O/T, but those interested in the fate of the US coal companies should read Bronte Capital on the puzzling disparity between the price of Peabody debt, and their shares. As an incentive, there's a huge finanical reward for anyone who can solve the mystery.
1. Now subs-only, it appears. Never mind; you can read the court judgement instead (thanks CH//JM). Summary: "Murry Salby, you are a waste of time". Also, ES at #7 provides a link to someone's cut-n-paste of The Oz.
"You have reached a subscriber-only article" :(
[Sorry about that. I read it, and I don't have a subscription. RA's link does the same for me. I think how it works is that if you go straight from a google search you can access it, because they want people to be able to come in from google. Although that, now, doesn't work for me either. Rats. Maybe they've changed it? -W]
The referee reports are a good read. Wonder why anyone bothers, though.
Non-"subscription required" version is here.
Interestingly, the judge found "Dr Salby has not established that his disciplinary/scientific view about human effects on climate change was in fact manifested as a political opinion." This implies that if you call denialism politics you're OK, but if you try to dress it up as science you're not. Seems fair enough.
I'm not sure the disparity is all that puzzling. It can happen anytime there's a 'short squeeze.' Add to that the fact many energy stocks - coal in particular - have lost so much relative worth that a 40% change in value today is hardly discernible from what would have been daily trading noise just a year or two ago.
Investopedia has a good summary:
"If a stock starts to rise rapidly, the trend may continue to escalate because the short sellers will likely want out. For example, if a stock rises 15% in one day, those with short positions may be forced to liquidate and cover their position by purchasing the stock. If enough short sellers buy back the stock, the price is pushed even higher."
"Contrarian investors look for stocks with heavy short interest specifically because of a short-squeeze risk. These investors may accumulate long positions in a heavily shorted stock if they believe its chances of success are significantly higher than believed by those who are bearish on it. The risk-reward payoff for a heavily shorted stock trading in the low single digits is quite favorable for contrarian investors with long positions. Their risk is limited to the price paid for it, while the profit potential is unlimited. This is diametrically opposite to the risk-reward profile of the short seller, who bears the risk of theoretically unlimited losses if the stock spikes higher on a short squeeze."
It's this casino-like game that gets played out everyday in the market. The fundamentals of longterm investment have been pretty much passé since the Reagan presidency.
[That says nothing about the debt -W]
Cripes. My guess is that The Australian is playing some kind of silly games with deep linking. Ah well.
I was able to get to it once by entering "climate change critic murry salby loses case against university" but that doesn't seem to work consistently.
Don't worry about the article. Read the judgment: it's open access (via the Australian legal information site, AUSTLII).
Try the citation Salby v Macquarie University & Anor  FCCA 3, in the Federal Circuit Court of Australia database.
Salby claimed to have been dismissed from Macquarie University because of ‘inconvenient’ opinions about carbon dioxide and climate. He claimed that his return from travel to Europe was hindered by the cancellation of the return part of his ticket.
He wanted travel leave for weeks during (teaching) semester. He didn’t get approval. He was told to cancel any travel arrangements made using University credit. He didn’t. He used a University credit card not only for travel arrangements but for air tickets, a purpose for which Macquarie credit cards may never be used (because air tickets come only through contracted travel agencies).
He didn’t turn up to give his lectures – even while he was still in Australia. Macquarie started disciplinary committee consideration of this as misconduct on his part. The committee considered the matter after Salby went to Europe and before he returned – he had nearly two weeks notice but did not appear.
Once Macquarie found he had not cancelled his travel arrangements, but instead had finalised them and left Australia, Macquarie deferred committee consideration of his credit card activity to allow him to respond. The committee met for this purpose only after Salby came back to Australia: but Salby did not appear.
The court has now found that Salby was dismissed for, and only for, his extended misconduct. Although Salby had formally contended that his carbon dioxide views were a reason for his dismissal, he wouldn’t question University witnesses along those lines – though the court, and the University’s counsel, made it clear that he had to do so if he wanted to make the argument (under Australian procedure).
Of course, none of the denial websites who shed tears and alleged Salby was being victimised have yet recanted their claims. On the internet, Salby will continue to appear as someone at least arguably victimised for his views.
Do falsehoods ever die?
I found the actual court judgment, and it makes jolly reading, although the judge didn’t know everything. … The judge firmly rejected every claim by Salby.
And The Australian, unsurprisingly was about as nice to Salby as it could be, and of course ignored Graham Readfearn’s role in apprising Dr. Chanin of Salby’s problems. She'd been badly misled by Salby.
It references the Colorado court records:
It is also clear that MQ did not “recruit” Salby in the sense of seeking him out. They ran an ad … and he contacted them. When he was already in deep trouble at CU.
Both at CU and MQ, the universities tried hard to work out issues with Salby, and he often just wouldn't even show up for meetings. (I've actually waded through all these court rulings.)
Judge’s comment about Don Quixote is amusing.
Less amusing is that
a) Salby played a lot of financial chicanery at CU with off-campus companies, of which only a fraction was discussed in 2013.
b) He then tried similar games in AU, trying to funnel startup money to an off-campus company run by a friend … who in fact did not provide the sorts of services that Salby claimed…
Sydney - Climate change critic and atmospheric scientist Murry Salby has lost his long-running court battle against Macquarie University, which he had accused of a raft of workplace contraventions and political interference.
Dr Salby, whose employment was terminated in 2013, had claimed Macquarie demoted him, obstructed his research and interfered with his right to interact with his research students because of his political views.
In emails obtained by The Australian in 2013, he claimed the university had blocked the presentation of research that was highly critical of the now defunct Climate Commission and refused him travel to Europe to unveil those findings, which he said countered “reckless claims” about the role of mankind in greenhouse gases.
Climate Commission chief Tim Flannery was a professor of environmental sustainability at Macquarie at the time.
But after nearly three years, Judge Rolf Driver has thrown out Dr Salby’s claims.
Dr Salby was recruited by Macquarie in 2008 from the University of Colorado. His duties included supervising postgraduate students and maintaining an active research program. However, a hiring freeze soon after Dr Salby tried to employ a research assistant appears to have triggered a breakdown of relations between the academic and the university, which advised him to teach undergraduate classes as well as supervise postgraduate students.
Several years later, the university declined to approve Dr Salby’s travel to the European Geosciences Union General Assembly in Vienna and a lecture tour of Paris, Cambridge, Oslo and Stockholm.
His employment was suspended on serious misconduct charges after he missed the start of lectures, but he later used the university’s corporate credit card for the European trip.
Justice Driver said Dr Salby had “failed to establish any of the elements of his case” and upheld Macquarie’s termination of his employment.
“Dr Salby did not articulate whether the relevant political opinions were those held by him or those held by the various people he alleges made the impugned decisions,” Justice Driver said.
“Dr Salby has not established that his disciplinary/scientific view about human effects on climate change was in fact manifested as a political opinion. Nor has he established that any of the relevant decision-makers had a view that was contrary to his.
“More importantly, he never put to any of the witnesses that they made any of the decisions which he attempts to impugn for the reason of, or for reasons including, either his alleged political opinion or theirs.”
Dr Salby’s sacking created a minor international furore, with the International Council for Science suggesting it could scrutinise the issue.
Marie-Lise Chanin, the French representative of the Paris-based council, said she was “scandalised by what happened”, only to backtrack on that statement the following month.
The US National Science Foundation placed a three-year bar in 2009 on Dr Salby receiving any federal grant after finding evidence of duplicate grant proposals and failure to comply with policies on conflicts of interest.
Dr Salby could not be reached for comment yesterday, while a Macquarie University spokeswoman said she could not comment on individual staff matters.
I just read the ruling. It seems like Salby thought himself a "speshul snowflake". If anything, the University bent over backwards for him but he refused to do things that he didn't want to because he thought them beneath him. He also thought himself above following proper procedures. In fact, I'm surprised the University took as long as it did to kick him out.
WC:"[That says nothing about the debt -W0
The debt isn't worth anything unless the company makes it to and is able to pay at maturation date. The odds on that don't look good. This is exactly why there were shorts to begin with.
[If you find yourself saying "The debt isn't worth anything unless the company makes it to and is able to pay at maturation date" then you need to pause and realise that you're saying the bleedin' obvious. And then distinguish shorting the stock from the debt -W]
He's not the Messiah, he's a very naughty boy.
At least with some browsers
Also look at cookies. Newspapers often use to limit # views.
Finally, they might keep a cache of IP addresses.
BTW Salby represented himself in court.
Salby represented himself in court.
"A man who is his own lawyer has a fool for a client"
[It would seem so. There are portions of the judgement that show that the judge was astonished that Salby didn't even *try* to dispute certain points and testimony, despite being invited to. As I read it, those bits of the claim would have failed just on that. Perhaps he really knew that the entire thing was doomed, but kept going either because backing out would be embarrassing, or perhaps because at least while the case was in progress he could go with "I wuz robbed". I'm still hoping for some denial-o-sphere reaction.
Actually, I got bored of waiting so I tweaked them: https://archive.is/QrOHI -W]
Thanks Christopher H and EFS -- entertaining. I, too, would like my employer to pay for some European tours instead of doing my work.
Something posted by carrot cake I would like to comment on. Why did he deserve that? What did he do to deserve that? I'll tell you why. It's not that his rationale is wrong. He's my brother and the most abusive person. I sure hope he sees this. Even his wife divorced him because of the abuse. Instant karma Murry! Well done you WANKER!
"Leah Salby ..."
Is this decipherable?
[Tricky. I cannot of course validate the identity. I know the IP used but unless there's a good reason I won't even geolocate it -W]
WC writes:"distinguish shorting the stock from the debt"
I have, the debt has a maturity date. If the company doesn't survive long enough the debt is worthless.
The asset price is *not* directly linked to this. Short sellers are betting the price will fall (in line with the debt outlook), but gamblers can bluff and buy the stock. If they buy enough the price goes up - causing the short sellers anxiety. Drive it up high enough and you get big discrepancies.
The fundamentals of the company haven't changed - it's a game of bluff, chicken, whatever you want to call it. If you sell short and I buy long one of us stands to lose - regardless the company fundamentals.
I agree it's bleedin obvious :)
The irony is that very few people would ever have heard about how Murry Salby misbehaved first at Colorado and then at Macquarie if he hadn't tried to play the victim card. Now he has become notorious. Talk about shooting himself in the foot!
But maybe now he can get some gig at Heartland or GWPF...
Look, I know my brother well. He would never try to pull off a gig like that. He's a conservative Jew for cripes sake. So don't go treating him like that. He is no thief. He is no liar. He is what he is. But, I am not going to degrade him for his research. Because he is right. You wanker!
JBL, decipherable? I am his sister! Bullocks!
You wanker! Get a job!
Lars, that is a lie about Colorado and Australia. They do that to people that they don't want to believe. Why don't you get the real facts before you start this thread. Go get an education. Wanker! You probably think the world is still flat.
I've been thinking about my previous comment.
To my knowledge, very often the reason somebody decides to represent him/her self is because no qualified lawyer will take the case, generally because they realise that it's hopeless.
It is true that some lawyers will not take on the case. However, my brother is well-versed in the law. All the great scientists that passed away and were vilified are now known to be correct. I rest my case.
Anyone who has the slightest doubt that Salby misused public funds via chicanery needs to study:
a) Murry Salby: Galileo? Bozo? Or P.T.Barnum?, which has attached all the US court cases I could find.
b) the AU ruling.
Both CU and MQ bent over backwards with Salby; had he been working for a company, he would have been fired long before. I used to fly a lot for companies, and I was senior enough to have a lot of flexibility, but Salby's credit card games alone were a firing offense.
Actually, there was a lot more grant funding chicanery in the US, which has yet to be published ... I.e., NSF was just focused on a few grants,but there were more.
The tactics were similar, even if details differed. In the AU case, search for "WW Strategy" and read sections 302-311, which ends with:
"Mr Parker was called to give evidence in Dr Salby’s case. During his cross-examination he admitted that Dr Salby and he had developed a plan whereby Mr Parker would lend his business name, WW Strategy, to enable Dr Salby to seek to elicit an early and upfront release of the remaining Startup Funds. Mr Parker also admitted that he was not in the business of supplying labour-hire services."
I.e., funding was supposed to be spent in certain ways, subject to MQ approval. Salby tried to send the money outside. Unfortunately, nobody seems to have asked "would Salby get some of that money as a kickback?"
This is quite reminiscent of Salby's use of ASA (which Salby controlled behind scenes) and AMSP (which was Salby) to hide the money flows.
As per Pseudoskeptics Exposed In The SalbyStorm (inspired by "we're all bozos on this bus"
the pseudoskeptic blogs erupted with nonsense, accusing MQ of all sorts of bad behavior, with intense words.
People of honesty and integrity would apologize to MQ.
"All the great scientists that passed away and were vilified are now known to be correct. I rest my case."
sounds like a Poe, but usually I would expect a Poe to be more comprehensible.
Denier blogs had made a big fuss about MQ canceling Salby's return ticket.
Salby had written:
"‘Upon arriving at Paris airport for my return to Australia, I was advised that my return ticket (among the resources Macquarie agreed to provide) had been cancelled. The latest chapter in a pattern, this action left me stranded in Europe, with no arrangements for lodging or return travel. The ticket that had been cancelled was non-refundable.’
‘The action ensured my absence during Macquarie’s misconduct proceedings.’
BIG PROBLEM with that story:
from the court proceedings, on 04/11/13, MQ wrote to Salby to tell him the MIC (misconduct meeting) would be on 04/24/13 and he should attend. They had the meeting, he did not attend.
He zigzagged around Europe (VIenna, Paris, Hamburg (for EIKE @ Helmut Schmidt U), Cambridge, Oslo, and back to Paris), not exactly an optimal travel route, and not exactly a densely-scheduled trip:
2013.04.01 apparently flew to Europe (Paris? or Vienna direct? don't know)
2013.04.09-10 2 Vienna, 2 posters at EGU
2013.04.18 Hamburg, Helmut Schmidt U, arr. by EIKE
2014.04.24 Oslo, eve, Klimarealistene
2013.04.25 Oslo, U i Oslo
When he spoke in Oslo evening of 04/24 it was already 08/25 in Sydney *8 hours ahead) and then 04/25 12:15-13:15 for U i Oslo Institutt for geofag.
He might have gotten to Paris later on 04/25, but then it is a day's flight to get to Sydney. It was impossible for ticket cancellation to have anything to do with him missing the meeting by several days.
The Nova-ite response was really dull. Alas.
[Yes. A shame. It looks like they're just going to pretend this never happened -W]
That is so untrue. Murry Salby is an Orthodox Jew. I am his sister. You don't know him like I do. It is not in his genes to do such a thing. Also, you state you don't know where he flew to. When he came to Atlanta he changed flights when he had to quickly. You seek to vilify him for his Scientific research and it is not the first time that scientists have been vilified. Wanker! Get your facts straight.
Julian - if he was being sued, couldn't afford a lawyer or get one provided to him and had to defend himself, that's one thing. But when he can't seem to find a lawyer to represent him, that should tell him something.
Unless he thinks he's the Galileo of the law as well as that of climatology. Galileo Magnetism?
Related - it looks like Aussies follow the English Rule - loser pays the winner's costs (or some of them anyway). Last statement in the case is "I will hear the parties as to any remaining issues." I expect Salby will be hearing from MQ about a bill to be paid.
I wonder if he'll stay around pay it, or choose the better part of valor.
Brian (or anybody):
is the appeals process. Maybe Salby will try that?
The court judgment does settled a few question marks for me, especially regarding dates, although no great surprises.
"Hedge funds and money managers have been piling into government bonds, betting that the central banks’ purchases would continue to boost bond prices. Such wagers have strengthened the correlation among the major government bond markets, which means any big move in one market would spread into others. -- Wall Street Journal, 3-9-2016
WC - I'm not sure why you deny the casino-like nature of the asset and debt markets. Price volatility is often driven by irrational decisions and really cannnot be discriminated from simply wagering a bet. This may not be the way economics was taught in your school days, but then they probably weren't teaching plate tectonics either.
[I don't know why you think they are casino like. It seems to be based on a simple misunderstanding of the word "bet". Which is like the GW denialists who get all hung up on the greenhouse effect not being really how greenhouses work. Bet is just a word; get over it -W]
WC:"[I don’t know why you think they are casino like. ..."
Irrational behavior and asset markets has been well (and long) documented. That is the casino-like nature; placing bets on red or black at the roulette table is no different.
Consider the entire industry of day-trading; is this really anything other than gambling? I made tens of thou$and$ over a brief period of time doing it - and (fortunately) realized it was little more than a good run of cards at the poker table.
Junk bonds, many penny stocks, most of the 2000s era REITs are all symptoms of this casino attitude. It's not that the fundamentals say BUY THIS NOW!" No, it's more like, 'Hey, I'll take a flyer on that 50:1 longshot and maybe get lucky.'
[Day trading by individuals is a mugs game. By large institutions, it makes sense. Or they wouldn't do it -W]
https://www.google.com/search?q=financial+instrument+risk+protection+ga… turns up much, just to pick one inflammatory item:
In 2014, at €700 trillion, the notional amount of outstanding derivative contracts that were traded over the counter exceeded the size of the underlying cash markets by more than five times. This goes against the better instincts of many outside the financial sector. It seems an unnatural state where the tail is wagging the dog. None other than the successful investor Warren Buffet famously wrote in the 2002 annual report of his investment vehicle, Berkshire Hathaway, “In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.” When suspicions over the lethal nature of derivatives were seemingly vindicated by the central role credit derivatives played in the Global Financial Crisis, the popular image of the financial crisis that we painted earlier in Chapters 3 and 4 was of bankers pulling smoking, toxic credit instruments out of their back pockets. These instruments were thrown into a crowd of bewildered consumers and the bankers were last seen grabbing the money and sprinting away.
[I respect WB; what he says should be listened to. ''by the central role credit derivatives played in'' - but that's bollocks. Its a cunning trick, following a quote from someone respectable by some nonsense, in the hope that the nonsense will be believed.
and the bankers were last seen grabbing the money and sprinting away: no. This is utter unthinking bullshit. The problem was that the bankers held onto these things. That's why the banks got into trouble, and that's where the problems came. If the banks had sold them on, they wouldn't have been in trouble. Come on man, think -W]
[Incidentally, your WB quote is faked. In a small way, but nonetheless its not actually a direct quote -W]
[And incomplete. A full analysis of WB's position would take effort; but he also said Indeed, at Berkshire, I sometimes engage in large-scale derivatives transactions in order to facilitate certain investment strategies. -W]
from the past, worth revisiting, given the fact that these "derivative contracts" totaled more than five times the underlying cash markets -- by definition there wasn't nearly enough money in the markets to pay them out. Nothing in financial regulation says people can't make a contract promising to deliver far more than is available -- then sell that contract at a 'discount' and walk away with real money having sold off imaginary future value that won't and can't exist.
Credit Default Swaps: Gambling as Insurance – Good Math ...
Posted by Mark C. Chu-Carroll on October 23, 2008.
Bad Bailouts? – Good Math, Bad Math - ScienceBlogs
Posted by Mark C. Chu-Carroll on March 24, 2009.
Shocking Fraud from Financial Scum – Good Math, Bad Math
Posted by Mark C. Chu-Carroll on April 20, 2010
Basically Earth can't produce nearly the amount of wealth that financial markets have promised to deliver in the future -- that's why it's casino gambling, because some but not all of the paper value can be actually cashed in.
P.S., Chu-Carroll moved from Scienceblogs to Scientopia and then to his own site, now at:
WB explains the derivatives contracts he does invest in :
Much water under the bridge since that date.
[Ah, that's interesting, thank you -W]
> the bankers were last seen grabbing the money ...
You must distinguish the bankers (and other hominids) from the banks (and other corporations) here. The bonuses paid out went to bankers (and securities people generally). The risks and the derivatives meant to profit from them stayed with the banks and securities businesses and insurance companies.
That's one reason for the repeated suggestion that bonuses should be based on longterm performance of the deals these people make, not the dollar amount of the deal at closing.
[Businesses should be free to pay whatever bonuses they think best -W]
Thanks John, that link on fees was interesting - it's pretty limited, especially for all the preparatory work involved in digging up the evidence. Still we could be talking about something in the range of $30k or so.
If I were Salby and also had some brains, I'd offer to give up an appeal if I could walk away without paying MQ's costs.
It's easy for climate realists to dismiss Murray Salby as yet another AGW-denier with scientific pretensions, who has predictably failed to support AGW-denial with science. What disturbs me, though, is how similar his story is to that of Andrew Wakefield, who is still a hero of the pernicious anti-vaccination movement long after he was exposed as a medical fraud, and long after his legal attacks on his critics were decisively defeated.
Both cases demonstrate how science and law are at a disadvantage, against even crude propaganda motivated by profit.
> [Businesses should ... think ... -W]
But they don't, do they? There's evidence to the contrary, barring strong AI that hasn't yet been revealed.
So far it appears that it's people who do the thinking, often to their own benefit primarily.
" Enron's downfall was more like Titanic's - hubris and an over-reliance on checks and balances led to Enron's downfall. I then explore how character (especially of those at the top of an organization) can lead to Enron-like disasters, and I talk about how cognitive dissonance can lead to very smart people making very stupid decisions...."
[I don't think Enron is a good example, because it was a fraud -W]
Cognitive? Sounds like they were in a coma. Give me a break. Murry Salby, my brother, may be p other things but, he was never ever wrong about his work. He worked endlessly when I was young and I watched him. You know nothing about him. The world turns on its axis. It's a natural phenomena. Therefore, you have the Antarctica and the South Pole. One will melt and the other will gain ice. It's just common sense. It's happened before end it is happening again. It has nothing to do with humans. People that think otherwise are no higher than a gibbon!
> a fraud
Well after the fact it was a fraud. During the event they truly and deeply honestly believed everything could go on as it was going, and the money would keep coming in. Or at least that's what 'hubris' means in that context.
And the mortgage securities bundles weren't?
"The belief that home prices would not decline was also fundamental to the structuring and sale of mortgage-backed securities. Therefore, the models that investment firms used to structure mortgage-backed securities did not adequately account for the possibility that home prices could slide. Likewise, the ratings agencies assigned their highest rating, 'AAA', to many mortgage-backed securities based partly on the assumption that home prices would not fall. Investors then purchased these securities believing they were safe and that principal and interest would be repaid in a timely fashion. (To learn more, read The Risks Of Mortgage-Backed Securities and The Debt Ratings Debate.)
It may not be "fraud" to have a business plan that violates Stein's Law -- it may not be "fraud" to have an economic system that violates Stein's law, for that matter. As we do.
But biologically it's untenable.
Calling one thing "fraud" and the other "business as usual" works as long as you don't look hard at the biology.
Thanks for the links Hank Roberts. Time to get another copy of Brian Hocking's "Biology or Oblivion." $2.94 at Abe's, $15.50 at Amazon.ca. Go figure.
"The world turns on its axis. It’s a natural phenomena. Therefore, you have the Antarctica and the South Pole. One will melt and the other will gain ice. It’s just common sense. It’s happened before end it is happening again. It has nothing to do with humans. People that think otherwise are no higher than a gibbon! "
Is Leah Salby referring to the one who wrote
The Decline and Fall of the Roman Empire?
More beyond #7
The Australian's piece somehow omitted its own strong role in promoting the Salby fantasy.
See Defamation By Internet? Part 1 - Murry Salby's Short-Lived Blog Storm, especially Graham Lloyd's "Climate chair left high and dry by uni" and Bernard Lane's "Academic's dismissal could face scrutiny".
"Dr Salby’s sacking created a minor international furore, with the International Council for Science suggesting it could scrutinise the issue.
Marie-Lise Chanin, the French representative of the Paris-based council, said she was “scandalised by what happened”, only to backtrack on that statement the following month."
They talked to distinguished French scientist Marie-Lise Chanin, surely because Salby had put them in contact. He invited a long-time associate to got out on a limb ... that Graham Readfearn and I had chainsawed a week and a half earlier. Apparently neither Salby nor The Australian saw fit to mention the NSF debarment, but Graham contacted her and asked. She understood the meaning of an NSF debarment, so had good reason to back away. This new The Australian piece somehow missed that. It was a "minor International furore" only at The Australian and blogs.
"Climate Commission chief Tim Flannery was a professor of environmental sustainability at Macquarie at the time."
That's gratuitous, as there is zero evidence that Flannery had anything to do with this whole mess, and the Court record mentions Flannery exactly zero times.
"Dr Salby was recruited by Macquarie in 2008 from the University of Colorado. His duties included supervising postgraduate students and maintaining an active research program. "
That is technically correct, but misleading, since it sounds like MQ sought out Salby. As shown in the ruling, MQ ran an advertisement and Salby responded to it..
For various reasons, leaving Colorado and the US were indicated, and it was convenient to find a university far enough way that they wouldn't ask friends about him.
" His duties included supervising postgraduate students and maintaining an active research program. "
No, his duties included the standard 40% teaching, ruling paragraph #60-61 and elsewhere.
Given paywalls, it is hard to find The Australian's articles,
but see Pseudoskeptics Exposed In The SalbyStorm and the PDF there of the text corpus:
p.318 Graham Lloyd Climate chair left high and dry by uni
p.324 Bernard Lane and Editorial
p.325 Graham Readfearn talks to Dr. Chanin
p.381 Bernard Lane "Physicist Marie-Lise Chanin changes her mind on Murry Salby support"
Lane finally mentions the NSF problem exposed weeks earlier, but not Graham's role.
Salby made claims against MQ quite similar to those against CU, filled with distortions that simply did not bear up. Every problem was someone else's fault. Neither judge bought *any* his claims.
"People that think otherwise are no higher than a gibbon!"
Is Leah Salby referring to the one who wrote
The Decline and Fall of the Roman Empire?
I think not, Russell. Uncapitalized, "gibbon" refers to the Hylobatidae, the family of "great apes" that are the most arboreal as well as the smallest in stature. In the wild, individual gibbons can be seen brachiating with draw-dropping speed and agility into the highest tree-tops of their forested habitats, as much as 65 meters above the ground!
Now, imagine Edward Gibbon brachiating through the rainforest canopy with jaw-dropping speed and agility. Then buy a new keyboard.
No, it seems more likely that Ms. Salby is saying, "people who think that changes in polar ice have anything do with climate change are no higher than 65 meters." I could easily be wrong, of course.
I was referring to the gibbon as in British slang. But it is a primitive monkey basically.
[Ah, I understand -W]
PS, as to what's "fraud" I recommend again the Chu-Carroll links I posted above. Of course, you'd have to agree with him that it's possible for something to be both fraud and legal. This from the third of that set:
The main trick was something called tranching.
Tranching takes the mortgage bundle, and divides it into tiers. When loans get repaid, the top tier gets repaid first. Only once the top tier has been entirely repaid does the next tier start to get repaid. By making a bunch of tiers (tranches) you can make the top ones look like they’re really safe, even when it’s based on pile of shit.
We’ve known for a long time now that tranching was a giant cheat. That top tier looked safe only because of a lie. It was only safe if the chances of individual mortgages in the bundle failing to be repaid was an independent event. But the mortgages that were given out like candy to kids weren’t independent in that sense: the events that caused one to fail would cause almost all of them to fail. The supposed safety of even the top
tranch was a bad joke.
Making matters worse, the banks didn’t just sell these bundles of mortgages. They layered them. They’d take a bundle of mortgages, package them into CDOs, and sell them. Other banks would buy parts of those CDOs, wrap up bundles made up of slices of other CDOs, and sell those. And so on, layer upon layer.
In my opinion, this was, in an ethical sense, simple fraud. Unfortunately, it’s also entirely legal. It shouldn’t be, but most of this stuff is far beyond anything that was imagined by the people who wrote the laws.
Of course, they could make the argument that Stein's Law may have exceptions ....
[This is just wrong. Chu-Carroll is simply wrong. None of the ranching was a cheat, and the top tier are paying. Who is this bozo, and why are you paying any attention to him? -W]
Maybe Ms Salby could persuade her brother to give a publicly-scheduled talk at some credible place in the US (as opposed to groups like PSI in UK, EIKE in Germany, Klimarealistene in Norway, etc)
Perhaps Georgia Tech would be a suitable venue - Judith Curry overalpped with Salby 1992-2002 at CU, magnanimously omitted Salby's formal complaints against her husband there, and wrote favorably in 2011:
‘JC comments: If Salby’s analysis holds up, this could revolutionize AGW science. Salby and I were both at the University of Colorado-Boulder in the 1990′s, but I don’t know him well personally. He is the author of a popular introductory graduate text Fundamentals of Atmospheric Physics. He is an excellent lecturer and teacher, which comes across in his podcast. He has the reputation of a thorough and careful researcher.’
[FWIW, I doubt that "LS" has the relationship she claims -W]
Benefit of the doubt ... but in any case, JC's comments are amusing, given the history ... and CU has a pretty detailed website with years of student evaluations, and curiously they do not exactly match what JC wrote.
In a situation like Peabody's, capital structure arbitrage can't rationally be done just by looking at a couple of charts.
What the Bronte piece omits to mention is that the debt-to-equity ratio is huge: even at 3c in the dollar the market price of all the debt is about three times the market price of all the shares.
[Interesting point, and thank you for it. I'm now curious: that wasn't obvious to me, but it should have been obvious to Bronte / John Hempton, who isn't dumb. Why do you think he missed it, assuming you're right? -W]
The shares have value for two reasons: first, because they're a far-out-of-the-money call on the company's assets: what that's worth depends as much on how big the upside is as on how likely it is. Second, because US bankruptcy law tends to give shareholders something.
> None of the ranching was a cheat
tranching, and opinions vary.
I don't suppose Wikipedia is reliable on this, but: https://en.wikipedia.org/wiki/Credit_rating_agencies_and_the_subprime_c… fits what I know about it.
[Even that doesn't say the tranching was a cheat. It says the credit ratings agencies mis-rated the tranches, which is quite possibly true, or might have appeared true in the panic. But it appears to be silent about which tranches are still paying. Indeed, if you look at the pic next to the text you quote you'll find that the bulk of the AAA tranches are marked as "unimpaired", with exception of the CDOs.
My original source for they-are-still-paying was Timmy: http://www.forbes.com/sites/timworstall/2015/10/31/run-for-the-hills-su…
I can't immeadiately find any other sources. Can you? -W]
> who is
Oh, some leftist PhD math programmer guy, never mind.
This might help, though: http://goodmath.scientopia.org/2011/02/11/another-crank-comes-to-visit-…
[It wasn't obviously helpful I'm afraid. You're probably trying to make a point, but I've missed it -W]
According to a table on SeekingAlpha today, the market price of all BTU's senior debt is about $1.2bn. The market cap (ie share value) is about $85m.
Bronte's piece is rather offhand about the bond price - according to his screenshot those bonds are 4c offered. And they'll quote clean - net of accrued interest - so they'd actually cost you about 6c in the dollar. The piece may be more of a wry remark to the effect that cap arb is not as easy as it looks than an examination of this particular trade.
"LOL" - that;'s the intelligent response to blaming the credit crisis on ratings agencies or clearinghouses. Tanta at Calculated Risk started writing about the (then) coming catastrophe in early 2007 with an insider's perspective. If you haven't read her articles go back and find them.
Bill McBride of Calculated Risk quoted a JP Morgan Chase memo from those good old days on how to get a loan applicant through the process: three "handy steps" to loan approval
"Do not break out a borrower's compensation by income, commissions, bonus and tips, as is typically done in a loan application. Instead, lump all compensation as the applicant's base income.
If your borrower is getting some or all of a down payment from someone else, don't disclose anything about it. "Remove any mention of gift funds," the document states, even though most mortgage applications specifically require borrowers to disclose such gifts.
If all else fails, the document states, simply inflate the applicant's income. "Inch it up $500 to see if you can get the findings you want," the document says. "Do the same for assets."
Dozens, hundreds of articles have been written showing how fraud was rampant throughout the system. Tranches, for instance, were just one way to do it. None of the individual practices were inherently 'wrong' - but in the hands of greedy humans absent regulation we saw the true nature of markets - and it wasn't pretty.
Tanta, June 28, 2007 on Subprime and CDOs: Illiquifying the Liquified:
"I am not a historian of financial markets, so perhaps it is true that the Whigs always win in this regard. But I would be inclined to think that perhaps it is true that in some cases "opaque, illiquid markets" become large enough to implode spectacularly before they ever get around to becoming "transparent." In fact, I wonder if in certain cases "opacity" is a feature, not a bug.
I do know enough of the history of the mortgage market to be willing to claim that it was, once upon a time, an opaque and illiquid market that did indeed become both very large and highly transparent for quite a while there. You can get an amazing amount of information about one of those nice low-yield boring vanilla GSE MBS, you know, not to mention a price right off the old Bloomberg terminal. Now, you might want to say that in the last few years somehow that famous liquidity and transparency of the residential mortgage market has largely evaporated on us, right at the time that tons of unregulated private money started pouring into it and yields of 12-18% became just not good enough. You might observe that right about the time, historically speaking, when we'd managed to accumulate giant performance databases about mortgage loans, we started offering "low doc, no doc and snow doc" deals with drive-by "appraisals" and automated underwriting and tiny due diligence sampling and every other mechanism we could think of to assure that there was, in fact, no data to be "transparent" about.
So now that we've "innovated" our way into a situation in which nobody has the first bloody idea what's going on with a huge portion of recently-originated mortgage loans, we've noticed that we've innovated our way into a situation in which nobody has the first bloody idea what's going on with the securities they're in or the CDOs that buy the tranches of the securities or the hedge funds that buy the tranches of the CDOs of the securities of the mortgages that were written on a hope and a prayer and a FICO. And this is a "teething" problem? Holy Mastication, Batman, you think this thing will improve if it grows some fangs?"
LOL. I remember her as good - I just forget how good.
as W says, CDOs are the problem. That's been the concern all along.
I followed Tanta at the time, and I read Chu-Carroll's critiques as seeing the same problems with the "collateralized debt" -- which is where things fell apart.
The credit default swaps added to the risk -- the amounts being bet and hedged exceed the value in the financial system -- financial musical chairs.
"Leading up to the crisis, certain investment banks started creating CDOs that included just the lowest rated tiers of mortgage-backed securities. Ratings agencies, nonetheless, rated those CDOs Triple-A. The thought was that while one high risk mortgage may be a bad gamble, thousands of high risk mortgages are a good bet because there’s safety in numbers. They can’t all go south at once, right?"
Do read that last link. Further down on that page:
"these savvy investors bought just the insurance contract (the CDS) without owning the flawed CDOs they were meant to insure against. In other words, they bought only the insurance that the mortgages would fail without ever owning the mortgage securities or the CDOs themselves. Some have compared this to owning theft insurance on someone else’s home in which you only get paid if they get robbed."
I am always confused by the statement that "regulations were insufficient" because it implies that somewhere in a statute it says "simple felony fraud is legal" or some such.
Hope of Leah & Murray being descended from primates is rapidly fading , as monkeys have a sense of humor
CF. entry for 1754 A.D. at
And, Peabody looks likely to follow every other coal co. into bankruptcy: http://money.cnn.com/2016/03/16/news/companies/peabody-coal-out-of-busi…
That stock runup has rundown again.
I'm sure they'll be back though, once they've dealt with some pesky pension obligations.
PS, tangentially related practice, this
> owning theft insurance on someone else’s home
> in which you only get paid if they get robbed.”
reminds me of a stink a few years ago -- turns out there's been a profitable market for companies that purchased life insurance on their employees, but did not disclose that to the employees -- and then had less reason to worry about working them to death as they got paid if the employee died.
> “regulations were insufficient” ... implies that
> ... “simple felony fraud is legal”
I recall long ago hearing an elderly partner at a major corporate law firm observe that every great fortune was made doing something before it became illegal.
There's no law against simply fooling people, becasuse people legally are presumed not to be easy to fool. It's called "puffery" in the US.
That's how the economy stripmines widows and orphans - I think Thomas Jefferson made an observation to that effect.
Justice Antonin Scalia: "Even in the commercial context we allow a decent amount of lying, don't we? ... It's calling puffing."
Peabody looks likely to follow every other coal co. into bankruptcy
Indeed. Fracking has taken over from coal mining. Our worries are over.
If Hank goes on accusing The Sky Dragons of puffery, Tim Ball may file another libel writ.
> Sky Dragons
Puffery is their magic.
Regulations -- this is how they work:
Excellent piece at Desmogblog.
Discussions stopped, although with little apology or introspection about gullibility at “skeptical” blogs.
Do the pseudosceptic blogs ever apologising for getting anything wrong?
Excellent piece at Desmogblog.
Discussions stopped, although with little apology or introspection about gullibility at “skeptical” blogs.
Do the pseudosceptic blogs ever apologise for getting anything wrong?
Apologize? Certainly possible, but I have not observed it.
For example, from a quick scan, the blogs most supportive of Salby have apparently not noticed this recent event.
Salby's earlier text is well-regarded, but it was downhill from there, and when he finally ventured out of atmospheric circulation into other areas, it did not go well.
a) carbon cycle, refuted by experts like Colin Prentice
b) bizarre claims about ice cores, refuted by experts like Eric Wolff, who heard him speak at Cambridge.
Even old associates like Marie Lise Chanin (who is quite distinguished) disagreed with him.
Then of course, he essentially stole from the US government, and then mis-used funds in Australia. MQ was incredibly tolerant, any company I've been in would have fired him right away for the shenanigans with credit card and unauthorized trip.
But Rupert Darwall (a Cambridge man, sad to say) bet on Salby strongly as a crucified Galileo. See Cheshire Claims, and take a look at the article in (Manhattan Institute's) City Journal., for which he got help from Jo Nova.
I really, really wish someone could talk him into doing a public talk in the US, as I'm certain many people would like to attend.
[H]e essentially stole from the US government, and then mis-used funds in Australia. MQ was incredibly tolerant, any company I’ve been in would have fired him right away for the shenanigans with credit card and unauthorized trip.
Yes. I'm actually quite surprised that he got off so lightly. I would have expected criminal charges for fraud, or at the very least, the University suing him to recover the funds.
In one of the Colorado cases, the judge basically told Salby to quit messing around or he'd be liable for CU's legal costs.
In the AU case, i think the matter of costs was not specified... But i think it is "loser pays" there....
Salby represented himself (and doesnt seem to be doing anything else). I'm not sure about possibility of appeals.
Salby may well continue legal battles and perhaps find another country before he has to pay.
You appear to have missed Salby's triumphant return to UK, courtesy of PSI, just two weeks ago.
Oops, sorry, that was in 2015, I'd stopped watching.
[Phew, that's a relief: you can have too much Salby I find -W]