Sports Update

NBA

The first-round playoffs have been great entertainment but haven't materially altered the outlook.

As I write, there are two teams poised on the edge of major upsets, leading 3-2 with a home game coming up: Utah and Milwaukee, each of which I considered to be seriously overmatched, largely due to the expectation I had that they could not overcome major late-season injuries. Although I have to give them credit for their overcoming, even if they can't complete their upsets, neither should pose a problem to their opponent in the next round (nor their current opponents, Denver or Atlanta, if they should somehow get through. I've had to give up my dreams of Denver's chances: they really haven't come together, and it's getting too late.)

There's one other first-round series still going, as Oklahoma City has performed up to my highest expectations in their longshot bid for what would be probably the greatest NBA playoff upset (in terms of huge surprise, and massive impact) ever, against the Lakers. Down 3-2 but with the next game at home, they couldn't have better than a 10% chance, but the Thunder--which resembles an expansion franchise, though of course they are the ex-Supersonics--have marked themselves as a major contender for future years.

My conference semifinal predictions: Cleveland 4-2 over Boston; Orlando 4-2 over either Milwaukee or Atlanta; San Antonio 4-3 over Phoenix; Lakers (or Thunder) 4-3 over Utah (or Denver)--the Lakers winning in typical Hollywood, fake-drama-tease fashion.

MLB

We're about one-seventh of the way through the regular season, and I would categorize two divisions as having already resolved themselves (NL and AL Central), two as being still in early-season upheaval mode (AL East, NL West), and two as having shown no trend whatsoever (NL East, AL West).

The big story that has emerged is coming from the Tampa Bay Rays, who I was perfectly happy to see outperform my preseason expectations, and who are doing that in a big way. I am a bit surprised at how bad the BoTox' pitching has been, not too surprised at the Dodgers' woes, slightly surprised at the Mets' recent resurgence, not at all surprised by the Twins' or Cardinals' quality, not at all convinced by the Padres, and still expecting more from the Giants.

Soccer

I am extremely worried for my team Chelsea going into this Sunday's Premier League game. They are playing away at our perennial nemesis, Liverpool. Now, Liverpool has had its worst season in my memory--they're in seventh place, eliminated from all cup competition (the last failure was yesterday, in the semifinals of the Europa--formerly UEFA--second-tier European competition). Their roster is looking very thin, their top scorer (Fernando Torres) is out, their coach is dissatisfied with the owners (and no doubt, vice versa), their fans near to rebellion, and they have no incentive, nothing to gain by winning (or almost as bad, gaining a draw).

Chelsea played a near-flawless game last weekend at home against a good team from Stoke, winning 7-0 (yes, I meant good--Stoke's defense has been very good all season). The Blues are almost completely healthy (Essian and Carvalho are the only significant injuries, I believe), with Ashley Cole, Joe Cole, Petr Cech, Didier Drogba all healthy, and Michael Ballack and Florent Malouda in very good form.

No matter. Chelsea always has trouble scoring in Liverpool. I'll be happy if they get any kind of win; then they'll only need one more, at home vs. Wigan, to win the title--probably by one standings point. Manchester United is very unlikely to make things any easier for Chelsea by failing to win either of its last two games, thus the pressure.

After that, the FA Cup final vs. Portsmouth will be fairly relaxed. I won't even mind if they lose to their financially-harassed, relegated opponents, as long as they can pull out the League championship. That's despite the fact--I've read-- that victory in the Premier League and the FA Cup would get Chelsea its first-ever cup double (is that possible? I seem to remember them winning the old Cup Winners' Cup, though their qualification for that related to a cup won the previous year).

Speaking of relaxed (in contrast with this week's nail-biter), I'll be very comfortable watching the Champions' League final, Bayern Munich vs. Inter Milan. Former Chelsea goal-scorer Arjen Robben stars for Bayern, and of course Chelsea's former coach Mourinho is at the center of Inter's successful run. Either way, I'm OK.


Next month: My World Cup preview. I can't wait (even if you can).

Truly Slow Grist--Pt. II

What Now, Me Lovelies?
The likelihood that the Senate will come to a conclusion on the financial reform bill within a reasonable period suggests the possibility that they may actually take up other major legislation in this session (at least before the elections). The time window of opportunity is fairly narrow, though. By mid-summer, the Senate adjourns, for all practical purposes, then definitively, to allow those running for re-election to campaign (a third are potentially up for renewal, but many of those have chosen not to run this year).

So. There are two areas (besides financial reform) for which major legislation is needed most urgently: immigration reform and energy policy.

In the past week or so, as the banking reform impasse has resolved itself, there has been a hard, partisan collision on which of these two would move forward into the legislative gauntlet first. Why the battle? The presumption is that there is only time, energy, and political capital for one to get done. This is a widespread, but generally unspoken belief that should be challenged immediately by Majority Leader Harry Reid and the Obama Administration. We should be able to do both.

Republican Sen. Lindsay Graham of South Carolina abruptly pulled out of what had been bipartisan negotiations to bring an energy policy bill to the Senate floor (the House already has already passed a bill, the Waxman-Markey cap-and-trade bill). He claime that Reid had failed to uphold a deal to let this bill go before immigration, and he'd heard that was changing.

It's not that he felt snubbed because his issue was deemed secondary in importance; Graham, historically, has been right in the center of bipartisan efforts to bring immigration reform legislation forward in recent years (efforts that have come to absolutely nothing so far). Rather, to do him justice, he felt that the Senate leadership and the administration were giving up on substantive progress in energy policy in order for Democrats to chase political brownie points (and I apologize for the phrase, no racial connotation intended) going into a very difficult election.

That's easy for Graham to say: he doesn't have to run this year. Immigration reform, though, is a core campaign promise upon which President Obama has to deliver--at least an effort. Further, it has been pushed to the forefront by the ill-advised Arizona bill which requires local authorities to investigate suspected illegal immigrants, demand their papers, arrest those without them, and fine those found to be illegals. If it were to be implemented (and I think it won't, which will keep things from flaming too much out of control), it would be immediately challenged, and should be ultimately defeated, in the courts. Enforcing border controls and visa restrictions are reasonable objectives, but the manner of this bill is an affront to civil liberties of all (and inevitably to Hispanics, again if it is ever truly enforced).

Then On the Other Hand I Would...

I am no expert on energy policy (I choose this name for it, because the Senate bill is apparently no longer cap-and-trade, and "climate change" is both vague and misleading about what this bill is all about), but I think an energy bill which aims at greater energy independence from foreign oil imports through offering money for domestic oil and gas drilling, developing "clean coal" and nuclear, renewables, and imposing caps on greenhouse gases from energy plants is a winner--a bill which should be able to get the votes from both parties to pass.

The first real problem is that the price for a bill will be some kind of clause which revokes the EPA's authority to regulate greenhouse gases under the Clean Air Act of the '70's, authority recently upheld by the courts and preliminarily being put into place by Obama's revived EPA in recent months. This aspect threatens to split Democratic support; without strong Democratic backing the resulting bill will end up even worse than it appears now.

President Obama's position that he wants greenhouse gas legislation rather than relying on the EPA's enforcement of the Clean Air Act is reasonable. Thinking of the future, and the likelihood that a future Republican administration would, Bushite-like, refuse to enforce standards, he needs more positive, current, relevant authorization to take effective action such as he has promised the world.

Another problem with the current proposal is the huge oil spill off Louisiana's coast caused by the explosion and sinking of an offshore, deepwater oil rig. This spill could go on for years, and it could end up having a Three Mile Island-type effect on this avenue of domestic production which has seemed promising.

My expectations (read: fears) are: a "climate change" bill will eventually come to the Senate. It will prove hugely controversial and split the environmentalists, and without their support, it will not pass. An immigration bill will be proposed in committee, but be gutted of all "amnesty"-type provisions, so it will be yet another ineffective enforcement bill which--whether it passes or not--will not satisfy Hispanics. These two outcomes--both of which I hope will be averted somehow--will not bode well for the elections, particularly for House Democrats (who are largely innocent, having already passed superior bills in both issue areas).

The Senate would thus, after the brief glimmer of hope from the healthcare bill passage and this recent period of progress, show once again what a dysfunctional institution it has become. Corporations' buying of elections--recently authorized by the Supreme Court, with remedies totally spured so far--may yet shock us into doing somthing. And then the EPA will begin to enforce the Clean Air Act, something which is going to be hugely controversial and opposed by massive corporate advertising campaigns.

Crist Rises from the Dead?

Florida Governor Charlie Crist announced today he would escape from a doomed Republican campaign against Tea-bagger favorite Marco Rubio and run as an independent.

His decision raises marginally the chances of something other than a Republican victory (maybe from 5% to 20%), but, more significantly, it will absorb the media focus as the highlighted race of the year. This should allow Majority Leader Harry Reid to consolidate his chances against a ditzy Republican challenger and hold onto his seat in Nevada.

My forecast--not really changed from my prior analysis, but starting to firm up a bit--is for the Democrats to hold 54-55 seats (with Sanders, not counting Lieberman) coming out of the 2010 elections.

(For those who want specifics, of the most closely contested races, I'm looking for Dems to win in Nevada, Illinois, Pennsylvania, and one or two of these three: New Hampshire, Colorado, and Ohio.)

The Grist Grinds Slowly--Pt. I

The cracks in the Republican Senate filibuster against the financial reform bill are timely and welcome. The legislation has been carefully considered and mostly does what it needs to do. The Republicans found themselves in an impossible position politically, because they did not have popular support for their obstructionist program on this issue, and furthermore their objections were incoherent. They recognized the need for the reforms and accepted most of the bill, arguing around the edges, but that couldn't hold together long a united front against even considering the bill on the floor.

Refloating the Titanic

A couple of notes on critical pieces of the craft of putting our unwieldy boatload of bucks back above water: the biggest hole yet unpatched is the lack of any reform of the credit rating agencies. Their business model was thoroughly exposed in the last crisis, and their ratings (at least for complex financial packages) lack credibility. Buyers today must do their own homework, which in the cases of these synthetic, derivative-based products is hugely difficult--by design. I see an opportunity to make a private business supporting the evaluation of mortgage-backed securities, and the logical place for it to develop would be either in the credit bureaus themselves, or in Fair Isaac, the credit score developer. These are organizations that are competent to deal with the mass of data (and mortgage data in credit bureaus has been improving steadily).

The $50 billion bogey--a fund built to "pay for the funeral expenses" of big financial institutions which must be closed down, sometime in the future--is negotiable, certainly in the amount, but the concept makes sense. The FDIC has shown it can close down the smaller banks, but the scale of the large institutions would overwhelm its budget (and threaten to drag down the support for all the banks). That scale can't be provided through normal appropriations, either, because they are too slow, when what would be needed must be quick, firm, and even confidential (to avoid panic). It makes no sense to pretend that there are not significant expenses involved, and it is important to emphasize that the funds may not be used to repay creditors and shareholders (which was done in the bailout).

The key aspect of the reform is the requirement to make derivatives trading public, and because that is included in the Dodd bill (at Obama's insistence), the whole thing is worth passing. My most fundamental criticism, though, is that the legislation is fighting the last war. Questioning of the bill's designers and economists always seems to focus on the question, "Would this bill have prevented the last crisis?" and, after some struggle, it seems that they can now confidently say that it would.

Unfortunately, though, that is not likely to be good enough to deal with the next financial crisis, which will come from a new, currently exotic direction. It is still too early to see the dimensions of that future iceberg, which we can only hope means it's not yet on the horizon. That doesn't mean though, that there shouldn't be some thought on the question--something also not apparent; perhaps a new, more forward-looking bill could be developed in the next year or two, along with something putting ratings agencies on the hook for their ratings and with requiring mortgage lenders to hold onto some of their bookings from here forward.

Happy 62, Israel!

I am sometimes a bit tough on Israel, so on this occasion of the 62nd anniversary of its formation as a nation, I am going to praise her, not try to bury her.

When we talk about exceptional accomplishments in this age, Israel has got to be up there. Its economy is innovative and productive, its military power self-generated and proven, and its politics are vigorous, democratic, and complex.

Israel'a strong bond with the US goes back to its inception as a modern nation; we were there with Israel at its beginning, and Israel proved itself a reliable ally during the Cold War, helping to repel Soviet influence in the critical Middle East region on many occasions. We have fraternal ties, too: Americans and Israelis have links of immigration in both directions that are ongoing.

I have no objection to the Israelis and Palestinians coming together to announce a long-term cessation of hostilities, to agree on a division of territory according to the interests of each people and international law, to allowing more free flow of people and trade between their respective territories. How could I object to any of that?--I could not.

I believe that if Prime Minister Netanyahu of Israel and President Abu Mazen of the Palestinian Authority made clear their serious intent and confidence that a deal could be concluded, those nay-sayers in their respective camps would give way. Further, a deal between Israel and Palestinians could readily be followed by additional agreements with Syria and Lebanon, which could bring the area, for once, under a more comprehensive peace.

So, yeah, I support the @two-states gig" as a way to move forward.

Mene, Mene, Tekel Upharsin

When it comes to art appreciation, I'm about 70 years behind the times. I claim some comprehension of works from Impressionism, Futurism, and Cubism; I get Surrealism to some extent; with Abstract Expressionism, I can see that something's being said, but can't quite follow the message. After that, not so much. I don't get Modernism, let alone anything that might be post- that.

So, for me it was a great pleasure to get a meaningful, understandable definition of post-modernism. This came in the form of a proposed post-modernist approach to history, in the collection of essays called "Re-Thinking History" by Keith Jenkins (Routledge, 1993). Jenkins' discussion of post-modernist history draws from a 1984 definition by Jean-Francois Lyotard in The Post-Modern Condition. Lyotard describes this existential state as characterized by the "death of centers" and behavior showing "incredulity to metanarratives".

This might seem just more gobbledygook, but it means something to me. When I went to college, history was a battleground between the standard interpretations--the DWEM (dead white European male) version of history, Euro-centric, or Amero-centric, and also the alternative centers of interpretation: the revisionist line, the Marxist line, Afro-centric, femino-centric, even homo-centric and pharmo-centric (history of drug use). Each was driven by an ideology--a "metanarrative"--which conditioned the interpretation, and the selection, of historical evidence.

So, the post-modernist throws off the metanarrative of religious dogma, the Communist ideology, even, perhaps, these nouveau ways of looking at our history. This parallels the political point of view which arose after the end of the Cold War, that nothing is left standing but the liberal democratic ideal, the one that allows all other points of view, the one that is supposed to remain.

Now, though, even this last ideology falls. I think of CNBC's Larry Kudlow as a represntative exponent of this last metanarrative, the one that goes something like this: "all we have to do is let the markets, in their wisdom, solve the problem. Let the bad companies fail, and the good ones will survive, and prosperity will return,,," and we will all surely get rich, like Larry. Well, I'm sorry, Larry, but it doesn't work that way, and it didn't work that way, and we don't believe in your world view anymore.

We are truly ready for that post-modern condition now. No party, no ideology, no belief in government, or capitalism, or anything except what works for us subjectively. Cut taxes--anyway the ones I pay--and give me the benefits--the ones I want. That seems to be where the post-modern mind is at.

There is something to be said for throwing off the burdens of inherited patterns of thought which limit us; further, for fighting against the belief structures which seek to hold us down, or even against narcissistic self-regard as an overriding philosophy of life, too. But what is left?

When everything has been de-bunked, what should be left should not be bunk. But what I see is fragmentation of society, collapse of civil norms, and a whole bunch of folks burrowing in and pursuing just those necessities to provide for themselves and (maybe) their immediate families. Culture is just the sum of your club memberships, in most of which you can participate without leaving your study.

What does this post-modernism lead to, though? Devotees would say, I think, to nothing. There's nowhere left to go. I see it differently, though: this throwing off is just a transitory phase, until something really big comes along, something which will find us coming together, not with one voice, but in shared perception of a meaning worth appreciating and an objective worth pursuing.

For me, that would be something about preserving civilization, the survival of the species, and the survival of life on the planet. It will take an awesome threat to make us all aware of the urgency and moved to act (OK, maybe not all of us; there will be those who are just waiting for the Second Coming, the 11th Imam, nuclear devastation, or other nihilistic forms of total destruction). I do feel that it's coming; it's just a matter of time, and maybe of the right events.

The title of this post, "mene, mene, tekel upharsin" is the proverbial "writing on the wall"--that which God is said to have mysteriously scrawled on the walls of Babylon shortly before its destruction (from the Bible's book of Daniel). It's said to mean "you have been measured and found wanting", though the literal translation of those Aramaic words is "counted, counted, weighed and divided". My post-modern translation of that would be: We know the value of everything, and it's nothing much.

NBA Playoff Preview

The NBA regular season showed greater parity than usual. There were about 6 teams that were just plain bad, about six more that really weren't in playoff contention, and the rest were very similar in their full-season performances (the West being a couple of notches better than the lower-rated Eastern teams in contention).

We're still basically looking at the same two questions I asked at the season preview: 1) Can anyone stop the Lakers in the West? and 2) Will the revamped Cleveland Cavaliers give LeBron James enough reason in this year's playoffs to stay around after this year? My guesses would be 1) no; and 2) no, unless getting to the Finals is enough, but I'm hoping I'm wrong.

The West was so close among all the teams 2) through 8) that there's no reason based on seeding or regular-season performance to call any team (except #8 Oklahoma City vs. #1 LA) a serious underdog. Here are my one-sentence first-round previews:

Mismatches: #1 Cleveland vs. #8 Chicago--the Bulls were, by several games, the weakest team in the playoffs, and the Cavs had the best record by a similar margin.

#3 Atlanta vs. #6 Milwaukee--This one would've had Milwaukee (first time in the playoffs in a decade or more) as just a serious underdog (see below) except for center Andrew Bogut's serious injury in the last week.

#3 Phoenix vs. #6 Portland--Ditto this one for Portland in this matchup of overachievers; it would be a reasonable matchup except for the late injury to Brandon Roy.

Serious Underdogs:#7 Charlotte vs. #2 Orlando
The Bobcats (playoff first-timers) have shown some signs of coming together recently, which makes me think they may come up with a couple wins.

#8 Oklahoma City vs. #1 Los Angeles--Phil Jackson's playing mind games with Kevin Durant, which tells me he takes their challenge seriously, but I think LA is just too big for the up-and-coming Thunder.

#5 Utah vs. #4 Denver--Kirilenko went down in practice this week for Utah, which makes the Jazz serious underdogs; I'm looking for the Nuggets--who now have key forward Kenyon Martin back--to make a serious run at the Lakers in the second round, as they did (in the Western Conference finals) last year.

Essentially Even: #7 San Antonio and #2 Dallas--Partly because they are the Spurs and the Mavs, and partly because their records are not all that different despite the difference in the seedings. Dallas overachieved a little in the regular season, San Antonio underachieved (until Manu Ginobili got hot late in the season), but we can expect the Spurs to be a tough out in the playoffs, as always.

#4 Boston and #5 Miami--Boston should be a lot better than the Dewayne's, but the Celtics have been less-than-convincing. This series could even be the last roundup for the aging Celtics' core which won the title two years ago.

Couldn't Happen to a Nicer Pod of Sharks

The announcement of the SEC's case against Goldman Sachs has to be the smartest use to date of the Administration's prosecutorial authority. GS is clearly the entity which has had the most hay made for it from the crisis and from the bailout, and it's time they pay the piper.

The specific charge is that one of the doomed Collateralized Debt Obligations they pushed out on the market was specifically engineered to fail, and they knew it, and they were shorting (betting against) the investment package from the start, and that their behavior constituted fraud. It's probably not the only POS-CDO they produced about which all that could be said, but around this one the SEC's investigation turned up some damning emails (in French) from the responsible SVP. They wouldn't be usable in a criminal trial, but the standard of evidence required for a civil case (as well as the weight of evidence for a verdict) made this a workable charge to press.

The Men of Gold can't afford to lose this case, which would brand them as slimy traitors to their clients and cause permanent reputational damage. The huge drop in their stock price Friday may have been partially due to technical (options-related) reasons, but if the charge is made to stick, worse could yet be coming.

U.K. Election Preview I

I don't believe I've ever posted before on an election in the United Kingdom (the one of Great Britain and Northern Ireland), but that's just because there hasn't been an interesting national election there in over 15 years.

I would make an analogy between Britain's electoral politics and ours, on the one hand, and cricket and baseball, on the other: the common pattern is that our games, both the political one and the ball-and-bat one, come from the same roots as the Brits' but have evolved differently over the centuries.

To push it a bit too far, cricket made the connection with me one day laid up in a hotel room in Delhi with "the belly"; it was a test match, and the hitter was parrying the thrown offerings, just like a batter fouling off pitches. Similarly, we can use our understanding of American politics to try to get some perspective on the British elections.

Like in the US, the British are struggling to recover from the economic crisis; also there, credit markets froze and business activity tumbled. Like the US in '08,
there is widespread fatigue with the governing party and longing for a change. And, like our political environment in this year, neither of the two major parties has inspired much confidence; as I believe we will see here this year, neither can seal the deal, so there will be much uncertainty as the polls open.

That's about as far as I can take it, though. The British election campaign lasts exactly one month (how I envy them!); unlike this year's US midterm elections, in which the game will be to get interest and turnout, the May 6 balloting in the U.K. will be a general election with everything at stake, and previews of the campaign agree that the key will be televised debates with the party leaders. Another difference is that over there it's the "left" party which has overstayed its welcome.

The largest difference--apart from minor things like traditions, parliamentary government and a monarchical head of state--is that there is a major third party in the U.K., a viable alternative for those dissatisfied with both of the major contenders for governance, Labour and Conservative. The Liberal Democrats are a party with a long tradition themselves (as the Liberal party), they have plenty of talent on offer, and they may well find themselves in a decisive role after the elections. To some extent, while their policies are similar to Labour's on many issues, and not necessarily closer to the Conservatives' than Labour's, they find themselves occupying a position attractive to moderates turned off by the partisan divide.

The Conservatives, under their most effective leadership in decades with David Cameron, held large leads in national polls until recently. Now, though, it seems the electorate is having second thoughts about going back to the party of Margaret Thatcher and to the agents of big capital (even if Cameron has done a great job of giving 19th-century political thought a 21st-century brand). Since Tony Blair left the leadership to Gordon Brown, though, New Labour's New Clothes have looked very flimsy, too authoritarian, controlling everything but not necessarily so effectively. While voters choose among candidates seeking pluralities in local elections, all voters will be aware that behind their choice is the question of the next leader of the national government.

Labour's victories in the last three general elections have been so decisive that they could form majorities in Parliament and governments just from their own membership. The outgoing House of Commons has 349 Labour members (of 650 total), 210 Conservatives, and 62 Liberal Democrats (the other 29 are from minor parties, primarily regAional-based ones in Scotland, Wales, and Northern Ireland, or independents). Labour is expected to lose seats; the question is how many (once again, like the US). While it is possible that Labour could retain a majority, or even that the Conservatives could defeat them so decisively that they would be able to gain a majority and form a government, the more likely outcomes are ones in which neither party can get 325 members elected in Commons.

In the event of a hung Parliament, some form of coalition or alliance will be required. Traditionally, the party which gets the most seats in Commons will get first shot at forming a government. If the Conservatives are leading and close to a majority they might be able to put together a shaky government with a few odds and ends, but a combination with the Liberal Democrats appears unlikely (and one with Labour, impossible).

An interactive tool which I found fun and instructive was included in the Guardian's coverage. This "swingometer" allows you to shift voters from the last election (uniformly) in any direction--towards one party from both the others, or towards two from the third, any amount of swing up to 10%. As you do so, some of the 650 boxes--one for each Commons seat--shift color, indicating a change in the party winning the seat.

Most of them don't change, though. One can shift the view to looking just at the seats which had narrower margins last time, the swing seats. One thing that is interesting is that there appear to be few seats that are closely contested among all three parties, but there are ones close between each of the two-way matchups. It's impossible, though, to get the LibDems past 100 seats, though it is possible to get very dramatic swings toward either Labour or Conservative majorities.

After some play, I came up with the outcome that looks like my prediction: a 4% shift from Labour, split about evenly toward the Conservatives and LibDems. The result in seats won favors the Conservatives a lot more--Conservatives +40 and Liberal Democrats +7--but the resulting totals would still favor a Labour/LibDem government: Labour 300, Conservatives 250, Liberal Democrats 69.

I'll attempt another post before the May 6 elections, attempting to distinguish between the policies, and the flavor, of the three major parties. The key thing we should try to understand is why there is a stable three-party system there, how its dynamics play out in this critical environment of a close contest, and, yes, why that can't happen here. Or can it?

From Three to Zero

Last year in the Champions' League semifinals there were three English teams out of the final four. Now, with Manchester United's defeat by Bayern Munich, and after Arsenal's defeat by Barcelona yesterday and Chelsea's by Inter some weeks ago, there are none. The four semifinalists will be Inter Milan, Bayern Munich, Barcelona, and some French team (Lyon and Bordeaux play in the quarterfinal whose result, though over by now, I haven't seen).

Arsenal had showed some character in their first game of the match with Barcelona at home, coming back from 2-0 with two goals for a draw. They nosed ahead after 18 minutes at Barcelona with a goal, but from there on it was, let's say, "messy". Leonel Messi scored three minutes later, then again, and again, and again, for a 4-1 victory and 6-3 aggregate result.

Manchester's departure was a shock. They did lose, 2-1 at Munich, but immediately canceled out the deficit in the home rematch with two early goals. They scored again, and I thought it was over--but for some reason I stayed around. Then, Ulic, the hero of the first game for Bayern, came up with a goal shortly before halftime that was part his characteristic hustle, part slack defense.

After that, I couldn't leave. The 3-1 score meant Manchester United was ahead 4-3, but one more Bayern goal, if it were possible, would give them the match (because Munich would have two away goals to Manchester United's one, the tiebreaker if combined goals are equal). The shocking goal to win it for Bayern Munich was set up by a cheap foul, a second yellow (=red) card to Man U's Rafael, which left them a man down. The defending got kind of frantic, and the match-winning goal came from our old friend, former PSV/Chelsea/Real Madrid left winger Arjen Robben, and it was a thing of beauty, a hugely difficult long volley behind goalie Van der Saar, directly off a sharp cross from in front of him.

All English fans should breathe, sigh, and then agree with the thought that this is the fairest result. Supremacy, this year, should be determined through the Premier League championship, for which all three leading English teams still have a real chance. Chelsea has the lead by two points over Man U. and three over Arsenal, but Arsenal arguably has the easiest schedule of the three. All three play would-be contender Tottenham; Chelsea has a tough away match at nemesis Liverpool, though the 'Pudlians may be somewhat demoralized by their poor record this year and lack of incentive (other than sticking the needle, once again, in our Blues).

Meanwhile, in the Champions' Cup semifinals, Barcelona will have a tough matchup against Jose Mourinho's Inter and may well lose. Barcelona is going for a repeat win of historic proportions; no team has repeated in the championship since the change to the current Champions League format some 15 years ago. Both teams are compelling and deserving. I'm so thrilled by Bayern Munich's win today, though, that I might have to root for them to win it all this year.

Republicans: Steeled for Defeat?

One can only smile with amusement at the travails of the Republican National Committee chairman, M ichaelSteele. He seems to attract bad publicity, and both party stalwarts and the parties' enemies gleefully pile on.

The current gaffe has to do with a $2000 charge on a RNC company card expensed at a "lesbian bondage strip joint". I can't imagine who would have done it, unless it was a prank, a disaffected Republican lesbian, or a saboteur (saboteuse?) Steele had nothing to do with it, didn't go there, and may or may not have personally disallowed the charge, but the damage is, somehow, out there (again, one should ask who was responsible for that. I know the cover-up is usually worse, politically, than the crime, but this may be an exception. Better to be ruthless, conspiratorial, and secret than ridiculous--just ask Dick Cheney).

The previous gaffe involved the production of ugly, semi-racist talking points to create fear and attack Democrats for fund-raising purposes, a Power Point presentation of scandalous content and dubious authorization. Once again, Steele was limited to complete denial and dismissal--reasonably plausible, but insufficient.

So now a bunch of mainstream (read: Bushite) party leaders have gotten together to form a new, parallel organization to raise money for Republicans apart from the discredited national committee: Freedom something-or-other. Perhaps this represents the beginning of a definitive solution to the long-standing question of "the size of the tent" for the party. Rather than large or small, why not two tents?

This is an improvised approach, and surely it won't last longer than the current midterm elections or Steele's departure from the RNC, whichever happens first. But, I think that there is in this, in all sincerity, a glimmer of a solution to the current post-2008 problem the party has.

Essentially, there needs to be one party organization for the neo-Bushite elitist party group (the traditional party leaders, who almost always control national outcomes), and one for the new party of Tea. These two groups are at odds, politically, and they basically can't stand each other, either. Except for hating Democrats, they have nothing in common. They need each other, though: the former party of governance, disgraced as it may be, for gravitas and credibility; and the Tea Party, to provide some enthusiasm and a semblance of a coherent point of view (Reaganite anti-statist "freedom") to voters. There is a perennial, truly coherent thread behind the Bushite party's policies, a hypocritical coating of freedom talk over welfare for corporations and the wealthy, but it must never be presented or seriously discussed publicly.

After the 2010 party primaries, the two fronts can work as a coalition to elect the individual Republicans each group prefers. There will be a reckoning, but it will not be until 2012, when the party's nominee is chosen. Once again, they will be faced with the the choice of hanging together or hanging separately, and that will be interesting to watch as they decide. Typically, they come together, but if the elitists unite behind someone like "Obamacare" Mitt Romney or Eric Cantor, it will be hard to bring in the tea-baggers; meanwhile, the "elite corps of impudent snobs" (to use the late William Safire's great line, delivered by arrogant hypocrite Spiro Agnew in the '70's to describe New Left radicals) would never accept someone out of the traditional mainstream like Sarah Palin, Ron Paul, or the new guy, ex-New Mexico governor Gary Johnson. The only likely hopes for unity would be someone marginally acceptable to both, like Huckabee or Pawlenty.

In the words of our President, "Go for it!" I would accept that Democrats should be expecting some losses of seats this year, due almost entirely to the lagging state of economic recovery, though not control of either House, and should try to dig in and limit losses of state houses. It seems preposterous that the party of financial crisis, bailout, and the Iraq invasion should be regaining ground so soon, but I see this as a second-order pendulum swing: the primary, long-term direction is still to their detriment.

Baseball Picks 2010

AL East
Yanks--still making the right moves. Curtis Granderson is the new Bernie Williams.
BoTox--Offense is too weak for the top, but rotation will keep them in it. Adrian Gonzalez could do the trick in postseason, if they can get to it.
Rays--Good team, tough competition. I'd be glad to be wrong that third is the best they can do this year.
Orioles--Progress!
BJ's--I can't see any reason to back them for anything but last.

AL Central
Twins--Best of a mediocre bunch
ChiSox--Medium-to-cool.
Tigers--Don't seem really to want it
Indians--Fading from contention
Royals--Almost forgot they were still in business.

AL West
Rangers--It's a bad bet, but I don't like this year's Angels much.
Angels--Falling short every year will eventually do this to you.
Mariners--Cliff Lee is not quite enough.
A's--Not terrible, but moneyball is only earning fourth place of four.

Wild Card--Boston.

NL East
Phillies--I don't like what they've done--precious little, except for losing Lee and getting Halladay, but their competition isn't there yet. Three straight NL pennants is a bridge too far for this crew: their luck will run out when their bullpen's does.
Braves--On the rise again.
Marlins--Could surprise.
Mets--On the fall again.
Nationals--Could beat out the Mets, if the injury bug stays with them through this year again.

NL Central
Cardinals--I hate to say it, but they look like the NL's best this year.
Reds--Hope springs eternal; a couple more young guys turning up, and they'll be ready to contend/self-destruct. Maybe next year when Dusty leaves and they get a real manager.
Cubs--I like them a little better than the...
Brewers--Their pitching rotation is a joke.
Pirates--At least they're not the...
Astros--I really don't like what they're doing.

NL West
Rockies--Best of a good bunch. Jeff Francis' relapse could be the beginning of a bad trend, though.
Giants--Their depth is impressive.
Dodgers--Joe Torre hits a wall.
Diamondbacks--Their record last year was a bad dream, but fourth place is for real.
Padres--No hope here.

Wild Card: Giants!

Both the Wild cards I've picked could be pennant threats with their excellent starters, but I'll go with Yanks and Cards in the World Series.

Cardinals in seven.

Chelsea: WOW

I made a mistake: I had highlighted the Manchester United-Chelsea game--for months---but I was thinking it was Sunday (tomorrow), and I was working on the preparations for my daughter's birthday party this morning. So I missed it--and I can't see anywhere when it's going to have a repeat telecast.

And I really want to see this one. There is nothing better than watching Man U. go down in a big game--and at home! Usually, watching them at home is a thing of dread, waiting for the inevitable late goal, or the home-crowd-pleasing penalty call.

Chelsea's 2-1 win, at Old Trafford, puts the Blues in the driver's seat, with a two point lead, a significant advantage in goal difference, and only a few games left to play. They're not all easy ones, but now Chelsea could survive a drawn game.

Apparently Manchester United's lacking a bit, too. I saw the finale of their 2-1 loss at Bayern Munich last week. It was golden, a late-game defense lapse: waiting for the whistle to blow, they didn't see the Munich attacker--the hard-working Croatian, Ulic--come from the blind side, take the ball from Rio Ferdinand, and turn and put it in the goal. On the same play sequence, ace striker Wayne Rooney went down with a foot injury (which left them critically short for today's showdown).

Final Four Standing
In a short while the NCAA men's basketball semifinal games will start. After West Virginia's win over Kentucky last weekend in the key game of the tournament (once Northern Iowa had upset Kansas), I am drained of passion, or even strong opinions, about the teams that are left.

On one side of the semifinals bracket, there are two #5 seeds, and the winner will be a huge underdog in the finals. Michigan State has once again overachieved to make a Final Four, with a decent team that barely won its first round game against 12-seeded New Mexico St., and has had a tough game every round since. Butler overachieved as well, the key game being their win over Syracuse in the third round.

The other side has two teams highly-rated teams that have made the most of their matchups, playing good defense and hitting the key shots. I will back West Virginia over Duke; it will probably come down to whether the Blue Devils can break down the Mountaineers' zone with outside shooting, something Kentucky was significantly unable to do.

Most of the rest of my family will be rooting for Butler, who'll be playing something like a home game crosstown in Indianapolis. I'll be happy for them if they can pull off two more big wins.

Top Shelf Rock: Update

First posted in 2007. See that posting for the Shelf Rules. We have moved the chronological edge of the Oldies rack forward considerably in just three years; it now appears to be about 1990. A note I should add is that blues, soul, and jazz are in another, more chaotically-organized rack (for another day, I guess).

I see all this MP3/iPod stuff as yet another attempt to get me to buy once again the music I already have; I've spit out the bait for the most part. So, it's still CD's, for the most part, for me. Turnover has been reduced, though, because of the contributions of my friend Jose, who filled in major gaps with some burned copies.

For more commentary, see also my review of favorite albums of the "decade" 2000-2009.

NEWER RACK

New Arrivals & Upgrades
Bob Dylan--Time Out of Mind: My choice for best of the New Dylan releases.
Eurythmics--Peace: Ditto for New Annie Lennox.
Living Colour--Time's Up: Vernon Reid would be my nomination as the successor to Jimi, and this would be my selection of his best.
Radiohead--The Bends: My selection as best Radiohead (Second would be In Rainbows, but that's my son's).
Coldplay--A Rush of Blood to the Head: Their second-best--"Viva La Vida" is my son's CD.
Fatboy Slim--You've Come a Long Way, Baby
Doves--The Last Broadcast
Steve Earle--Jerusalem
Morcheeba--Big Calm
Bright Eyes--I'm Wide Awake, It's Morning
Green Day--American Idiot
The Killers--Hot Fuss
James--Seven
Olive--Extra Virgin
K.D. Laing--Ingenue
Beck--Mutations
Various Artists--No Alternative
Various Artists--Future Soundtrack for America
Beatles--Anthology 2 (technically, released in 1996)
Los Lobos--Colossal Head



Holdovers
U2--Achtung!Baby, Bush--Sixteen Stone, Alanis Morissette--Jagged Little Pill, P.M. Dawn--Jesus Wept, Nirvana--Unplugged in New York, Modest Mouse--Good News for People Who Love Bad News, Santana--Supernatural, Gomez--In Our Gun

OLDER RACK

New Arrivals & Upgrades
Simple Minds--Sons & Fascination
The Police--Zenyatta Mondatta
King Crimson--Lizard: Jose's KC#1 covered the early albums, except this obscure, beautiful release.
The The--Infected: A tough call vs. "Mind Bomb". I went with Infected because of "Sweet Bird of Truth"

Holdovers
The Beatles (White Album), The Who--Tommy, Steve Winwood--Arc of a Diver, Bruce Springsteen--The Wild, the Innocent and the E Street Shuffle, The Rolling Stones--Sticky Fingers, Elton John (eponymous), Al Stewart--Past, Present and future, Pixies--Doolittle, Indigo Girls (eponymous), Traffic--John Barleycorn Must Die, The Allman Brothers--Eat a Peach, Yes--Close to the Edge, Cream--Disraeli Gears, Robbie Robertson (eponymous), Simon and Garfunkel--Bookends, Hot Tuna (eponymous), Bob Dylan--Blood on the Tracks, The Edge--Captive, Steely Dan--Pretzel Logic, Frank Zappa--Apostrophe/Overnight Sensation, The Clash--Combat Rock, Sex Pistols--Never mind the bollocks here's the, Talking Heads--Speaking in Tongues, Tears for Fears--Songs from the Big Chair, Pet Shop Boys--Disco.

The Great Game in the 21st Century

Comes now the intrepid New York Times to report that Afghan Pres. Hamid Karzai is complaining about US motives and strategy. We are not doing well by Afghanistan, just trying to gain influence in the region, the unnamed US sources accuse him of complaining. He could do a deal now with the Taliban if the US weren't interfering, he is said to have said. The US, for its part, goes public with the news that Karzai's invitation to visit the White House (on a date not set, but soon) has been revoked--ostensibly because he made moves to force his control of a corruption commission.

Still no mention of the offer on the table and how it relates to the current complaints and counter-complaints. Now, Afghanistan is not one of those reputed great chess-playing nations (like the Iranians, Russians, or Armenians)--their national game is the one where the men mounted on horseback drag the dead goat back and forth. I see Karzai as choosing to be one of the mounted guys, rather than the goat.

First, it can only help his level of esteem among the average Pashtun to be standing up, even a little, to the US. Here he's taking a page from Iraqi P.M. Al-Maliki.

The tension I see (which has not been reported) is whether to engage in peace discussions now or in the not-so-distant future. The optimal strategy is to beat up the Taliban and other insurgents throughout the summer and work the negotiations with the bruised remaining forces next winter. Then, the pullouts could begin on President Obama's schedule, or even a bit ahead of schedule.

I see the US military as the ones who are opposed to Karzai's desire to move more swiftly than that. Let's say that the reasons for that are "good" ones: the buildup of US forces is just now kicking in, and there are many available Taliban butts to kick. There may be a chance to strike successfully, and they don't want it taken away by an early peace, which may not be sustainable without more military success.

The only problem will be if one or more of three things happen: 1) The Taliban don't get their butts kicked this year--the battle in Kandahar, Karzai's home area, is going to be extremely tough; 2) The offer to make peace is permanently withdrawn by all insurgent groups; or 3) The US military starts doing a Vietnam-like "just one more offensive, just six more months" kind of thing in 2011 (and thereafter). 1) and 2) are clearly linked, but could happen independently; 3) could happen as a result of 1), but also independently, as our success will inevitably be less than complete.

My strongest advice is for President Obama, and it is that he not become the goat both sides start tugging. The message which should have come out of his secret, but announced meeting with Karzai should be: 1) The offensive will continue in force throughout the summer; 2) Engage the enemy in peace talks aimed at completion around year's end; 3) There will be no extensions of time, and we plan to pull out ALL forces from Afghanistan. Neither Karzai, nor our US military commanders, have to like this, but they should have no choice.

Obama in Kabul

It is certainly cool that President Obama can disappear from Camp David and suddenly reappear in Afghanistan and basically the public doesn't hear about it until he's there. Certainly it's best not to allow our foes to know of our commander-in-chief's movements in advance, and it's a good opportunity, at this holiday season, to boost morale and show our country's support to our forces.

I suspect there is another motive in the visit, one that I haven't yet seen reported (but as a blogger, I'm free to speculate upon it). It is a fact, well-reported, that one of the top leaders of the Afghan insurgency, Gulbuddin Hekmatyar, has made a recent peace proposal to the Karzai government. It would make a ton of sense for Obama to meet privately with Karzai to discuss the proposal and agree on a strategy to respond to it.

Hekmatyar is a guy who has been on the scene forever. He received aid from the US during the insurgency against the Soviet invasion in the '80's. He was one of the chief warlords battling over Kabul in the period after the Soviets' withdrawal and basically destroying the city...until the Taliban came and took over. He ended up going into exile when the Taliban were overthrown, and now his forces are fighting with them. He is a hardcore fundamentalist and an Afghan nationalist.

He should not be considered a Taliban leader, though: he's basically a warlord with his own independent power base, as well as considerable, continuing support from Pakistan. Clearly, he's looking to return, and his proposal, although not acceptable in its current form, would quite possibly form the basis for negotiating amnesty and a separate peace agreement, possibly even on terms that could attract other components of the insurgency. For example, he is not objecting to the continuation of the current government and control of security in the country. The timetables he proposed for withdrawal of Western forces don't align with US' plans, but are close enough to discuss. So, this is an opportunity which should be engaged, not passed up or flatly rejected.

This is complicated and delicate stuff, no doubt. Pakistan recently caught one of the top Taliban leaders--he was apparently involved in peace discussions with a special envoy backed with the UN for some time, so the arrest--while it seemed positive for the counterinsurgency--put an end to that channel for making peace. We have had to accept that Pakistan will have a critical role in what happens in Afghanistan. This is equivalent to the role we needed to acknowledge for Iran in Iraq's fate. You could also compare it to the interest the US might have had when Europeans put one of theirs, Maximilian, in charge of a weakened Mexico in the late 1800's. So, if Pakistan's guy wants to make peace, it can't be all bad.

Officially, it's Karzai's country and his play, but there's also every reason for him to review options with us, and there are probably a few tactics we can employ which would help him succeed in bringing this guy, and his forces, in from the cold.

Iraqi Election Update: Oh, Well

I am (seriously) interested in the Iraqi election results, and there was major news reported today: Prime Minister al-Maliki's State of Law group finished narrowly second, both in the national "popular vote" and in the Parliamentary seats announced today. The apparent leader in the voting is former P.M. Ayad Allawi (a secular Shiite) and his Iraqiya list which features many Sunnis.

The New York Times reported this news, and it included a very interesting and useful interactive graphic (click on the title of this post, or here, to view it). It was both interesting and useful, but it included some errors, which, with the help of Al-Jazeera's site, I can correct here. Four provinces' names were not given on the graphic: the one in the top in the Kurdish area is Suleymania, the one on the top which has none of the boxes filled in (the actual results appear to be 8 seats for Allawi's Iraqiya, 4 seats for the minor party Iraqi Unity) is Salahuddin, the one in the middle section with the votes closely divided among four or more parties is called Muthanna, and the one in the southern section is Wasit. Wasit? Yes, it was. Also, the one they are calling "Tamim" is generally referred to as "Kirkuk" (a very critical area, one whose parliamentary votes are evenly split between the Kurdish Alliance and Iraqiya).

Finally, the "Other seats" at the bottom have to do with seats allocated to religious minorities and to women, if necessary. From the graphic, it suggests there are 15 seats, of which seven were allocated to the four major party groups. The other eight, if they existed, would take the total seats to 333 rather than the 325 which all news reports have. The explanation is that the other eight seats were not allocated (at least at this stage), perhaps because enough women were elected through "natural" means. There is quite a complicated process for this, explained in English at this site posted by the Iraqi electoral commission.

OK, So What?
First, I credit Allawi's ability to create a credible political challenge to Maliki's grouping and even reach first place (results subject to challenge, review, and possible modification, of course) despite some efforts to suppress his efforts, including disqualification of many of its candidates. His group's appeal was truly national; a lot of the early reporting focused on how Maliki's group led in more provinces, but Allawi's group got seats in more provinces, including ones both in the north-center and the Shiite south. The fact that his list drew strong participation from Sunnis, and apparently some others as well, bodes well for the development of truly national parties, and for the chances to keep Sunni insurgency from bursting out once again. And, that has to be the most important objective of the elections, from our perspective in the US, and also that of most Iraqis.

Second, though the numerical allocation of seats among the parties was not that different from what I had anticipated in my election preview, it was different enough to change the picture substantially. The outcome may be the same--Maliki leading a coalition with parts of the Shiite Iraqi National Alliance and the major Kurdish parties--but the route to it is likely to be more tortuous, contentious, possibly even more violent, than we were hoping.

By normal Parliamentary protocol, Allawi will be given first shot at forming a government as leader of the party with the most seats. (That is, once the results are certified, which could itself take a while, both because the elections are so close, and because Maliki's governing party has every reason to challenge if there's any chance of gaining any ground.) Allawi is unlikely to be able to ally with any of the three other leading parties, though: Maliki's because he will prefer to lead the government himself, the Kurds because of their intense rivalry over the border Kurdish areas with the Sunnis, and the Iraqi National Alliance, because that group will presumably not want to ally with either Sunnis or secular Shiites.

Only after that effort has fully played out would Maliki have his chance. As I suggested previously, he will likely have good possibilities to ally with at least part of the Shiite Iraqi National Alliance, with the larger Kurdish parties (as he did before), and even, possibly, with Allawi's party. This latter development would probably the best for Iraqi's long-term stability, if it were to occur.

Banking Reform Checklist

With health insurance reform, I was blissfully unaware of the issues for a long time, existing comfortably within the warm and comfy incubator of employer-sponsored group insurance. It was only when I was thrust out from that womb-like environment that I saw the ugly pustules in our healthcare system.

Banking is different: I lived it (or at least worked it) for many years, and I saw the warts from the inside. So, I'd humbly say I know pretty well what needs to be done to properly seal up this critical, cracked pillar of our economy. The reader is encouraged to use the following as a checklist to evaluate any legislative proposals for their adequacy.

First, a single entity must be responsible for identifying those private institutions--banks, insurance companies, processors, trade associations, exchanges, etc.--which are critical components of the financial system. They must be US-licensed and be subject to regular independent audits, and all their assets and liabilities must be visible to that regulatory entity. The Federal Reserve being that entity would make sense.

Next, all those critical institutions should be required to have filed, at all times, a "business liquidation plan" in the event of their sudden economic collapse, just as they make business continuation plans for contingencies like computer failure, natural disaster, or act of war. If they were required to identify how their equity and capital could disintegrate, and what would be done with the remaining shards of their business, it would have a sobering effect which would make real to their directors or owners that they are no longer viewed as "too big to fail" and would make their actual collapse much less likely. Significant changes in the asset or liability makeup of the institution should be immediately reflected in the liquidation plan, with appropriate criminal and civil penalties for omissions.

Safety and soundness is actually a different regulatory issue, which should be done by a different organization. The task of supervising potential liquidation of all these institutions requires extreme detachment and disbelief; helping banks to do things to stay alive is a more supportive role, and should ideally be done by an arm of the institution, such as today's FDIC, which will be on the hook to cover the bank's assets (actually it's mostly the liabilities, but I like the sound better the other way) if things go bad. It should still have the hammer--we'll shut you down if you don't raise those reserves/stop making that kind of loans, etc.--but it should be more like "we'll make you stop because we want you to survive".

On consumer protection, the point is not to restrict legal practices more; there are plenty of legal prohibitions, and the basic principle of contracts--that both parties should be able to enter into contracts when the terms are fully disclosed--should be honored. There has been considerable progress in making disclosures to consumers better. The objective should be that there is a potent--even feared--government unit which will listen to consumer complaints and act against unfair practices. That unit should also have a pure enforcement component to shut down, and apply criminal or civil penalties, to lenders, collection agencies, insurers, etc. that do not habitually operate their business according to the laws.

I do not generally favor strict limitations on interest rate lenders can charge--that just eliminates segments of the population from having access to credit. (This includes "subprime" mortgages, which should not be banned.) Of course, there are common-sense boundaries to what lenders may be permitted: if they are charging 10% a month, they are going to have to use leg-breakers to enforce those kinds of terms. Otherwise, the rules should be: you must reserve properly for the risk you take on, and you must keep some portion of all the assets--loans, or insurance policies--you book. The percentage should in all cases be significant, but they might vary to allow low retention percentages for low-risk, "conforming" mortgages and other properly secured loans. Allowing sale--without recourse, except in case of negligence or fraud--helps keep our credit grantors liquid, which is necessary to keep business going, but this business of book, sell, and walk away must end.

Then, there are a few measures I've called for in the past: credit rating agencies' business model has been exposed for a fraud; it must be revised (to be paid for by the buyer, not the seller), or they must take on some of the risk of their bad evaluations, or they should be replaced by a government agency that will do the job with rigor and integrity.

Banks should be "encouraged"--that is, squeezed--to become either investment banks or custodians of public funds, but not both, by a revision of reserve requirements which penalizes such a mix of assets beyond the level which each class would require.

Complex derivatives should be traded on transparent markets, or prohibited. Derivatives that require secrecy for their purpose should not be allowed for publicly-regulated utilities.

Hedge funds have been unfairly advantaged over mutual funds and equity investments based overseas; the rules which attempt to prevent Americans owning such investments should be relaxed, as they are an arrogant assertion of extraterritoriality (pretending we have jurisdiction over peoples' actions outside our borders).

Finally, the mortgage industry's risk management (and account servicing) techniques are immature. The huge edifice of equity in homes, comprising the largest share of Americans' savings, rests upon three poorly-poured foundation elements: a naive assumption of steadily rising home prices, the perceived benefit of the mortgage interest deduction, and simple rules of thumb in credit granting and treating troubled loans. The first has been permanently shaken and lies in ruins; the second, though politically (and economically) impossible to repeal anytime soon, should begin to be phased out in the near future (just as credit card interest's deduction was phased out some 20 years ago); and the rules, while useful for establishing the terms of securitization and FNMA/FHA guarantees, have proven inadequate as a basis for downstream management of accounts. Mortgage grantors need to monitor better the real estate values of properties they "own" (and they should own more of them) and more proactively and efficiently use a broad array of account management techniques (refinancing and restructuring offers, temporary payment holidays, structured cash management and renovation assistance, etc.), all designed to prevent unfavorable foreclosures--the economic cost of which, to lender, borrower, and community--have become too familiar during the ride through this Great Crater.

I will evaluate proposals against this lengthy checklist. My first impression is that Barney Frank's House legislation is closer to the mark (although its range is too limited), and that Chris Dodd's desperate attempts to placate Senate Republicans was both unsuccessful (in getting their support) and terribly weak in its power and scope.

Health Care: Last in a Series?

So, it's finished--all but the Epilogue, the Senate's passage of the reconciliation package. The Republicans may be able to delay it briefly, but the budget reconciliation procedures themselves should ensure that is not too long. The only hiccup that is likely is that if some provision in the carefully-vetted package does not fit within the limitations of budget reconciliation (as judged by the Senate's Parliamentarian), then there may need to be some minor modifications which would require it to return to the House again.

For that reason, Senate Majority Leader Harry Reid's work on the project is still officially Incomplete, but he seems headed for a B or B-. It was, after all, the Senate bill which was signed today, one for which Reid somehow managed to get 60 votes. It is a shame, though, that the Senate never had a vote on a public option--regardless of whether he had the votes, he let us down on that one.

President Obama also let them off on that topic--a government-run program was part of his original campaign promise (and no government mandate, either). This ended up being a success for him, a credit to his patience, persistence, and the power of his final pushes--for passage of the Senate's bill in the House, and framing the final reconciliation package, a delicate set of compromises and policy considerations. As he said about his first-year performance, "a solid B+".

Top marks (an A) go to Speaker Nancy Pelosi and the Democratic members of the House (the ones who voted for it, anyway). She and her team of Democratic leaders found the necessary formulas to deliver the votes that were needed, when they were needed, every time. She got a bill passed with a public option, too!

Republican efforts get a failing grade--their ideas were weak and insufficient, their tactics ugly and ultimately unsuccessful.

A Personal Note, and A Glimmer of Hope
In the five years since my COBRA policy ended, I've been one of those who've seen the ugly, blunt edge of our health insurance system. I have paid for 100% increase in monthly premiums (and in deductibles) on our Blue Cross policy, and a member of my family was denied coverage for a minor (but potentially expensive), pre-existing condition. Her insurance coverage (until--coincidentally?--this month) has been flimsy, overpriced, and continuously increasing.

This experience has taught me that the current system of private health insurance really is not a working one--I would not wish that experience on others, but if more had been exposed to it, they would not have been so complacent about the need to change this system. The private insurers do not deserve the additional business, and the continuation of their monopolistic control of most of the market, that this bill will further cement into place.

The effort to start a government-run program was an attempt to make the insurers honest. Instead, it will be attempted through regulation, and we shall see if this works, and for how long: there is a long history in this country of regulatory agencies being effectively captured and ultimately controlled by the industry they are supposed to regulate.

But wait--perhaps there is something with potential in this area in the bill, after all. Read this description in the excellent interactive chart summarizing key areas of the Senate bill and modifications included in the reconciliation package, from in Sunday's NY Times:

The federal Office of Personnel Management, which provides health benefits to federal employees, would sign contracts with insurers to offer at least two national health plans to individuals, families and small businesses. The new plans would be separate from the program for federal employees, and premiums would be calculated separately. At least one of the plans would have to operate on a nonprofit basis.

This text is far from clear: two pilot programs, but where and for whom? I did some research--the provision is in Sec. 1334. It will follow the Federal employees' health plan in design and implementation, though it will be separate from that very successful program. The government's Office of Personnel Management will take some time--months to a year?--to get proposals from insurers (or groups of insurers) and make contracts for this offering, which will initially be offered--to individuals, and small businesses--to 60% of states, and roll out to all within three years afterward.

This does suggest that maybe, in a few years, there will be something better on offer, something to complete "health insurance reform" (as President Obama correctly described it). Then, we can move on to the next, even larger task: that of reforming our health care system itself, how it works, and how it is paid for, so that we can deal with the tsunami wave of future health care needs that is visible on the horizon. Other than just heading for the hills!

Bracket Madness

Every year it gets bigger: the spectator sport of picking the NCAA men's basketball team through all the rounds is deep and getting deeper.

ESPN has tried to hijack the NCAA tournament as its own (CBS has the network telecasts for the key games). Its website, which usually is full of features limited to paying customers, is open for all to participate in its Tournament Challenge for a $10,000 prize. One thing I really love is that ESPN allows us to make ten different sets of complete bracket picks, which allows us to experiment a bit with various scenarios.

It also seems to be clogging up their website. I made seven sets of picks Sunday night, before the dust had settled. I tried to do one tonight and the computer kept hanging up.

I didn't see a whole lot of games this year during the regular season beyond my faves (Kentucky, Louisville, Syracuse, New Mexico), my hates (any televised game I thought Duke, Texas or North Carolina could lose), and my parents' alma mater (Indiana, and its arch rival, Purdue). I did watch the conference tournaments last week pretty devotedly, and their impact on my opinions has been considerable.

To The Whiteboard, Already
There have been two teams that have shown the kind of dominance and consistency one looks for in a potential national champion: Kansas and Kentucky. There is a pretty large gap between their success and that of any other team. As a Kentucky fan, I would be disappointed if the Wildcats lose in any game other than the final, to any team other than Kansas. I expect the Jayhawks' fans feel the same, if not more so (i.e., they may not give Kentucky as much respect).

I have no real issue with the other two #1 seeds, Duke and Syracuse. Duke came on strong and dominated the ACC, even if it was relatively weak this year. Syracuse had a great regular season in the toughest conference, even if the Orange were clearly outplayed in their first game in the Big East tournament by Georgetown. What makes no sense whatsoever to me was that the #2 seeds in Kansas and Kentucky's regions are the best ones, the ones that should clearly have been #5 and #6 in the seedings, the winners of the Big 10 and Big East tournaments (Ohio St. and West Virginia).

Just as there is a big separation between the top two and the next level, there is also a pretty sizable gap between the upper seeded teams (let's say the top three in each region) and the rest, especially to the lower-rated at-large selections. The difference is one of consistency of performance, because these teams have had big wins, but they have many more losses (often ten or more) and usually some losses to mediocre teams.

This means that there are plenty of opportunities to pick upsets against vulnerable big conference teams by "mid-majors" or even low-rated conferences--in fact, they're hardly upsets. The real trick, the difference maker in bracket picking, is finding those momentous games where the 1, 2, or 3 seeds in regions might lose. There won't be many of them, but it is critical to identify them.

Some Critical Games Each Round
First Round The classic upset pick in the first round is the #12 vs. #5; the records show it happens a lot more than any other true upset game (#8 vs. #9 and #7 vs. #10 are essentially even matchups; feel free to flip a coin or just go with your gut on those. It mostly doesn't matter, because the winners usually get eliminated in the next round by the #1 and #2 seeds). I like this year's #5 models, though, and I see more opportunity for big upsets in the #4 vs. #13 games: Purdue (weakened by injury) vs. Siena, Vanderbilt vs. Murray State, Maryland vs. Houston, and Wisconsin vs. Wofford. I recommend at least one, maybe two upsets for your bracket from among those. Among the 5-12's, three of the underdogs--Cornell, UTEP, and New Mexico St.--are at least interesting picks, but I'm not going with any of them in my standard, "canonical" picks.

I don't see any likely first-round upsets of the 1,2, or 3 regional seeds--though one will probably happen, I don't see where. Two #11's I like in their first round games against sixth-seeded teams are San Diego St. (winner of the Mountain West tourney) over Tennessee (which was seriously humbled by Kentucky in the SEC tournament) and Minnesota over Xavier. This latter is a weird one: a lower-level team from a top conference as underdog beating a perennial upset threat team from a mid-major. I just don't think this Xavier team is as good as their best, while Minnesota showed a lot in the tournament of the eleven-team Big 10 conference.

Second Round The South region (Duke's) has the weakest top seeds, but some very good mid-level seeds. This should show up in the second round, with three really good matchups with upset potential projected: #6 Notre Dame (a rising team) vs. #3 Baylor, #7 Richmond vs. #2 Villanova, and #9 Louisville vs. #1 Duke.

One other big obstacle to a seeded team making the Sweet Sixteen is the projected matchup in the East (Kentucky's) region between #6 Marquette and #3 New Mexico. The Lobos have done great things for the morale of all of us here in NM this year, but this game is a deadly serious early-round threat they will have to be fortunate to survive.

Third Round If you've got Villanova surviving the second round, then they're likely to face another severe (even terminal) challenge from the Notre Dame-Baylor winner. This is the round when all the top Big East teams will face critical challenges: Georgetown-Ohio St. looks likely in the Midwest (Kansas') region, there's a possible intraleague matchup of Marquette and West Virginia in the South (West Va. won by one point in their only matchup during the season), and Syracuse could face a serious threat from either Maryland or NCAA overachiever Michigan State.

Fourth Round Teams that have gotten this far have proven their class, so there aren't any weak links. An upset here is defined as a #1 team losing. Kentucky's biggest challenge (prior to the final) could come here against #2 West Virginia, if they make it this far, and, similarly, Kansas' could be here against Georgetown (or even Ohio St.)

The big ones, though, are my clear expectations (in my "standard" brackets) that Duke would lose here (most likely, to Baylor), and that Syracuse will fall here to Kansas State (who looks to have a pretty easy ride to the regional final). My standard Final Four are Kansas, Kansas State (great Big 12, intrastate matchup projected for the semis, the fourth time they would meet, with Kansas winning all three so far), Kentucky and Baylor. This is a huge shout of respect for the Big 12, with three teams in the last four (that certainly has never happened, with the move from Eight to XII being a fairly recent development; I believe it happened once with the Big East and never with any other conference). I've got occasional brackets including one, but not both, of Syracuse and Duke in the Final Four (though losing in the semifinals), with longshot candidates Butler, Georgetown, and Richmond winning a regional final somewhere in my set of ten ESPN brackets.

Most of my brackets will have the standard matchup of KU and UK in the final. It won't differentiate me from the pack, but it will give me the best chance of having the final two, which in most systems and most pools is a requirement to be seriously in the running to win.

If you're competing against me and have read this, you can try to game me. Emphasis on "try". Shame on you, though; otherwise, good luck!