Friday, October 21, 2011

Occupy Philly Defeats Eric Cantor

House Majority Leader Eric Cantor was scheduled to speak at the Wharton School late this afternoon. His office cancelled this morning when they found out that protesters from Occupy Philly and unions would be allowed to attend.

Cantor was expected to speak about the GOP's plan for wealth redistribution or "income mobility".

Justice Breyer Riffs On The Death Penalty, Citizens United, Bush v Gore

Last week, I had a chance to hear Supreme Court Justice Stephen Breyer speak at the World Affairs Council of Philadelphia. Breyer came to discuss his most recent book, "Making Our Democracy Work: A Judge's View.

Breyer described his job this way to his son, "Being a Supreme Court Justice means doing homework for the rest of your life. It is reading and writing done in isolation. Each day, I am in front of a word processor."

He even read briefs for the cases that the court will hear in November on his way to Philadelphia by train. He joked, "Why are they called briefs since they are not brief. The average case has 12-15 amicus briefs; right to die cases have 80; affirmative action cases have 120."

In the book, Breyer criticizes the legal theory of originalism that is favored by Justice Scalia and other conservatives. While originalism believes that judicial decisions should be based on the original intent of the founding fathers, Breyer contends "Politics are not law. George Washington could not have imagined the internet. Historical values do not change but the circumstances do change. We now need computer experts not historians."

Legal differences aside, Breyer said, "Nino and I are good friends. We talk about everything like opera, baseball." The dissension on the court seems to be exaggerated. Breyer ticked off these statistics: "40% of all of the Supreme Court cases are unanimous. Only 20%-25% are 5 to 4."

According to Breyer, there is only one reason that the Supreme Court will decide to hear a case - "Whether or not, the lower court came to a different conclusion about the meaning of a federal statue. The Justices are hesitant to declare a law unconstitutional."

The judges use their "imagination" to understand how their ruling will affect a lot of people. They review a law by asking if it is "pragmatic, pertinent, workable, has purpose, and underlying reason for existence."

Breyer, who dissented from the majority, still thinks the court should not have heard Bush v Gore that installed Bush as President. "Elections are a state issue," asserted Breyer. He marveled that after the decision "the people followed the rule of law and no riots or deaths ensued after the decision. The Supreme Court is a national treasure."

Although he dissented, he defended the controversial Citizens United decision by invoking the 14th amendment. Breyer said, "The 14th amendment protects persons. Case law has deemed corporations individuals for 100 years now."

The easygoing, affable Breyer only became defensive when the subject of the death penalty was raised. "You have to understand that each death penalty case usually comes before the court three times. The average defendant is on death row for 15 years," said Breyer.

He continued, "The recanting of witnesses is often raised. That is not enough. It is necessary to have proof that someone else has had to pull the trigger. There would have to be something really wrong for the Supreme Court to hear anything significantly new that was not heard before by the lower courts. We are presented with roughly the same arguments, just at the last minute."

Breyer explained that the court can not rule on the death penalty itself or address the racial disparity of its imposition since "it is mostly imposed by state law, rarely federal law. Only the legislature can abolish the death penalty," said Breyer.

Citing the example of French President Mitterand, Breyer utilized his bully pulpit to urge the executive and legislative branches to abolish the death penalty in America. "Europe is against the death penalty now," he said. "In 1980, 2/3 of the French electorate supported the death penalty. Still Mitterand, in a television interview, came out against the death penalty. He immediately went up in the polls because he took a position of conscience. The same thing could happen here."

He doubts that abolition of the death penalty will happen. "Politicians were in the popular club in high school. They hold their finger up to the wind to measure popularity," opined Breyer. "Judges are terrible politicians."

An audience member asked him what his typical month looked like when the court was in session. Breyer answered "The first two weeks of each month from October to June, we listen to oral arguments. Tomorrow, I will talk to my law clerks about a tentative position on the cases that the court will hear in November. I read the average of twelve briefs on each case and assign each clerk three briefs to read. They answer the questions that I ask and ask their own questions."

He continued, "Next week, the judges will conference. The justices are not arguing or convincing you of their point of view instead we go back and forth on the legal reasoning that will be helpful in making a decision. Starting with Chief Justice Roberts, each judge speaks in order of seniority. Everyone has to speak once before someone can speak again."

Each judge can ask questions during the half hour of oral arguments before the court. The Chief Justice assigns someone to write the majority opinion. If Breyer is chosen to write the arguments, he and his his clerks work on it together. After it is written, the writer circulates it for signatures.

Off the court, Supreme Court Justices often entertains foreign dignitaries. The first question that supreme court justices from other lands ask is "why would anyone listen?" Breyer answers, "The word is mightier than the sword. We will follow the rule of law here."

Friday, October 14, 2011

Occupy Philly is Starting "The People's Law School"

The Occupy Philly site is currently a sea of tents. When the scheduled $50 million renovation of Dilworth Plaza is scheduled to begin in approximately three weeks, the protesters will be forced to move unless they want to face arrest. The City of Philadelphia has so far not granted permission for the protesters to move to another site. With the protest costing the city $80,000 a day in police overtime, the city is not in a hurry to issue a permit for a new site.

Occupy Philadelphia has partially become a pedagogical movement. One of the protesters, Aaron, has been arranging for speakers to inform the crowd about the issues. The schedule of events is posted on a big calendar. Last night's lecture, "Financial Inequality" was given by a Swarthmore College professor. The public relations team is offering "Harvey's Homeless Reality Tour" at 4pm daily.

Next week, Occupy Philadelphia is starting the "People's Law School". Community Legal Services lawyer Michael Froehlich, at the request of his union, will be conducting classes at 5 30pm Monday thru Thursday each week. He will start with tenant rights, but will address disability, discrimination, etc.

The protesters stood outside the main Philadelphia branch of Wells Fargo on Wednesday afternoon and chanted "Give it back" to the accompaniment of drums. The crowd, which was more racially mixed than the main protest, was objecting to a $63 million payment by the Philadelphia School District to Wells Fargo due to interest rate swaps.

Prison reform has been a focus in Philadelphia. Signs like "Prisons Are Concentration Camps for the Poor" and "$93 million for Jail Cells for Pot instead of a ticket" captures the zeitgeist.

Occupy Philly has a sub-genre, which I have named "Occupy Judaism." Rabbis from the Reconstructionist branch of Judaism, including Rabbis Julie Greenberg and Mordechai Liebling, regularly visit the site. I participated today in the ceremonial blessing over the lulav (branches) and etrog (lemon) with Rabbi Lauren, who heads a congregation in West Philadelphia. The site's Sukkah (ceremonial hut), which urges those that enter to "enjoy and respect the space," is her old Sukkah. There was a moving Kol Nidre service to commemorate the beginning of Yom Kippur.

The demonstrators include families with small children and a hunger striker. Artist RJ Smith is on Day 6 of a hunger strike. He will not feed until "Wall Street Ends the Greed". His fiancée begs, "Don't Let Wall Street Kill My Fiancé."

Among the protesters that are employed, I have noticed several in the computer field. Some of the people, who initially came out of curiosity, have been converted to protesters. Peter, the head of an IT firm, claims not to be a protester, but yet I have seen him there several times.

Monday, October 10, 2011

Gaza: Pictures From A Mediterranean Paradise

The picture to the left is of the central public library in Gaza. If it does not look familiar to you, I am not surprised. Whenever there is a story on Gaza, a picture of the squalid refugee camps is usually attached. Most people do not realize that the majority of Gaza is developed and very beautiful. I hope these pictures dispel the myth of the indigence of Gaza.

I hate to scream media bias against Israel. I just hope that you realize that the reporters that neglected to show you the presentable sections of Gaza are the same ones that tell you about the suffering of the Palestinians. Draw your own conclusions. Imagine the image of New York if all the stories featured Bedford-Stuyvesant and Brownsville instead of the Manhattan skyline, Times Square, or Wall Street.

While the plight of the Palestinian is constantly told and retold, the media talks very little about the excruciation of the Lebanese Christians at the hands of the Palestinians and other Arabs. Since the United States is a predominately Christian country, this aperture in the reporting from the Middle East seems odd.

My neighbor George, a Lebanese Christian from the southern town of Sarba (near Saida), reminded me "the Palestinians were willing to leave Gaza in the late sixties and early seventies and resettle in Lebanon." During the long war between the Palestinians and Lebanese, the Palestinians killed 20 of his relatives. Some members of his family were murdered at a family funeral to mourn the original members of the clan that had been killed by the Palestinians. George can not go back to his family home because the Palestinians have stolen it from them.

Friday, October 7, 2011

Occupy Phillly Pictures Day 2

The overnight crowds were buoyed by a surprise visit from Philadelphia Mayor Nutter at 1 30 am last night. Protesters urged him to "Stop Nutting on Us" and begged him not to be Mayor Bloomberg, the billionaire who criticizes the poor. "Let Freedom Ring," a complaint that the Eagles football team manufactures their memorabilia in China, and protesters in Philly shirts added a Philadelphia touch to the protest.

On the second day, the crowds were thinned out, but were hardcore. The group, who are extremely well organized are still determined to effectuate change. The most thoughtful slogan was "Tax the Rich, They Lose a Yacht, Tax Me, I Lose my Home." Republican presidential candidate Mitt Romney was singled out for attention. The protests in Philadelphia are more anti-Fed than anti-Wall Street. Think "Skank America." Healthcare is a major focal point of the protests. "Cancer Is Not A Business" reflected many of the demonstrators sentiments.

Thursday, October 6, 2011

Pollard and Tuna Tartare On The Menu at Biden's

Last night, more than 140 Jewish community leaders, members of Congress, and administration officials gathered at Vice President Biden's home at the Naval Observatory to commemorate the Jewish New Year, Rosh Ha Shanah. The usual suspects like Abe Foxman, head of the ADL, were there.

The Kosher food selection included: North African meatballs, petite turkey slider on homemade brioche with cranberry aioli, classic tuna tartare presented in a mini wonton cone, wasabi mousseline, sweet tomato jam tartlets, and crisp vegetable ceviche shooters. The desert table was festooned with French macaroons, apple latkes served with a honey creme, petite honey and walnut cakes, and mini chocolate cupcakes with lemon frosting.

The party occurred a midst a flap over Biden's comments about the possible release of convicted spy Jonathan Pollard. The New York Times reported several days earlier that he said,"President Obama was considering clemency, but I told him, ‘Over my dead body are we going to let him out before his time. If it were up to me, he would stay in jail for life. The Israeli newspaper Haaretz later reported that he claimed to be misquoted.

Something good has come out of Biden inserting his foot in his mouth. The Jewish community has coalesced around Pollard. Biden has agreed to meet with a small group of Jewish leaders to discuss the release. Along with arguing for the release, the Jewish community possibly should pursue a different tactic and ask for the reason that the intelligence community is so opposed to his release. With the entire intelligence community united in their opposition, there must be more to his transgressions than what was publicly released during his case. Even if the the spooks can not divulge the entire basis for their antagonism because it is classified, maybe they can provide some color.

Occupy Philadelphia Pictures

I stopped by the Occupy Philadelphia protests in Dilworth Plaza, next to City Hall and across from the Ritz Carlton Hotel. The more than 600 protesters at 11 am were sharing space with the homeless people that typically stay there. They were demonstrating against Congress, bank bailouts, the Troy Davis execution, the wars in Iraq and Afghanistan, healthcare, and the Supreme court Citizens United decision. My favorite signs were "Wall Street is Dog Meat," "When Did Socialism Became a Dirty Word?" "Do You Feel The Trickle Down?' and "Phire the Phat Man," which referred to Eagles Football Coach Andy Reid. Police presence was not overwhelming. The mostly white, young crowd was entertained by a pick up band consisting of a bass, trumpets, guitar and drums.

One enterprising lawyer could not resist the opportunity to capitalize on the protests. He hired workers to carry signs directing people to a website if they were disaffected stock brokerage clients.

They should be there all night. Unlike the city of Seattle, Philadelphia Mayor Nutter had agreed to let them sent up a tent city in a designated area.

The media has portrayed the protesters as unemployed and estranged from society. I did not find that. Most of the people that I interviewed had a decent job and were taking a personal or vacation day. Quite a few were licensed healthcare professionals that worked at local hospitals.Well known African American activist Michael Coard and Jeremy Burton, the education and community services coordinator of the Philadelphia regional office of the Pennsylvania Human Relations Commission were two of the lawyers that I talked to.

Many are committed for the long haul. One said, "I am only leaving at 6 tonight because I have a rehearsal dinner. My wife would kill me if I did not go. I will be back tomorrow."

One English protester reminded me that we were lucky to live in America. He said,"Protests like these have been banned in England."

Wednesday, October 5, 2011

Defending Skybridge's"Mooch" Scaramucci from Bloomberg and Reuters

I need to respond to the recent spate of negative publicity received by Anthony Scararmucci, managing partner of Skybridge Capital and founder of the SALT (Skybridge Alternatives) hedge fund conference. Bloomberg's Edward Robinson placed the hatchet squarely in Scaramucci's back. Reuters Felix Salmon followed up  by divulging a petty fight that happened a long time ago.  

Both authors seemed hell bent on badmouthing Scaramucci because he is made millions without seeming to possess any discernible talents but schmoozing. They lament the paucity of his investment talent but forget to mention that he dodged the Madoff, Starr, and Stanford frauds. Robinson glosses over the incredible deal that he engineered to acquire Citigroup hedge fund assets for next to nothing. While Bloomberg (the media outlet) typically glorifies conspicuous consumption, they resent Scaramuuci's charity showboating and extravagant marketing expenditures in this article. 

Robinson sticks it to Scaramucci coming and going. He also hectors him for his lack of billions. He notes that Scaramucci, who collects 1.5% running a fund of funds, is not as rich as his hedge funds colleagues that charge 2/20. 

Scaramucci is a schmoozer extraordinaire, a skill that should not be dismissed lightly. As someone whose take home pay depended on jawboning clients, I can tell you it is a lot harder than it looks and requires more intelligence than you think. Your work is not done when the cocktail party ends.You still need to execute. 

Robinson focused a third of the article on minor failures in Scaramucci's life that occurred over twenty years ago. Spoiled by Mark Zuckerberg and Bill Gates, the media now thinks you are a failure if you are not worth a billion dollars by college graduation. Robinson seems to forget that JP Morgan CEO Jamie Dimon was fired from Citigroup, the late Senator Kennedy was expelled from Harvard, and Mediq terminated US HC founder Len Abramson.

For Salmon, Scarmucci's high crimes and misdemeanors was vigorously complaining aboutan unflattering article about him. The retelling of this ancient incident probably reveals more about Salmon than Scaramucci.

A sense of irritation at the lavishness of the conference emerges from the article by Bloomberg. The article never discloses that they are competitors of Scaramucci since Bloomberg also runs conferences, which are not as good. 

As a frequent conference participant, I appreciated the effort and expense that went into the conference's preparations. Quite simply, the SALT conference is the best conference that I ever attended. Speakers included former President Bush, former Secretary of State Colin Powell, former British Prime Minister Gordon Brown, former Senator Chris Dodd, and Presidential adviser David Axelrod. It was at this conference that former President Bush disclosed his reaction to the capture of Bin Laden. Star economist Nouriel Roubini pontificated, SAC hedge fund founder Steve Cohen whitewashed, Third Point's Daniel Loeb evangelized, and Citadel's Ken Griffin trashed Obama. 

The lineup of illustrious speakers was not what made this conference great. Unlike most investment conferences, this was a conference with a heart. Representatives from various charities such as Wounded Warrior Project and Charity: Water shared stage time with the financial and political luminaries. Generals candidly communicated the current conditions of American troops in Iraq and Afghanistan. 

What both articles did not tell you is that Scaramucci is genuinely a nice guy. Although everyone wanted a piece of him, Scaramucci took the time to hug me hello. (Robinson accurately depicted Scaramucci's love of physicality.) He told that I was "beautiful," which was a total lie, but music to this middle aged lady. This personal gesture was all the more extraordinary since I was an unknown, but clearly not well heeled or well-connected. 

I am not going to defend the fees attached to the fund of funds structure or Skybridge's performance. As an investment professional, I found that it was not always possible to sell clients the product that is best for them. Believe it or not, they often gravitated towards high commission products. The word hedge fund was magical to many and they could not be dissuaded from investing. 

Do not believe everything you hear. Scaramucci may not be perfect, but he is a mensch.