Monthly Archives: May 2011

DSK is Tom Wolfe’s “Great White Defendant” from Bonfire of the Vanities

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We are talking about the proper handling of guns and human cages, so any less than a presumption of innocence is reckless.

Regular readers know that I despise everything that DSK stands for politically – he’s a member of the French Socialist Party and has orchestrated a series of sovereign bailouts while head of the IMF. I am nonetheless disgusted with the public discourse around his case.

There is no presumption of innocence, as if accusers of sex crimes never turn out to be liars. Typical of this attitude is mayor Bloomberg’s quip, “if you don’t want to do the ‘perp walk’, don’t do the crime.”

There are any number of possibilities for what really happened in that hotel suite, but only one seems to be seriously considered in the US press: that this plump, 5’7″, 62-year-old overpowered a 5’11″, 32-year-old African woman with such force or martial efficiency as to not leave either of them significantly bruised and scratched. The story seems to be that she was so intimidated by his strength that she went along and performed oral sex without harming him. Maybe I just lack DSK’s skill, but my wife is 5’10″, and I’m a young and fit 6′, and I’d end up in the emergency room if I tried something like this! I bet Diallo could have beaten DSK to a pulp if she’d wanted. How can feminists have such a low regard for women that they assume they would all just comply with demands from random, unarmed old men?

The above is a possibility, but without evidence it is no more, if not less probable than that he offered her money or favors in exchange for sex but she found him to be a “rutting chimpanzee” and abusive jerk, spurring her to cry rape in revenge. He had stayed in the hotel at least 6 times in the last year, so maybe this wasn’t even their first encounter but a spat – we just don’t know. Of course, we can’t discount conspiracy, as if such things never happen in politics. Such a set-up would of course be likely to take advantage of the man’s known vices. All she would have to do is flirt with him, and the old horndog would come on to her. Easy to cry rape in exchange for a few hundred grand, and easy to keep silent when sufficiently intimidated.

In my perusal of the French discourse on this subject (via the Google Translate Chrome plugin), I find it much more deliberative than the US take on the affair. Is it possible that Americans are even more politically correct than the French, at least when it comes to sex? It also may be that the French are cooly cynical about the workings of power, having tossed out several governments in the last two centuries. A poll on Wednesday showed that 57% thought DSK is the victim of some kind of set-up. It is perfectly respectable to question such things as the official versions of current and historical events (certain German activities in WWII notwithstanding – that may land you in prison). They are also much better dinner companions and conversationalists than most Americans, and don’t observe the same taboos.

The Great White Defendant refers to these rare cases where prosecutors get to target a member of the privileged class, and as a consequence of their guilt from having put away so many poor people, they pursue him like Ahab after the white whale. Of course, journalists love these cases because they fit their own preconceptions of oppressors and oppressed, and the media attention makes prosecutors stars and helps their political careers. The last such major case was the prosecution of several white Duke lacrosse players on the word of a black stripper who turned out to have made the whole thing up. The lead prosecutor in that case ended up being convicted of contempt and disbarred for his criminal disregard of the truth. Nifong served one day in jail, and neither the accuser nor the currupt police have been prosecuted for their actions. BTW, the accuser, Crystal Mangum, is facing a first degree murder charge for the stabbing of her boyfriend last month, but the New York Times is strangely silent on that story.

I hope Tom Wolfe is watching this case closely (and I suspect he is, as he lives in NYC) and gives us a write-up or two by the time it’s over. No matter what actually happened and what verdict is reached (jurors are selected for gullibility, so the verdict will not necessarily reflect the truth), the affair may refect poorly on journalism and the court system.

The rigor with which journalists and prosecutors pursue the truth is critical for a civilized society, since the legal system has a monopoly on the use of force. The burden of proof is on the accuser, whether a policeman or alleged victim. We are talking about the proper handling of guns and iron cages, so any less than a presumption of innocence is reckless.

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Here’s the Bonfire of the Vanities on Amazon
 I strongly recommend it (and not the movie with Hanks & Willis), along with everything Wolfe has written – he’s the best novelist/journalist of our time.

Ron Paul starting strong in first debate

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The first Republican debate of the 2012 US presidential election was held last night in South Carolina. I found this video of Ron Paul’s responses. Looks like he got a lot of time, unlike in the 2008 debates:

He also raised a million dollars online yesterday in the first of probably many moneybombs. He has never expected to win, but runs because the election is the best way to spread his message. The appearance of fellow libertarian Republican Gary Johnson this year is probably a direct result of Paul’s trailblazing.

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BTW, I post a lot on twitter under this account – some on the resources sector, some on the markets in general and whatever else I feel like: http://twitter.com/miningalmanac

This is why silver margins were hiked

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Since the futures opened on Sunday, silver has fallen $13. For a standard 5,000 ounce contract this is $65,000, more than three times the COMEX margin. Today alone silver is off $15,000 per contract. It is just plain silly to claim a conspiracy against silver, and even sillier to claim that margins were hiked for nefarious reasons. Margin had to be hiked to keep up with the price of silver and its volatility, to protect the exchanges and winning traders (and to protect losers from themselves).

Like I said a two weeks ago at $45 when I discussed buying near-term puts on silver in anticipation of the bubble popping, I think the metal’s run is over. I suspect that it may establish a new normal in the $10-20 range for the coming decade or so, until the next secular inflation cycle is upon us.

Where is the skepticism?

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It’s disheartening to see how many people all over the world are just accepting the OBL story with no proof at all, purely on the word of a group of known liars. For the last decade we have heard almost nothing about Bin Laden that hasn’t come from people with zero credibility and strong motives to mislead the public.

We know nothing for sure, but based on this week’s news, it is very likely that the man is dead, if only because this group would not make its claim if there were any risk of him popping up alive. The complete lack of evidence*, lame excuses for such**, changing story***, and the incentives of the storytellers lead me to believe this is pure fabrication. He may have died years ago from kidney failure or in some other assassination scenario to keep him silent. By 2011 he had long lost his usefulness as a bogeyman, so the PR points were harvested.

That’s my opinion. Other conclusions could certainly be drawn, but they are baseless if they rely solely on statements from the US government. After all, the government is nothing but a group of self-interested individuals with very low professional ethical standards for whom lying is second nature.

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* An image of a dead OBL would not constitute proof, but the only photos from the scene so far released were purchased by Reuters from a Pakistani guard who took them 1 hour after the incident. They show three dead men and no arms other than a neon water pistol. I’m inclined to believe that they haven’t released an OBL image because a) they don’t have a real one, b) there are too many people skilled at identifying fakes, and c) the public is so credulous that they don’t need to try.

** Islamic law does not require immediate burial, just that dogs and rats don’t chew up the corpse.
As for the photo being too gory, gore doesn’t even bring an R rating anymore, and the world is used to seeing Muslim bodies mangled by the US military.

*** First OBL was firing from behind his wife and they both were killed, then he was unarmed and not hiding behind her and she was shot in the leg, then she was also reported dead. Oh, and photos show that the “million dollar mansion” or “compound” is just a crumbling, unairconditioned house like any other in this dingy town (they all have walls around the property, as is typical in that part of the world).

Hussman: Market risk is extreme

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John Hussman is the rare mutual fund manager who uses technicals and hedging to minimize risk and maximize returns during a full bull-bear cycle. He hedged up in 2000 and 2007 to preserve his fund’s equity during the ensuing bear markets, and is again tightly-hedged in preparation for another downturn.

His weekly market comment is a must-read (if you just read this and Mish’s blog regularly, you’re all set). He uses a set of indicators to identify periods during which risk is elevated based on historical statistical analysis. They are: 1) stock market investor sentiment, 2) Case-Shiller PE ratio, 3) Treasury yield trends, and 4) price action (to indicate whether stocks are overbought or oversold using moving averages).

He concludes each market comment (in which he puts on his academic cap to discuss market statistics, Fed policy, etc in geeky detail), with a quick summary of where his funds are positioned according to the prevailing risk profile. When he starts his conclusion like this, you better not be long stocks:

Market Climate

As of last week, the Market Climate for equities was characterized by an unusually extreme profile of overvalued, overbought, overbullish, rising-yield conditions. Both Strategic Growth and Strategic International Equity remain tightly hedged here.

Here is a chart showing where these market conditions have existed in the past: