Streetwise Professor

On Thursday, the CFTC voted along party lines to approve a proposal on position limits. The party line vote reveals a salient fact: the proposal represents a virtual abandonment of the Commission’s earlier proposals (2011, 2013, 2016). Indeed, virtually all of the features that I criticized in the earlier proposals are gone, and the current proposal largely mirrors the recommendations of the Energy and Environmental Markets Advisory Committee that I served on (before being uninvited by current EEMAC chair Dan Berkovitz). (More on EEMAC below.)

Most importantly, limits outside the “spot month” (which is actually just a few days for some commodities) for energy and metals commodities are gone. Good riddance. They remain for nine legacy ag futures contracts (corn, cotton, and the like), but the any-and-all limits have been expanded substantially.

The rule expands hedging exemptions beyond the prior proposals, and in doing so meets the objections of companies like Vitol. Interestingly, the proposal tidies up the definition of a “bona fide hedge” and makes explicit, rather than implicit, the principle that bona fide hedges are solely for the reduction of price risk.

The Commission did eliminate the “risk management” hedging exemption for swaps dealers, based on an interpretation of Congressional intent and a reading of statute that limits hedging to the management of risk of physical commodity positions. On principled grounds, I object to this. A swap dealer buying an oil swap from an E&P firm facilitates the hedging of a physical position, and hedging that swap via the futures markets serves a classical risk transfer function. A dealer selling an index swap to a pension fund isn’t hedging a physical risk, but it is still serving a risk transfer function and the distinction between physical commodity hedges and non-physical hedges is rather Talmudic.

The practical effect is unknown. In terms of index swaps, most swap dealers are out of the nearby contract when an index (e.g., GSCI) rolls, which is well before the spot month for energy and metals that make up the bulk of most indices. Hedges of the ag portion of these swaps could be affected by the any-and-all limits and the elimination of the risk management exemption, but the dramatic increase in the size of these limits may well greatly reduce any impact. A dealer hedging a swap with payments based on final settlement prices of say NYMEX crude or natural gas could be impacted by the elimination of the exemption, but the spot month limits may be large enough to cushion the impact here as well.

The most interesting feature of the proposal is its rather tortured attempt to address the “necessity” issue that derailed previous proposals in court.

The most important aspect of this is that it appears that the Commission has essentially conceded that a necessity finding is, well, necessary. That raises the issue of the criteria for establishing necessity.

One criterion could be that a limit is necessary only if the risk of speculation causing unwarranted price fluctuations is sufficiently great.

An alternative criterion is that a limit is necessary as long as the risk of unwarranted price fluctuations exists at all, if the contract is important enough.

The Commission took the latter approach, and limited its limits to commodities it deemed were sufficiently important (measured by volume and open interest) so that any unwarranted price fluctuation could lead to impairment of price discovery and risk transfer on a large scale. The closest that the Commission came to taking likelihood of disruption into account is its restriction of the limits to physical delivery contracts that could be cornered or squeezed. This is a logical problem (cash-settled contracts give rise to manipulation too) but this is of secondary importance. But it could be read to limit the Commission’s interpretation as to the source of unwarranted fluctuations to market power manipulation, which would be a good limitation indeed.

A sufficient statistic to infer that the Commission conceded much in its necessity finding is Dan Berkovitz’s freak out on the issue in his dissent.

As a manipulation-related aside, I will note that the spot month limits are justified by the notion that a position in excess of deliverable supply is necessary to execute a market power manipulation (i.e., a corner or squeeze). I have some recent research (which I’ll post and write about soon) showing that this may be a sufficient condition, but not a necessary one. Meaning that the limits will not be sufficient to eliminate market power manipulation.

The recent proposal, assuming it is finally approved as a rule in something resembling its current form, represents the end of a saga that has had a major influence on my life. I began writing about the speculation issue when it became a source of renewed political controversy in 2006. I wrote my first major post in response to a Senate Permanent Subcommittee Report (large authored by Dan Berkovitz) on oil speculation in August 2006.

As oil prices spiraled upwards in 2007 and 2008, I wrote more about the issue, and gained more notoriety. This resulted in my testifying before the House Ag Committee in July 2008 (a day or two before oil prices reached their all time high) and led to a WSJ oped.

Then the Financial Crisis happened, and I focused more on clearing issues, with periodic forays into the speculation debate. But Frankendodd included a provision on speculative position limits in commodities, and the CFTC rolled out a proposal in 2011.

I wrote a comment letter on the proposal. That letter (and others I wrote subsequently) were sufficiently important that in the final rulemaking and in later proposals it or other things I’ve written were cited dozens of times (my name gets 50 hits in the 2016 proposal).

But the impact of the letter on my life went beyond that. Gene Scalia–son of Justice Antonin Scalia, and now Secretary of Labor–retained me to write a declaration criticizing the inadequate cost-benefit analysis in the proposal (it being something required under the law.)

Perhaps most importantly, Blythe Masters at J. P. Morgan liked it, and called to tell me so. She then proposed that I write an analysis of the systemic risk of commodity trading firms for SIFMA. I did–and came up with the wrong answer. So SIFMA spiked the report. But word leaked out, which prompted Trafigura to retain me to write a study (with a subsequent follow-on study) of the economics of commodity trading firms.

I don’t think I’m exaggerating to say that this study proved to be very influential, perhaps because of the lack of competition: writing on the sector was, and remains, very sparse. I have traveled, lectured, and taught around the world based on people wanting to hear what I wrote about in that piece.

The study was also the hook for the New York Times hit piece on me in December, 2013. See! I took money from evil speculators while writing in opposition to limits on speculation! Never mind that I had been consistently opposed to limits years before, and never mind that Trafigura (and other oil traders) are not speculators and use the futures markets mainly for hedging.

(As an aside, I am convinced, but cannot prove, that Gary Gensler was the moving force behind the piece. After all, why else would the NYT devote front page space to an obscure academic? And under the theory of there-are-no-coincidences-comrade, comments on the 2013 revised proposal were due in January, 2014. So December 2013 was the perfect time to kneecap a gadfly. By the way, Gary, how’s that gig as Treasury Secretary working out. Oh. Right. Well maybe you can chair Hillary’s legal defense fund.)

Asides aside, other than frightening my aged parents this article actually was all for the good. It validated me as an influential voice. It also got many very reputable people to rush to my defense, including Thomas Sowell, one of my long-time heroes.

The article raised its head a few years later when I was serving on EEMAC, and was asked to write the (Frankendodd-mandated) report on the committee’s deliberations. I was the dutiful scribe, and honestly recorded the committee’s adamant opposition to the then-outstanding proposal (which included all the bad features jettisoned in the new proposal).

This caused Elizabeth Warren to lose her [insert vulgar metaphor of your choosing here]. This article in particular cracked me up (and still cracks me up): Why Elizabeth Warren Is On the Warpath This Week.

Well, why was she on “the warpath”? Well–me, now that you ask:

The committee, which was established by Dodd-Frank, has nine members. Though it is supposed to express a “wide diversity of opinion” and “a broad spectrum of interests,” eight of the nine members represent companies or industries with a financial interest in killing the position limits rule, or have a personal financial interest themselves. 

. . . .

The recent inclusion of Craig Pirrong on the committee is perhaps the most flagrant example. Pirrong, who co-wrote the first draft of the report with James Allison, is a professor of finance at the University of Houston, who has been paid by several industry participants and trade groups for his research into commodity speculation. He was also a paid research consultant for the International Swaps and Derivatives Association, the very group that got the initial rule overturned by the courts.

The CFTC report relies mostly on Pirrong’s research and a presentation he made to the committee last year, which did not include the opinion of anyone who believes in the dangers of excessive commodity speculation. In fact, 10 of the 13 witnesses at EEMAC meetings came from industry, two were representatives of CFTC, and the other was Pirrong. The meetings never mentioned that there would even be a final report. [Er, it’s in the law, you knobs.]

As Public Citizen’s Tyson Slocum, the only non-industry committee member and the only one to dissent from the recommendation, points out, Pirrong was not on the committee until after he co-authored the report. Pirrong “is so new to the EEMAC,” Slocum wrote in a minority dissent, “that I only learned he was a member when he was listed as a co-author.” 

This kerfuffle warranted another mention in the NYT, and I’ve been told that Warren used it (and me) in a fundraising pitch.

I’m so proud. One’s enemies are the best comment on one’s character.

What cracks me up is that it wasn’t a right-wing snarkmeister like me that included “Warpath” in the title of an article about Liz Warren. It was the (by then) far-left New Republic. Freudian slip? Whatever, it’s hilarious.

Alas, understandably but not commendably, Commissioner and EEMAC chair Christopher Giancarlo buckled under the political pressure and withdrew the report. But this was almost certainly a non-event: the proposal was dead in the water, and was only salvaged by saving major pieces overboard. And I’ve sailed on.

What a long strange trip it’s been. The speculation debate has had a first-order impact on the arc of my life for more than a decade. Although the Commission proposal will likely put an end to one chapter of that debate, as I wrote in my first piece in 2006, speculation controversy is a hardy perennial, and will no doubt recur the next time some major commodity price spikes or craters. And maybe I’ll be around to draw more fire–and deliver some–when that happens. And until then, I’ll keep Truckin’ on whatever fits my fancy.

Nota bene: I’m not a Dead Head by any means. But if the song fits . . . Well, not the drugs part!

The Assad regime and the Russians are on the verge of victory in northern Syria. In particular, the rebel stronghold of Aleppo is on the verge of falling.

This is not all that surprising. It demonstrates the decisive effect of airpower if–and this is crucial–it is operated in support of an even minimally competent ground force, especially one with armor. This is particularly true if the airpower is utilized ruthlessly, with little squeamishness about civilian casualties.

The few victories against ISIS–Kobane, Sinjar, and Ramadi–demonstrate the same point, as does the ineffectualness of the “allied” air attacks against ISIS in Syria and Iraq generally, because these attacks are not mounted in support of a coherent ground attack undertaken by an even moderately effective infantry and armor force.

The Syrian-Russian success also provides an interesting contrast to the Saudi fiasco in Yemen. The Saudis have bombed ruthlessly, with little military effect, because the bombing is not coupled with a credible ground campaign against the Houthis. This no doubt reflects the Saudi’s knowledge of the severe limitations of their ground forces.

These limitations made me laugh at the Saudi offer to deploy troops to fight ISIS in Iraq and Syria. Even overlooking the logistical impracticality of this, the Saudis would be setting themselves up for an embarrassing failure.

The Russians and Syrians actually intensified their offensive in the lead-up to the farcical “peace” talks in Geneva. No surprises here. They are in this to win decisively, not to negotiate a compromise. And there is no better way to send that message than by victory on the battlefield on the cusp of talks.

This has left the US and Europeans and Gulf Arabs sputtering in ineffectual rage. John Kerry was particularly embarrassing (nothing new here!):

“Hospitals have been hit, civilian quarters have been hit, and in some cases, after the bombing has taken place, when the workers have gone in to try to pull out the wounded, the bombers come back and they kill the people who are pulling out the wounded,” Kerry told reporters in Washington. “This has to stop. Nobody has any question about that. But it’s not going to stop just by whining about it.”

But what else is he (or anyone else) doing about it other than whine? Nothing. It would have been better for Kerry to remain silent, rather than advertise his (and The US’s) impotence.

It is also interesting to note that Kerry is damning the Russians and Syrians for bombing civilians, yet is utterly silent on the equally bad (if not worse) Saudi air campaign in Yemen.

In response to the Aleppo debacle, Turkey has closed its border with Syria. Erdogan is no doubt attempting to create (exacerbate, really) a humanitarian crisis in order to goad the US and Europe into intervening. It will never happen. The Europeans lack both the will and the means. The US has the military capability, but not the will: whatever will existed at one time (which was minimal) disappeared when intervention meant a confrontation with the Russians.

So Putin will likely get a battlefield victory. But so what? He and his Syrian creature will conquer a depopulated and devastated country. This will have little impact on the strategic balance in the region, and virtually no impact on US interests. Yes, Erdogan’s imperial and sectarian ambitions will be thwarted. Saudi and Qatari sectarian supremism will be defeated. To the extent that the US is impacted, these are actually favorable developments.

Those in the West who fulminate over Putin’s success in Syria are ironically engaged in the vacuous zero-sum thinking that drives Putin. A Putin victory is not necessarily an American defeat.

But the zero-sum thinker Putin is probably gleeful at the shrieks of distress from Kerry, the head of the UN, the Europeans, and various anti-Russian elements in the Western media. It’s all music to his ears, and also quite useful to him domestically. Another irony, that: the more that Putin’s enemies in the West screech about what is happening in Syria, the more it helps him.

Putin’s victory may be hollow, though, and his glee short-lived. He initially attempted to utilize his intervention in Syria as a way of presenting Russia as an ally of the West in the war against ISIS in order to undermine the sanctions regime, and to bring Russia in from the diplomatic cold. However, his unabashedly pro-Assad campaign, his intensifying the offensive in the run-up to the Geneva talks, the resultant humanitarian and refugee crisis, and the minimal Russian targeting of ISIS will make it impossible for the Europeans to do anything that will appear to be rewarding him. Putin’s intervention, with its demonstration of the cynicism and pointlessness of American policy, and thereby make Obama look bad, will cause our petulant president to retaliate in his passive-aggressive way, but maintaining sanctions, and pressuring the Europeans to do the same.

Putin is overplaying his hand elsewhere in Europe as well. The Russian media and government histrionics over the “Lisa” fake rape case in Germany has deeply angered Merkel who is already under siege over the migrant crisis (and especially the sexual assault crisis that has followed in its wake). Further, Putin met with Bavarian governor Horst Seehofer, Merkel’s most strident critic on immigration.  This will also anger Angela.

Putin, of all people, should realize that if you strike at the king (or queen) you better strike to kill. If Merkel survives-which is likely-she will be ill-disposed to ease sanctions, especially since Putin is ratcheting up the conflict in Donbas as well. Long surviving politicians tend to have long memories as well.

In sum. Air power can be dominant when teamed with infantry and armor. Putin will likely win a tactical victory in Syria. But the victory will be strategically barren, and possibly counterproductive, because (a) the “winner” will inherit a blasted and dysfunctional battleground, and (b) this “victory” will set back Putin’s efforts to roll back sanctions.

If anyone “wins” out of this, it is Iran. The Iranians will maintain their pipeline to Hezbollah, and deal the Saudis a stinging defeat. So Putin will succeed as the mullahs’ muscle, and in the process he will gain the satisfaction of humiliating the US (which stupidly set itself up to be humiliated), but at the cost of perpetuating Russia’s economic isolation, which is exacting a terrible toll on a country already reeling from the collapse in oil prices. That is about as Pyrrhic a victory as one could imagine.

Brent traded with a 66 handle for most of today. I am sure that Putin was not getting his kicks on Brent 66.

But no worries. It didn’t stay there long: it’s now trading at a 65 handle.

Going down, down, down, in a ring of fire.

US Defense Secretary Chuck Hagel spoke to his Russian opposite number, Sergei Shoigu. Shoigu ranted to Hagel about the fascist Ukrainians, saying that “the use of combat aviation and heavy artillery, including multiple-launch rocket systems and missiles against civilians and civilian infrastructure in the region was unacceptable.”

Talk about chutzpah. This coming from a man responsible for arming rebels in Ukraine that do everything-everything (except the use of combat aviation)-that he condemns. They do all that, and more: e.g., shooting down jetliners with nearly 300 innocent people aboard.

Good rule of thumb: whatever Russians rant about, is what the Russians are doing.

If Hagel had been anyone but the ignorant dolt* that he is, he would have schooled Shoigu on some history. Recent history. Russian history. Putin’s history.

In a word: Grozny.

Russian forces obliterated Grozny not once, but twice. The first time in 1994-1995, the second in 2000.

In the Yeltsin-era assault, Russian infantry and armor proved so incompetent in its initial assault on the city that the Russians were forced to resort to indiscriminate firepower: they leveled the place with artillery and bombing. The results are shown in this picture. As is always the case, the number of civilian casualties is in dispute, but accepted figures run in the tens of thousands.

Putin leveled Grozny again as part of his campaign to establish himself as a popular Russian leader. The Russian military avoided the mistakes of the first Grozny campaign and waited to deploy the armor and infantry until after they had unleashed an intense aerial and artillery bombardment. Most of the civilians had fled, but 40-50 thousand still remained. The Chechen rebels had dug in deeply, and the Russians had to root them out from their cellars and trenches. They had used thermobaric weapons sparingly in 94-95, but they used them indiscriminately in 99-00. The Buratino system rained fire down on the Chechen fighters-and the many civilians that were intermixed with them. And by “rain fire” I mean that literally, not figuratively. That’s what thermobaric weapons do.

Thermobaric weapons-fuel-air explosives-are truly grim weapons. This provides considerable detail on the weapons, and how the Russians-how Putin-deployed them in Grozny.

But the Chechens should feel lucky. The Russians decided not to employ chemical weapons.

I could also go into Russian use of artillery and air power during the Russo-Georgian War. And Russian support for Assad’s indiscriminate use of firepower-and chemical weapons-in Syria.

Hagel should have shoved all this back in Shoigu’s face, and told him to STFU. It is beyond chutzpah for Putin and his creatures to lecture Ukraine, and the world, about the use of artillery and airpower on civilians.

Putin wrote the book on this, when he first took power. He secured this power in Russia by obliterating Grozny. Russians loved him for it.

This is the same Putin who says sugary words about his desire for his desire to avoid war and confrontation in Ukraine.

Don’t believe a word of it, and don’t dare let him or his minions lecture anyone on the use of firepower on civilians.

*And likely drunk. His face has alkie written all over it.

Snowden was interviewed by NBC’s Brian Williams. There was nothing in the way of real information, except that the interview confirmed Eddie’s rampant narcissism and grandiosity. His insistence that he was a trained “spy” rather than some low level system administrator was a classic. One thing that narcissists can’t handle is to have their delicate, fragile self-esteem challenged. Sometimes they react with rage. Other times with haughty assertions of their own talents and achievements. Snowden’s answer was definitely in the latter category. Blathering on about how he was a trained “intelligence operative” pretty much betrayed that he was in fact not a trained intelligence operative.

The most amusing portion of the interview was when Snowden insisted that has no relationship with the Russian government.

And I am Anastasia Romanoff.

Even if he’s not a trained intelligence operative, he is a natural for the FSB, for he has Putin’s ability to utter patently-and obviously-untrue statements that spindle, mutilate and fold credulity (“there are no Russian troops in Crimea”) without batting an eye.

Hours after I wrote that a good model for understanding Ukraine would be medieval France or England, and that Putin would be perfectly fine with the country being ruled by local barons, Ukrainian Prime Minister Yatsenyuk warned of the dangers of the feudalization of the country, and said that was Russia’s goal.

Prime Minister Arseniy Yatsenyuk believes that separatists in the east are trying to achieve not federalization of state and its feudalization. But the central government will not allow it. Ukraine was, is and will be a unitary, independent and sovereign. The Head of Government said at the meeting of the second All-Ukrainian “round table” of national unity in Kharkov.

Yatsenyuk made another comparison that I had just mooted, namely that Ukraine would become a collection of rump statelets involved in frozen conflicts:

Ukraine should be a single unitary state with broad powers of regions and not to share small enclaves where every businessman will buy to itself local council, the local administration and have small Abkhazia, Ossetia and Transnistria in Ukraine.

Yatsenyuk seems to see what is transpiring in Ukraine, and Putin’s goals, similarly to what I’ve written here on SWP. Maybe we are both wrong, but I think this is a far more reasonable reading of Putin’s desired end state than to presume that he wants to invade and annex large swathes of Ukraine as he did Crimea.

Against this background, this article which is getting a great deal of play looks ridiculous. As I said in the comments to the earlier post:

[That] article is yet another example of the court press raving about Emperor Obama’s magnificent raiment, when in fact he is stark naked. The premise is that Putin wanted to invade and conquer Ukraine, and since he hasn’t, Obama must have deterred him. As I’ve written several times, I don’t believe that Putin had any intention of invading, let alone ruling over any part of Ukraine other than Crimea. Militarily it would be a disaster. Yes, he would likely succeed at first, but the occupation would become a bleeding ulcer. He is content to have frozen conflicts, and a balkanized and dysfunctional Ukraine. His primary objective is preventing Ukraine from moving closer to the EU and Nato, and having a weak Ukraine that he can manipulate from afar, primarily working through the oligarchs. He would be quite content having a purely transactional relationship with someone like Tymoshenko in charge.

With a few more Obama “victories” like Ukraine and Syria, we are well and truly ruined.

 

 

 

Putin flipped a double bird at the world, traveling to Sevastapol to deliver a truculent speech at a Victory Day celebration in the Crimean port city.

A major theme of Putin’s short (4 minute) speech was a demand for respect of Russia.

Obsession with respect and disrespect is characteristic of mafioso, gangbangers, and other psychopaths. Given the rapturous reception to Putin’s rhetoric and actions in Russia, one can only conclude that this is a national trait.

In news from Ukraine, Victory Day wasn’t as bad as I feared. There was fighting in Mariupol that left 21 dead (20 of them apparently separatists killed when the police station that they had seized was retaken by Ukrainian forces). But for the most part, the country was peaceful though restive.

And speaking of psychopaths, the separatists in the Donbas are proceeding with their referendum, allegedly without Russian support. But thinking through the decision tree, this is really a no lose situation for Putin. He (via the GRU) started this effort. If separatist sentiment appeared broad and deep (similar to what appeared to be the case in Crimea) he could support the referendum, insist it proceed, and claim that he was “respecting the right of self-determination” and demand the world do the same. If separation had little support, Putin could do what he has done: request that it be stopped. No doubt, however, he is encouraging the effort privately, because he can now claim publicly that the separatists’ insistence on proceeding demonstrates he does not control them.  What’s more, the apparent climbdown feeds western apathy and encourages western delusions that he can be negotiated with.

And I am sure you are shocked, but there is zero evidence that Russia has withdrawn troops from the border. Nato and the US deny they have observed any movement. But you don’t have to take their word for it. Recall that when Russian troops were moving to the border, there were numerous videos posted on YouTube and numerous photos posted on Twitter and elsewhere showing convoys of Russian armor moving west, on trains, and on the roads. There have been no similar postings of troops moving in the opposite direction either before or since Putin’s claim that the troops had returned to their bases.

This isn’t over. The subversion continues. The election is two weeks out, and expect the efforts to undermine it to pick up.

The widow of the heir to the Winchester Repeating Arms Co. fortune, Sarah Winchester, believed that her home in New Haven, CT was haunted by the ghosts of men shot with Winchester rifles.  A medium told her to move west and build a house big enough to house all of the spirits.  So she moved to the Santa Clara Valley in California, and in 1884 began construction of a house.  Construction continued, day after day, for 38 years, as Winchester directed the addition of room after room after room to appease those haunting her. Today the Winchester House is a museum.

Yesterday, the inventor of the Kalashnikov assault rifle, Mikhail Kalashnikov, left this mortal coil at age 94.  It is almost certain that the ubiquitous AK-47 (and its successors like the AK-74) has killed more people than any firearm in history.

Pace Mrs. Winchester, how many rooms would be required in a Kalashnikov mansion to house all of the pour souls slain by Kalashnikovs?  A city of Winchester Mansions, probably.

Kalashnikov himself was disturbed but realistic about what his mechanical genius had wrought:

Mr. Kalashnikov said he regretted that it became the weapon of choice for guerrilla armies. “It was like a genie out of the bottle, and it began to walk all on its own and in directions I did not want,” he told Britain’s Guardian newspaper in 2003. But he added, “I sleep soundly. The fact that people die because of an AK-47 is not because of the designer, but because of politics.”

This is true.  In particular, the politics of the USSR (and the People’s Republic of China), which liberally supplied AK-47s to its clients around the world, and which armed, directly and indirectly, numerous guerrilla forces engaged in conflicts euphemistically known as “wars of national liberation.”  Once millions of AKs were in circulation, as Kalashnikov said, “they began to walk all on [their] own” to every corner of the globe.  The genius of the design is that a child can use it.  And tens of thousands of child warriors have.

Look at the photos from any of today’s most brutal conflicts.  Syria. Central Africa. You see AKs, not FNs or M-16s.

A toxic combination.  A weapon of brilliant simplicity and durability produced by one of the most malign states in history, which had no compunction against indiscriminately flooding the world with them as part of a geopolitical strategy intended to realize the imperatives of a twisted ideology.  Meaning that Comrade Kalashnikov’s mansion would have to have rooms almost without number.

And now for something completely different.  No Eddie.  No Vova. Nothing about clearing or derivatives or Obama or Gary Gensler. Instead, this is a concert review-and crowd review.

This evening I spent 80 minutes in full body contact/hand-to-hand combat at the Rancid show at House of Blues in Houston.  By far the wildest, most intense show I’ve ever seen.  I thought the Dropkick Murphys crowds were insane, but they had nothing on the crowd tonight.  I was at the rail the entire show: close enough to read every letter on Lars’s somewhat fading “skunx” forehead tattoo.  I’ll say that I forced my way up there with brute strength, but truth be told it was more like I was propelled there, and then spent the night fending off attacks from three sides.  The advantage of the rail is that you are protected in the front and can use it for leverage 😛  I made some new friends-Niko, who shouted all the lyrics in my ear, and who clung to me for protection, and the burly guy who kept trying to elbow me aside until he finally gave up, put his hand on my head and shook it around, saying “you’re a bad motherfucker. I like that.” Mom will be so proud.

Because of the way things were, there was no way I could take pics, except a couple during song intros which I’ll post later.

As for the show.  Rancid killed it.  I’ve only seen them once before, at a bigger venue, and in an abbreviated (50 minute) set where they were the lead in act to Rise Against (which is a lame band, IMO-Jeez I can’t stand them).  Here they were the headline act, and played 80 minutes with just a 5 minute break.  They were excellent.  High energy, very tight.  They played songs from every one of their albums, including several from my favorite, Rancid 2000.  Black Derby Jacket was my favorite.  Matt Freeman just killed it on the bass.  That guy is unbelievable.  Best bass player I’ve ever heard or seen.  His fingers just fly over the frets.  It’s not just rhythm, it’s melody, and melody that you feel in your solar plexus.  No one else even comes close.

One interesting observation.  Lars was wearing Oxfords.  Very funny.  Another observation.  One kid went over the rail and security grabbed him, and put him in a headlock.  Stupidly, he put up a fight against the burly security guys (probably because he was obviously very wasted) .  As he was being wrestled away, Lars bent down, put his hand on the kid’s hand and told him to be cool and settle down.

Um, when Lars Frederiksen tells you to chill, you know you’re out of control.

Tim Armstrong did double duty, performing with Tim Timebomb and Friends as the second act.  Very entertaining ska and reggae influenced set.  That alone would have been worth the price of admission.

I hope Rancid doesn’t wait 5 years to return to Houston.  Hell, I’ll be old by then.

I thought The Bloodhound Gang was lame during its heyday, such as it was, in the late-90s.   Which is probably why they’re playing FSU hotspots like Odessa, rather than the Warped Tour.  While in Odessa, the bassist tried to suck up to the western Ukrainians by using a Russian flag as something that is in very short supply in Venezuela. (Perhaps they got wind of stories like this and figured that an anti-Russian gesture would go over quite well right now.)

Not a bright move, given that the band’s next stop was in Russia.  They were kicked off the bill of a festival in Kuban/Krasnodar.  While hotfooting it to the airport, their car was pelted with eggs and tomatoes (that wouldn’t have happened in the late-90s!, given the economic conditions at the time).  When in the airport, they were set upon by a group of self-styled Cossacks, fittingly dressed in black shirts.  The band was roughed up before security personnel belatedly intervened.

And of course, the Cossacks needed to celebrate their victory over the evil американцы. And since two wrongs make a right, their response to an insult to the insult to the Russian flag was to insult the American flag. Which I’m sure just happen to be readily available in the Anapa airport. Oh, and that was after the “Cossacks” attempted to smother the bassist with it.

Keep it classy, folks. Keep it classy.

Here’s a video of the confrontation (h/t LL). All those thinking of going to Sochi next February might want to take a look, though if you’re so clueless as to still be entertaining that idea, it probably won’t make a dent.