Friday, July 25, 2014

Thoughts about Bonds and Transparency



Debt is traded very differently from most corporate equity. The secondary market for bonds gets along without the big listed exchanges that provide a central narrative in the world of corporate stock. Indeed, for a long time trades were negotiated and agreed upon through telephone calls. In the 1990s, it occurred to various pioneers that “we could use the internet for this” and they tried to create an exchange-like model, an anonymous central limit order book (CLOB). A company called Trading Edge created BondLink for this purpose.

Perhaps a related development: in 1998, the chairman of the Securities and Exchange Commission at the time, Arthur Levitt, said in a speech at the Media Studies Center in New York, “Investors have a right to know the prices at which bonds are being bought and sold. Transparency will help investors make better decisions, and it will increase confidence in the fairness of the markets.”

Well, more transparency is always greater than less if the difference is costless. But if the difference is costless, and there are people who want the greater transparency, then the problem solves itself. The problem is that such differences always do have costs. At any rate, there was no great market demand for BondLink, and Trading Edge itself disappeared in 2002.

By that time, though a second wave of entrepreneurs had decided on a more incremental approach to changing the bond markets. They created the electronic request-for-quote model (RfQ), which lowered execution cost and increased efficiency vis-à-vis the old Graham-Bell based system, but kept allowed the bond world to keep its decentralized feel. The RfQ was a click-to-trade billboard system, and sufficiently successful to allow for steadily growing volume over the next ten years.

Thursday, July 24, 2014

What Hath Man Wrought

Aircraft used for Malaysia Airlines Flight 17


Keeping track of the news has become an increasingly dispiriting activity.


The events of Thursday, July 17th are themselves sufficient to illustrate this.


Malaysian Airlines 17, a commercial flight from Amsterdam to Kuala Lumpur, crashed in the Ukraine that day.


Also, Israel began its ground offensive in Gaza.


Meanwhile, the twittersphere was full of speculations about a giant hole in Siberia, something that looks much more ominous than the garden variety sinkhole encountered in places with variable water tables. The hole on the Yamal Peninsula looks positively apocalyptic, and has inspired tralk of everything from global warming, to alien attacks.


U.S. business news made its contribution to the distressing tone of the day, as Microsoft announced tens of thousands of layoffs.  Microsoft! Fourteen percent of its workforce.


How can we wrap our heads around such news? The first was almost certainly a deliberate act of war, the second was quite certainly an escalation of war, the third seems like creepy symbolism from a horror film, and the fourth? -- just God's way of saying "no one and nothing is safe, not even a job at a software titan."

Sunday, July 20, 2014

Raphael Golb's Sentence, Part II

Image: Raphael Golb enters a courtroom in New York on Sept. 27, 2010


Raphael Golb, pictured here, son of Normal Golb (see yesterday's discussion of who he is) is expected to surrender to authorities on Tuesday, July 22 to begin serving his sentence.


This is despite a victory at the Court of Appeals, which discarded the felony charge against him, identity theft, and declared unconstitutional the New York statute on "aggravated harassment." I'm glad of his victories, by the way. When such offenses are on the books they render possible the criminalization of vigorous and free-wheeling debate on the sort of issues that the first amendment was, precisely, designed to protect.


That left misdemeanor charges of forgery and impersonation still standing.


Golb took part in internet debates about the Dead Sea Scrolls, one of the issues on which his father has made a reputation. Not surprisingly, Norman Golb's thesis on this point has been hotly contested, by (among others) Lawrence Schiffman, of New York University.


In the wake of the victory of the Maccabeans over the Seleucids, and the resultant new dynasty in Judea, Jews had to figure out where they stood in the new order. It was this shake-up, Schiffman stresses, that led the Essenes to head out to the desert -- and that led hem to do exactly what Norman Gold emphatically denies: to create a vast library of their discontents, the Dead Sea Scrolls. So the library in the caves isn't the consequence of any general spiriting out of texts from Jerusalem at a much later date (the era of Roman conquest). It -- or much of it -- was created roughly where it was found.


The Golb/Schiffman dispute, which is of course part of a much broader academic contretemps, become entangled with accusations of plagiarism. It seems to have been Raphael's conviction that his father had been plagiarized by the theoretic foe that led him, Raphael, to seek to pay it back by way of impersonating Schiffman. He established e-mail accounts pretending to be Schiffman and then used those accounts to send out 'admissions' of plagiarism.


Schiffman denies the plagiarism, and the impersonation seems way uncool at any rate.
What a wonderful motive is revenge!







Saturday, July 19, 2014

Raphael Golb's Sentence, Part I

Raphael Golb, listens as his lawyer, Ronald Kuby argues on his behalf during a sentencing hearing in New York State Supreme Court in Manhattan July 14, 2014.The case is bizarre, on a number of grounds.


A New York court has sentenced the man pictured here, Raphael Golb, on misdemeanor criminal impersonation and forgery charges.


If this were just another petty crook, it wouldn't be worth our notice at Jamesian Philosophy Refreshed. But this is the son of an important scholar, and the crimes were committed on behalf of the proper interpretation of certain ancient texts, the lifework of that paternal inspiration.


Raphael's father, Norman Golb, is known as an advocate of the view that the Essenes had no especially close association with the Dead Sea Scrolls.  \


Why is that important? The Essenes, an ascetic sect of Judaism that disagreed firmly with both the Sadducees and the Pharisees, are mentioned by several ancient authors (Philo, Josephus, Pliny) and are widely thought to have withdrawn from the wicked world into the purer environment of Ein Gedi, near the shore of the Dead Sea.


As ancient scrolls were discovered near Ein Gedi beginning in 1956, a process of discovery that took another decade, the natural assumption was that these Essenes had written them.


Norman Golb's theory is very different. He believes that the scrolls came ultimately from libraries (plural, not one single Library) in Jerusalem. In 70 AD, as a consequence of a Zealot rebellion against Rome, Roman armies  besieged Jerusalem, and various individuals from diverse groups smuggled out books that they held in high esteem, hiding these valuable scrolls, taking them to the fortress of Qumran, a fortress which happened to be near the old Essene stomping grounds -- but that fact was incidental to their presence their. From the fortress, they made their way in time to the caves. In short, the scrolls represent Judaism in general in the "inter-testamental" period, not a particular sect.


This theory has been heatedly controverted, and the younger Golb has himself waded into the scholarly controversial about whether there is anything Essenic about the Scrolls.


The legal troubles into which he has gotten himself as a consequence? I'll discuss this tomorrow.





Friday, July 18, 2014

Cher: the social philosopher




On a certain Facebook page, there is a debate underway over the ethics of shunning, that is, social ostracism independent of legal sanctions.


The debate reminded me of a Cher song title, "Gypsies, Tramps, and Thieves."


Shunning, after all, has at least three sorts of target: ethnic/racial minorities, those people who make despised lifestyle choices, and those who engage in genuinely anti-social behavior.


Any society will have to find some means of deterrence of the third, called by our philosopher "thieves" for short. Shunning seems the most fittingly anarchistic way of dealing with such anti-social behavior.


Applied to "gypsies" or "tramps," and the sort of target I take each term to represent, the practice is morally dubious at best.

Thursday, July 17, 2014

Merger Activity Round the World



North American deal flow activity is up by 17% compared to this time last year (YoY). Deal flow is up 22% quarter-on-quarter.  The QoQ figure is inpart due to the sort of seasonal variation whence the YoY figure helpfully abstracts.


European deal flow is also up 17% YoY. There is some return of activity even in countries that were regarded as basket cases a year ago. Meanwhile, Germany continues to act as the continent's safe haven for investors.


Latin America is weaker than either NA or Europe, and early stage M&A activity is down 7% YoY. Dealmakers in the region are said to be optimistic about a turnaround, though.


Deal activity levels in the Asia Pacific region are down, whether measured YoY or QoQ. Japan is doing well, but China is pulling back on it recent aggressive round of overseas acquisitions. In terms of sentiment: dealmakers tend to see the move in the Asia Pacific region as a sign of volatility rather than as a lasting turn for the worse.


Hope you enjoyed the quick tour.



Sunday, July 13, 2014

Modes of Belief in God






I was thinking recently about the different ways that different theists complete the phrase "I believe in God because...."  Thinking here of the reflective believers, those who are interested in answering the question, not those who, say, simply adopted the beliefs passed on to them as children and have never questioned them.


Adopting the pronoun "Him" from convention and for convenience.


1. Mystics: "I believe in God because I am personally in touch with Him."


2.  Mysticists: "I believe in God because the last guy who spoke is credible, and until I have my own such experience I rely upon his."


3. Rationalists: "I believe in God because logically sound proofs, from plausible premises, lead to the inference that He exists."


4. Fideists: "I choose to believe in God despite the fact that there is no very powerful because."


The fideists can presumably be subdivided further. Even if there is no overpowering "because" there may be reasons that create some lesser degree of inclination toward this particular choice, and those could be stated.