FUTURE BUREAUCRAT

Every once in a while I find an article or a book that totally changes my perspective on an issue. It happened this week after I read a small piece in the New Yorker by James Surowiecki. Surowiecki outlines the “risk premium” affecting the price of oil. Essentially, the “risk premium” is the extra price traders are willing to pay for a barrel of oil today to account for the chance of disruption in supplies sometime in the future. By some accounts the “risk premium” could add an extra $10 - $15 to the price of oil, depending on current events.

What makes his article so interesting is that he goes on to analyze the rhetoric of President Ahmadinejad of Iran with the “risk premium” in mind. Ahmadinejad is by no means universally liked or supported domestically in Iran. He was elected on a populist platform by promising to tackle high unemployment and a stagnant economy. His programs have not been successful. The official unemployment rate is still something in the range of 10 - 15%, but most economists believe it is actually somewhere above 20%. Inflation continues to be a problem. The oil infrastructure is in desperate need of upgrades and repairs. So what does Ahmadinejad do? Well, think about it… Continue Reading »

Do you understand the options backdating “scandal”?  What is it exactly?  Why are so many companies in trouble?

Let’s start at the bottom. What are employee stock options? Employee stock options are the right (but not the obligation) to purchase shares in the company’s stock for a specified price and for a specified period of time. Do not confuse employee options with options on equities, indexes and futures like those traded on open markets. Generally, employee options are a benefit that companies offer to their employees, officers or directors in addition to their normal compensation, and are not transferrable. (unless you work for Google) The price is usually determined by the closing price in the market on the day the option is granted. Options will often have a 5-10 year period during which the employee is required to “exercise” the option, or purchase the underlying share. During this time, if the employee decides to exercise his or her options the employee will always pay the “exercise price”, or the share price determined on the day the option was granted, even if the shares have increased or decreased in value. If the employee does not exercise the option in the time permitted, the option will expire.

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Listen to a heart-warming story of love from the folks at This American Life.

Can an Iraqi POW and an American soldier be together?  Find out…

In a story about the recent increase in helicopter crashes in Iraq, the New York Times hits the nail on the head:

“Historically, improved tactics in shooting down helicopters have proved to be important factors in conflicts in which guerrillas have achieved victories against major powers, including battles in Somalia, Afghanistan and Vietnam.”

The US military needs to get this situation under control.  If the insurgents control traffic along Iraq’s road through the use of IEDs, and they can make helicopter travel dangerous, too, then the Americans really will be trapped in the Green Zone.  This is bad news for the military project, but it is far worse for American diplomatic efforts.  The State Department is already finding it difficult to convince senior diplomats to serve in Iraq.

If you read the news you’ve surely heard the drumbeat. It’s a steady drip now. Almost a daily dose.

Depressing, really.

Say what you want about the conduct of the Bush administration and its foreign policy, but (and I’ve said it before) you must recognize their intelligence and political skill. They’re down now, but not out. These are brilliant, motivated people. So as they turn up the heat on the Iranians in the hopes that Ahmadinejad does something stupid, and provides them with the casus bellum they seek, remeber the following: this war will not start in the same way the Iraq war began. Continue Reading »

There was an interesting article in the New Yorker last week written by Michael Specter. The article focuses on the killing of Anna Politkovskaya in Moscow in October of 2006. Politkovskaya was a journalist and outspoken critic of Russian policies in Chechnya, and was particularly critical of Putin’s leadership. Her death was noted widely in the Western press and in liberal circles within Russia. Despite a dramatic funeral in Moscow, however, Specter notes that few Russian media outlets covered her killing in any detail. Putin himself, when asked about her death at a press conference, dismissed her influence on Russian politics as “very minor.” Continue Reading »