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Streetwise Professor

February 22, 2008

Bitch, Bitch, Bitch

Filed under: Military,Politics,Russia — The Professor @ 1:46 am

Russia has complained about the US Navy’s dramatic shootdown of a satellite plummeting to earth. The New York Times reports that “Moscow suggest[ed] it could be used as cover to test a new space weapon.”

How lame is that? Um, if we were going to test a new supersecret space weapon, wouldn’t we, like, do it, you know, in secret? Why announce it to the world? Have news conferences about it? Tell the world what ship will launch the missile (so that every intel asset in the world capable of monitoring it will monitor it)? Disclose what type of weapon would be used (an SM-3 SA missile) so that it would be obvious if we actually did something different?

There are potentially genuine reasons for concern by Russia and China here, although (a) part of the reason for their concern is a reason for the US to be pleased with the outcome, and (b) there is also a strong case to be made that there was a legitimate rationale for the shootdown. Nonetheless, Russia does itself no favors by voicing such risible objections as the-launch-is-a-cover-for-a-new weapon.

When you always complain, and when many of your complaints are as dumb and self-serving as this one, people eventually tune you out; then even your legitimate complaints/criticisms fall on deaf ears. Funny that that’s another thing the Putiniki are always complaining about.

One final, and almost completely tangential point. This whole episode triggers flashbacks of Skylab’s descent to earth in July, 1979. I vividly remember the Chicago radio duo of Steve Dahl and Garry Meyer doing a running bit about a Skylab crash drill; they also wrote a parody song about it, which I think I saw Dahl’s band perform at the Ida Noyes Hall at the University of Chicago while I was an undergrad there. Bet your life wasn’t complete until I told you that.

February 20, 2008

Said the Spider to the Fly

Filed under: Energy,Politics,Russia — The Professor @ 10:54 am

In this last Presidential news conference, Vladimir Putin was in rare form. He was particularly outspoken on American efforts to encourage Europe to develop alternatives to Russian energy:

“We are aware of how the United States has been acting in Europe.”

“It puts pressures, it looks for new delivery routes, it urges others to refrain from buying fuels from Russia. This policy is wrong, and it is also silly,” Putin said, coupling this opinion with a warning against excessive politicization of the issue. As an example, he mentioned Turkey. When Iran slashed fuel export to that country, Russia compensated for the shortfall “without much a do.”

Putin voiced surprise why the West was so much afraid of Gazprom’s growing strength, a Russian monopoly that guarantees supplies to western consumers.

“The consumers should feel happy the economic potential of the Russian provider company is on the rise,” he said.

Yeah, I’m sure that the Europeans are just ecstatic over having Gazprom supplying a large percentage of their gas. Gee, ya think that Gazprom’s “economic potential” is in part built on rents extracted from Europeans by charging supercompetitive prices for gas?

Also note the divide-and-conquer rhetoric, another classic Putin touch; in Putin’s framing, the US is using the Europeans as a pawn against the poor, misunderstood Russians. But warning of the dangers of becoming overly dependent on Russian energy is not just an eeevil American plot to poison European minds against the innocent Russians–myriad thoughtful and farsighted Europeans, those that haven’t been bought off, anyways, recognize that it is very wise to develop alternative supply sources. (And maybe even more Germans will get a clue, after Lukoil cut off oil shipments today.)

Putin also framed things in terms of Russia always meeting its supply obligations. For one thing, that is debatable; consider, for instance, the Ukrainian gas shutoff in 2006 and the knock-on effects in Europe. For another thing, it misses a crucial point–price. Europeans should care not only about whether Russia delivers its contracted quantities at the contracted price–it should care deeply about what those quantities and prices are. A Europe that has numerous suppliers competing to serve it will be able to obtain more gas at better prices than if its supply alternatives are sharply limited, and overly dependent on Russia.

So, if the Europeans are smart they will see through Putin’s bluster and strive mightily to avoid becoming trapped in his–and Gazprom’s–web.

Stephen Blank Nails It

Filed under: Politics,Russia — The Professor @ 10:29 am

In the most recent Russia Profile expert’s panel Stephen Blank hits the nail on the head. He points out the (1) complete disconnect between Putin’s (and Medvedev’s) relatively economic liberal/rule of law rhetoric and Tsarist/centralized/statist/autarkic reality, and (2) the delusional threat assessment repeated ad nauseum by Putin and the Russian military high command:

While proposing a bold socioeconomic agenda, Putin leaves behind a state and governing structure which represents the single greatest obstacle to the realization of that vision. Secondly, behind him is a Russia which is stronger internationally by dint of its energy resources, American recklessness, and his own diplomacy, but which is as isolated as before if not more, and still noncompetitive beyond its borders. The governing structure, with its renationalizations “velvet repivatizations,” etc. cannot be economically competitive, except within the bounds of its own increasingly autarchic economy. The uncertainty of property rights and of foreign direct investment (as opposed to portfolio investment) will continue to retard economic development and obstruct innovation. The recent failure of the defense industry to compete is but one example, as is the response to it — more state takeovers. Until and unless the natural genius of the Russian people is allowed to flourish freely, all the inequities cited above cannot be overcome in a meaningful way, because this government, whose structure is the pre-modern Tsarist paradigm, cannot allow for consumer sovereignty, a truly free-market economy, and political freedom of its people. Undoubtedly, progress can occur within this framework along the goals that Putin postulated, but it will inevitably fall short of what is needed.

As for the national security part of the program, this threat assessment is frankly nonsensical. NATO can’t even unite in Afghanistan against an attack on its own members. Putin’s statements about the advancement of troops to the border, dating back a year and a half, are quite false and fallacious, reflecting the government’s continuing dependence upon inflated and self-serving threat assessments. The latter are proffered by the military and intelligence services who remain unreformed and are still fighting in the last lager of the Cold War.

There are signs that this assessment, coupled with the utter ineptness of the military industry and armed forces in reforming themselves, is leading to a situation where we could return to a state of frozen hostility, embodied in a nuclear arms race, because Russia cannot compete in the conventional sphere. In fact it also means that Russia cannot cope with the real threats it faces, not the imaginary NATO threat, but the real threat of losing the North Caucasus to terrorists.

Putin’s call for a new military road in the North Caucasus suggests that Russia might lose control over the Georgian military highway, its main highway to the area, due to the fighting that goes on there. The proliferation of missiles by Iran and China, as some officials admit and others know, is a greater threat than anything Washington or Brussels might do, but these states are Russia’s supposed friends and allies. Thus the gloomy threat assessment and determination to play an obstructive role vis-à-vis Russia’s true Europeanization not only isolates Russia, but renders it unable to cope with the real threats to it security, and gives too much power to the metal eaters who, like the Bourbons have learned nothing and forgotten nothing.

An autocratic and an autarchic economy will continue to prevent Russia from reaching Putin’s goals as laid out in his speech. Ultimately, it is a consummate historical irony that it is Putin’s own policies that have contributed to this cul de sac, and despite the progress in the economy, ultimately Putin, in his own way, will be seen as a political leader who, to echo Mayakovsky, stepped on the throat of his own song

Regarding the constant invocation of the NATO bogeyman, even at its peak in the 80s, NATO didn’t have the ability to project conventional power into the Soviet space. On a good day the alliance considered itself just able to fight off a Soviet conventional thrust; on other days, it harbored severe doubts about even that. The eastward movement of NATO’s borders hasn’t changed that, due to the other changes in NATO’s military capabilities. A 10 division US Army and 3 division US Marine Corps with world-wide commitments plus various NATO armies would pose no serious threat to Russian sovereignty or territory even if they all redeployed to the eastern borders of Poland and Ukraine (in the event of that country joining NATO). Most NATO armies have devolved into armed social work organizations that, to paraphrase Patton, couldn’t fight their way out of a piss-soaked paper bag if they wanted to–and they don’t want to. To build on Stephen’s point, NATO contingents are are facing both a crisis of will and hellacious logistical problems supporting a very modest commitment in Afghanistan; they can’t even scrape together a few helicopters to support operations in country, and several contingents (notably the Germans) have no will to fight whatsoever.

So even if the Russian assessment were based purely on an evaluation of capabilities, and ignored intent altogether, it would be utterly unhinged from reality.

Perhaps the Chicken Little alarmism in the Russian military reflects their intimate understanding of the decay in its conventional capacity as well as oldthink/budgetary gamesmanship/political demagoguery.

The market/rule-of-law oriented domestic rhetoric that Putin and Medvedev are spouting is also hard to reconcile with the reality of Russia’s evolution, especially post-2003.

Given the tenuous connection between words and deeds, it’s better to pay attention to the latter, and ignore the former.

All Newlywed Husbands Think the Same Thing

Filed under: Politics,Russia — The Professor @ 10:10 am

“I will be the boss,” says likely Russian president. Let us know how that works out, Dmitry.

February 14, 2008

Bizness as Usual

Filed under: Military,Politics,Russia — The Professor @ 9:56 am

In Nezavisimaya Gazeta Alexander Khramchikhin and Igor Plugatarev provide detailed corroboration of a familiar SWP theme: the Potemikinesque nature of Russia’s military “resurgence.” (H/T JRL.)

The most alarming point is the critical condition of the Strategic Nuclear Forces – responsible for upholding Russia’s full security and sovereignty. As at the start of 1992, the Russian Federation had 6,347 nuclear warheads. When Boris Yeltsin resigned at the end of 1999, he left his successor 5,842 warheads. As at the start of 2007, Russia had 681 ICBMs (including ICBMs carried by submarines) with 2,460 warheads, and 79 strategic aircraft with 884 cruise missiles. That’s a total of 3,344 warheads.

If current trends persist (new missiles are being built at an extremely slow rate, while the withdrawal of old missiles is accelerating), the Strategic Nuclear Forces might have no more than 300 ICBMs by the middle of the next decade, with no more than 600 warheads. [As I said before, on the road to being Upper Volta without missiles.]

According to official propaganda, as related by some senior federal officials, the aviation group of the Strategic Nuclear Forces will be increased to 50 Tu-95MS and Tu-160 bombers by 2015. The Russian Air Force has 79 of these aircraft at present; in other words, a reduction of 29 aircraft is being portrayed as an increase.

In terms of conventional weapons, there has been a substantial (several-fold) decrease in the volume of arms procurement as compared to the 1990s; state rearmament programs have failed to meet their targets, and the content of these programs has deteriorated. In 1992-99, for example, the Ground Forces took delivery of 120 new T-90 tanks (four battalions) and up to 30 T-80U tanks (one battalion). In 2000-07, no more than 90 new T-90 tanks (three battalions) were delivered. The Ground Forces have a total of around 200 tank battalions. If the rate of new tank acquisition is so slow, why bother doing it at all?

The situation in the Air Force is much worse. In the Yeltsin era, the Air Force received up to 100 new aircraft. In 2000-07, only two new Su-34 planes were purchased. The situation in ground-based air defense is similar. Starting from 2000, official Armed Forces representatives kept declaring that new S-400 air defense systems would be delivered “this year” or “next year.” But these deliveries didn’t actually start until 2007. Yet the planned acquisition quantities for the S-400 aren’t even sufficient to cover the Strategic Nuclear Forces, let alone Russia’s main administrative and industrial centers.

At the same time, the Russian military is acting in a much more aggressive and provocative manner. From the LA Times:

The Pentagon is trying to assess whether a low-level flight by a Russian bomber over American warships in the Pacific Ocean last weekend was a sign that Moscow is returning to a worrisome “Cold War mind-set,” a top Defense official told Congress Tuesday.

Recall too that it was recently announced that Russia will resume the Soviet tradition of Red Square military extravaganzas/parades.

And, just yesterday, Putin found another country at which to aim his diminishing missile arsenal: Ukraine. (I like the comment of the Polish foreign minister, if I recall correctly, who asked Lavrov, again if I recall correctly, that the head of the Russian military ration his threats to use nuclear weapons to one every three months.)

The yawning gap between walk and talk persists.

It seems that the Russian military-industrial complex is producing as much as possible for export sale, while little of the new equipment is actually going to the military. Not that I object that much, mind you. But it does speak volumes about the priorities of the power structures. Threats of force are cheap, and seem to work, even if the Russian military has little capability to back them up; and selling weapons overseas for real money is a lucrative line of bizness.

Craig Says . . .

Filed under: Commodities,Derivatives,Economics,Exchanges — The Professor @ 9:39 am

No, another Craig–Craig Donohue, CEO of the CME. In fact, though, in his speech today, that Craig–Craig D.–echoed some things that this Craig–Craig P.–has written in several working papers on clearing.

In his full-throated defense of integrated clearing, Donohue said:

[T]here has not been sufficient discussion of the potential problems associated with an investment bank-owned/controlled CCP. While one can reasonably argue that some exchange-owned CCPs may seek to extract monopoly rents, one must also be willing to acknowledge that investment bank-owned CCPs may limit CCP activities in some markets in order to maximize trading and dealing profits for their owners at the expense of smaller members of the CCP and true end-users.

I made a related point here. Donohue also said:

These problems exist in large part because investment banks traditionally have resisted a more centralised, transparent execution system for these products, preferring to maintain their dealer franchises and proprietary trading profits. And they have tended to oppose central counterparty clearing services in these markets, worried that a mutualised risk structure will dissipate their credit and balance sheet advantages.

I made a similar point in a 1999 working paper (cited here by current Fed Governor Randy Kroszner) that morphed into this paper.

Relatedly, the Federal Trade Commission Report on the Grain Trade of 1921/1922 reported that concerns that central clearing would level the credit playing field was a source of opposition to the adoption of the clearinghouse at the CBOT in the ‘teens and twenties.

Stepping back a bit, it is important in this context to remember Coase’s point that it is necessary to compare real world alternatives, not a real world situation to the Nirvana alternative. Too much of the debate on clearing has compared the existing clearing arrangements to a pie-in-the-sky alternative (with crucial implementation details conveniently left out.) Donohue makes appropriate comparisons. He acknowledges that a central clearer may exercise market power, but draws attention to the point that alternative clearing arrangements may also result in the exercise of market power.

That’s a major theme of my most recent paper on clearing silos. There I show that seemingly innocuous differences–such as, whether a cooperative clearer owned by banks rather than an exchange rebates fees proportionally to output, or instead rebates fees to owners proportional to fixed ownership shares–can have a major impact on market power, with the latter arrangement essentially allowing the “cooperative” clearer to operate as a perfect cartel. Moreover, as I have pointed out in other articles (namely, my JLEO and JFM papers on exchange organization) a “not-for-profit” firm (be it an exchange or a clearer) can effectively exercise market power by restricting membership; in this case, the market power rents are not earned by the firm itself, but by the members.

So, let the debate continue–but when considering alternatives to exchange-owned clearing, let’s focus on how those institutions might work in practice.

February 13, 2008

The G-7 on China & India Oil Price Controls/Subsidies

Filed under: Commodities,Economics,Energy — The Professor @ 10:43 am

Catching up with several 2007 SWP posts, the G-7 finance ministers have called for China, Indonesia, and India to end price controls on oil (and the associated subsidies) because these encourage inefficiently high consumption. According to the linked Economic Times (India) article, Indonesia spends $11.5 billion to subsidize fuel; India $2.8 billion; and China $2 billion.

The article does not state whether the G-7 or any commentators have provided estimates on the additional consumption of oil that has resulted from these policies, or the impact on the world oil price. Nor have I been able to track down (via Google) any other articles or statements containing this information. Given the magnitude of the subsidies, and the inelasticity of oil supply, the quantity and price effects are unlikely to be trivial.

It’s good to see that this issue is finally getting some visibility, and that decision makers in the G-7 countries understand the world wide effects of these price controls. I wish I could be more sanguine that things will change, but I seriously doubt they will.

February 11, 2008

Further From Russia, Closer to God?

Filed under: Energy,Politics,Russia — The Professor @ 10:25 am

Or, if not God, Europe, the US, and China. Stephen Blank reports favorable developments from Turkmenistan. According to Blank, Turkmen President Berdymukhamedov is playin’ the Russians in the gas game. Realizing (it’s about time!) that he has tremendous leverage due to Gazprom’s junkie-like dependence on his country’s gas, Berdymukhamedov is playing hardball with the Russians, opening channels to China; Blank also suggests that this presents a major strategic opening for the EU and the US.

Importantly, Blank points out that Russia will face problems regardless of whether Turkmenistan has much gas or little. (The actual amount of gas there is a major mystery to outsiders.) If it has a lot, Turkmenistan will have the ability to deal with China and put gas in a Transcaspian pipeline that would undercut Russia’s dominance in European and Asian markets. If it has a little, Russia will be unable to meet its burgeoning domestic demand and its large export commitments.

This is good news, and helps ease some of the angst I felt after Putin’s apparent triumphs in the Caspian region last year. It all goes to show that unlike post-holiday sales, when it comes to this part of the world, No Deal is Final! Negotiations never end, and every announced contract is just another act in a drama with no end. Opportunism is the name of the game, and every shift of fortune leads to a new battle between contracting partners over how to divide the pie.

That said, it should also be recognized that the contrast between the despond of spring ’07 and the optimism of winter ’08 is a reminder that we understand very little of what goes on in that part of the world. We glimpse only the dimmest shadows cast by combatants in a dark and distant arena. We see the announcements–what we are supposed to see–but cannot discern most of what goes on. The bribes, the threats, the shifting alliances. This signal-to-noise ratio is low, so our mood should not shift too much in response to this announcement or that.

We should also put things into a broader context. I have often noted that Putin and the Russians are greatly, greatly exaggerating Russia’s military strength and prowess. Bob Amsterdam has repeatedly emphasized the Russian propensity for “premature contractualization”–the announcement of deals that never transpire, a practice that I have analogized to vaporware. In his piece, Blank notes that “Russia is very good at playing the bluffing game.”

That is, Russia’s talk far exceeds its capacity to walk. Through aggressiveness and bold talk Putin has achieved much more than the objective “correlation of forces” would suggest is possible. Calling some of these bluffs could very well demonstrate that the Tsar has no clothes. Inasmuch as the current Russian government depends crucially on maintaining an aura of strength and dominance, public rebuffs in the energy or geopolitical spheres would deeply shake it, and threaten Russia’s brittle stability.

I have no expectation whatsoever that Europe will call any bluffs anytime soon, and a lame duck administration in the midst of a contentious election season is unlikely to either. However, a year from now, things may be very different, especially if John McCain becomes US president.

One last thing. Stephen Blank is becoming one of my favorite commentators on Russia. He is a regular participant in the Russia Profile Weekly Expert Panel, and the one I am most likely to agree with.

Given that my views on Russia pundits seems to be nearly perfectly, negatively correlated with those of some of my doughty commentors, I suspect that my endorsement of Dr. Blank (a Chicago guy to boot!) will unleash a barrage of criticism–so, open fire, guys! And I mean that in all sincerity. Although, given the aforementioned negative correlation, it is unlikely that I will agree with your assessment of Dr. Blank, I do enjoy hearing all sides, and do learn things from your comments that help me calibrate my reading.

February 10, 2008

Run Away! Run Away!

Filed under: Commodities,Derivatives,Economics,Exchanges,Politics — The Professor @ 10:10 am

Apparently having confronted the Beltway equivalent of catapulted cows or killer rabbits, the DOJ has beat a hasty retreat from its bold condemnation of exchange control of clearing in financial futures. (Dunno if any armor was soiled.)

As would befit Eric Idle’s Robin of Loxley, DOJ denies that they were ever itching for a fight. Oh no. They were just calling for a study:

The U.S. Department of Justice said its opinion this week that financial futures exchanges are anti-competitive took no stand on how the issue should be addressed.

The division’s comments did not take a position on what action, if any, that should result from such a study and contemplated that Treasury would take into account a range of consideration, the department said.

Sure, Brave Sir Robin. Here are the first couple of paragraphs from the DOJ Comments:

[T]he department believes that certain regulatory policies governing financial futures may have inhibited competition among financial futures exhanges, potentially discouraging innovation and perpetuating high prices for exchange services.

More specifically, the Department believes that the control exercised by futures exchanges over clearing services . . . has made it difficult for exchanges to enter and compete in the trading of financial futures contracts. If greater head-to-head competition for the exchange of futures contracts could develop, we would expect it to result in greater innovation in exchange systems, lower trading fees, reduced tick size, and tighter spreads, leading to increased trading volume.

And from the conclusion:

The Department believes that current rules and policies related to clearing futures contracts may be unnecessarily inhibiting competition among futures exchanges . . . to the detriment of the economy and consumers. Unnecessary restraints on competition threaten the viability of the US financial markets to adapt to changing dynamics . . . .

The Department believes that significant benefits might be achieved if regulatory policy were changed so as to foster exchange competition by, inter alia, ending exchange control of clearing.

Now, although the DOJ “recommends that Treasury undertake a careful and objective review of exchange controlled clearing of financial futures” the quoted language makes it abundantly clear that it is extremely disingenuous to say that the Department “took no stand on how the issue should be addressed.” Justice obviously cannot tell Treasury what to do, but it is crystal clear–even given the Loxleyesque “mights” and “mays”– that DOJ was taking a very clear stand on what it thought Treasury (or was Congress the real audience?) should do. So, rather than stand by the courage of its convictions (flawed though they are) that clearing be wrested from exchange control, as expressed in 22 single spaced pages, DOJ hid behind the the two sentences in the Comments calling on Treasury to study the issue.

Who you gonna believe, the DOJ press release, or your lyin’ eyes?

One other curious, curious thing. Dennis Carlton, former Deputy Assistant Attorney General for Economic Analysis, the individual who oversees the Competition Policy Section, rejoined Lexecon on 30 January, 2008. The Comments were dated 31 January, 2008. Assistant Attorney General (and head of the Antitrust Division) Thomas Barnett has stated that the Comment was not something prepared hastily, but was instead the product of long study and work, as evidenced by its 22 page length. As I noted two days ago, moreover, the Comment was submitted two months late. Dennis did not sign the Comment.

I don’t know exactly when Dennis resigned from DOJ, but it is possible that his resignation was effective on or about 30 January, 2008 given that FTI Lexecon announced his return to the firm on that date. If this is the case, the comment was written while Dennis was still at DOJ. It is my understanding that Dennis recused himself from the CME-CBT case because Lexecon was working for CME on the case. Therefore, perhaps Dennis did not sign the letter because of the same perceived conflict.

But that is hard to square with the Comment’s release the very day after Dennis rejoined Lexecon. Another possibility that is more compatible with the timeline–and this is clearly just speculation on my part–is that Dennis did not agree with the substance of the analysis, and that as a result its release was delayed until after his departure from the Antitrust Division and his return to Lexecon. This would explain the otherwise inexplicable submission of the Comment two months after the deadline had passed. Moreover, I would be greatly surprised if Dennis agreed/agrees with the substance of the Comment. Regardless, the credibility of the Comment would have been enhanced if an economist of Dennis’s stature had signed it–if they could find one who would do so.

February 8, 2008

Curiouser and Curiouser

Filed under: Commodities,Derivatives,Economics,Exchanges,Politics — The Professor @ 12:07 pm

So let me get this straight. The DOJ submitted its comments to Treasury two months after the end of the public comment deadline. Moreover, the Treasury disclaims any interest whatsoever in antitrust issues in futures markets (from Bloomberg):

Treasury officials preparing an overhaul of U.S. financial regulations haven’t discussed antitrust issues involving financial futures exchanges, Treasury Undersecretary Robert Steel said, two days after the Justice Department said the companies may inhibit competition. “Our issue is the overall structure” of markets and not antitrust matters, Steel said today in an interview.

How clearinghouses are structured “really hasn’t been part of our discussion,” Steel said. “The issue of antitrust is not something Treasury is involved with.” Steel said such matters were under the authority of the DOJ.

Now, what is the probability that DOJ didn’t know that Treasury couldn’t care less about clearing market structure? Zero would be a good guess–and my only one.

So, let’s put it together. Well after the deadline for public comment DOJ submits a tendentious comment letter on an issue of no interest to the recipient thereof. The comment therefore did not serve its ostensible purpose of illuminating Treasury about a matter of concern to it, and the DOJ surely knew this was the case. So, what was the motive for doing this?

I don’t want to go all Soviet over this, and turn every question of fact into question of motive, but the objective reality is that there is an agenda at work here. Exactly what it is I don’t know. But the situation bears the hallmarks of a disgruntled staff getting some payback, or attempting to achieve a desired policy outcome (the derailing of the CME-NYMEX tie up?) that it could not achieve through established procedures (e.g., a merger review). Did DOJ feel pressured by Illinois’ formidable Congressional delegation into waving through a CME-CBOT merger that it really wanted to oppose? Just guessing here, but the extraordinary circumstances (timing, disconnect between the comments and the DOJ announcement on its closing of the investigation of CBT-CME merger, the fact that the comments were completely off point to the issue about which comments were solicited) raise very serious questions. I have tried–really I have–to discern a benign or favorable interpretation of these facts, but have failed miserably.

This is serious business. These gratuitous, unsolicited comments cost investors billions of dollars. They created tremendous uncertainty. DOJ better have a very good reason for its actions, but I’ll be damned if I can think of one. Somebody got some ‘splainin to do, Lucy.

The politics/motive are interesting and important, but the most important thing is to focus on the substance of the comments. As I blogged yesterday, the substance is an embarrassment. The suspicious circumstances surrounding the release only gild the lily.

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