Marginal Utility

by Ken Houghton

While Felix and Yves are rising to something resembling a defense, the Sainted Bess at dealbreaker, FT alphaville, and minyanville treat the WSJ's rehash of James E. Cayne's sins today.

The winner hands down is Minyanville, which produces enhanced graphics as well:

Labels: Naked Capitalism, PortfolioMarketMovers, The Old Firm, WSJ

by Ken Houghton

The WSJ notes a detail in the ouster of Warren Spector from The Old Firm:

Nevertheless, Mr. Spector had agreed months earlier to play with partners in a national bridge tournament in Nashville, Tenn. So he flew there in mid-July to compete. With Bear Stearns's shares reeling and concerns about the firm's management mounting, he spent about a week at the tournament, rising early to work the phones in his hotel room and jumping into the game in midafternoon. Along with his partners, Mr. Spector won the tournament. Still Mr. Cayne, who also played in the Nashville competition, was steamed that his lieutenant had been away from the office, according to people familiar with his thinking. [emphasis mine]

This does leaves open the question of whether Mr. Spector's sin was to play in the tournament or to win it.

The WSJ piece closes (currently) with a clear indication of Mr. Spector's faith in the firm:

Around that time, there was also tension over Mr. Spector's pay, due to his practice of deferring his annual compensation for a period of years, people familiar with the matter say. The firm allowed such deferrals, but Mr. Spector's total deferrals were becoming expensive for the firm, Mr. Cayne and some other executives felt.

They would also have been expensive for other firms. When Mr. Spector's name was floated as the possible CEO of Morgan Stanley last year (by, among others, the NYPost), we ballparked what it would cost to get him to walk away. From the public documents, it would have been about $40 million—before you start talking compensation for any new job.

That's a fairly clear alignment of Mr. Spector's interests with The Old Firm's. Apparently, it's just not enough for Messrs. Cayne and Schwartz, who, per the WSJ article, will move Jeffrey Mayer into Mr. Spector's old position.

UPDATE: Via the comments at CR, the school where Spector finished his undergrad days discusses his ouster. This may be key:

Warren’s rise was often described as “meteoric” in the press. The MarketWatch story linked above calls him “high-flying” and “top trader.” And the WSJ story notes he is often named as a likely heir to the CEO chair.

Meanwhile, the firm’s other President and co-Chief Operating Officer is Alan Schwartz. Who is ten years older.

One is led then to wonder if the opportunity provided by the industry-wide crisis is not being used to arrange an eviction by people less than pleased with Warren’s press clippings.

Mr. Spector uses the same publicist as his wife.

Labels: The Old Firm, WSJ

by Ken Houghton

While Robert Barro fellates MSFT (though not Bill Gates) in the WSJ (h/t Mark Thoma via DeLong), saner heads note that arguing a Consumer Surplus requires making a positive contribution to the commonweal:

Over the last two months Microsoft and a cadre of high paid lobbyists have been working a full-court press in Albany in an attempt to bring about a serious weakening of New York State election law. This back door effort by private corporations to weaken public protections is about to bear fruit....

In an earlier blog I wrote about Microsoft's unwillingness to comply with New York State's escrow and review requirements. Now the software giant has gone a step further, not just saying “we won't comply with your law” but actively trying to change state law to serve their corporate interests. Microsoft's attorneys drafted an amendment which would add a paragraph to Section 1-104 of NYS Election Law defining “election-dedicated voting system technology”. Microsoft’s proposed change to state law would effectively render our current requirements for escrow and the ability for independent review of source code in the event of disputes completely meaningless - and with it the protections the public fought so hard for.

But there's a lot of productivity created by the Blue Screen of Death Crew, so what's a few votes?

Labels: Brad DeLong, Economists View, Mark Thoma, MSFT, programming, WSJ

by Ken Houghton

From today's Featured (i.e., non-firewalled) editorial:

Mr. Gates seems to think he can succeed as the anti-Rumsfeld by appeasing the likes of Mr. Levin, but his kowtow only makes Mr. Bush look weaker as a Commander in Chief who can't even select his own war generals.

As the Sainted Donald Rumsfeld once said, "You go to war with the generals you selected."

But catch the follow-on, which appears to claim that the Democrats fought with the Administration and won:

Mr. Levin was quick to brag about his latest conquest, confirming for reporters that he had told Mr. Gates that General Pace's nomination would have resulted in a fight. The Democrat will now return Mr. Gates's favor by holding Senate hearings on the Administration's detainee and interrogation policy. Mr. Levin is seeking thousands of documents to further embarrass Mr. Bush, and we're told Mr. Gates is urging the White House counsel's office to accommodate the Democrat.

How vile! But surely this cannot be true, as the Democrats always cave; the meme is that they have a "lack of resolve."

Someone needs to tell the WSJ editorial page to Get With the Program.

Labels: Iraq, Politics, WSJ