Tuesday, November 22, 2011
MF Global and Rule 1.25
[ed. Most detailed explanation yet of the MF Global debacle. For added background read this story on CFTC Rule 1.25 and MF's efforts to have this regulation modified (ultimately successful) thereby hastening their demise. The big shoe yet to drop - figuring out where all the money went, why it went where it went, and the rippling effects on counterparties.]
To read the original pdf by Janet Tavakoli with links click here.
MF Global Revelations Keep Getting Worse
By Janet Tavakoli
November 21, 2011
When MF Global collapsed on October 21, it was the biggest financial firm to collapse since Lehman in September 2008. Then Chairman and CEO Jon Corzine is connected to the head of one of his key regulators, the Commodity Futures Trading Commission (CFTC), through his former protégé at Goldman Sachs, Gary Gensler. He also knows the Fed’s William Dudley, a key member of the Fed’s Open Market Committee, from their days at Goldman Sachs. The Fed approved MF Global’s status as a primary dealer, a participant in the Fed’s Open Market Operations, just before Jon Corzine took its helm and beached it on a reef called leveraged credit risk.
MF Global’s officers admitted to federal regulators that before the collapse, the firm diverted cash from customers’ accounts that were supposed to be segregated:
In layman’s terms, you may buy a Rolls Royce with customers’ excess cash, sell it at a profit, and pocket part of the profits. You may buy a Rolls Royce and try to resell it at a profit with your firm’s cash. But you aren’t allowed to take customers’ money to make the car payments on your firm’s Rolls Royce. If one engages in this impermissible activity, it becomes almost impossible to cover up if you have an accident driving your Rolls Royce.
From Jesse's Cafe' Americain | Read more:
To read the original pdf by Janet Tavakoli with links click here.
MF Global Revelations Keep Getting Worse
By Janet Tavakoli
November 21, 2011
When MF Global collapsed on October 21, it was the biggest financial firm to collapse since Lehman in September 2008. Then Chairman and CEO Jon Corzine is connected to the head of one of his key regulators, the Commodity Futures Trading Commission (CFTC), through his former protégé at Goldman Sachs, Gary Gensler. He also knows the Fed’s William Dudley, a key member of the Fed’s Open Market Committee, from their days at Goldman Sachs. The Fed approved MF Global’s status as a primary dealer, a participant in the Fed’s Open Market Operations, just before Jon Corzine took its helm and beached it on a reef called leveraged credit risk.
MF Global’s officers admitted to federal regulators that before the collapse, the firm diverted cash from customers’ accounts that were supposed to be segregated:
MF Global Holdings LTD. “violated requirements that it keep clients’ collateral separate from its own accounts…Craig Donohue, CME Group’s chief executive officer, said on a conference call with analysts today that MF Global isn’t in compliance with the rules of the exchange and the Commodity Futures Trading Commission.”Cash in customers’ accounts may be invested in allowable transactions, and MF was allowed to make extra revenue from the income. But what isn’t allowed, and what MF Global apparently admitted to doing, is to commingle customers’ money with its own and take money from customers’ accounts to meet margin calls on MF Global’s own allowable transactions. Even if all of the money is eventually clawed back and recovered, this remains an impermissible act. Moreover, full recovery—even if it is possible—is not the same as restitution. People have been denied access to their money, and businesses and reputations have been tarnished.
“MF Global Probe May Involve Hundreds of Millions in Funds,” Bloomberg News – November 1, 2001 by Silia Brush and Matthew Leising
In layman’s terms, you may buy a Rolls Royce with customers’ excess cash, sell it at a profit, and pocket part of the profits. You may buy a Rolls Royce and try to resell it at a profit with your firm’s cash. But you aren’t allowed to take customers’ money to make the car payments on your firm’s Rolls Royce. If one engages in this impermissible activity, it becomes almost impossible to cover up if you have an accident driving your Rolls Royce.
From Jesse's Cafe' Americain | Read more:
Birth of a Meme
If you want to vanquish the enemy, render him absurd. Most recent case in point? The viral stardom of University of California, Davis, police Lt. John Pike. A week ago, you didn’t know his name. Now, he’s Pepper Spray Cop. And Pepper Spray Cop is considerably more entertaining than Lt. John Pike.
Lt. John Pike, as the world was made painfully aware last Friday, is the officer who pepper sprayed a phalanx of peacefully linked protesters who refused to move from the university’s quad. The gung-ho Pike, it should be noted, was swiftly joined by several of his similarly pepper-spray-happy cohorts. But it was the image of him and his confident, casual, almost bored delivery of a torrent of orange that ignited outrage — and then, inevitably, parody. (...)
But easily the most Facebook wall-ready appropriation of Pike’s moment of infamy has been his sudden, often hilariously Photoshopped appearance “cracking down on so many famous moments in history.” The cleverest have already been neatly gathered on the Pepper Spraying Cop Tumblr, which depicts Pike unleashing his orange rain in the midst of Picasso’s “Guernica” and “Washington Crossing the Delaware,” upon a noble George Bailey, and, of course, the deeply troubled star of Munch’s “The Scream.” Sample caption, accompanying an image of Pike going to town on Rosa Parks: “Sitting is a perfectly peaceful form of activism. What are they gonna do about somebody calmly sitting down to make a pointAUUUAHAHAGHAGHAGHGHGHHH.” (...)
But as Megan Garber pointed out Monday for the Nieman Journalism Lab, there’s power in the way that instantly iconic image of Pike — so cool, so brazen — has become something unto itself. It’s something that “demands, in trending topic terms, attention.” And whereas once the old maxim used to be that comedy is tragedy plus time, who has time anymore?
Instead, what we have is the meme. And yes, it’s dopey and pretty juvenile. But for as long as we’ve been human, we’ve had satire. We turn to the Onion after 9/11 to make us laugh at one of the worst human disasters in our nation’s history. We cling to Colbert and Stewart, groping to make mockery of the bad news of the day. Even Harry Potter had to learn a “riddikulus” spell to chase away the boggarts. Humor gives us context. It shrinks the monsters down to size. It can’t make a guy with an itchy trigger finger and an inflated sense of purpose any less real a threat, but it diminishes his power to scare us. And when we’re not afraid, that’s when we find the courage to stand up again.
by Mary Elizabeth Williams, Salon | Continue reading:
[ed. Hundreds of images here. Click on a picture to enlarge:]
Descending Into Hawaii's Haleakala Crater
Entering Haleakala Crater, the enormous mouth of Maui’s largest volcano, in the Hawaiian Islands, feels like an exercise in sensory deprivation. At the crater floor, a desolate expanse of twisted, dried lava reached after a two-hour hike down a trail carved into its wall, the silence is absolute. Not a breath of wind. No passing insects. No bird songs. Then I thought I detected drumming. Was it the ghostly echo of some ancient ritual? No, I finally realized, it was my own heartbeat, thundering in my ears.
In 2008, National Park Service acoustic experts found that the ambient sound levels within Haleakala crater were near the very threshold of human hearing—despite the popularity of the park. Around one million people a year visit the park, many of whom also ascend to its highest point—Haleakala’s 10,023-foot summit—and peer down at the vast field of dried lava below, which, in 1907, the writer and adventurer Jack London called “a workshop of nature still cluttered with the raw beginnings of world-making.”
The now-dormant volcano, which emerged from the Pacific Ocean more than a million years ago, takes up fully three-quarters of Maui’s landmass. Although its interior, whose rim is 7 1/2 miles long and 2 1/2 miles wide, is commonly called a crater, geologists refer to it as an “erosional depression” because it was created not by an eruption but by two valleys merging. Still, there has been frequent volcanic activity on its floor. Carbon dating and Hawaiian oral history suggest that the last eruption occurred between 1480 and 1780, when a cone on the mountain’s southern flank sent lava surging down to La Pérouse Bay, about two miles from Maui’s southernmost tip, near the modern resort town of Wailea.
Only a small number of visitors to Haleakala descend to the crater floor. Those who make the effort, as London did on horseback with his wife, friends and a band of Hawaiian cowboys, find themselves in a strangely beautiful world of brittle, contorted lava. “Saw-toothed waves of lava vexed the surface of this weird ocean,” wrote the author of The Call of the Wild, “while on either hand arose jagged crests and spiracles of fantastic shape.” Initial impressions of the crater as a lifeless wasteland are quickly dispelled. Delicate lichens and wildflowers dot the landscape, along with a bizarre plant found nowhere else on earth called the ahinahina, or Haleakala silversword. The plant grows for up to half a century as a dense ball of metallic-looking leaves, produces a single tall spire that flowers only once, with a brilliant, blood-red blossom, then dies. Endangered Hawaiian birds thrive here, including the largest nesting colony of Hawaiian petrels, or uau, which let out a peculiar barking cry, and Hawaiian geese, called nene. (...)
On my solitary expedition, the silence of Haleakala did not last long. As I picked my way across the lava fields, the first gusts of wind arrived, then dense clouds that were filled with icy drizzle. Soon the temperature was plummeting and I could barely see my feet for the fog. Thunder was booming by the time I reached Holua cabin, one of three public refuges crafted in 1937 from redwood with help from the Civilian Conservation Corps. They’re the only man-made shelters in the crater other than park ranger cabins. I lit a wood-burning stove as the sky erupted in lightning. For the rest of the night, tongues of crackling light illuminated the ghostly, contorted lava fields. Pele, the volatile ancient Hawaiian goddess of fire and volcanoes, must have been displeased.
The story of Haleakala National Park is inseparable from that of Hawaii itself, whose transformation from independent Pacific kingdom to 50th U.S. state has largely been forgotten on the mainland. When the federal government created the park in 1916, less than two decades after it seized the archipelago, it ignored the crater’s cultural importance for native Hawaiians. But in recent years, Haleakala’s ancient status has gained new attention.
by Tony Perrottet, Smithsonian | Read more:
Photographs by Susan Seubert
[ed. Also this link about the Garden of the Gods (Lanai) for future reference.]
The News Forecast
The 20 employees of Recorded Future aren't foreign-policy experts. They aren't traders either, but if you'd started using Recorded Future's predictions to buy US stocks on January 1, 2009, you would have made an annual return of 56.69 per cent. (The S&P 500 had an annualised return of 17.22 per cent over the same period.) Between May 13 and August 5 this year, as markets behaved with vertiginous abandon, their strategy returned 10.4 per cent; in contrast, the S&P 500 lost 9.9 per cent of its value. They're data experts: computer scientists, statisticians and experts in linguistics. And in the data, they think, lies the future.
All Recorded Future's predictions, whatever the field, are based on publicly available information -- news articles, government sites, financial reports, tweets -- fed into the company's own algorithms. The result, it claims, is a "new tool that allows you to visualise the future" -- one that is changing how government intelligence agencies gather information and how giant hedge funds place bets. On its website, Recorded Future states: "We don't grant interviews and we don't issue press releases." But behind closed doors, the company is developing the technology that has been described be one tech blog as an "information weapon".
The company, cofounded by Christopher Ahlberg, an entrepreneur who sold his first business for $195 million and served in the Swedish special forces, has $8.5 million in funding. Its first two investors were Google and the CIA. Recorded Future counts US government agencies, banks and hedge funds among the clients paying million-dollar contracts. But its true ambition is to organise all the data on the internet for similar predictive analysis -- to make the future calculable. (...)
The first generation of search engines, such as Lycos and Alta Vista, used traditional text search to deliver web pages, deploying their own algorithms, but essentially looking at individual documents in isolation. Google changed this in 1998. Its PageRank algorithm analysed the links between web pages, promoting those that had more links pointing to them from other sites. Recorded Future is part of the third generation: instead of explicit link analysis, it examines implicit links -- what it calls "invisible links" between documents that refer to the same entities or events. It does this by separating the documents and their content from what they talk about, identifying canonical entities and events that exist outside of the article.
"What matters is that it's freaking complicated," says Ahlberg. In practice, Recorded Future harvests 25,000 data sources as RSS feeds, which could include Companies House and US Securities and Exchange Commission filings, a New York Times article, Twitter and Facebook posts, obscure blogs (there's one on Norwegian salmon fishing) or transcripts from earnings calls or political speeches -- "just a flood of stuff", says Ahlberg. It does the same for Chinese and Arabic sources. "Then we look for entities -- people, places, technologies; and events -- a murder, a bomb explosion, a person moving from A to B, product launches."
by Tom Cheshire,Wired | Read more:
Photo: Natalie Lees
4.74 Degrees
[ed. New study of 721 million Facebook users says there may be only 4.74 degrees of separation between you and George Clooney.]
“We are close, in a sense, to people who don’t necessarily like us, sympathize with us or have anything in common with us,” Dr. Kleinberg said. “It’s the weak ties that make the world small.”
Still, he noted that such ties were hardly meaningless. “We should ask what things spread well on weak ties,” he said. “News spreads well on weak ties. Those people I met on vacation, if they send me some cool news, I might send that to my friends. If they send me something about a protest movement, I might not.”
Matthew O. Jackson, an economist at Stanford who studies social networks, raised questions about the bias built into a study based on random samples. He said the study confirmed Facebook’s success in being where millions of people communicate. “It’s more evidence that they’ve been enormously successful at connecting a large number of people very well,” he said.
The research underscores the growing power of the emerging science of social networks, in which scientists study the ways people interact by crunching gigantic sets of Internet data.
“These social network tools provide individuals with tremendous reach,” said Dr. Horvitz, the Microsoft researcher. “People can share ideas with only a few jumps to a large portion of the world’s population and with even fewer steps to the entire population of a nation.”
by John Markoff and Somini Sengupta, NY Times | Read more:
“We are close, in a sense, to people who don’t necessarily like us, sympathize with us or have anything in common with us,” Dr. Kleinberg said. “It’s the weak ties that make the world small.”
Still, he noted that such ties were hardly meaningless. “We should ask what things spread well on weak ties,” he said. “News spreads well on weak ties. Those people I met on vacation, if they send me some cool news, I might send that to my friends. If they send me something about a protest movement, I might not.”
Matthew O. Jackson, an economist at Stanford who studies social networks, raised questions about the bias built into a study based on random samples. He said the study confirmed Facebook’s success in being where millions of people communicate. “It’s more evidence that they’ve been enormously successful at connecting a large number of people very well,” he said.
The research underscores the growing power of the emerging science of social networks, in which scientists study the ways people interact by crunching gigantic sets of Internet data.
“These social network tools provide individuals with tremendous reach,” said Dr. Horvitz, the Microsoft researcher. “People can share ideas with only a few jumps to a large portion of the world’s population and with even fewer steps to the entire population of a nation.”
by John Markoff and Somini Sengupta, NY Times | Read more:
Monday, November 21, 2011
Poet and the Police
by Robert Haas, University of California Berkeley, US Poet Laureate, NY Times.
Life, I found myself thinking as a line of Alameda County deputy sheriffs in Darth Vader riot gear formed a cordon in front of me on a recent night on the campus of the University of California, Berkeley, is full of strange contingencies. The deputy sheriffs, all white men, except for one young woman, perhaps Filipino, who was trying to look severe but looked terrified, had black truncheons in their gloved hands that reporters later called batons and that were known, in the movies of my childhood, as billy clubs.
The first contingency that came to mind was the quick spread of the Occupy movement. The idea of occupying public space was so appealing that people in almost every large city in the country had begun to stake them out, including students at Berkeley, who, on that November night, occupied the public space in front of Sproul Hall, a gray granite Beaux-Arts edifice that houses the registrar’s offices and, in the basement, the campus police department.
It is also the place where students almost 50 years ago touched off the Free Speech Movement, which transformed the life of American universities by guaranteeing students freedom of speech and self-governance. The steps are named for Mario Savio, the eloquent undergraduate student who was the symbolic face of the movement. There is even a Free Speech Movement Cafe on campus where some of Mr. Savio’s words are prominently displayed: “There is a time ... when the operation of the machine becomes so odious, makes you so sick at heart, that you can’t take part. You can’t even passively take part.”
Earlier that day a colleague had written to say that the campus police had moved in to take down the Occupy tents and that students had been “beaten viciously.” I didn’t believe it. In broad daylight? And without provocation? So when we heard that the police had returned, my wife, Brenda Hillman, and I hurried to the campus. I wanted to see what was going to happen and how the police behaved, and how the students behaved. If there was trouble, we wanted to be there to do what we could to protect the students.
Once the cordon formed, the deputy sheriffs pointed their truncheons toward the crowd. It looked like the oldest of military maneuvers, a phalanx out of the Trojan War, but with billy clubs instead of spears. The students were wearing scarves for the first time that year, their cheeks rosy with the first bite of real cold after the long Californian Indian summer. The billy clubs were about the size of a boy’s Little League baseball bat. My wife was speaking to the young deputies about the importance of nonviolence and explaining why they should be at home reading to their children, when one of the deputies reached out, shoved my wife in the chest and knocked her down.
Another of the contingencies that came to my mind was a moment 30 years ago when Ronald Reagan’s administration made it a priority to see to it that people like themselves, the talented, hardworking people who ran the country, got to keep the money they earned. Roosevelt’s New Deal had to be undealt once and for all. A few years earlier, California voters had passed an amendment freezing the property taxes that finance public education and installing a rule that required a two-thirds majority in both houses of the Legislature to raise tax revenues. My father-in-law said to me at the time, “It’s going to take them 50 years to really see the damage they’ve done.” But it took far fewer than 50 years.
My wife bounced nimbly to her feet. I tripped and almost fell over her trying to help her up, and at that moment the deputies in the cordon surged forward and, using their clubs as battering rams, began to hammer at the bodies of the line of students. It was stunning to see. They swung hard into their chests and bellies. Particularly shocking to me — it must be a generational reaction — was that they assaulted both the young men and the young women with the same indiscriminate force. If the students turned away, they pounded their ribs. If they turned further away to escape, they hit them on their spines.
Read more:
Life, I found myself thinking as a line of Alameda County deputy sheriffs in Darth Vader riot gear formed a cordon in front of me on a recent night on the campus of the University of California, Berkeley, is full of strange contingencies. The deputy sheriffs, all white men, except for one young woman, perhaps Filipino, who was trying to look severe but looked terrified, had black truncheons in their gloved hands that reporters later called batons and that were known, in the movies of my childhood, as billy clubs.
The first contingency that came to mind was the quick spread of the Occupy movement. The idea of occupying public space was so appealing that people in almost every large city in the country had begun to stake them out, including students at Berkeley, who, on that November night, occupied the public space in front of Sproul Hall, a gray granite Beaux-Arts edifice that houses the registrar’s offices and, in the basement, the campus police department.
It is also the place where students almost 50 years ago touched off the Free Speech Movement, which transformed the life of American universities by guaranteeing students freedom of speech and self-governance. The steps are named for Mario Savio, the eloquent undergraduate student who was the symbolic face of the movement. There is even a Free Speech Movement Cafe on campus where some of Mr. Savio’s words are prominently displayed: “There is a time ... when the operation of the machine becomes so odious, makes you so sick at heart, that you can’t take part. You can’t even passively take part.”
Earlier that day a colleague had written to say that the campus police had moved in to take down the Occupy tents and that students had been “beaten viciously.” I didn’t believe it. In broad daylight? And without provocation? So when we heard that the police had returned, my wife, Brenda Hillman, and I hurried to the campus. I wanted to see what was going to happen and how the police behaved, and how the students behaved. If there was trouble, we wanted to be there to do what we could to protect the students.
Once the cordon formed, the deputy sheriffs pointed their truncheons toward the crowd. It looked like the oldest of military maneuvers, a phalanx out of the Trojan War, but with billy clubs instead of spears. The students were wearing scarves for the first time that year, their cheeks rosy with the first bite of real cold after the long Californian Indian summer. The billy clubs were about the size of a boy’s Little League baseball bat. My wife was speaking to the young deputies about the importance of nonviolence and explaining why they should be at home reading to their children, when one of the deputies reached out, shoved my wife in the chest and knocked her down.
Another of the contingencies that came to my mind was a moment 30 years ago when Ronald Reagan’s administration made it a priority to see to it that people like themselves, the talented, hardworking people who ran the country, got to keep the money they earned. Roosevelt’s New Deal had to be undealt once and for all. A few years earlier, California voters had passed an amendment freezing the property taxes that finance public education and installing a rule that required a two-thirds majority in both houses of the Legislature to raise tax revenues. My father-in-law said to me at the time, “It’s going to take them 50 years to really see the damage they’ve done.” But it took far fewer than 50 years.
My wife bounced nimbly to her feet. I tripped and almost fell over her trying to help her up, and at that moment the deputies in the cordon surged forward and, using their clubs as battering rams, began to hammer at the bodies of the line of students. It was stunning to see. They swung hard into their chests and bellies. Particularly shocking to me — it must be a generational reaction — was that they assaulted both the young men and the young women with the same indiscriminate force. If the students turned away, they pounded their ribs. If they turned further away to escape, they hit them on their spines.
Read more:
With a Little Help From Your Friends
If you’re a professional musician, however, with a little bit of luck you'll land in a safety net provided by MusiCares, a sophisticated national foundation supported by the likes of Lady Gaga, crooner Steven Tyler and guitarist (and onetime Jack Daniels devotee) Slash.
Founded in 1989 and run by The Recording Academy (best known for throwing the Grammys), MusiCares came about when a brilliant jazz clarinetist and band leader named Woody Herman died homeless and alone. According to MusiCares Executive Director Debbie Carroll, the circumstances of his passing led “a number of musicians, including Bonnie Raitt, to come together and say no one in our music family should end up in this type of situation.”
The fact is that musicians often have no insurance—a significant issue if you combine that with bouts of unemployment, a depressed economy, and, as is often the case, addiction. Though there are similar programs for writers and other artists, including Writers in Treatment, few share the breadth and scope of MusiCares.
Out of offices in LA, Nashville and New York, MusiCares has eight full-time employees serving over 2700 clients a year—as well as consultants in Austin, Fort Collins, and New Orleans. According to Carroll, addiction recovery services comprise about 30% of what they do—the other 70% is dedicated to helping people through the other bumps in the road: financial, medical, and other needs.
While the needs of the community grow every year, MusiCares is—thanks to their fundraising efforts—able to grow with it. “In the last year, we've served 2,700 clients with $2.9 million in aid,” says Carroll. “The year before, it was roughly 2,500 with $2.7 million. As people become more aware of us, they want to help.”
by Kristen McGuiness, The Fix | Read more:
Photo via: AeroNewsDaily
Do Nothing?
The ongoing collapse in Europe, and the increasing possibility of a “Fall 2008″-like series of events there has the Eurozone trading under pressure.
In the US, its supposedly the SuperCommittee that is the source of our woes — but I somehow doubt that is the problem. Their inability to accomplish anything was telegraphed a long time ago, and it was all but inevitable that failure was a high probability outcome.
Those folks truly concerned about the long term debt of the United States, and not merely deficit peacocks playing politics, consider what E.J. Dionne wrote last week:
If you really believe the deficit is a problem for investors (and the Bond Markets sure don’t) then you need to find another boogieman. A huge swath of the federal debt is about to go away, courtesy of political dysfunction and committee failure.
via: Barry Ritholtz, The Big Picture | Read more:
In the US, its supposedly the SuperCommittee that is the source of our woes — but I somehow doubt that is the problem. Their inability to accomplish anything was telegraphed a long time ago, and it was all but inevitable that failure was a high probability outcome.
Those folks truly concerned about the long term debt of the United States, and not merely deficit peacocks playing politics, consider what E.J. Dionne wrote last week:
“Here is a surefire way to cut $7.1 trillion from the deficit over the next decade. Do nothing.
That’s right. If Congress simply fails to act between now and Jan. 1, 2013, the tax cuts passed under President George W. Bush expire, $1.2 trillion in additional budget cuts go through under the terms of last summer’s debt-ceiling deal, and a variety of other tax cuts also go away.”The savings, as detailed here, are as follows:
• $3.3 trillion from letting temporary income and estate tax cuts enacted in 2001, 2003, 2009, and 2010 expire on scheduled at the end of 2012 (presuming Congress also lets relief from the Alternative Minimum Tax expire, as noted below);
• $0.8 trillion from allowing other temporary tax cuts (the “extenders” that Congress has regularly extended on a “temporary” basis) expire on scheduled;
• $0.3 trillion from letting cuts in Medicare physician reimbursements scheduled under current law (required under the Medicare Sustainable Growth Rate formula enacted in 1997, but which have been postponed since 2003) take effect;
• $0.7 trillion from letting the temporary increase in the exemption amount under the Alternative Minimum Tax expire, thereby returning the exemption to the level in effect in 2001;
• $1.2 trillion from letting the sequestration of spending required if the Joint Committee does not produce $1.2 trillion in deficit reduction take effect; and
• $0.9 trillion in lower interest payments on the debt as a result of the deficit reduction achieved from not extending these current policies.Total deficit reduction from utter Congressional failure? $7.1 trillion dollars over the next decade.
If you really believe the deficit is a problem for investors (and the Bond Markets sure don’t) then you need to find another boogieman. A huge swath of the federal debt is about to go away, courtesy of political dysfunction and committee failure.
via: Barry Ritholtz, The Big Picture | Read more:
I-eclectic, Reminiscent, Amused, Fickle, Perverse
[ed. A new biography about Ahmet Ertegun, the former head of Atlantic records, has just been released. It reminded me of this extensive profile piece that appeared in the New Yorker back in 1978. What a life, what a character.]
Ahmet Ertegun, the head man at Atlantic Records, sat in a restaurant, put one hand on the table in front of him, and snapped his fingers. He looked across the room abstractedly. Across the room, there was a brown velvet wall punctuated by English hunting prints. The prints showed an understanding of the traditional order. The brown velvet, participating in a very contemporary chic, prevented the traditional order from penetrating too deeply into the atmosphere of the restaurant. The atmosphere of this room (at the Carlyle Hotel) was sympathetic to Ahmet Ertegun. The room was impeccable without having reference to any authority that could be perceived as inhibiting. The room had, in fact, been decorated by his wife. “Mica did this, you know,” Ahmet said to me after a moment.
At lunch, Ahmet was not entirely comfortable with me, or I with him. We had known each other for several years. I first met him at a time when his hegemony in the music business had reached a climax. For some time after that, I tried to find the locus of his authority and could not. I was by turns infatuated and disappointed. In time, I learned that this was appropriate—that Ahmet was himself always infatuated and always disappointed, and that at the heart of his achievement there was no answer stated or question posed but, rather, only this: the rhythms of infatuation smartly expressed. Then I found that to notice the manifestations of infatuation (which I had perceived at the start as ephemeral) was instructive. At the moment when I met Ahmet, at the beginning of this decade, it was assumed that the style of the years to come would derive from the principal styles of the nineteen-sixties—and this expectation has not been disappointed entirely—but then as I saw Ahmet together with important custodians of the style of the nineteen-sixties and noted his greater power and presence, I began to understand that it would be his style (eclectic, reminiscent, amused, fickle, perverse) that would be the distinctive style of the first years of the new decade, that Ahmet would achieve this new importance as exemplar precisely because he lacked the inflexible center I had confusedly looked for, and that he would achieve it through his intuitive, obsessive mastery of the modes of infatuation, this mastery having made it possible for him to absorb into himself the power of several archetypal American styles that had fallen into disuse among Americans but still had great power when they were expressed in a manner that the contemporary public could accept, which is to say when they were expressed in a manner that divorced style from substance and had no reference to any authority that could be perceived as inhibiting. There was something moving about this—that so much was possible through restlessness—but there was something disturbing about it, too, and the fact that my approach to Ahmet had become as unstraightforward as his own mode (to which I had adapted myself) made it difficult for the two of us to see one another without some embarrassment.
Ahmet’s business involves negotiated relationships—courtships, separations, estrangements, reconciliations. At lunch, there were several of these to discuss. Ahmet had signed the Rolling Stones to a new contract (for the distribution of their records in the United States and Canada, and paying an advance against royalties said to be near seven million dollars). “Mick came to me,” Ahmet said. “I mean, Mick is at this point a very good personal friend, you know? And I told him that the Stones should make a killing, you know, on this contract, because, to be realistic, by the time of the next contract they’ll be near forty, and one can’t be sure what will happen then. So I advised him. And what happened was that they got so much for the European rights, and so forth, that they could stay with Atlantic in America.” Ahmet had brought the group Crosby, Stills & Nash back to an active career at Atlantic. “They only recorded one album for us as Crosby, Stills & Nash, you know, before they added Young. And then there were some things that they thought might be the company’s fault, and they wanted a change, and I said go ahead, and I released them from the contract with the understanding that when they recorded together again they would be with us,” Ahmet said. “And so they called me, and last week I went down to Miami. We met at Criteria Sound, and they prepared a place for me to sit, and they all sat around and they played the album for me and it is a very powerful album. Stephen Stills plays some of the best guitar . . . Stephen and I have been together, you know, since 1966.” And Ahmet had begun to negotiate with Ray Charles, the powerful rhythm-and-blues singer, who had given Atlantic Records its first real eminence, in the late nineteen-fifties, and who upon the expiration of his contract in 1959 signed with ABC-Paramount without consulting Ahmet or his partners. “We’ve always kept in touch, you know?” Ahmet said. “And B’nai B’rith asked him to be their Man of the Year, and Ray told them that he would only do it if I were chairman. That was about a year ago. I paid a visit to Ray. He has a very well-kept modern building in Los Angeles, on West Washington Boulevard. He owns it, and a government agency rents a part, I think. And he said that he wanted to come back to Atlantic, and we reached an agreement—the outline of an agreement. But then things got bogged down, you know, with the lawyers. And it began to take a while. So one day Ray called and said, ‘Hey, why don’t you and I do it? Not through the lawyers—just you and me.’ And we did that. And it was amazing how much he knew, you know, about contracts—returns, free goods, records shipped as opposed to records sold, and so on. And so I think we have a deal, you know, and he is going to send me a tape this week.”
by George W. S. Trow, New Yorker | Read more:
Photo: Julie Jacobson/APAt lunch, Ahmet was not entirely comfortable with me, or I with him. We had known each other for several years. I first met him at a time when his hegemony in the music business had reached a climax. For some time after that, I tried to find the locus of his authority and could not. I was by turns infatuated and disappointed. In time, I learned that this was appropriate—that Ahmet was himself always infatuated and always disappointed, and that at the heart of his achievement there was no answer stated or question posed but, rather, only this: the rhythms of infatuation smartly expressed. Then I found that to notice the manifestations of infatuation (which I had perceived at the start as ephemeral) was instructive. At the moment when I met Ahmet, at the beginning of this decade, it was assumed that the style of the years to come would derive from the principal styles of the nineteen-sixties—and this expectation has not been disappointed entirely—but then as I saw Ahmet together with important custodians of the style of the nineteen-sixties and noted his greater power and presence, I began to understand that it would be his style (eclectic, reminiscent, amused, fickle, perverse) that would be the distinctive style of the first years of the new decade, that Ahmet would achieve this new importance as exemplar precisely because he lacked the inflexible center I had confusedly looked for, and that he would achieve it through his intuitive, obsessive mastery of the modes of infatuation, this mastery having made it possible for him to absorb into himself the power of several archetypal American styles that had fallen into disuse among Americans but still had great power when they were expressed in a manner that the contemporary public could accept, which is to say when they were expressed in a manner that divorced style from substance and had no reference to any authority that could be perceived as inhibiting. There was something moving about this—that so much was possible through restlessness—but there was something disturbing about it, too, and the fact that my approach to Ahmet had become as unstraightforward as his own mode (to which I had adapted myself) made it difficult for the two of us to see one another without some embarrassment.
Ahmet’s business involves negotiated relationships—courtships, separations, estrangements, reconciliations. At lunch, there were several of these to discuss. Ahmet had signed the Rolling Stones to a new contract (for the distribution of their records in the United States and Canada, and paying an advance against royalties said to be near seven million dollars). “Mick came to me,” Ahmet said. “I mean, Mick is at this point a very good personal friend, you know? And I told him that the Stones should make a killing, you know, on this contract, because, to be realistic, by the time of the next contract they’ll be near forty, and one can’t be sure what will happen then. So I advised him. And what happened was that they got so much for the European rights, and so forth, that they could stay with Atlantic in America.” Ahmet had brought the group Crosby, Stills & Nash back to an active career at Atlantic. “They only recorded one album for us as Crosby, Stills & Nash, you know, before they added Young. And then there were some things that they thought might be the company’s fault, and they wanted a change, and I said go ahead, and I released them from the contract with the understanding that when they recorded together again they would be with us,” Ahmet said. “And so they called me, and last week I went down to Miami. We met at Criteria Sound, and they prepared a place for me to sit, and they all sat around and they played the album for me and it is a very powerful album. Stephen Stills plays some of the best guitar . . . Stephen and I have been together, you know, since 1966.” And Ahmet had begun to negotiate with Ray Charles, the powerful rhythm-and-blues singer, who had given Atlantic Records its first real eminence, in the late nineteen-fifties, and who upon the expiration of his contract in 1959 signed with ABC-Paramount without consulting Ahmet or his partners. “We’ve always kept in touch, you know?” Ahmet said. “And B’nai B’rith asked him to be their Man of the Year, and Ray told them that he would only do it if I were chairman. That was about a year ago. I paid a visit to Ray. He has a very well-kept modern building in Los Angeles, on West Washington Boulevard. He owns it, and a government agency rents a part, I think. And he said that he wanted to come back to Atlantic, and we reached an agreement—the outline of an agreement. But then things got bogged down, you know, with the lawyers. And it began to take a while. So one day Ray called and said, ‘Hey, why don’t you and I do it? Not through the lawyers—just you and me.’ And we did that. And it was amazing how much he knew, you know, about contracts—returns, free goods, records shipped as opposed to records sold, and so on. And so I think we have a deal, you know, and he is going to send me a tape this week.”
by George W. S. Trow, New Yorker | Read more:
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