“Earl Says … ” Blog is Featured on WordPress’ 10/2/2008 “Blogs about: Harvard Law School”

Well, I did mention Harvard Law School once in that particular blog. It was actually a rail against the New York Times specifically … and lawyers in general with a reference to Senator Obama and his alma mater.

New York Times Slaps Down McCain Op Ed is the featured article on Harvard Law School — Blogs, Pictures, and more on WordPress on 10/2/2008.
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New York Times Slaps Down McCain Op Ed

Wow!!

Somehow, I thought this was the United States … and New York City was part of it … and the New York Times supported democracy … and free speech. Apparently like a two-bit, tin-horn dictator, the New York Times only supports freedom of speech when it adheres to their political agenda. I would be the first to vote for the New York Times to receive the Hugo Chavez/Fidel Castro Award for Journalistic Freedom.

Since John McCain won’t declare a timetable for withdrawal of troops from Iraq, the Times won’t publish his op ed. Since John McCain has steadfastly been opposed to a declared timetable, doesn’t this, in essence, amount to journalistic blackmail and political censorship?

Since the staff of the New York Times is an ardent supporter of Barack Obama, is this an indication of the direction that Obama’s policies on freedom of speech and political dissidence will take? I suppose the disturbing thing about this is that I’ve been listening to Democratic pundits defending the New York Times editorial position all day. I doubt that Obama himself will have anything to say about it since his usual tactic is to allow his cronies to deal with his dirty work while maintaining “plausible deniability”. Yet, that’s probably the smart thing to do, since it usually takes his campaign advisors at least four days to figure out an appropriate response and Obama rarely shows the capacity to think on his feet. Smart, intellectually adroit lawyers can actually practice their profession in the courtroom. The rest teach, work for the broadcast media where their opinions are scripted, or practice in other areas, like politics, where the demands on their mental capacity isn’t acutely challenged. Is that why Obama returned to South Chicago after graduating from Harvard Law School … to hide in the womb of like minded people who wouldn’t challenge him?

Wesley Clark’s Sleeze Attack Against John McCain

Sunday, on “Face the Nation” retired Army general, Wesley Clark, made direct assaults against John McCain’s military service and his qualifications to be president. Clark insinuated that commanding a training squadron in peactime wasn’t equal to commanding that same squadron during war; that it didn’t require ordering bombs to be dropped. He also stated that getting shot down while flying in combat didn’t qualify a person to be president.

Let’s not even compare John McCain’s experiences to Barack Obama’s since there’s really no comparison. In many ways, retired General Clark is right. Flying a ground attack fighter through a barrage of SAM missles over North Viet Nam is no more presidential than parking your PT boat in front of a Japanese destroyer and getting it cut in two. Also, being a prisoner of war in North Viet Nam for five and a half years is no more presidential than shacking up with a German spy in a downtown Charleston, SC hotel for several months during World War II. President Kennedy was given a medal for not being able to outmaneuver a destroyer with his agile PT boat. He was put in charge of the PT boat in the South Pacific to get him out of the European theater after living with a woman in Charleston who was found to be a German espionage agent by the FBI.

When taking Air Force ROTC in college, my classmates and I were constantly being barraged with the notion that where else but in the military could a young officer get such leadership experience with the responsibility over numerous personnel and millions of dollars of equipment. Was all of that just a bunch of hogwash? The military builds leaders … at all levels of command. That was the military message. Maybe Wesley Clark should review some of the “propaganda” that the military indoctrinates it’s officer candidates with if his view is so contradictory to the time honored line. According to what I was taught, and based on my experience while on active duty … during peacetime … squadron commanders get a lot of executive experience.

And, Wall Street, as well as corporate America, amply rewards that executive experience. Wesley Clark should know. He’s been a beneficiary.

Let me tell you a story … a factual and true story.

Back in 2006, I became interested in some low priced biotech stocks that were involved in doing research in the area of flu vaccines. I invested in several of these and followed them closely for about a year, buying and selling, trying to get a sense of why they were moving as they did. These were really budget stocks … less than $10 a share … and one fluctuated between $1.20 and $2.00 a share. I actually did quite well with that stock when buying selling it in lots from 3 to 10,000.

Watching these closely and continuing to do research on them, trying to figure why they moved as they did, I began to notice that the financial analysis of these stocks was being done primarily by one company, Rodman and Renshaw. When the stocks were doing terribly and some bad news about them would come out, the analyst would write a glowing and promising review of the stocks and a predictable group of suckers … I mean investors … would rally the stock. I quickly learned to buy on the bad news and sell on the predictable rallies that would occur after the financial analyst would make his report. It became a matter of trying to pick the trough the stock hit before the predictable good news would come out. I actually did fairly well.

Over time, my curiosity about Rodman and Renshaw grew and I decided to research it. I found that Rodman and Renshaw had started filing financial reports with the SEC and reviewed these. To my surprise, Rodman and Renshaw’s stock was virtually worthless with the bulk of the financial transactions involved paying legal fees to maintain it’s public corporate status … less than $100,000 a year.

On further investigation, my findings were quite surprising. Rodman and Renshaw was a New York city firm that dealt, as best I could tellat the time, exclusively with biotech stocks … but not just any biotech stocks. They seemed to specialize in biotech stocks that were in extreme financial distress and in great need of cash to continue their research. Rodman and Renshaw organized biotech “fairs” to match their biotech clients with their investor clients while having their financial analysts write glowing reports which were publically available for market researchers like myself.

Not that long ago, Congress passed a bill called the Sarbanes-Oxley Act. Another name for this bill is the Public Company Accounting Reform and Investor Protection Act of 2002. It was designed to force publicly traded companies to clean up their accounting practices and provide greater transparency for the investing public. One of the sections of this act was specifically aimed at financial analysts, holding them accountable for their assessments of publicly traded corporations and theoretically protecting them from executive pressures to overvalue or falsely valuing the corporations they were analyzing.

Rodman and Renshaw refers to itself as a full service investment bank and a leader or specialist in PIPE and RD transaction markets. PIPE stand for “private investment in public equities” and RD stands for “registered direct placements”. Basically, what this means is that they’re in the business of arranging private funding for these corporations, in essence diluting the real value of the stocks, while they’re being trading on the open market. In other words, it’s like the selling out of K-Mart to private investors during their bankruptcy and receivership without these companies actually having to declare bankruptcy … doing all of this while promoting these stocks to the gullible public who aren’t watching and questioning the financials.

It seems that back in 2006, Rodman and Renshaw got into a little trouble. One of the stocks they were promoting was being followed by a financial analyst at their firm by the name of Matthew N. Murray.

It seems that a stock he was following and had done an analysis on had risen in price on the stock market. In following quarterly review, he maintained his valuation of the stock in spite of its superfluous rise in the market. He was approached by his supervisor and “encouraged” to raise his valuation of the stock which he refused to do stating that his original assessment of the stock was a truer representation of its actual value rather than it’s market price. This was his job … what he was supposed to do.

Murray reported the actions of his supervisor and possibly others to the Senate Finance Committee since the actions of the Rodman and Renshaw executives was a violation of the Sarbanes-Oxley Act. And, he was subsequently fired … also a violation of the Sarbanes-Oxley Act.

The chairman of Rodman and Renshaw was called to testify before the Senate Finance Committee.

Senate Group Investigating Firing at a Brokerage Firm – New York Times

In her New York Times article, Gretchen Morgenson points out that Rodman and Renshaw was a privately held company at the time of the article. It appears that some time in May of 2007 it became a publicly traded company. So, it’s possible that it may have been able to avoid prosecution under Sarbanes- Oxley although that would bring into question why the Senate finance Committee held inquiries and why Mr. Murray made his complaint to them. Evidence presented in Ms. Morgenson’s article would indicate that,for some reason, Rodman and Renshaw were doing their best to try to discredit Mr. Murray …. which wouldn’t be necessary if they weren’t subject to the provisions of Sarbanes-Oxley. They would simply thumb their nose at the Senate committee.

While digging a little deeper into the financial history of Rodman and Renshaw, I ran across some interesting facts. A group of investors bought a firm in Colorado that was involved in real estate and land development. They, then sold all of its assets. Next, they bought a defunct firm based in New Jersey that had, years before, been involved in market trading. It’s name was Rodman and Renshaw. So, they bought a name … that sounded respectable. Next, they found a lucrative market to manipulate … primarily biotechnology … with struggling companies who had an extremely long shot of discovering something of worth but at great expense with frequent and heavy losses … sucking up lots of capital.

Rodman & Renshaw

Read the New York Times article and note the date. A nose thumbing is exactly what Rodman and Renshaw did to the Senate Committee. In November of 2006, elections were held in which the Democrats gained control of the committees in both houses of Congress. By the time I had correspondence with Ms. Morgenson in the fall of 2007, the issue was dead … apparently dying as it was probably tabled by the now Democratic controlled Senate Finance Committee.

By the way, if you haven’t taken the time to read the New York Times article, the chairman of the board of Rodman and Renshaw was then and is now retired Army General Wesley Clark.

Frankly, my sleeze-meter went off the register when I was doing the research on Rodman and Renshaw. Watching the interview of Wesley Clark on “Face the Nation” reminded my why.

Addendum: 7/1/2008 – Review of the Sarbanes-Oxley Act, Section 5 deals with securities analysts. It is the one section of the act which says nothing about a publicly traded company but refers to securities analysts who are employed by brokers or dealers involved in investment banking without specifying whether they are public or privately owned. To me, this implies that any broker or dealer who is involved in investment banking, which Rodman and Renshaw claims to have been doing since 2003, are subject to the provisions in this section.

Section 501 — Treatment of Securities Analysts by Registered Securities Associations and National Securities Exchanges

Taking a Look at The Colombian Free Trade Agreement

Politics is in the air and as usual it stinks.

Nancy Pelosi has probably effectively canned the Colombian Free Trade Agreement catering to the Democratic talking points, one of which is that free trade agreements are bad for American workers.

Ironically, in a very twisted way, this puts her in direct alignment with leftists in Columbia as well as Central and South America who are opposed to the free trade agreement but for different reasons.

This is where it gets really weird.

The Democrats would argue that workers in Columbia don’t have the same rights and benefits that American workers have therefore they are able to be paid less causing an unlevel playing field. Also, the democrats would use the free trade agreement to manipulate social change in Colombia such as protection for union workers, control of the drug traffic and protection of  of endangered species.

Here’s the irony. The leftists in South America see all of these things … these assurances that the Democrats want, the better pay and benefits for Colombian workers … as the United States forcing it’s “imperialistic” ways on South and Central American countries.

Colombia-US free trade treaty – far more than trade

Now, if you can get through Toni Solo’s Marxist gibberish, you can see he’s opposed to the trade agreement for all of the assurances that would have to be in it for the Democrats to approve it.

Since Colombia is already sending its goods to the United States tariff free, the trade agreement would remove the current high tariffs on American goods exported to Colombia. This would help large manufacturers such as Caterpiller and help to create much needed jobs in the industrial sector, something both Hillary Clinton and Barack Obama repeatedly say they are in favor of.

Susan Schwab on the Colombian Trade Deal – US News and World Report

From the above article:

If the agreement levels the playing field between the two nations, why is there so much criticism of it?
Good question. Certainly not because of the substance. It was probably best expressed by [House Ways and Means Committee] Chairman [Charles] Rangel, who said, “It’s not the substance on the ground—it’s the politics in the air.”

At the recent conference in New Orleans on NAFTA, even New Orleans mayor came out in favor of the trade agreements which are beneficial if not crucial for New Orleans recovery from Katrina:

Next-Door Neighbors Back Bush on Trade – New York Times

It has also divided Democrats. While Mr. Bush reveled in the expected support of American business executives who gathered in New Orleans under the auspices of the United States Chamber of Commerce, he also found an ally in this city’s Democratic mayor, C. Ray Nagin, who on Monday evening said trade benefited the city, still reeling under the ravages of Hurricane Katrina.

Frankly, I’m not in blanket agreement with the free trade agreements and even share some of the concerns of the leftists in Latin America for the same reasons they oppose it, that these agreements give foreign powers too much influence over our sovereignty.

Frankly, I don’t think we have any more business telling other countries how to run their affairs than they have telling us how to run ours.

The bottom line on the Colombian Free Trade Agreement is that it removes tariffs on U.S. goods being exported into Colombia, levels the playing field in that respect making it both good for American businesses and American workers.

If I can make that distinction,then why can’t Nancy Pelosi, Harry Reid, Hillary Clinton and Barack Obama?

When is doing something good for Americans bad for a political party?

Elliott Spitzer and Ben Stein

I have just been listening to Fox News this morning. They finally got around to talking about the “Elliott Spitzer Situation”.

Ben Stein made several comments regarding Spitzer’s downfall.

Ben quoted the parable regarding, “Let the person who has not sinned cast the first stone.” (paraphrased)

Ben also stated that the New York Times passed judgment on Spitzer, not the American public. This was at the end of a discussion regarding the American public deciding what standards to hold elected officials to.

Just a few thoughts, Ben.

If I understand Spitzer’s history as New York attorney general correctly, he made it his business to prosecute prostitution rings. I think that puts him in the position of “casting the first stones”. So, he gets hit with a boulder. Some might say, “Serves him right.”

And, you may actually be right about the New York Times. They do tend to revel in trying people in their newsprint. But, when you look objectively at their proper responsibility … which is to report the news … and which they apparently did fairly accurately this time, they did their job. You know … the old adage, “We report, you decide.”

By the way, there is something I was wondering about …

Spitzer is charged with violating the Mann Act because he arranged for this young woman to go from New Jersey to Washington, D.C. to have their “get-together”. Now, this woman lives in New Jersey. If they were meeting in New York previously, does this mean each time they “got together” in New YorkCity,  by her leaving her home in New Jersey to meet with him in New York City, was a violation of the Mann Act?

For you math nuts, what is $80,000/$4300 (X)times the sentence for each violation of the Mann Act? Ouch!

One other thing, at the end of one of the exchanges on the show Ben mumbled, “Who says he enjoyed it?”

Ben, all I have to say about that is, “$80,000. That’s a lot of castor oil … or whatever. Right … he didn’t enjoy it.”