Monday, February 20, 2017

A Talk on the Middle East by Ambassador Dennis Ross

On February 15 Ambassador Dennis Ross and author of "Doomed to Succeed: U.S -Israel Relationship from Truman to Obama" gave a talk sponsored by the Santa Fe Middle East Watch. Needless to say his talk opened with a discussion of the Trump-Netanyahu meeting that took place earlier that day. Ross worked with  all of the administrations from Carter to Obama on middle eastern and European issues. 

Below you find a YouTube link to his talk and I believe you will find it most informative. I am in the process of reading his book and will post a review when I am finished.

Friday, February 17, 2017

My Amazon review of Bret Baier's and Catherine Whitney's "Three Days in January: Dwight Eisenhower's Final Mission"

I Like Ike

Fox news anchor Bret Baier and Catherine Whitney have written a carefully researched hagiographic biography of President Dwight Eisenhower with a focus on his last three days in office. The bookends are Eisenhower’s farewell “military-industrial complex” speech and President Kennedy's inaugural “Ask not..” speech. Baier’s Eisenhower is a highly organized leader who is deliberate and recognizes the importance of processes and teamwork. After all he did lead the D-Day invasion and had a very successful presidency. Under Eisenhower the Korean War was ended, a war in Vietnam was avoided, civil rights moved forward and the interstate highway system was started. Perhaps more importantly the nuclear genie was kept in the bottle as he dealt with the post-Stalin era Soviet Union.

Eisenhower was most concerned about presidential transition and he wanted to make sure that President-elect Kennedy got off to a good start.  He actually spent a year thinking about is farewell address perhaps thinking that the “missile gap” was a creature of election year politics. Kennedy later acknowledged that there was no gap. Unfortunately, like too many of today’s politicians, Kennedy and his crew thought they knew it all. That led to the fiasco at the Bay of Pigs early in his administration.

I wonder after writing this biography how Baier as a Fox news anchor can report on Donald Trump without puking. If ever there were an opposite of Dwight Eisenhower it is Donald Trump. 

Thursday, February 16, 2017

My Amazon Review of Michael Kazin's "War Against War: The American Fight for Peace 1914-1918"

The Good Fight?

Georgetown history professor Michael Kazin wears his biases on his sleeve. As someone who was very active in the 1960s anti-war and radical movements, Kazin has written a highly sympathetic account of the anti-war movement that arose in the U.S. to keep us out of World War I. He organizes his history around the lives of four people who symbolized the broad-based coalition that worked round the clock in their anti-war efforts. They are the Southern segregationist Majority Leader of the House and Chairman of the Ways and Means Committee, Claude Kitchin; Crystal Eastman a social reformer who founds the Woman’s Peace Party and the American Union Against Militarism; Morris Hilquit the Jewish Socialist labor lawyer and politician form New York City and Senator Robert La Follette, the Wisconsin progressive filibusters President Wilson’s proposal to arm merchant ships. It was that filibuster that caused the Senate to adopt the cloture rules we have today.

Along the way we meet Crystal Eastman’s brother, Max who publishes Masses, future socialist Norman Thomas, auto magnate Henry Ford, social reformer Jane Addams and Roger Baldwin who would found the ACLU. All in all it was quite a broad coalition and in Kazin’s mind they worked a miracle to keep the U.S. out of the war as long as it did in countering a pro-war movement headed up by Theodore Roosevelt.  After all the Lusitania was sunk by a German U-boat in 1915 and under the aegis of the German ambassador, Germany was running a vast terror network on the east coast. That network caused the Black Tom explosion in New York Harbor which blew up munitions heading for England.

He argues that were it not for the anti-war movement the U.S. would have entered the war sooner causing countless more American deaths. I would argue to the contrary because, in my opinion, a U.S. entry say in early 1916 would have likely shortened the war and prevented the carnage on the eastern front that was to come.

My criticism of Kazin’s work is that he ignores the broad forces of history that made U.S. entry into the war inevitable. The U.S. as a rising power couldn’t really stay out and a Professor Adam Tooze has taught us that during 1916 economic power was being transferred from England to the U.S. Simply put the U.S. had too much at stake in an Allied victory as the Allies were head over in heels in debt to the U.S. and the war was engendering an economic boom. It was only a matter of time for the “peace candidate” Wilson to tip his hand. That happened in 1917 when Germany renewed unrestricted submarine warfare, the Zimmermann telegram was published indicating German overtures to Mexico and Tsar Nicholas II abdicated making it easy for Wilson to say that the war was about democracy. Put in a geopolitical context, no U.S. president would allow a Europe dominated by a hostile Germany.

Nevertheless Kazin tells a good story about an era in American history that has long been forgotten.

Thursday, February 2, 2017

My Amazon Review of Edward O. Thorp's "A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market"

A Quant before his Time

Ed Thorp has written a rather enjoyable autobiography about a math/science nerd kid from depression Chicago who moved with his parents to Southern California in the 1940s where they found work in the war plants. Who would have predicted that a kid who made nitroglycerin in the family refrigerator and placed red dye in a the Long Beach municipal swimming pool would grow up to invent card counting for blackjack and become a pioneer in quantitative finance.

After receiving a Ph.D. in mathematics in 1958 from UCLA Thorp moved on to post-doctoral research at M.I.T. There he would write an apparently obscure paper for the Proceedings of the National Academy of Sciences (Jan. 1961) entitled “A Favorable Strategy for Twenty-One” that would evolve into his best-selling book “Beat the Dealer.” Nevertheless the paper attracted press notice and the attention of Manny Kimmel, a mob-connected businessman from New Jersey. In an amusing part of the book Thorp discusses how Kimmel showed up at his modest rental house in Cambridge in a Cadillac with his two blond “nieces” dressed in mink coats. Kimmel would go on to backing Thorp in his adventures in Reno and Las Vegas. Once the casinos caught on to his successful gambling strategy he became a persona non grata and was physically threatened. However the secret was out and Las Vegas became inundated with Thorp card counters, one of whom was the famous Pimco manager to be, Bill Gross.

Also at M.I.T., Thorp would work with information science guru, Claude Shannon. Together they would invent the first wearable computer. Its purpose: to beat roulette, which it did. After M.I.T. Thorp ultimately moved on to U.C. Irvine where he became interested in the ultimate casino the financial markets. During this time I had the pleasure of casually meeting him in a few academic settings.

Thorp became interested in the pricing of warrants, options and convertible securities. He intuitively developed what was later to be formally derived as the Nobel Prize winning Black-Scholes Model. It was a money maker and Thorp formed Princeton-Newport Partners (PNP) to capitalize on his expertise.  PNP had a great run from the early 1970s until the late 1980s when it closed down after being peripherally involved in the insider trading scandals involving Drexel Burnham. Along the way Thorp and team developed the trading strategy of statistical arbitrage which is utilized by quant shops to this day. He also mentored several people who would go on to become the hedge fund titans of today.

The last quarter of the book is devoted to his political and life philosophy and his approach to charitable giving. Thorp is a very likable person and his autobiography is a good read.

Sunday, January 29, 2017

Reliving the 1930s - Part 3

In 2014 I posted two blogs as to how we are reliving the 1930s. The first dealt with President Obama's vacillation with respect to Putin's aggression in Ukraine and the second dealt with the rise Antisemitism in Europe. Here are the links: and

With only one week in office it now seems that President Trump put us into "hyper-drive" back to the 1930s. He is in the process of starting a trade war with Mexico, whose government is only now undoing the oil nationalizations of Lazero Cardenas in 1938. Perhaps President Trump wants a virulent left-winger heading up the Mexican government. Trust me if he is worried about Mexican immigration today, just wait for an economic upheaval in Mexico.

More frightening is his wholesale exclusion of Muslims by executive order from seven countries previously identified with terrorism by the Obama Administration in 2015. They are Iraq, Syria, Iran, Libya, Somalia, Sudan and Yemen. He also closed our borders to the admission of ALL refugees for 4 months. Although not an explicit Muslim ban, it certainly comes close. The message is loud and clear. Moreover, until restrained by a Judge, legal residents with green cards and immigrants with H1-B Visas were also banned from reentering the United States.

His act is a chilling reminder to the the world of 1939 where President Franklin Roosevelt closed our door to European Jewry seeking refuge from Hitler. In fact he refused to allow the refugee filled ship, the St. Louis, from coming ashore in the U.S. Similarly the UK government issued a White Paper sharply restricting Jewish immigration to Palestine. Just like in today's Syria, the refugees were trapped. If only only Obama enforced his Syrian red line in 2012. But that was then and this is now.

Until this weekend I poo-poohed the talk of Trump fascism. I now have to take it seriously as the 1930s come into clear view.

Wednesday, January 25, 2017

My Amazon Review of Daniel Todman's "Britain's War: Into Battle, 1937-1941"

A Comprehensive Look at Britain Going to War

History professor Daniel Todman has written an encyclopedic look at what the effects were of the onset of World War II and its actual beginning on the people of Britain. Aside from the broad geopolitical history which is well known, Todman details the internal politics of both the Conservative and Labour parties as well as discussing the day-to-day lives of the British people. It is a long book for the lay reader, 816 pages in the print edition, but the reader is rewarded. Still I would have preferred a shorter book, hence four stars, not five. Moreover for readers interested in a very accessible view into the lives of the average Brit during the war I would recommend the British television series, “Foyle’s War” available on Netflix.

Todman begins his book with the coronation of George VI in May 1937 and ends with twin debacles at the start of the Pacific War at Pearl Harbor and sinking of the prides of the British fleet off Singapore by carrier based Japanese aircraft in December 1941. It is a lot of history to cover and at home aside from the collapse of the old industrial regions of the north, the British economy was doing relatively well in the 1930s being governed by moderate conservative policies. For all practical purposes Labour was frozen out. However as the war clouds grow in Europe the British economy is put on a war footing increasing taxation and putting much activity under the command and control of the government. This is Labour’s opening to power.

With the collapse of France, Chamberlain resigns and Churchill becomes Prime Minister to rally the country after Dunkirk. The key Labour ministers in the government are Ernest Bevan and Clement Atlee. Their long term goals are to bring socialism to Great Britain. They succeed in 1945 so much so that their policies hold back the country for the next 30 years. (My comment, not the author’s.) Churchill’s goal is to preserve the British Empire; at this he fails. He also fails in the sense the liberal reform wing of the Conservative Party headed by Eden and Macmillan end up in control. Nevertheless he certainly wins the main fight in defeating the Nazis.

Todman has given us an excellent work of history and for the real history buff I highly recommend it, a little less so for the average lay reader.

Friday, January 20, 2017

President Trump: A New Age of Jackson?

President Trump, I never thought I would be saying it, but here we are. President Trump's inaugural address was not that of a traditional Republican; it was Jacksonian in style and substance with a flat out attack on the D.C. establishment of both parties. It was protectionist and nationalist. Gone was the outspoken internationalism of President Obama. He was speaking to his base, and unlike former inaugurals it was more a campaign speech than being broad and unifying. But then again Andrew Jackson's inaugural was far from unifying and it signaled a new age. 

The one fly in the Jacksonian ointment is that the new administration is populated with billionaires and Wall Street types. Whether this administration delivers to its populist base remains to be seen. Furthermore if Trump is going to govern the way he campaigned the stock market will be littered with a series of disappointments.

Nevertheless my best guess is that in four years time his fervent supporters will be disappointed and his critics worst fears will not be realized. Meantime I won't be surprised to see a foreign policy crisis emerge within his first 100 days. Stay tuned.