Tough to follow up Milton Freedman, but Warren Buffet offered this fantastic piece in the New York Times (worth signing up for the free membership).


In calculating the pension costs that directly affect their earnings, companies in the Standard & Poor's index of 500 stocks are today using assumptions about investment return rates that go as high as 11 percent. The rate chosen is important: in many cases, an upward change of a single percentage point will increase the annual earnings a company reports by more than $100 million. It's no surprise, therefore, that many chief executives opt for assumptions that are wildly optimistic, even as their pension assets perform miserably. These C.E.O.'s simply ignore this unpleasant reality and their obliging actuaries and auditors bless whatever rate the company selects. How convenient: Client A, using a 6.5 percent rate, receives a clean audit opinion — and so does client B, which opts for an 11 percent rate.

All that is bad, but the far greater sin has been option accounting. Options are a huge cost for many corporations and a huge benefit to executives. No wonder, then, that they have fought ferociously to avoid making a charge against their earnings. Without blushing, almost all C.E.O.'s have told their shareholders that options are cost-free.

For these C.E.O.'s I have a proposition: Berkshire Hathaway will sell you insurance, carpeting or any of our other products in exchange for options identical to those you grant yourselves. It'll all be cash-free. But do you really think your corporation will not have incurred a cost when you hand over the options in exchange for the carpeting? Or do you really think that placing a value on the option is just too difficult to do, one of your other excuses for not expensing them? If these are the opinions you honestly hold, call me collect. We can do business.

More news from Milton Freedman, who turns 91 on the last day of the month and extolls the facilies of the "war on drugs" and the socialist state of our governement. Not that I am pro-drugs or is Milton, it is just that the entire war on drugs effort is a joke and a complete waste of tax payer dollars, not to mention limiting the freedom of individuals. If you look at one link on this site, please check this one.


Friedman said "the war on drugs and the harm which it does are simply manifestations of a much broader problem: the substitution of political mechanisms for market mechanisms in a wide variety of areas." He estimated that "the United States today is a little over fifty percent socialist," as measured by the resources the government commands through taxes and regulation.

Friedman emphasized that "the problem is not the kind of people who run our governmental institutions versus those who run our private institutions. The trouble, as the Marxists used to say, is in the system."

In particular, he explained, the ability to spend other people's money at will means that government programs do not face the discipline that private businesses do. "When a private enterprise fails, it is closed down," he noted. "When a government enterprise fails, it is expanded."

Friedman cautioned reformers against trying "to cure a problem created by socialism [with] some more socialism" by putting the government in charge of drug distribution. He urged them to "recognize that repealing drug prohibition is part of the broader problem of cutting down the scope and power of the government and restoring power to the people."

The DPF speech displayed several of the qualities that have made Friedman such an effective champion of liberty. For one thing, he is not shy of disagreement, even with people who share some of his views. He challenges leftish opponents of the war on drugs to rethink their opposition to school vouchers, and he challenges conservative supporters of vouchers to rethink their support for the war on drugs.

At the same time, Friedman strives to engage people on their own terms. He does not suffer fools glady, but he sees his task as correcting their foolishness rather than silencing or humiliating them.

An interesting article on breathing through your nose compliments of Hatch.

Douillard's research suggests, in stark contrast with conventional wisdom, that the Zone isn't something elusive or mystical; it's actually achievable and sustainable, as long as one remembers to breathe the right way. During the drill, though, I finally just have to open my mouth. "How long have I been doing this? Three minutes?" I manage to blurt out, gasping.

Douillard smiles. "Try twenty," he says. "That's the first step. Time fades away."

Even if you haven't felt it, you've seen the Zone. In 1976, Olympic decathlete Bruce Jenner described feeling like he was "rising above myself, doing things I had no right to do." Ted Williams said there were times he could see the seams on a fastball. And who could forget Michael Jordan, who, in a 1992 NBA Finals game, made his sixth-straight three-pointer and looked at the camera and simply shrugged his shoulders, as if to say, "Even I can't explain this."

Rep Traficant got the boot today with only Gary Conduit voting against his expulsion from Congress. Mob connections, crazy rants, kick backs and a whole mess of other baggage plauged Mr. Trafficant, who represented Youngstown, Ohio and may be back in Congress very shortly.

A few hysterical conservatives have opined that Traficant was removed for the crime of being very un-P.C. He was certainly that, but he was also a total nut job, albeit a highly amusing one. In his testimony before the Committee on Standards of Official Conduct, Traficant explained to the chairman why he was late to his own hanging: “I was on media broadcasts trying to demean you and the others.” He asked former employer and friendly witness Sandra Ferrante point blank, “Were you and I sex partners?”

Ferrante: No.

Traficant: Why not?

Another great onion piece on a Harvard student and a fast food menu.

CAMBRIDGE, MA—Jon Rosenblatt, 27, a Harvard University English graduate student specializing in modern and postmodern critical theory, deconstructed the take-out menu of a local Mexican restaurant "out of sheer force of habit" Monday.
"What's wrong with me?" Rosenblatt asked fellow graduate student Amanda Kiefer following the incident. "Am I completely losing my mind? I just wanted to order some food from Burrito Bandito. Next thing I know, I'm analyzing the menu's content as a text, or 'text,' subjecting it to a rigorous critical reevaluation informed by Derrida, De Man, etc., as a construct, or 'construct,' made up of multi-varied and, in fact, often self-contradictory messages, or 'meanings,' derived from the cultural signifiers evoked by the menu, or 'menu,' and the resultant assumptions within not only the mind of the menu's 'authors' and 'readers,' but also within the larger context of our current postmodern media environment. Man, I've got to finish my dissertation before I end up in a rubber room."

Holloywood hacking into your PC? Unfortunately this is not a joke.


Sponsored by Reps. Howard Berman, D-Calif., and Howard Coble, R-N.C., the measure would permit copyright holders to perform nearly unchecked electronic hacking if they have a "reasonable basis" to believe that piracy is taking place. Berman and Coble plan to introduce the 10-page bill this week.

The legislation would immunize groups such as the Motion Picture Association of America and the Recording Industry Association of America from all state and federal laws if they disable, block or otherwise impair a "publicly accessible peer-to-peer network

Is my blog hot or not?

Look for Common's new album to drop sometime soon. The Isness is what it is, so make sure to pick it up.

Great great article on Ted WIlliams aka the Kid.

Andrew Sullivan askswhat did Robert Rubin know about the Enron?

How do you write a piece about a shady deal with Enron at Citigroup without mentioning Robert Rubin? The same Rubin who placed calls to protect Enron to the Bush administration? The same Rubin who has the gall to demand a change of course in the current administration, while he presided over the bubble we're now recovering from? We all know the Times is tight with Rubin, but this lacuna screams for further investigation. Rubin joined Citigroup in the fall of 1999. The deal was cemented orally that year, before Rubin was ensconced. But it was controversial even within the bank throughout that year, and keeping the loan off the official books would surely have required a decision at some point after the fact. Was Rubin apprised of this? Did he know about it when he contacted Treasury to ask for even more kid-glove treatment of Enron the following year?

Al Sharpton caught on drug tape...almost too good to be true.


Sharpton in video still excerpt from 1983 FBI surveillance tape.

A shocking FBI surveillance tape shows the Rev. Al Sharpton discussing a major drug deal with an undercover agent posing as a South American kingpin.
The black activist was offered thousands of dollars as a cut for arranging bulk sales of cocaine on the 1983 videotape, which will be shown tonight on HBO's "Real Sports with Bryant Gumbel."

"I can get pure coke ... for about 35,000 a kilo," says Victor Quintana, the FBI agent, as Sharpton nods during the sting operation. "But I gotta get, you know, more than one."

"Right," Sharpton replies.

"Ten kilograms is, like, $350,000," Quintana says. "That's a drop in the bucket, you know. We can go bigger."

Sharpton nods.

"Every kilogram we bring in is 3,500 to you. How does that sound?" Quintana asks, as Sharpton nods again. "So we bring in 10, you'll make $35,000.

"I hear you," Sharpton replies.

Sharpton admitted yesterday that he appears on the never-before-seen tape but insisted he was rebuffing a government attempt to set him up.

A fantastic looking into the world of George Gilder, one of the pioneers of the telecom bubble and author of the once famous "Gilder Technology Report".

Still, he allows, "I led a whole bunch of credulous people to finance this huge buildout of fiber." And ultimately he blames himself for all those hundreds of millions of dollars investors lost based on his predictions. "I accepted the laurels when they were being offered," Gilder says. "Now I really have to eat crow and not skulk off to the corner and claim 'I'm just a technologist.'"

Time to buy stocks. That is all I have for today.

A refreshing view of the current Big Dog (Glenn Robinson) and Al I (Allen Iverson) arrest news.

Allen Iverson is the “top dog” right now in terms of merchandise revenue for the NBA (i.e., he sells A LOT of jerseys), so he can pretty much get away with murder (hmm…better not give him any ideas). And despite A.I.’s mother proclaiming after her son’s arrest that, "This is supposed to be the brotherly love place…I'm not feeling it right now", Philadelphia has proven to be nothing less than totally forgiving of its adopted son (it’s native sons like Kobe that they shaft).

Fortunately, the opposite will likely hold true for the underdog of this sordid tale, who in the end is just another guy trying to be the Answer. Glenn Robinson is a pet that’s taken on the characteristics of his master, knowing full well to never bite the hand that feeds him. He’s learned that, in this league, it’s far better not to have gone through any obedience training. I’m certain Big Dog’s actions will not be condoned so readily in Milwaukee, nor should they be. He’ll be lucky to receive an iota of puppy love from that blue-collar city before they freely offer him to a good home.

Sadly, it’s widely believed that Allen Iverson will get no punishment for his suspected wrongful acts, and will receive no negative fallout from fans as a result of his alleged criminal conduct. He’ll never see the error of his ways, and neither will Robinson. So, in the end, these mingled dramas will boil down to a non-seeing eye dog being guided by a blind man, invisible victims in plain sight, and the rest of us looking the other way to what’s readily apparent. I find it very funny when people wonder what’s wrong with the world…

Fantastic article that compares the panic of 1819 to the current day panic in the market. A MUST READ!!!


"Of all men's miseries the bitterest is this: to know so much and to have control over nothing." --Herodotus

Unlike the cycles that occupied the thinking of the ancient Greeks such as Herodotus, business cycles are not destined by fate, nor are they natural events like tropical storms or volcanic eruptions. Business cycles are contrived; they grow out of previous errors made during the boom and are symptomatic of a rotten monetary system burdened with inconvertible paper money, and hence, credit and monetary expansion. Although there are many differences between today’s economy and that of 1819, the parallels and commonality are what make for absorbing reading.

Some Wake recruiting news (HOOPS) from Hatch... Sounds like Skip is down a great job and putting together a squad...

He got another recruit, a Shooting Guard from Kinston, NC. From what
I've read about this guy, he can jump out of the gym and plays well with
Chris Paul, our nationally ranked PG recruit. Both are for the class of
2003. Go Deacs!

Some commentary on the American CEO....

"Having served on 15 or 20 boards . . . I've seen the evolution of corporate governance over a long period of time and the one thing that I've become acutely aware of is how crucial the issue of what the chief executive officer believes and does is to governance," Mr Greenspan told Congress last week.

He said lax corporate governance was "largely a symptom of a failed CEO" and independent directors were essential. But the Fed chairman echoed business lobby groups' concerns when he told Congress to be careful not to "create a competing set of directors and conflicting sources of power that are likely to impair a corporation's effectiveness".

World Com finally declared for bankruptcy, taking the cake as the largest in US history.


The telecommunications company listed assets and debts as “more than $100 million.” The Clinton, Miss., company also listed its total number of creditors as more than 1,000.

How depressing is this? Yeah I've been accumulating since May. Dannnnnggggggg.....