Jamesian Philosophy Refreshed

Thomson Reuters is putting an end to what until days ago remained of HedgeWorld. Excuse me while I shed an inward tear. HedgeWorld, founded in 1999, was the first news operation to focus squarely, full time, upon the hedge fund industry. The founders lit this candle soon after the self-destruction of Long-Term Capital Management created a broad public desirous of information on this subject. Better to light that one candle, after all, than to curse the darkness. I was the first hire of those founders -- they brought me on board in the spring of 2000. HedgeWorld had a complicated corporate history, but in time it was captured by Reuters, and it was run as a semi-autonomous operation beneath that broad Reuteronian sky. Then, alas, Reuters merged with Thomson, and the Bigs of the two operations put their pointy heads together and decided where they could make cuts. They closed down HW as a news gathering operation in the fall of 2008. That was the end of my in...

A few thoughts about Turkey. The readers of this blog are a well-informed bunch, and I'm sure they know the basics. To wit: on May 31,  protests were underway (peacefully) in Istanbul, where the catalyzing issue was the government's plan to replace a historical park with a shopping mall. Police responded that day in a heavy-handed way, tear gas, water cannon, 63 arrests. This has led to a spreading of the protests and a wider range of grievances, while Prime Minister Tayyip Erdoğan has asserted that he has the high ground, and called the protestors "hoodlums." This is clearly about a good deal more than a single land-use dispute. It reminds me of something I wrote in my book, Gambling with Borrowed Chips . I sought to explain an upswing in crude oil prices that began in April 2007 and that continued until the summer of 2008. The world price of crude is of course very sensitive to news about the politics of the middle east. In April 2007, when the upward mo...

Not long ago I read the novel DEATH BENEFIT by Robin Cook. The set up is this: after the financial crisis of 2008, two newly unemployed bankers started LifeDeals Inc.  Their business plan? selling annuities to people with known illnesses, and given their database about the medical facts along with the tendency of many humans to be excessively optimistic about their own longevity, they could do so on terms profitable to themselves.  The two principals of LifeDeals are distinguished as characters: Russell is the quant and computer geek, Edmund the hale alpha male. The key to the plot is that LDI is heavily dependent on its settlements with patients with diabetes. Thus, a breakthrough in research into the regeneration of the pancreas using stem cells could destroy it. Another business entity that enters into the plot is called Big Skies. This seems to be a multi-strategy hedge fund, and it is shorting LDI in the credit derivatives market (in oth...

As I noted in yesterday's entry, the U.S. Supreme Court this week declined to hear an appeal from State Street Bank & Trust after the 6th Circuit Court of Appeals gave the go-ahead to litigation against it brought by former (pre-bankruptcy) employees of General Motors. State Street had tried to get this case squashed on a motion to dismiss for failure to state a claim on which relief can be granted (the old-fashioned term for that was a demurrer).  SCOTUS' non-decision decision means that it has failed in that effort. State Street's claim had been that ERISA shielded it from immunity. Other fiduciaries in similar situations may continue to make such claims (outside of the 6th Circuit), because SCOTUS' s refusal to take an appeal has no precedential significance.  Still, the 6th Circuit, which consists of the federal districts within Tennessee, Kentucky, Ohio, and Michigan, ain't peanuts, and the 6th Circuits decision is sure to be cited elsewhere. This m...

A bit of fascinating news this week was mostly overlooked. The U.S. Supreme Court, on Monday, December 3, declined to hear an appeal from State Street Bank & Trust after the 6th Circuit Court of Appeals had given the go-ahead to litigation against it. So, without having to do the work of listening to arguments or  reading briefs and writing an opinion -- all that tiresome stuff -- the high court has determined this lawsuit will proceed. The underlying lawsuit is a big enough deal to make that nod a big deal as well. Here's a link to the 6th Circuit decision which, we now know, stands. Before the fateful year 2008, auto giant General Motors offered its employees 401(k) plans with a variety of investment options, including mutual funds, non-mutual fund investments, and the General Motors Common Stock Fund itself. The later option was intended to enable both salaried and hourly employees to acquire an equity interest in their employer. Defendant State St...

Are accounting rules of any broader significance than just something for accountants to follow? do they themselves constitute data for the science of economics? or are they arbitrary, subject to erasure and thus re-writable at will? I've been thinking about this recently because of an argument I got into at a message-board site about the Bush adminsitration's bait-and-switch over the TARP legislation of 2008. As some of you will of course remember, the crisis-created coalition of Bush and Pelosi sold to the public and both houses of Congress a Troubled Assets Relief Program. The idea was that the government would buy up certain positions of the Wall Street banks, positions that typically involved both assets and liabilities, and that in the circumstances of the crisis involved way too much of the latter, too little of the former. But even as Congress was voting on TARP, on October 3, 2008 [a month before Obama's election, and less than a week after Congress had reje...