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.