Streetwise Professor

December 31, 2013

Let’s Play Connect the Dots! What Did the NYT Conveniently Leave Out of Its Hit Piece?

Filed under: Commodities,Derivatives,Economics,Energy,Exchanges,Politics,Regulation — The Professor @ 9:26 pm

It’s New Years Eve, and perhaps a little game is in order to get ready for the turn of the calendar in about 3 hours.  Let’s play connect the dots.

  • In July, David Kocieniewski writes a big-totally incoherent, but big-article in the New York Times on the aluminum warehouse controversy involving Goldman Sachs, JP Morgan and others. The article focuses on Goldman’s Metro Warehouse in Detroit.
  • On 1 August, 2013, the law firm Lovell, Stewart, Halebian and Jacobson LLC files suit against Goldman Sachs for violating Sections 1 and 2 of the Sherman Antitrust Act in its operation of the Metro Warehouse in Detroit.
  • The Lovell, Stewart complaint cites the Kocieniewski article.  Numerous news articles state that Lovell, Stewart is the firm that filed the complaint.
  • Lovell, Stewart is one of the leading plaintiffs’ law firms in the country.  It is indisputably the leader in manipulation class action lawsuits filed under the Commodity Exchange Act.  LSHJLLP has been the lead counsel or co-lead counsel in virtually every major manipulation lawsuit in the US, and has won hundreds of millions of dollars in settlements in such cases.  Its web page lists numerous past and current commodity manipulation cases, as well as other cases filed against financial institutions.
  • I have worked as an expert in numerous cases for Lovell, Stewart (and its predecessor law firms) going back to 1994.  Many of these are manipulation cases.
  • David Kocieniewski knew, before writing his hatchet job, that I had worked for Lovell, Stewart.
  • Kocieniewski did not ask me about my work for Lovell, Stewart.  He did ask me about my work for trading firms and banks.  I did mention, on my own initiative, that I had been adverse to such firms in some of my work.
  • Kocieniewski mentioned my work for trading firms and banks, but did not mention my work for Lovell, Stewart.

So there are the dots.  Help me connect them.

Seriously.  I would like you to tell me in the comments what you see when you connect those 8 dots: what inferences do you draw?  I know what I see, but I’d like to crowd-source this.  Maybe you all see something different.  Thanks in advance for your help, and have fun playing!

And to all my readers: have a Happy and Healthy New Year.  Your interest and continued support is what makes this a rewarding endeavor.  Cheers!

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  1. Keep up the good fight in the coming year. Fair winds and following seas!

    Comment by DrD — December 31, 2013 @ 10:05 pm

  2. SWP, this is quite the chain of events! You know me, I’m biased. I know a man of integrity when I see one. I wouldn’t waste 4 years of my life on someone who didn’t possess it. Yes, it’s been close to 4 years here for me. Anyway, you got a hit piece on your hands. The guy’s a skank, and he has to know it. There’s no rule book for these people. The narrative reigns supreme.

    The way I look at it is you’ve made a well-earned name for yourself and it makes you a target. Take it as a compliment even though it looks hard right now. But I gotta say that if you have Sowell watching your back, holy moly, that’s the way to do it.

    I wish you the best, support you all the way, and know that your view of what is the truth will always win. Just don’t get too famous and get this private blog all gummed up man! 🙂

    Happy New Year and good luck. You’ll do fine.

    Comment by Howard Roark — December 31, 2013 @ 10:34 pm

  3. It’s seems like its a fishing exhibition by David to bolster the case against Goldman. He has an axe to grind and wants Goldman hung on a noose and will go to great lengths to prove his case including impugning your reputation.

    Comment by Rivers — December 31, 2013 @ 10:35 pm

  4. Perfesser:

    The extortionists will stop at nothing. When you have a case try the facts. When you don’t attack the witness(es).

    Honestly didn’t think the NYTimes & WaPoo could sink lower, but they are plumbing new depths.

    Keep fighting the good fight, & like HR sez, don’t get too famous. If you do, keep digging for facts, & re-analyzing your assumptions.


    Comment by Vlad — December 31, 2013 @ 11:08 pm

  5. My comments were trolling in nature. I’m sorry. What is so odd about the piece is that there are no insiders breaking ranks (I’m referring to the piece in July) Where are these eye witnesses in the higher ups of these banks? Even if there is such market manipulation usually people close to the situation can go under anymously or you have someone tip you off? Have we become that mistrusting of bankers that now it’s guilt by association. I just don’t get where all this comes from.

    Comment by Rivers — January 1, 2014 @ 2:36 am

  6. Happy New Year, Prof. 🙂 Hope this one will be without any pathetic slimeballs trying to damage your reputation.

    Comment by deith — January 1, 2014 @ 6:09 am

  7. Connecting these 8 dots can lead some people who are not familiar with your work to conclude that you are involved in a tangle of conflicts of interest and therefore expert opinions or testimonies that you give may biased in unexpected and unpredictable ways. Certainly, if the judges in these cases that you mention have accepted your opinions as objective and unbiased then this would make your argument much stronger.

    Comment by qqq — January 1, 2014 @ 6:50 am

  8. The first four bullet points would make me suspect that the NYT and LSHJLLP are in cahoots; and you are the latter’s favored hired gun. But for some reason the NYTimes have decided that you get in the way of their larger objective so they put a hit on you despite their apparent relationship with LSHJLLP (of course it might be a question of who is using who between the Times and LSHJ).

    The NY Times and the Current Administration want to go after the entire financial industry on certain issues that make great politics but get very murky (from a pr perspective) when you get to the details. You are the advocate, the child who tells the “emperor” he doesn’t have any clothes. Rather than rethinking proposed regulations or not putting them into place. They don’t seem to understand that there can be a greater risk to the economy (this is not exclusive to the DP, the RP esp the “Tea Party” element IMO was willing the let the entire banking system collapse in late 2008).

    Basically, what you have written against (that they are for) seem to be the commodity speculation arguments, the central clearing requirements for all derivatives and that it wouldn’t mitigate, and might in fact exacerbate systemic risk. The entire monetary system is and has always been subject to this systemic risk (bank runs, money supply collapse).

    Irwin is another irony. I thought I had never heard of him until this article. Then I recalled I had found on a U of Ill web site a brilliant explanation of the RINS market and the relationship between the various classes of biofuel RINS including biodiesel and various market issues. Went back to check it, the author was none other than Scott Irwin.

    Bottom line, in the writings of either you or Irwin, I have not seen any evidence of a “political hack”

    Somehow this all seems pretty bizarre. Maybe you are not being either grandiose or paranoid enough.

    It wouldn’t be that the NYT, the Clintons, are trying to rebrand left with Bill swearing in Bill what ever his last name is deBlasio. And you’ve been commenting on Bengazi, the ACA (Obamacare), Snowden, always on Russia & Putin. There is definitely a Jacobin leftist ideological terror rising in Dem Politics (the Republicans have their analogue with the TP) and perhaps the Clintons are trying to ride that wave.

    I think my conclusion has to be that “they” – are going after Professors who consult and “Corporate” oriented university factions and curriculums (like business schools – but they’ll throw in the rest in good time). And you got in their way and made a good poster child.

    Comment by JavelinaTex — January 1, 2014 @ 7:53 am

  9. Dear Professor: I am an attorney who regularly hires trial experts. The experts opinion must include compensation and list all expert opinions for the past five years. If the report gets filed with the court for any reason, it finds its way into Westlaw and in many cases and jurisdictions onto PACER. Are any of your reports public in this way? Did the reporter request any of your reports? I was quizzical over the original article and your response because it seemed that the information you were accused of concealing would be available to any adversary in a litigation, at least as it related to your prior expert testimony. I am not sure my comments would apply to any accusations related to paid research, but if your cases make it to trial, such facts would certainly come out in the wash during discovery and depositions. As a regular participant in the game of cross examining expert witnesses, I would be surprised if you were not subject to much greater public scrutiny than the New York Times article suggests.

    Respectfully yours, Raymond J. Dowd

    Comment by Raymond Dowd — January 1, 2014 @ 8:10 am

  10. The dots I see form this line: it’s a case of projection on NYTimes part. They are the ones feeding from the hands of Big Left Government, they are the hired demagogues, they are the ones who’ll twist and turn any topic according with one and only party line – they know the crime from within and secretly ashamed – that’s why they try to deny it publicly by hanging it on objective people.

    Have a great year, Professor. I am sure you’ll win; these people are sawing the wind. Happy New Year.

    Comment by Tatyana — January 1, 2014 @ 8:49 am

  11. @Raymond. Thanks for your detailed comment. Yes. All of that is correct. There are some reports that are sealed, but some are public. And as you note, all of that information is available to the other side in litigation. The most important thing you say is at the end: the scrutiny under which an expert undergoes is far more intense than anything in academia or in commenting on policy issues.

    The ProfessorComment by The Professor — January 1, 2014 @ 1:13 pm

  12. Neutralize a possible expert witness on behalf of defendant Goldman Sachs?

    Comment by pitpro — January 1, 2014 @ 2:04 pm

  13. Kangaroo court tactics, Goldman is the next up to start paying the huge fines JP Morgan has been paying. Plus they want a high level resignation that they did not get from JP Morgan.

    Comment by Tom Henderson — January 1, 2014 @ 3:36 pm

  14. I’m not so sure they need to be connected. Kocieniewski does not appear to care greatly for the accuracy of his statements. That weird long article from July sources all the wrong factual claims with links. His diatribe against you was equally long and Felix Salmon demolished it with publicly available information. The pattern I see is this “journalist” writes very long pieces that are supposed to expose some controversy, but he doesn’t care if he gets it right or not. His editors don’t seem to have the inclination to wade through all the words in order to fact check it before going to press.

    Comment by Ben — January 1, 2014 @ 8:49 pm

  15. I still believe it was motivated by Lakota Lizzie and the anti speculation frenzy on the left.

    Assuming that not to be the case then communication between DK and Lovell Stewart seems most likely based on the info you provided. You were critical of the original DK article and so maybe Lovell Stewart indicated they didn’t intend to use you as an expert witness but they didn’t want to see you on the other side. This would be a possible explanation for not mentioning Lovell Stewart his interview. Someone there had already provided the information he required.

    I would prfer to lay this at the feet of Deripaska and/or Goldman but too many tenuous assumptions are required that do not fit your fact set well

    Comment by pahoben — January 1, 2014 @ 9:09 pm

  16. @All-Thanks. Interesting hypotheses, but not quite what I was thinking. So I’ll throw this out and you all can have at it. I can connect the dots in two ways, both of which derive from the fact that the information Kocieniewski had in his possession about LSHLLP and me should have made him aware that I was not reflexively pro-bank/pro-trader. LSHLLP represents plaintiffs in class actions against commodity traders. I did work for LSHLLP. Not exactly a great leap to put these facts together.

    So the two ways I connect the dots are: (1) He was too stupid to put draw this obvious inference, or (2) he deliberately ignored it in order to depict me in a distorted, dishonest, and misleading way that advanced his agenda.

    The ProfessorComment by The Professor — January 1, 2014 @ 9:56 pm

  17. 1. Is stating the obvious you can spend 5 mins reading what you say and realize that you’re not reflexively pro bank. 2 is what I was trying to get at. In addition he might be trying to raise concerns about academics testimony (which is obviously false in your case) and regards academics as easy targets.

    Comment by Rivers — January 2, 2014 @ 2:27 pm

  18. I’d say ‘2’.

    This author appears to have cherry-picked information that would support his ad hom argument. Anything inconsistent with that argument was left out.

    Knock ’em dead Prof.

    Comment by Regulator on Lunch Break — January 2, 2014 @ 2:40 pm

  19. Let me try to connect them in a different way, entertaining biases I assume.
    1. Koz writes an article because GS gets huge profits for no economic output in aluminum. (not a lot different than what the old boys did in the pork belly’s, but I digress)
    NYT and liberals hate banks, empathize and enable Occupy movement-so any thing they write that supports that bias is “good”
    2. Lawsuit filed-need to know more about venue. Why Detroit and why Michigan? Is there something special about tort law there?

    3. Author has selective memory. Your work for the law firm doesn’t fit the narrative or bias. Additionally, as a principled classical economist NYT is afraid of what you might say because it’s impossible to predict, unlike a Keynesian.

    Comment by Jeff — January 2, 2014 @ 9:14 pm

  20. Sorry Professor. The first time I connected the dots it was like a big arrow pointing right at the Kremlin. I downshifted the conspiracy detector and figured it must be the lawyers. Too much time resding above top secret I guess. It is certainly no stretch to conclude as you did that the simplest explanation is that DK is a dishonest POS.

    Comment by pahoben — January 3, 2014 @ 6:42 pm

  21. I would chill about it. It elevates you, really. Congrats! Major piece about you in the NYT! What could be better?!

    Comment by lynn — January 10, 2014 @ 1:44 pm

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