the Port Authority. Again, it was ignored. And again, on Sept. 11, Rescorla found himself leading a massive evacuation of Morgan Stanley's 2,700-person workforce - which occupied floors 44 through 74 of the south tower. As soon as the first plane hit the north tower, Rescorla sprung into action. He ignored the admonition of Port Authority security officials to stay put. A co-worker shot a now-famous photograph of Rescorla commanding his troops with a bullhorn. Employees marched two-by-two down the stairwells. Rescorla sang patriotic songs to keep them calm. 'Today is a proud day to be an American,' he is said to have told co-workers.
Most of Morgan Stanley's employees were safely out of the building by the time the second plane hit the south tower. All but six of Morgan Stanley's workers survived. Rescorla was one of the lost six. He was last seen walking back up the stairs, in search of stragglers.
Rescorla's bravery has been recounted in worldwide media outlets, from the Washington Post to the New Yorker magazine to the BBC. A movie based on his life is now being planned. And hundreds of veterans have signed an online petition urging President Bush to posthumously award Rescorla the Presidential Medal of Freedom.
It's exactly the kind of thing Rescorla would not have wanted. He shunned public praise for his past heroism, kept his war photos and medals in a closet, and told his wife he didn't want to see the Mel Gibson movie based on 'We Were Soldiers' when it came out. Rescorla was a man who didn't need to be reminded of the high price of freedom.
We do"
http://www.NewsAndOpinion.com -- IF politicians can find it in their hearts to give away government aid to illegal alien relatives of the victims of Sept. 11, isn't it time to reward a naturalized American hero who sacrificed his life to save hundreds, if not thousands, of lives on that day?
Rick Rescorla was born in England and came to the U.S. to enlist in the Army in 1963. He was a key figure in the ground-breaking Vietnam War book, 'We Were Soldiers Once.and Young,' which was turned into a movie starring Mel Gibson that debuts nationwide next weekend. A photo of Rescorla, haggard but fierce with his bayonet fixed, graces the cover of the true-life military thriller co-authored by Lt. Gen. Harold G. Moore and former UPI reporter Joe Galloway.
Lt. Rescorla's bravery and good humor were infectious. In the midst of battle, the fierce anti-Communist sang old Cornish tunes to boost morale. The men of the 2nd Battalion, 7th Cavalry nicknamed him 'Hard Core' for his daring exploits. But beneath this platoon leader's steel exterior lay soulful introspection. Rescorla, who later became a military instructor, construction firm owner, writer, lawyer, and professor, shared with Moore and Galloway his recollections after the infamous battle at Landing Zone X-Ray in Vietnam's Ia Drang Valley:
'We were flown away, but the stench of the dead would stay with me for years after the battle. Below us the pockmarked earth was dotted with enemy dead. Most of the platoon were smiling. Suddenly a grenadier next to me threw up on my lap. I understood how he felt. He was, like many, a man who had fought bravely even though he had no stomach for bloodletting.'
Rescorla earned a Silver Star, a Purple Heart and Bronze Stars for Valor and Meritorious Service. He became a U.S. citizen in 1967, got married, had children, divorced, remarried, and found mid-life success on Wall Street as vice president of security at Morgan Stanley Dean Witter. His office was on the 44th floor of the south tower. Rescorla brought military precision, preparation, and intensity to the job. He drilled employees regularly and gave prescient warnings to Port Authority officials that the Twin Towers were extremely vulnerable to a terrorist attack. His advice was ignored. During the 1993 World Trade Center garage bombing, Rescorla ensured that every one of his firm's employees was safely evacuated. He was the last man out of the building.
Again, he offered his expertise and advice to the Port Authority. Again, it was ignored. And again, on Sept. 11, Rescorla found himself leading a massive evacuation of Morgan Stanley's 2,700-person workforce - which occupied floors 44 through 74 of the south tower. As soon as the first plane hit the north tower, Rescorla sprung into action. He ignored the admonition of Port Authority security officials to stay put. A co-worker shot a now-famous photograph of Rescorla commanding his troops with a bullhorn. Employees marched two-by-two down the stairwells. Rescorla sang patriotic songs to keep them calm. 'Today is a proud day to be an American,' he is said to have told co-workers.
Most of Morgan Stanley's employees were safely out of the building by the time the second plane hit the south tower. All but six of Morgan Stanley's workers survived. Rescorla was one of the lost six. He was last seen walking back up the stairs, in search of stragglers.
Rescorla's bravery has been recounted in worldwide media outlets, from the Washington Post to the New Yorker magazine to the BBC. A movie based on his life is now being planned. And hundreds of veterans have signed an online petition urging President Bush to posthumously award Rescorla the Presidential Medal of Freedom.
It's exactly the kind of thing Rescorla would not have wanted. He shunned public praise for his past heroism, kept his war photos and medals in a closet, and told his wife he didn't want to see the Mel Gibson movie based on 'We Were Soldiers' when it came out. Rescorla was a man who didn't need to be reminded of the high price of freedom.
We do"
Power Line: Let's Send These Guys to Jail
Power Line: Let's Send These Guys to Jail: "Let's Send These Guys to Jail
The Valerie Plame case has established that any leak of classified information from an intelligence agency is a serious matter, regardless of how trivial the information may be, and must result in criminal investigation and prosecution. Fine. Here's another one that's not trivial, from today's New York Times:
Months after the Sept. 11 attacks, President Bush secretly authorized the National Security Agency to eavesdrop on Americans and others inside the United States to search for evidence of terrorist activity without the court-approved warrants ordinarily required for domestic spying, according to government officials.
Under a presidential order signed in 2002, the intelligence agency has monitored the international telephone calls and international e-mail messages of hundreds, perhaps thousands, of people inside the United States without warrants over the past three years in an effort to track possible 'dirty numbers' linked to Al Qaeda, the officials said. The agency, they said, still seeks warrants to monitor entirely domestic communications.
How does the Times know this? Because intelligence officials who are hostile to the Bush administration, and disagree with its policies, leaked the information:
Nearly a dozen current and former officials, who were granted anonymity because of the classified nature of the program, discussed it with reporters for The New York Times because of their concerns about the operation's legality and oversight.
The administration vigorously defends both the legality and the effectiveness of the policy:
The Bush administration views the operation as necessary so that the agency can move quickly to monitor communications that may disclose threats to the United States, the officials said. Defenders of the program say it has been a critical tool in helping disrupt terrorist plots and prevent attacks inside the United States.
Administration officials are confident that existing safeguards are sufficient to protect the privacy and civil liberties of Americans, the officials say. In some cases, they said, the Justice Department eventually seeks warrants if it wants to expand the eavesdropping to include communications confined within the United States. The officials said the administration had briefed Congressional leaders about the program and notified the judge in charge of the Foreign Intelligence Surveillance Court, the secret Washington court that deals with national security issues.
Not only that: the administration specifically asked the Times not to publish this article, on the ground that such publication would damage the country's security:
The White House asked The New York Times not to publish this article, arguing that it could jeopardize continuing investigations and alert would-be terrorists that they might be under scrutiny. After meeting with senior administration officials to hear their concerns, the newspaper delayed publication for a year to conduct additional reporting. Some information that administration officials argued could be useful to terrorists has been omitted.
The Times believes that it should be the arbiter of what will and will not help the terrorists and thus impair our national security. I don't agree. Under the Plame precedent, this case is a no-brainer. The intelligence officials who leaked to the Times should be identified, criminally prosecuted, and sent to prison. Under the Pentagon Papers case, the reporters and editors at the Times who published the leaked story can't be criminally prosecuted. Perhaps the Supreme Court should revisit that precedent when the opportunity arises."
The Valerie Plame case has established that any leak of classified information from an intelligence agency is a serious matter, regardless of how trivial the information may be, and must result in criminal investigation and prosecution. Fine. Here's another one that's not trivial, from today's New York Times:
Months after the Sept. 11 attacks, President Bush secretly authorized the National Security Agency to eavesdrop on Americans and others inside the United States to search for evidence of terrorist activity without the court-approved warrants ordinarily required for domestic spying, according to government officials.
Under a presidential order signed in 2002, the intelligence agency has monitored the international telephone calls and international e-mail messages of hundreds, perhaps thousands, of people inside the United States without warrants over the past three years in an effort to track possible 'dirty numbers' linked to Al Qaeda, the officials said. The agency, they said, still seeks warrants to monitor entirely domestic communications.
How does the Times know this? Because intelligence officials who are hostile to the Bush administration, and disagree with its policies, leaked the information:
Nearly a dozen current and former officials, who were granted anonymity because of the classified nature of the program, discussed it with reporters for The New York Times because of their concerns about the operation's legality and oversight.
The administration vigorously defends both the legality and the effectiveness of the policy:
The Bush administration views the operation as necessary so that the agency can move quickly to monitor communications that may disclose threats to the United States, the officials said. Defenders of the program say it has been a critical tool in helping disrupt terrorist plots and prevent attacks inside the United States.
Administration officials are confident that existing safeguards are sufficient to protect the privacy and civil liberties of Americans, the officials say. In some cases, they said, the Justice Department eventually seeks warrants if it wants to expand the eavesdropping to include communications confined within the United States. The officials said the administration had briefed Congressional leaders about the program and notified the judge in charge of the Foreign Intelligence Surveillance Court, the secret Washington court that deals with national security issues.
Not only that: the administration specifically asked the Times not to publish this article, on the ground that such publication would damage the country's security:
The White House asked The New York Times not to publish this article, arguing that it could jeopardize continuing investigations and alert would-be terrorists that they might be under scrutiny. After meeting with senior administration officials to hear their concerns, the newspaper delayed publication for a year to conduct additional reporting. Some information that administration officials argued could be useful to terrorists has been omitted.
The Times believes that it should be the arbiter of what will and will not help the terrorists and thus impair our national security. I don't agree. Under the Plame precedent, this case is a no-brainer. The intelligence officials who leaked to the Times should be identified, criminally prosecuted, and sent to prison. Under the Pentagon Papers case, the reporters and editors at the Times who published the leaked story can't be criminally prosecuted. Perhaps the Supreme Court should revisit that precedent when the opportunity arises."
Thursday, December 15, 2005
There is an extreme difficulty in expressing a father's love for his daughter.
Most words are trite. Too trite. Much of the sentiments that can be expressed in the English language are repetitious and dull, words put together one time too many in the annals of the language.
Some languages allow greater expression. Greek has four words -- philia, eros, storge, agape -- friendship, romance, familial, and divine. Even these fall short of a father's love, although each represents but a tiny portion of a father's love.
When your daughter climbs from your lap to slap the toggle for her toy, making the balls bounce and pop and froth, and she looks back with a joyful smile, sharing her joy with you, that is philia, the love of companions and friends.
When she softly strokes your cheek as she takes her last bottle, and your heart swells and skips, it is a purely romantic thrill that echoes through your heart. It is to eros as puppy love is -- pure, romantic, and thrilling.
Your devout vows of protection, whispered as she falls asleep in your arms or as you place a goodnight kiss on her forehead just before she's placed in her safe haven for the night are all manifestations of storge, the familial love traditionally considered of father to daughter.
At last, there is the divine -- the all encompassing, never ending, never quenched love. This is how God is supposed to love. It seems inadequate to have a word for such a depth of affection and aspiration for another being.
There are four Greek words for love, and they are not enough.
Not enough to convey the joyous feeling that tickles every bone when your daughter looks up at you with a messy, toothy smile, and offers you a crushed, sodden french fry, offering to share with you, her father, for the first time. And nothing can describe the sweet ambrosia that is that french fry as you lean down and let her put the sodden end between your lips so you can take a bite.
There are no words so great."
Wednesday, December 14, 2005
Saturday, December 10, 2005
Friday, December 09, 2005
Bankstocks.com: Bankstocks Booklist: Sizing Your Bets, Made Easy
Bankstocks.com: Bankstocks Booklist: Sizing Your Bets, Made EasyBankstocks Booklist: Sizing Your Bets, Made Easy
Monday, December 05, 2005
Matt Stichnoth
bankstocks.com
mstichnoth@bankstocks.com
Solve the following problem. You’re at the track with $1,000 in your pocket, and see that the posted odds on a certain horse winning an upcoming race are 5 to 1. You (and only you) have a secret line of communication to the horse’s trainer, and learn that the horse’s chances of winning are meaningfully higher than the posted odds—say, 1 in 3. Which is to say, you have a material information advantage over other bettors. How much of your $1,000 do you bet?
That, in a nutshell, is one of the most crucial and least discussed dilemmas in the capital allocation process. While CAPM types preach about the virtues of diversification, the Warren Buffetts of the world know better. Diversification only assures mediocre returns, they point out; the real money is made when you put a lot of capital to work in those rare opportunities when you have a true edge. Like, say the 1-in-3 shot above that’s going off at 5-to-1.
William Poundstone gets at this issue in Fortune’s Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street. The book is a history of a formula called the “Kelly Criterion” that allows gamblers (and other capital allocators) to maximize their profits on a series of bets where they have an information edge, but without betting so much that they risk going broke. Take the horse-racing example, above. Yes, you’ll want to bet more than you normally would, to make the most of your insider knowledge. But you don’t want to bet everything: even by your own reckoning, the horse has just a 33% chance of winning. Once you’re bankrupt, you can’t get back in the game. The optimal bet size is somewhere in between.
The namesake and inventor of the Kelly formula is a man named John Kelly, a mathematician at Bell Labs in the 1950s and 1960s. Kelly developed his formula by building on the work of another Bell Labs mathematician, Claude Shannon. Poundstone says Shannon is considered by many to be the second-most-brilliant individual of the twentieth century, after Einstein. In particular, Shannon is the father of “information theory,” which serves as the broad mathematical foundation for essentially the entire electronics and digital revolutions. Everything from integrated circuits to fiber-optic cable to DNA sequencers rely at rock-bottom on Shannon’s work. His models apply to any kind information conduit, electronic or otherwise. They allow communications engineers to minimize the amount of noise—static, gossip, whatever--in a given conduit, and maximize the amount of information the conduit can carry. Which is to say, Shannon essentially developed a mathematical way to convert uncertainty into certainty.
Communications engineers aren’t the only ones with an interest in separating information from noise, of course. Bettors and investors could use some help there, too. So it’s perhaps not coincidental that some of Shannon’s math can be put to use at the race track, the blackjack table, and on Wall Street. One of the first to apply Kelly’s formula was a young physics grad student, Edward Thorp, who used it in conjunction with a card counting system he developed for blackjack. (Thorp later wrote a book on card counting called Beat the Dealer that’s now considered a classic among blackjack aficionados. Later on he ran a hugely successful quant fund, Princeton-Newport Partners, that eventually got tangled up in Rudolph Giuliani’s pursuit of Michael Milken in the 1980s. But that’s another story.)
How does the Kelly formula work, you ask? It’s pretty simple. The formula says that the optimal wager size is determined according to the following fraction:
Edge/Odds
The denominator, odds, is the public odds posted on the track’s tote board. The numerator, edge, is the amount you stand to profit, on average, if you could make this same bet over and over and over. Let’s go back to the horse racing hypothetical in the first paragraph, and see how it works. The posted odds are 5 to 1. So we’ll put a 5 in the denominator. But recall that you believe the true odds are 1 in 3, not 5 to 1. If you bet $1,000, then, you’ll have a 33% chance of winning $6,000 ($5,000 plus your original $1,000 wager), or $2,000, on average. On a $1,000 bet, your profit is thus $1,000. That’s your edge. For the formula’s purposes, the $1,000 becomes a 1.
So according to Kelly, the edge is 1 and the odds are 5. Plug in the numbers and you get 1/5. You should bet 20% of your bankroll.
A few comments are in order. First off, this only works in instances when you have a true, material information advantage. If you don’t, your edge is zero, so you shouldn’t bet. Second, the only time the formula will tell you to bet all you’ve got is when you’re absolutely, positively sure you’ll win. In the real world, that hardly ever happens. Thus Kelly prevents bettors avoid being wiped out completely, so that they’ll have capital to put to work when the next opportunity rolls around. This is no small advantage. Other capital allocation strategies gamblers use, most notably “martingale,” in which the player doubles down after a losing bet in order to quickly recoup losses, a can be quick trips to bankruptcy. Finally, using Kelly on a series of bets is the most efficient way to compound your winnings. Models show that, say, a more aggressive “Kelly times 2” strategy actually leads to lower long-term returns.
The chart below, from the book, illustrates Kelly’s advantages. It shows the results of various strategies for betting on a series of hypothetical coin flips where the bettor has a 55% chance of winning.
It scarcely needs to be added, of course, that the economics profession has roughly zero use for all this. First off, the formula was developed by a mathematician, not an economist, which naturally makes economists skeptical. Second, the notion that an investor can have a true edge is anathema to the efficient-market dogma that still dominates most economics departments. Paul Samuelson is particularly scornful of Kelly (or “g,” as it’s referred to in economics circles), calling it a “fallacy.”
The Kelly criterion’s virtual absence in economics and M.B.A. curricula explains why the formula is not well known on Wall Street. It shouldn’t be. It is hard enough to find ideas where an information advantage is even possible. When those do occur, investors can use all the help they can get in figuring out how much capital to apply. Kelly may not be as ideally suited to Wall Street as it is to blackjack, but it sure seems like a good place to start.
What do you think? Let me know!
The author is an employee of bankstocks.com and Second Curve Capital, an investment management firm. His fund often buys and sells securities that are the subject of his articles, both before and after the articles are posted. Under no circumstances does this article represent a recommendation to buy or sell stocks. This article is intended to provide insight into the financial services industry and is not a solicitation of any kind. Neither the author nor bankstocks.com can provide investment advice or respond to individual requests for recommendations. However, we encourage your feedback and welcome your comments on any of the articles on this site. Neither the author nor bankstocks.com has undertaken any responsibility to update any portion of this article in response to events which may transpire subsequent to its original publication date.
Monday, December 05, 2005
Matt Stichnoth
bankstocks.com
mstichnoth@bankstocks.com
Solve the following problem. You’re at the track with $1,000 in your pocket, and see that the posted odds on a certain horse winning an upcoming race are 5 to 1. You (and only you) have a secret line of communication to the horse’s trainer, and learn that the horse’s chances of winning are meaningfully higher than the posted odds—say, 1 in 3. Which is to say, you have a material information advantage over other bettors. How much of your $1,000 do you bet?
That, in a nutshell, is one of the most crucial and least discussed dilemmas in the capital allocation process. While CAPM types preach about the virtues of diversification, the Warren Buffetts of the world know better. Diversification only assures mediocre returns, they point out; the real money is made when you put a lot of capital to work in those rare opportunities when you have a true edge. Like, say the 1-in-3 shot above that’s going off at 5-to-1.
William Poundstone gets at this issue in Fortune’s Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street. The book is a history of a formula called the “Kelly Criterion” that allows gamblers (and other capital allocators) to maximize their profits on a series of bets where they have an information edge, but without betting so much that they risk going broke. Take the horse-racing example, above. Yes, you’ll want to bet more than you normally would, to make the most of your insider knowledge. But you don’t want to bet everything: even by your own reckoning, the horse has just a 33% chance of winning. Once you’re bankrupt, you can’t get back in the game. The optimal bet size is somewhere in between.
The namesake and inventor of the Kelly formula is a man named John Kelly, a mathematician at Bell Labs in the 1950s and 1960s. Kelly developed his formula by building on the work of another Bell Labs mathematician, Claude Shannon. Poundstone says Shannon is considered by many to be the second-most-brilliant individual of the twentieth century, after Einstein. In particular, Shannon is the father of “information theory,” which serves as the broad mathematical foundation for essentially the entire electronics and digital revolutions. Everything from integrated circuits to fiber-optic cable to DNA sequencers rely at rock-bottom on Shannon’s work. His models apply to any kind information conduit, electronic or otherwise. They allow communications engineers to minimize the amount of noise—static, gossip, whatever--in a given conduit, and maximize the amount of information the conduit can carry. Which is to say, Shannon essentially developed a mathematical way to convert uncertainty into certainty.
Communications engineers aren’t the only ones with an interest in separating information from noise, of course. Bettors and investors could use some help there, too. So it’s perhaps not coincidental that some of Shannon’s math can be put to use at the race track, the blackjack table, and on Wall Street. One of the first to apply Kelly’s formula was a young physics grad student, Edward Thorp, who used it in conjunction with a card counting system he developed for blackjack. (Thorp later wrote a book on card counting called Beat the Dealer that’s now considered a classic among blackjack aficionados. Later on he ran a hugely successful quant fund, Princeton-Newport Partners, that eventually got tangled up in Rudolph Giuliani’s pursuit of Michael Milken in the 1980s. But that’s another story.)
How does the Kelly formula work, you ask? It’s pretty simple. The formula says that the optimal wager size is determined according to the following fraction:
Edge/Odds
The denominator, odds, is the public odds posted on the track’s tote board. The numerator, edge, is the amount you stand to profit, on average, if you could make this same bet over and over and over. Let’s go back to the horse racing hypothetical in the first paragraph, and see how it works. The posted odds are 5 to 1. So we’ll put a 5 in the denominator. But recall that you believe the true odds are 1 in 3, not 5 to 1. If you bet $1,000, then, you’ll have a 33% chance of winning $6,000 ($5,000 plus your original $1,000 wager), or $2,000, on average. On a $1,000 bet, your profit is thus $1,000. That’s your edge. For the formula’s purposes, the $1,000 becomes a 1.
So according to Kelly, the edge is 1 and the odds are 5. Plug in the numbers and you get 1/5. You should bet 20% of your bankroll.
A few comments are in order. First off, this only works in instances when you have a true, material information advantage. If you don’t, your edge is zero, so you shouldn’t bet. Second, the only time the formula will tell you to bet all you’ve got is when you’re absolutely, positively sure you’ll win. In the real world, that hardly ever happens. Thus Kelly prevents bettors avoid being wiped out completely, so that they’ll have capital to put to work when the next opportunity rolls around. This is no small advantage. Other capital allocation strategies gamblers use, most notably “martingale,” in which the player doubles down after a losing bet in order to quickly recoup losses, a can be quick trips to bankruptcy. Finally, using Kelly on a series of bets is the most efficient way to compound your winnings. Models show that, say, a more aggressive “Kelly times 2” strategy actually leads to lower long-term returns.
The chart below, from the book, illustrates Kelly’s advantages. It shows the results of various strategies for betting on a series of hypothetical coin flips where the bettor has a 55% chance of winning.
It scarcely needs to be added, of course, that the economics profession has roughly zero use for all this. First off, the formula was developed by a mathematician, not an economist, which naturally makes economists skeptical. Second, the notion that an investor can have a true edge is anathema to the efficient-market dogma that still dominates most economics departments. Paul Samuelson is particularly scornful of Kelly (or “g,” as it’s referred to in economics circles), calling it a “fallacy.”
The Kelly criterion’s virtual absence in economics and M.B.A. curricula explains why the formula is not well known on Wall Street. It shouldn’t be. It is hard enough to find ideas where an information advantage is even possible. When those do occur, investors can use all the help they can get in figuring out how much capital to apply. Kelly may not be as ideally suited to Wall Street as it is to blackjack, but it sure seems like a good place to start.
What do you think? Let me know!
The author is an employee of bankstocks.com and Second Curve Capital, an investment management firm. His fund often buys and sells securities that are the subject of his articles, both before and after the articles are posted. Under no circumstances does this article represent a recommendation to buy or sell stocks. This article is intended to provide insight into the financial services industry and is not a solicitation of any kind. Neither the author nor bankstocks.com can provide investment advice or respond to individual requests for recommendations. However, we encourage your feedback and welcome your comments on any of the articles on this site. Neither the author nor bankstocks.com has undertaken any responsibility to update any portion of this article in response to events which may transpire subsequent to its original publication date.
Sunday, December 04, 2005
Great Quote!
A Glimpse of Iraq: "'I am not bound to win, but I am bound to be true. I am not bound to succeed, but I am bound to live by the light that I have.'
Abraham Lincoln
"
Abraham Lincoln
"
Saturday, December 03, 2005
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