Accel recants

Mercury News | 08/05/2002 | Venture capital funds shrink Though investors had technically “committed” their capital to venture firms, most venture firms gave back some of the money to generate goodwill. Investors pay management fees on the uninvested capital — recently estimated by the NVCA at almost $200 billion — and this year started to … Continue reading “Accel recants”

Mercury News | 08/05/2002 | Venture capital funds shrink

Though investors had technically “committed” their capital to venture firms, most venture firms gave back some of the money to generate goodwill. Investors pay management fees on the uninvested capital — recently estimated by the NVCA at almost $200 billion — and this year started to complain venture firms weren’t investing it quickly enough. They said the venture firms had more money than they knew what to do with.

The most public spat came at Palo Alto’s Accel Partners, when some investors rejected Accel’s initial plan to simply halve its fund into two smaller funds, and not give money back. Accel recanted and gave back $461 million.

Accel must think its investors are fools to try and pull off a scam of this magnitude, but given the nature of their networking investments over the course of the past decade, such an idea would be simple projection. The bottom line is that any company with Accel as a lead investor is probably flaky.

Assemblyman Longville honors the dead

PE.com | California News reports: During an Assembly floor session, Longville rose in mock solemnity and asked Speaker Herb Wesson, D-Culver City, for special permission to honor the dead. “Reflecting the bipartisan spirit with which we react to tragic circumstances in this body,” he said, “I would move that when we adjourn today, the Assembly … Continue reading “Assemblyman Longville honors the dead”

PE.com | California News reports:

During an Assembly floor session, Longville rose in mock solemnity and asked Speaker Herb Wesson, D-Culver City, for special permission to honor the dead.

“Reflecting the bipartisan spirit with which we react to tragic circumstances in this body,” he said, “I would move that when we adjourn today, the Assembly adjourn, in the memory of the Simon for Governor campaign.”

Longville, who rarely pulls his partisan punches, said Davis would have to be arrested in a child-abduction case to lose to Simon now.

“If I were looking for organ donors . . . where I’d be going is to the Simon campaign,” Longville said. “If I needed something other than a brain, that is.”

R. I. P., B. S.

Recovering from Simon

Bill Simon should bow out, according to Debra Saunders: BILL Simon should just give up. He’s a lousy candidate. He should admit it, bow out of the race, then endorse a good Republican — Secretary of State Bill Jones — who has a shot at beating the otherwise-vulnerable Gray Davis. A write-in campaign for Bill … Continue reading “Recovering from Simon”

Bill Simon should bow out, according to Debra Saunders:

BILL Simon should just give up. He’s a lousy candidate. He should admit it, bow out of the race, then endorse a good Republican — Secretary of State Bill Jones — who has a shot at beating the otherwise-vulnerable Gray Davis.

A write-in campaign for Bill Jones probably does have a better chance than this idiot Simon.

Simple Simon met a pieman

…and took one in the face. Bye-bye to the Simon-for-Governor campaign, thanks to this $78 million business scandal: A Los Angeles Superior Court jury ordered the William E. Simon & Sons firm to pay $78 million in damages for fraud and other misconduct in an investment debacle that also led to a major personal financial … Continue reading “Simple Simon met a pieman”

…and took one in the face. Bye-bye to the Simon-for-Governor campaign, thanks to this $78 million business scandal:

A Los Angeles Superior Court jury ordered the William E. Simon & Sons firm to pay $78 million in damages for fraud and other misconduct in an investment debacle that also led to a major personal financial loss for Republican gubernatorial nominee Bill Simon Jr.

It was nice knowing you Bill. In 2006, we’ll have Jim Brulte (R) v. Bill Lockyer (D) in the governor’s race, and it will be a prime-time, professional, bare-knuckle, no-holds-barred affair. I can hardly wait. In the meantime, Gov. Davis has my unwavering support.

A case of crabs

Bienvenue sur Emmanuelle.net reports on Matt Welch’s crabs: I don’t know when men started boiling crabs and cracking their legs but Matt has a special connection with these bellicose and strange-looking animals. Happy Birthday, dude.

Bienvenue sur Emmanuelle.net reports on Matt Welch’s crabs:

I don’t know when men started boiling crabs and cracking their legs but Matt has a special connection with these bellicose and strange-looking animals.

Happy Birthday, dude.

Re-electing Gray Davis

I spent the day in Sacramento serving on an advisory board that I helped create by passing some legislation a few years ago, and when I came back home I discovered something interesting on the web. Ann Salisbury, a Gray Davis volunteer, wants to remind us of Gray’s accomplishments, so she’s posted a list of … Continue reading “Re-electing Gray Davis”

I spent the day in Sacramento serving on an advisory board that I helped create by passing some legislation a few years ago, and when I came back home I discovered something interesting on the web. Ann Salisbury, a Gray Davis volunteer, wants to remind us of Gray’s accomplishments, so she’s posted a list of them to her blog:

— In his first three years, Governor Davis increased investment in K-12 education by $9.1 billion, or 39 percent — the largest three-year increase in history;

— Expanded the Cal-Grant program to help disadvantaged students who need financial assistance to pay for college;

— Increased University of California freshman admissions among African-American students by more than 13 percent for Fall 2001;

The list goes on and on, including virtually every major bill the governor signed or vetoed in the past three years. There are a couple of interesting things about this list, to whit: a) it was copied from the gray-davis.com web site, and b) most of the measures Gray and Ann tout were actually conceived and passed by members of the legislature who aren’t especially friendly to Gray.

John Burton, arguably Gray’s most vocal critic, wrote the expansion of the Cal-Grant program that’s number two on this list, and Gray wasn’t at all friendly to it since it’s a potential budget-buster. Similarly, the increase in African-American enrollment in UC is a consequence of the Four Percent Plan George W. Bush cooked up as governor of Texas, and Prop 209, a measure Gray opposed, which sent much of the affirmative action population to the lesser UC’s and away from Berkeley and UCLA. At the places like Riverside and Irvine, they don’t drop out as fast, so total ethnic enrollment is up. Most of the increased spending on K-12 is the result of Prop 98, and Gray can’t take credit for that either, not that education quality is up commensurate with education spending. She also touts:

— Expanded the eligibility and streamlined the application process for the Healthy Families program ? increasing enrollment from 30,000 to over 500,000 previously uninsured and disadvantaged children;

— Expanded the Medi-Cal low-cost health insurance program to include two-parent working families at or below the federal poverty level;

Increasing enrollment in Healthy Families and MediCal were the result of drives taking place over the course of several years that started well before Gray took office. He has no business trying to take credit for these things even if they did finally come to fruition while he was officially governor.

Ann and Gray also want to take credit for Fred Keeley’s park bond, Sheila Kuehl’s gay rights in the schools bill (“California Student Safety and Violence Prevention Act of 2000”), the legislature’s MTBE phaseout, Byron Sher and Dianne Feinstein’s Headwaters Forest deal (enacted while Pete Wilson was governor), and giving out money under the CalWorks welfare law that was passed under Wilson as a result of the Gingrich welfare reform.

There are some legitimate accomplishments of the Davis Administration that deserve some touting, such as the education reforms he pushed through in his first year, and the reorganization and continued improvement of the child support collection system, but the list Ann Salisbury cribbed from the Gray-Davis.com web site is extremely misleading.

The question that this list raises, however, is why Gray wants to reposition himself as a solid, hardcore leftwinger with all these welfare- and ethnic- and enviro- and gay-centric issues, after he won election in ’98 as a moderate, centrist, DLC-style Democrat. During the last campaign, Davis said he would continue Pete Wilson’s policies in most areas, and now that we’re in the midst of a budget crisis triggered by our too-heavily-indexed tax rates, that seems a more prudent course than running to the extreme left.

Davis has had the most dysfunctional relationship with the Legislature of any governor in memory. The way the system normally works is that legislators contact the governor and engage him in dialog over any measure that has the potential to draw a veto; changes are made, the hard edges are softened, and a compromise generally emerges that allows both the lawmaker and the governor to emerge looking like winners.

Even hard left politicos like Sheila Kuehl work this way with Republican governors, because there’s nothing more heartbreaking than a veto. Tom Hayden knew it was time for him to leave the legislature when Gray made him the most-vetoed member, telling Hayden that he intended to make an example of him. Davis, however, doesn’t return these calls, so lawmakers send legislation to the corner office blind, without any clue as to whether he’s going to sign it or send it back. Lawmakers consider him arrogant, uncooperative, and high handed, and they haven’t forgotten the infamous Davis outburst to the Chronicle’s editorial board when he said the legislature is simply supposed to “implement his vision.”

Gray, give me a call and let’s see if I can’t help you out; your campaign strategist Garry South must be smoking some of Burton’s locoweed to have put out this list of “accomplishments.”

A distraction

BBH&Co. Insurance Asset Management reports on expensing options: Every scandal has its poster children. For some reason, the lack of income statement accounting for executive stock options has become the scapegoat of choice for the most recent wave of corporate scandals. Former JPMorgan executive Walter Cadette declared in a recent New York Times Op-Ed that … Continue reading “A distraction”

BBH&Co. Insurance Asset Management reports on expensing options:

Every scandal has its poster children. For some reason, the lack of income statement accounting for executive stock options has become the scapegoat of choice for the most recent wave of corporate scandals. Former JPMorgan executive Walter Cadette declared in a recent New York Times Op-Ed that “the stock-options culture is at the root of the current scandals on Wall Street.” Warren Buffett placed the issue front and center this week with a scathing editorial (Who Really Cooks the Books?) claiming that option accounting was one of the two most “flagrant deceptions” in accounting today. Buffett declares that he is opposed to legislators setting accounting rules on principle. However, he is so appalled by stock option and pension surplus accounting that he is willing to make an exception to his own rules.

That guy writes so well, he should have a blog.

Profiting from Black-Scholes

Nova last night was a repeat of a 2000 show on the spectacular failure of Long Term Capital Management, a hedge fund setup to use the Black-Scholes and similar models (Scholes himself was one of the principals) to make hugely leveraged investments in virtually all the world’s financial markets. LTCM collapsed and threatened to take … Continue reading “Profiting from Black-Scholes”

Nova last night was a repeat of a 2000 show on the spectacular failure of Long Term Capital Management, a hedge fund setup to use the Black-Scholes and similar models (Scholes himself was one of the principals) to make hugely leveraged investments in virtually all the world’s financial markets. LTCM collapsed and threatened to take the markets down with it, as this book (When Genius Failed: The Rise and Fall of Long-Term Capital Management) explains:

LTCM began trading in 1994, after completing a road show that, despite the Ph.D.-touting partners’ lack of social skills and their disdainful condescension of potential investors who couldn’t rise to their intellectual level, netted a whopping $1.25 billion. The fund would seek to earn a tiny spread on thousands of trades, “as if it were vacuuming nickels that others couldn’t see,” in the words of one of its Nobel laureate partners, Myron Scholes. And nickels it found. In its first two years, LTCM earned $1.6 billion, profits that exceeded 40 percent even after the partners’ hefty cuts. By the spring of 1996, it was holding $140 billion in assets. But the end was soon in sight, and Lowenstein’s detailed account of each successively worse month of 1998, culminating in a disastrous August and the partners’ subsequent panicked moves, is riveting.

Models like Black-Scholes are inherently unreliable, as this collapse shows.

How the New York Times hacks Op-Eds

Op-Ed columns are supposed to represent the point of view of the writer, and not that of the paper in which they’re published. They’re a primary vehicle for broadening the scope of newspaper’s editorial pages, and for bringing voices into the public policy dialog that wouldn’t otherwise be represented. This isn’t the case at the … Continue reading “How the New York Times hacks Op-Eds”

Op-Ed columns are supposed to represent the point of view of the writer, and not that of the paper in which they’re published. They’re a primary vehicle for broadening the scope of newspaper’s editorial pages, and for bringing voices into the public policy dialog that wouldn’t otherwise be represented. This isn’t the case at the New York Times, however, where editors require Op-Ed contributors to alter their messages to conform to the paper’s point of view. Here are two recent examples, the first from “The New Though Police” by Tammy Bruce, recounting her ordeal in trying to place a pro-Laura Schlessinger Op-Ed with the paper:

… [I] faxed it cold (without a contact) to the editorial desk of the New York Times. Within an hour, an editor from the op-ed page called to say yes, it was a good piece and they?d love to run it. Voila! Back in the real world, with a newspaper that knows how to make a decision.

My Times liaison on the piece seemed sincere and hardworking; she checked in with me occasionally over the next few days for clarification on one point or another. It gradually became clear that there were several people involved in ?editing? and ?clearing? my piece. E-mails and telephone calls to me, however, consistently expressed the editor?s intent to publish, despite an increasing delay.

Eventually, I was e-mailed an ?edited? version of the piece that bore little resemblance to what I had originally submitted. It was now replete with sentences I never wrote and moved in a direction that was arguably anti-Laura.

In the past, none of the edits on any of my opinion pieces had been such as to warrant a protest, but someone at the New York Times had actually added the line, ?Not everything Schlessinger has to say is offensive.? This was so contrary to the intent of the piece that I asked for the line to he removed. The editors refused. Rather than let myself he positioned as some sort of apologist for comments I deemed to he offensive, I once again withdrew the piece.

A more recent example arose out of an Op-Ed critical of the UN Human Rights Commission’s stand against Israel and in favor of such notorious human rights abusers as China, Syria, Libya, and Cuba. The author is Professor Anne Bayefsky, a professor who represented the International Association of Jewish Lawyers and Jurists at the Durban Conference. Here’s a log of her e-mail dialog with the Times, over a piece you can read as written here.

This piece was originally submitted and accepted by the New York Times on 8 May 2002. After acceptance, editorial demands resulted in the submission of six new drafts, four additional drafts with smaller changes and corrections, seven drafts from the editors and 6 hours of editing by telephone. A piece, ultimately published 22 May 2002, was only accepted on condition – not only that the dynamic be significantly altered – but that the following words (in bold) be specifically omitted:

Its [UN Human Rights Commission] members include some of the most notorious human rights violators in the world today: China, Cuba, Libya, Saudi Arabia, and Syria. Those countries prefer devoting UN funds, (22% of which are from the United States), to criticizing Israel – lest attention wander too close to home.

Human Rights Watch rushed out a report on Jenin and a critique of Israel, while a report on suicide-bombers operating for the past 20 months is still coming. Selectivity, as the UN calls it, is not just a governmental problem.

But one regional group remains outside the target range. The Asian group (including China and the bulk of Muslim states) has no regional human rights system. These states strenuously avoid international human rights scrutiny and are largely successful in their efforts. No resolution has ever been passed at the UN Human Rights Commission concerning China or Syria, for example. At the just-completed Commission session, the Special Rapporteur to investigate human rights violations in Iran was deleted after six years of denying him entry into the country.
Narrowing the gap between international right and remedy means confronting not only the double-standards advocated by states, but the slackening of standards advocated by NGOs. Their buzz word is listening to the ?voices of the victims?. This was the tack of Amnesty International at the Durban World Conference Against Racism. The glitch is that voices say all kinds of things. Like South African Archbishop Desmond Tutu who recently said in Boston: ?People are scared in this country [the US] to say wrong is wrong because the Jewish lobby is powerful, very powerful.

Well, so what?…Hitler, Mussolini, Stalin…were all powerful, but in the end they bit the dust.? Human rights protection is not about the self-selection of the most extreme, the loudest, or best-funded of the mob. It is about universal standards and remedying legitimate claims.

That individual?s [the High Commissioner] chance to make a positive impact on the international protection of human rights will depend on his or her…willingness to confront the UN?s internal resistance to professionalism and transparency…
Negotiations between myself and the editors over the one sentence specifically relating to Israel, included the following exchange:

Original:
?…Those countries prefer devoting UN funds…to criticizing Israel – lest attention wander too close to home. The strategy of diversion has been wildly successful. Fifteen percent of Commission time and one-third of country-specific resolutions over thirty years are directed at this one state.?

Editor?s revision (15 May 2002)
?It [the Human Rights Commission] was, not surprisingly, toughest on nations that didn?t have seats on the commission this year, and especially tough on Israel (which is both politically offensive to many member states and very weak at the United Nations) and Cuba.?

Following my objections, the editor?s next revision (16 May 2002):
?The annual Human Rights Commission session…was able to agree on resolutions concerning just 11 of the 189 member states, and with its customary disproportionate focus on Israel.?

Only after continuous objection on my part, did they allow the one sentence on Israel in substantially the same terms as originally proposed.

The reference to anti-Semitism at the Durban World Conference was also the subject of interminable negotiation. Every draft received from the editor prior to the penultimate version, omitted any reference to anti-Semitism and refused to provide specific examples of the failings of human rights NGOs. In the end result, the language allowed was deliberately general and omitted the specific reference to those NGOs? one-sided concerns in Jenin. As such, it opened the door to a response from those same NGOs challenging the allegation of their selective human rights interests. Predictably, such a letter to the editor was in fact sent to the Times by Human Rights Watch and Amnesty International, and was printed a few days later. When I inquired about writing a letter in response, which would have included the substance of my originally-accepted piece, I was informed that editorial policy did not permit authors of op-eds to respond to any criticism.

So it’s all the news that’s fit to print, but only the views that conform to The Times’ view of the world.