Dana Blankenhorn

Potemkin Markets

Think of this as Volume 18, Number 14 of the newsletter I have written weekly since March, 1997. Enjoy.

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When the business day begins, thousands of well-off people turn on their TVs to Squawk on the Street or Opening Bell, its Fox Business equivalent.

They think they're learning how to get rich. They're thinking they're learning what money is doing.

They're wrong.

What they're seeing is a TV studio surrounded by displays for what is, in the end, just the very tip of the financial market iceberg.

Trading does not really happen on the New York Stock Exchange – TV happens there. And the stock market represents only a very small portion of the financial market.

The Core and the Edge

Think of this as Volume 18, Number 12 of the newsletter I have written weekly since March, 1997. Enjoy.

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The IN in the word Internet stands for interactive. (Right, Sir Tim Berners-Lee, whose 1989 paper set the terms for today's World Wide Web.)

The assumption of its designers was that the Internet would be a two-way network, that as many bits would flow in one direction as the other. Peering, the original financial agreement underlying today's Internet, is based on this assumption.

The Internet, in other words, was not designed to be TV. It was not designed to be a passive medium, as something you watch, or read, or listen to. We already had such media. The Internet was designed to be something you interacted with.

That's not how things are working out in our time. The Internet is becoming TV, is becoming something you watch, or read, or listen to. The bits are mostly flowing in one direction, from the core to the edge of the network. Most of the technical standards underlying consumer Internet traffic, like DSL and DOCSIS, are designed to let bits flow faster downstream than upstream, on the assumption that more bits would do that.

Solving College Football

My old alma mater, Rice University, is playing for a conference title today, at home, against the Thundering Herd of (We Are) Marshall, as seen on a movie channel near you.

Didn't know? No one else does, either.

That's because Conference USA, where the Owls play these days, isn't considered a “major” conference. It's a “mid-major” conference, thus beneath contempt.

For the last several years, a host of schools have been moving between conferences, and among conferences, based on the size of their alumni, the power of their football teams, and the school's willingness to spend money in order to find a “better” home.

The system enriches only football coaches, and ex-football coaches. It's one of the biggest scams going. The players often get nothing (some get a decent education, if they apply themselves and the coach doesn't fire them for poor play), and the schools are also left destitute. Only a few dozen schools actually profit from football, and they plow the money into athletic facilities, enriching coaches in minor sports.

The system is broken. Time to fix it.

Liberal Ennui

Think of this as Volume 17, Number 37 of the newsletter I have written weekly since March, 1997. Enjoy.

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These are hard times to be a liberal. In some ways, it's harder than in the Bush years. At least then we had someone to hate.

When you're in power, you're naturally playing defense. When you're in the 5^th year of a Presidential cycle, you're also expecting bad things to happen. Lincoln didn't survive 1865, McKinley didn't survive 1901, FDR's 1937 was an annus horribilus and the horrors that were unearthed about Nixon in 1973 destroyed him.

Compared with that, the problems Barack Obama has faced are minimal. The economy hasn't been great but it's growing. Syria almost blew up on us but it didn't. Every effort to inject fear has been followed by a relief rally. Health reform is coming into force. Next year's off-year elections don't look like a disaster.

Still, liberals are mostly pissed at this Administration. The NSA revelations have a lot to do with it. The fact that the crooks who got us into the Great Recession are still walking around free. The fact that the President's legislative initiatives aren't just stalled, but they're being slowly reversed, in both state houses and the Capitol.

Cheap Corruption of the Tea Party

Like the Civil Rights marchers of a half century ago, the Tea Party came to Georgia politics determined to make a big difference, and to be better than the sleazy politicians who bent to every wind.

They're not. There has been plenty of corruption in African-American politics. Since I've lived in Atlanta I have seen my city's mayor convicted of it, watched a succession of city councilmen and school board members resign in shame over it. Even our sheriff shot his deputy, for the crime of running against said sheriff, and winning. 

To a degree today's Tea Party rising in Georgia is a reaction against all that. They see the Clayton school district lose its accreditation, the Atlanta schools mired in a cheating scandal, and the DeKalb Schools run so badly the board has to be replaced. They have a lot to be angry about, and figure they, from their exurban lairs, can run things better than those who live and vote in the affected areas can. Thus we have the spectacle of the state trying to take over the city's transit system, which local taxpayers pay for, and basically sell it off to private interests, believing that private is always better than public, and never mind Halliburton.

But what has been most surprising about this crowd is how easily they're corrupted. 

Football

The NCAA was created in 1906 because football was killing people. It was organized under the aegis of President Theodore Roosevelt because “plays” like the “flying wedge” were routinely resulting in the death of college students. He didn't want the game to become more important than human life.

The penalties imposed today on Penn State are in keeping with that mission, and while Pennsylvania is a northern state they will resonate most in the south. The last decade has seen an incredible football money chase, accelerating every year, and to say that any football program in the Southeastern Conference is subservient to its academic masters is a gross lie.

I hear it on sports talk stations all the time. What does President (Insert Name Here) know? How dare he criticize Coach (thus and so). Or when an honest coach with a losing record is fired, what's the message there? Just win, baby. And the boosters nod in sympathy.

Even in the wake of this press conference, ESPN “College Gamday” analyst Chris Fowler insisted that college athletics isn't “going backward,” that the money put into it will only go up. “It's going to be an uphill fight,” he added, but he seemed skeptical the fight will really be made. 

Coach Lou Holtz, by contrast, had it right. “College football is way too big. Coach's salaries are out of line.” But Holtz was never “just” a football coach. (Of course we thought that was true of Paterno.)

The people who wrap their lives around college football, who pore over lists of recruits like Kremlinologists, and who throw their hard-earned dollars into “seat licenses” and other gimmicks for ever-larger football palaces, they're the real enablers here. We created Joe Paterno. He never went into football expecting, or wanting to be, that guy. That he was seduced into becoming that guy tells you everything you need to know about the level of corruption, and temptation, in the sport.

It can get to anyone.

Barbie Doll Drift

MSNBC host Rachel Maddow has a new book out.

It's called “Drift.” 

It describes the last decade as one of increased acceptance of a madness, the idea that you can fight wars without having to pay attention to them, even pay for them, leading to a society divided between those who fight the wars and those who send people to fight our wars.

Good premise. Interesting book. Maddow is one of the most intelligent and verbally agile TV hosts I've ever seen. (Even those who hate her have to admit to her verbal agility. She's a Rhodes Scholar, for pete's sake.)

But as Maddow was interviewed by other MSNBC anchors, and people like Jon Stewart, it occurred to me she's been going through her own drift.

US Soccer Evolves

Last night I saw the most amazing thing, although what was most amazing was how unremarked upon it was.

A record crowd filled the old Skydome in Toronto for a soccer game in March between two MLS teams, Toronto and the LA Galaxy. It wasn't even a league match, although it wasn't a friendly, either. Instead, it was a quarter-final in something called the CONCACAF Champions League, a regional competition designed to replicate what the UEFA Champions League has in Europe.

This competition has been going on for several years but Americans haven't really cared about it. Teams have almost deliberately fallen-down after being chosen, including the Galaxy, whom I once saw lose a two-legged tie to Puerto Rico's A-League outfit in front of maybe 2,000 people. 

Portlandia Comes to Town

Last night I decided to honor my late friend Russell Shaw, who loved Portland from the moment he saw it in the late 1990s until his death in 2008, and attend a show based on Portlandia , a TV show I know he would have loved.

Portlandia, starring Fred Armisen and Carrie Brownstein, portrays Russell's Portland as nothing I've ever seen. It never rains in this Portland. All the people are quirky and individualistic, obsessed with small, personal things. Even when the personal things are broad – like the fate of the Earth – it's all still personal.

The show itself started at 11 PM in the Variety Playhouse, a converted movie theater near Little Five Points, which itself is like a tiny version of Portland plopped into Atlanta's intown. Fred and Carrie really had very little to offer – a few lame jokes, some video clips, a question-and-answer session. It was mainly a chance for fans of the show, mostly hipsters in their 20s and 30s, to see and get close to their heroes. (I hadn't seen so much white skin in Atlanta since Spamalot.)

Clint Re-Elects the President

I'm old enough to remember when the Ronald Reagan campaign lifted Bruce Springsteen's "Born in the USA" to sell the Gipper.

Springsteen was, and is, a Democrat. He didn't like being done that way. He complained, and ever since then musicians have been complaining when politicians have used their stuff without their direct political consent. (Not that it's stopped the politicians.)

Something similar happened during last night's Super Bowl.

Clint Eastwood re-elected President Obama.

I know he didn't mean to. Clint is a lifelong Republican, a former mayor of Carmel, California, quite outspoken in his beliefs, most of which I disagree with. But, like Springsteen, he's a brand. He represents America, and when he speaks we listen.

Yesterday he spoke for Detroit. He never mentioned the brand, Chrysler, whose message he was narrating. He didn't mention that Chrysler is, at present, a joint-venture between the UAW's health plan and the Italian auto maker Fiat, one Fiat is due to own all of in 2015.

Instead he gave a "half-time pep talk" to the country, noting that Detroit was back, that America was back, and the world better watch out for us in the second half.

It was inspiring. It was non-political. But it was political as hell.