Friday, April 4, 2014

Democracy, NRA & Lewis -- Friday's bucket


Last night I participated in the Canadian primary process for the first time ever (possibly for the last time too).  It was following the creation of a new electoral district in Montreal -- called Ville Marie.  Initially the two candidates (actually acquaintances both) we running for Canada's Liberal Party (run by Trudeau -- not the cartoonist, but the son of the one who was Prime Minister in the 1980s).  Anyway this event had to be moved to a larger venue -- there was just too many registered Liberal party voters in the district.  The room could sit about 600 and there was another 100 to 200 outside the doors in the corridor.  The final result was 289 to 198, so about half the room that attended the vote was there for show (among them a friend or two)!

The first thing that comes to mind is that the democratic process is a strange one.  the new district is widely recognized as being a Liberal bastion -- so in effect 50,000 Canadian voters (all those who live in the district) saw the selection of their new member of parliament handed to 500 voters... as Churchill once said, It has been said that democracy is the worst form of government except all the others that have been tried.  I suddenly realized that these 500 activists (1% of the electorate) selected the next member of parliament for Ville Marie -- and lets be honest here it was 100% a popularity contest, there was no debate (they got to speak of 5 minutes each) they got the job simply by registering more members to the party (actually its worse than the American system).

As an add on:  yesterday walking back from a meeting I saw a Green Party electoral poster, where the Candidate was preaching an ecological socialist solution! My first thought was that some of the worse environmental disasters have been perpetrated by Socialist governments!


Until recently I didn't understand the NRA's game (as a Canadian bystander) but I think I now get what it is doing: Scorched Earth!  The electoral power of the NRA is such that its like Dirty Harry -- they don't even have to pull their gun to scare the crap out of all elected officials.  The stand your ground laws being enacted everywhere in America (where you can shoot a black person because...well why not) and probably shoot anyone else because you feel threatened is a worrying development.  One of my favorite TV shows is Top Gear.  This British show (ostensibly about cars) has its three stars go all over the world:  Botswana, Irak, Mianmar to name three dangerous ones.  They also went to the US (driving from Miami to New Orleans).  To this day, the three hosts maintain that they've never been as concerned about their safety than when they travelled in the US.  This morning I was reading an article about warning shot legislation (third paragraph).  Apparently its OK to try to shoot someone to defend yourself but its against the law to fire a warning shot (I Know strange better to kill than to warn).  The NRA no longer has to do anything, you just point to their (electoral) holster and hint that they're packing heat (negative adds, PAC money etc) -- and can destroy your career if they want.  Now that's power!

Michael Lewis

The vitriol!  You know that you hit a nerve on Wall Street when you get the kind of reaction Lewis is getting this week.  He wrote a new book Flash Boys, about the HFT "problem" the fact of the matter is that his book discusses not only a problem but a solution.  I must of seen (and read) two dozen blog/articles about Lewis and HFT over the past 4 days, and the large majority are negative.

I just started the book yesterday.  From the very beginning you first note that most of the data he talks about goes back to the 2008 to 2010 period (he does talk about flash crash too -- and they continue) But from the book you get that he's following a story where the protagonists have been actively looking at the problem for some years, and you know that there is a solution .  Lewis knows he's not "discovered" the problem, he's telling a story and he can really write an compelling yarn (at least the first 75 pages) that I have read.

Lewis say's that he got a taste of the acrimony when he published Money Ball -- but not the Big Short [there he got:  "It was actually worse than what you wrote" -- proof if was needed that the SEC/FBI failed in conducting criminal prosecution following the 2008 collapse of the RMBS market].  Lewis can defend himself (he was great on Bloomberg TV Tuesday) and its evident that Lewis doesn't see himself as breaking news but unlike most of these bozos he is articulate about the subject.  Finally, apparently the FBI/SEC are now investigating HFTs -- considering that even Lewis write that their activities were not illegal... don't know what they are investigating (and why they are wasting ressources).


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