Friday, June 30, 2006 06/30/06-Auguste Rodin

In today's excerpt, the French sculptor Auguste Rodin (1840-1917):

"In Rodin, France produced a sculptor of outstanding quality and importance. But he stood alone...

"He was more vehemently for the past than other sculptors but did not limit his enthusiasm to the classical tradition, taking a passionate interest in Gothic art and seeing Michelangelo as 'the culmination of all Gothic thought.' All his work was concerned with the human figure. He had the original idea (inspired by classical remains) of making truncated figures, limbless and/or headless torsos, which were thought in his day to reveal a streak of sadism (as perhaps they do), but have the important effect of lifting sculpture out of the range of normal subject-matter into a sphere where its abstract qualities of line, mass and tension dominate the responses it evokes.

"Rodin, who admired and encouraged Degas as a sculptor, went far beyond him in search of the unposed pose...Rodin planned for deviations. His models moved around him and he captured in swift line-and-wash sketches those momentary dispositions that seemed to him expressive. Thus, like Michelangelo, he found in artistically unprecedented movements a whole world of expressive form that seemed to him at one with nature at large: 'A woman, a mountain or a horse are formed according to the same principles.'"

To view works at the Rodin Museum in Paris, click here:

Musee Rodin
: <>

Myers and Copplestone, General Editors, The History of Art, Dorset, 1990, pp. 819-820

Thursday, June 29, 2006 06/29/06-Systems and Anarchy

In today's encore excerpt, John Steinbeck and his biologist friend Ed Ricketts muse on the subjects of systems and anarchy, in the immediate aftermath of World War II:

"We thought that perhaps our species thrives best and most creatively in a state of semi-anarchy, governed by loose rules and half-practiced mores. To this we add the premise that over-integration in human groups might parallel the law in paleontology that over-armor and over-ornamentation are symptoms of decay and disappearance. Indeed, we thought, over-integration might be the symptom of human decay. We thought: there is no creative unit in the human save the individual working alone. In pure creativeness, in art, in music, in mathematics...the creative principle is a lonely and individual matter. Groups can correlate, investigate, and build, but we could not think of any group that has ever created or invented anything. Indeed, the first impulse of the group seems to be to destroy the creation and the creator...

"Consider, we would say, the Third Reich or the Politburo-controlled Soviet. The sudden removal of twenty-five key men from either system could cripple it so thoroughly that it would take a long time to recover, if it ever could. To preserve itself in safety such a system must destroy or remove all opposition as a danger to itself. But opposition is creative and restriction is non-creative. The force that feeds growth is therefore cut off...thought and art must be forced to disappear and a weighty traditionalism take its place...A too greatly integrated system or society is in danger of destruction since the removal of one unit may cripple the whole.

"Consider the blundering anarchic system of the United States, the stupidity of some of its lawmakers, the violent reaction, the slowness of its ability to change. Twenty-five key men destroyed could make the Soviet Union stagger, but we could lose our congress, our president and our general staff and nothing much would have happened. We would go right on. In fact we might be better for it..."

John Steinbeck, The Log From the Sea of Cortez, Penguin, 1951, pp. 257-8

Wednesday, June 28, 2006 06/28/06-India Emerges

In today's excerpt, the nation of India emerges as a world power, on a path to quickly overtake Japan as the world's third largest economy and, at 1.1 billion people, eventually challenge China for its position as the world's largest nation:

"After three postindependence decades of meager progress, the country's economy grew at 6 percent a year from 1980 to 2002 and 7.5 percent from 2002 to 2006--making it one of the world's best performing economies for a quarter century...

"In the first decades after independence...socialist Prime Minister Jawaharlal Nehru and his imperious daughter, Prime Minister Indira Gandhi...shackled the energies of the Indian people under a mixed economy that combined the worst features of capitalism and socialism. Their model was inward-looking and import- substituting rather than outward-looking and export- promoting...

"In the 1980s, the government's attitude toward the private sector began to change, thanks in part to the underappreciated efforts of Prime Minister Rajiv Gandhi. Modest liberal reforms--especially lowering marginal tax rates and tariffs and giving some leeway to manufacturers--spurred an increase in growth to 5.6 percent...

"More than 100 Indian companies now have a market capitalization of over a billion dollars, and some of these--including Bharat Forge, Jet Airways, Infosys Technologies, Reliance Infocomm, Tata Motors, and Wipro Technologies--are likely to become competitive global brands soon. Foreigners have invested in over 1,000 Indian companies via the stock market."

Gurcharan Das, "The India Model," Foreign Affairs, July/August 2006, pp. 2-6

Tuesday, June 27, 2006 06/27/06-The Atlantic Ocean

In today's excerpt, the Atlantic Ocean in the mid- 1700s had become a cohesive maritime system encompassing all four continents, and the most important trade network in the world:

"The ocean became an 'immutable connection' between east and west, or, as the historical geographer Meinig put it, 'a single arena of action.' Firmly established trade routes joining producers and consumers on both sides of the Atlantic made the ocean a common roadway rather than a forbidding barrier...more easily traversed in stable routes than many European land areas...

"One association of London merchants and Scottish affiliates in the mid-eighteenth century that we know a great deal about dealt in slaves, sugar, tobacco, timber and provisions. The debts they incurred in opening plantations in Florida were balanced by profits in slave markets in Africa; profits from contracts for supplying bread to the troops in Germany were invested in land deals in the Caribbean; funds derived from sugar production and marketing provided capital for commercial loans...

"By mid-century 1,000 ships a year were involved in England's transatlantic traffic, 459 in the sugar trade alone. France in 1773 sent 1,359 ships across the Atlantic to transport colonial goods. No less than 3,500 vessels were engaged annually in the Atlantic wine trade, moving out from six nations--Britain, Denmark, the Netherlands, France, Spain and Portugal--to the Azores and the Canaries where they took on cargoes for delivery to 104 ports in Europe, Africa, and North and South America."

Bernard Bailyn, Atlantic History, Harvard, 2005, pp. 83-86

Monday, June 26, 2006 06/26/06-Lord Acton

In today's excerpt-Lord Acton. John Emerich Edward Dalberg Acton, First Baron Acton of Aldenham, was born in Naples, Italy in 1834, a descendent of an established English line. Widely known for his belief that "power corrupts", he considered himself first and foremost a historian, though he pursued electoral politics and entered the House of Commons in 1859. In 1869, Prime Minister Gladstone rewarded Acton for his efforts on behalf of Liberal political causes by offering him a peerage. In 1895, Lord Acton was appointed Regius Professor of Modern History at Cambridge University. When he died in 1902, Lord Acton was considered one of the most learned people of his age. A sample of his political thinking:

"Power tends to corrupt and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority: still more when you superadd the tendency or the certainty of corruption by authority." Letter to Mandell Creighton, 1887

"The danger is not that a particular class is unfit to govern. Every class is unfit to govern." Letter to Mary Gladstone, 1881

"Liberty is not a means to a higher political end. It is itself the highest political end." Lecture, February 26, 1877

"The man who prefers his country before any other duty shows the same spirit as the man who surrenders every right to the state. They both deny that right is superior to authority."

"It is bad to be oppressed by a minority, but it is worse to be oppressed by a majority. For there is a reserve of latent power in the masses which, if it is called into play, the minority can seldom resist. But from the absolute will of an entire people there is no appeal, no redemption, no refuge but treason."

"The most certain test by which we judge whether a country is really free is the amount of security enjoyed by minorities."

Friday, June 23, 2006 06/23/06-Dali Unsold

In today's excerpt, Salvador Dali's most famous work, The Persistence of Memory, 1931, goes unsold:

"Dali described the genesis of this painting in his 1942 which he claimed that the unforgettable limp watches were inspired by the remains of a very strong Camembert cheese. He had contemplated this cheese one evening after dinner, when he stayed at home with a headache while Gala went to the cinema with friends. Having meditated on the 'super-soft' qualities of the runny cheese, Dali went to his studio where he suddenly realized how he should finish a lonely landscape featuring the rugged cliffs of the Catalan coast, illuminated by a never-setting sun, which had been sitting on his easel awaiting inspiration.

"I knew the atmosphere which I had succeeded in creating with this landscape was to serve as a setting for some idea, for some surprising image, but I did not in the least know what it was going to be...

"Throughout his career Dali explored his fascination with softness and malleability in numerous paintings, sculptures and works on paper...However none has a more obvious sexual significance than the limp pocket watches in this painting...

"Although Gala would prophetically claim that 'no one can forget it once he has seen it,' The Persistence of Memory was left unsold when it was first shown in Paris...However the young American art dealer, Julien Levy, acquired the painting shortly after the close of the show, paying the trade price of a mere $250."

Dawn Ades and Michael R. Taylor, Dali, Rizzoli, 2005, p. 148

To view the painting click: comm544/library/images/341.html

Thursday, June 22, 2006 06/22/06-Outside Interests

In today's encore excerpt, legendary Wall Street investor Leon Levy writes about the outside interests of professional investors:

"Perhaps the most astute financial mind in the Oppenheimer (investment management) galaxy was Daniel J. Bernstein...

"Daniel Bernstein died of leukemia at age 51 in 1970...He left behind a legacy of good works that reflected his diligence and originality. He started the National Scholarship Fund and Service for Negro Students when, after calling around the country, he realized there were many scholarships for African Americans that went begging simply because students weren't aware of them. He was able to enlist scores of college presidents to support the effort. Also a vocal opponent of the war in Vietnam, he paid for a series of ads in The New York Times that listed the names of professors and other prominent Americans who called for an end to American involvement.

"Although Danny was clearly a master of the game, making money was not an end in itself for him. I think that is true of many successful people in finance. Apart from giving money away, they have passionate outside interests. George Soros wants to rescue civil society; Jim Wolfensohn, a gifted dealmaker who is now president of the World Bank, has a passion for music; Jon Corzine seamlessly stepped from running Goldman Sachs to pursuing a liberal agenda in the U.S. Senate.

"It is easy to dismiss the outside indulgences of the rich as hobbies they can afford, but I think this misses the point. Quite often those outside interests provided an anchor or larger perspective that was essential to their success in finance. In the top financial ranks are disproportionate numbers of contrarians. (This makes perfect sense, since investors too deeply wedded to conventional wisdom will perform only as well as the bulk of the crowd.) These successful contrarians often have a worldview of which finance and the markets are but a small part."

Leon Levy, The Mind of Wall Street, Public Affairs Press, 2002, pp.71-4

Wednesday, June 21, 2006 06/21/06-9/11

In today's excerpts-9/11. In the 1990s, Osama bin Laden was a fundamentalist who rejected the oppression of Middle East dictators and their increasing concessions to the secular world. He and his fundamentalist organization were using terrorist tactics because to make their voice heard:

"Fundamentalism--whether Jewish, Christian, or Muslim--rarely arises as a battle with an external enemy; it usually begins, instead, as an internal struggle in which traditionalists fight their own coreligionists who, they believe, are making too many concessions to the secular world." Karen Armstrong, The Battle for God, Ballantine, 2000, pp. 110-1

"The mechanism of violent insurgency runs like this: The world is full of terrorist entrepreneurs; Osama bin Laden is merely among the most ambitious. To accomplish their aims, they first have to recruit foot soldiers, who are almost always young men. One recruiting tactic is to stage spectacular acts of aggression that make the insurgency appear to be powerful and exciting. What the entrepreneur wants to have happen next is a big, indiscriminate counterattack, which, in effect, means that the enemy has been put to work as his chief recruiter. This initiates what ETA, the Basque separatist organization in Spain, calls the action-reprisal-action cycle, and the insurgency takes off. A good example of this dynamic comes from ETA's own history. In 1973, ETA assassinated Luis Carrero Blanco, the Spanish premier. Generalissimo Francisco Franco sent in troops hell-bent on punishment, and in so doing he set off a lengthy and violent regional war. Much the same thing happened in Sri Lanka, where the Tamil Tigers were small-scale terrorists until 1983, when they killed thirteen government soldiers. This set off a series of anti-Tamil pogromswhich in turn had the effect of starting a true civil war, one that is still going on. Bin Laden has added a new wrinkle: take action against, and draw reprisal from, an especially powerful third party; namely, the United States." Nicholas Lemann, "What Terrorists Want," The New Yorker, October 29, 2001, pp. 38-9

"...Bin Laden found himself, by the mid-1990's, bottled up in the Afgan badlands, having been stripped of his Saudi nationality and booted out of ostensibly "Islamist"-ruled Sudan. Among his camp mates, the ragtag leftovers of the Muslim foreign legion of Afghanistan, the fire of armed jihad still burned. But their passion lacked a satisfactory immediate outlet. Radical insurgencies had been defeated, or severely constrained, across a number of local fronts, from Egypt to Algeria to the Southern Phillipines. Most ordinary Muslims in these countries, as Randal observes, had not merely failed to join in the fight but questioned its very premises.

"With these so-called "near enemies" in Asia and the Middle East proving inconveniently resilient, the idea emerged of transferring jihadist zeal instead to the "far enemy". Hitting the United States would in itself score points, considering that America was seen as a pillar of support for compromised Muslim regimes, such as Egypt's and Saudi Arabia's, that bin Laden had as his target. The boldness of attacking the strongest world power would propel Islam (or rather, the jihadists' version thereof) onto the geopolitical stage as a force demanding equal stature. This would not only inspire reluctant jihadists to join in the fight. It would also help cement the broader, and growing, Muslim sense that their faith was somehow under threat, and needed vigorous defense. This strategy is not original." Max Rodenbeck, The Truth About Jihad, The New York Review of Books, August 11, 2005, p. 52

Tuesday, June 20, 2006 06/20/06-Spice

In today's excerpt--the definition of spice:

"Broadly, a spice is not an herb, understood to mean the aromatic, herbaceous, green parts of plants. Herbs are leafy, whereas spices are obtained from other parts of the plant: bark, root, flower bud, gums and resins, seed, fruit, or stigma. Herbs tend to grow in temperate climates, spices in the tropics. Historically, the implication was that a spice was far less readily obtainable than an herb--and far more expensive.

"...Chemically, the qualities that make a spice a spice are its rare essential oils and oleoresins, highly volatile compounds that impart to spices their flavor, aroma, and preservative properties. Botanists classify these chemicals as secondary compounds, so called because they are secondary to the plant's metabolism, which is to say they play no role in photosynthesis or the uptake of nutrients. But secondary does not mean irrelevant. It is generally accepted that their raison d'etre is a form of evolutionary response, the plant's means of countering threats from parasites, bacteria, fungi, or pathogens native to the plant's tropical environment. Briefly, the chemistry of spices--what in the final analysis makes a spice a spice--is, in evolutionary terms, what quills are to the porcupine or the shell to the tortoise. In its natural state cinnamon is an elegant form of armor; the seductive aroma of nutmeg is, to certain insects, a bundle of toxins. The elemental irony of their history is that the attractiveness of spices is (from the plant's perspective) a form of Darwinian backfiring. What makes a spice so appealing to humans is, to other members of the animal kingdom, repulsive.

"By any measure the most exceptional of the spices, and far and away the most historically significant, is pepper. The spice is the fruit of Piper nigrum, a perennial climbing climbing vine native to India's Malabar Coast...Black pepper, the most popular variety, is picked while unripe...White pepper is the same fruit left longer on the vine."

Jack Turner, Spice, The History of a Temptation, Vintage, 2005, xix-xxi.

Monday, June 19, 2006 06/19/06-William Thackeray

In today's excerpt, William Makepeace Thackeray (1811-1863), an English novelist famous for his satirical works, especially Vanity Fair, a portrait of middle class English society. Often compared to his contemporary, Charles Dickens, his writings are seen as cynical and detached while Dickens often lapsed into sentimentality. Charlotte Bronte was an admirer and dedicated to him the second edition of Jane Eyre. A sample of his wit and wisdom:

"I never know whether to pity or congratulate a man on coming to his senses."

"Despair is perfectly compatible with a good dinner, I promise you."

"Let a man who has to make his fortune in life remember this maxim: Attacking is the only secret. Dare and the world yields, or if it beats you sometimes, dare it again and you will succeed."

"At certain periods of life, we live years of emotion in a few weeks, and look back on those times as on great gaps between the old life and the new."

" 'Tis not the dying for a faith that's so hard, Master Harry--every man of every nation has done that--'tis the living up to it that is difficult." The History of Henry Esmond

"To endure is greater than to dare, to tire out hostile fortune, to be daunted by no difficulty, to keep heart while all have lost it, to go through intrigue spotless, to forego even ambition when the end is gained-- who can say this is not greatness?"

"Remember, it's as easy to marry a rich woman as a poor woman."

Sunday, June 18, 2006 06/16/06-Gustav Tenggren

In today's excerpt, Gustav Tenggren (1896-1970), Disney artist and illustrator on such projects as Snow White, Bambi and Pinocchio. Disney, and Hollywood generally, were beneficiaries of the Great Depression and the rise of totalitarianism in Europe, as hordes of highly talented but out-of-work painters, musicians and other artists poured into Hollywood in search of employment. These artists took Disney's animation to unforeseen heights:"In New York, Tenggren was part of a group of writers and artists who gathered in clubs on Greenwich Village's MacDougal Street for drinking, smoking and highly opinionated conversations. 'Gustav was always somewhat vocal within that group, then always independent enough to go off by himself,' according to Mary Anderson, one of several nieces. 'His hair was long, he wore a camel hair coat with a sash and suede shoes. He was a true artist. He saw things differently.' His aloofness, which would not endear him to co-workers at Disney, was 'very much in keeping with the Swedish character,' said Mary T. Swanson. Like Garbo, the most famous Swede of all, it was a 'quality of aloneness, which is often seen as aloofness. There is a joke about Swedes, Norwegians, and Finns stranded on an island: a year later the Finns have set up a lumber industry, the Norwegians a fishing industry, and the Swedes are looking at each other waiting to be introduced. That gives you a feeling.'

" 'During the Depression, things got very slow,' said Mary Anderson. 'So, like a lot of artists, he went out there and worked for Disney.' Tenggren, borrower of artistic styles from classical to contemporary, subtly adapted to whatever assignment was at hand. In Tenggren's depiction of Snow White's fearsome flight through the forest, for example, where spindly hands of anthropomorphic trees reach and grab for the girl, there is debt to both Dore' and Rackham, but Bauer is also present..."Tenggren was 'a meticulous researcher and kept files and cuttings' on Hollywood movie scenes containing unusual camera angles, favorite American painters, such as Thomas Hart Benton, Grant Wood and Edward Hopper, and photos and sketches of European locales. In Pinocchio, Albert Hurter met Grandfather Teng; or, as Robin Allan put it, 'Germany and Sweden come together in the three- dimensionalizing of Geppetto's workshop interior.' "

John Canemaker (2005 Oscar winner for his animation short!), Before the Animation Begins, Hyperion, 1996, pp. 40-41

Thursday, June 15, 2006 06/15/06-Gay Index and High Tech

In today's encore excerpt, Richard Florida speaks to the ingredients that make a city or region thrive economically:

"...I try to identify the factors that make some cities and regions grow and prosper, while others lag behind. One of the oldest pieces of conventional wisdom in this field says the key to economic growth is attracting and retaining companies--the bigger the company, the better...But it quickly became clear that this wasn't working.

"I saw this firsthand in the mid-1990s with Lycos, a Carnegie Mellon spin-off company. The Lycos technology, which you have probably used to search the internet, was developed in Pittsburgh. But the company eventually moved its operations to Boston to gain access to a deep pool of skilled managers, technologists and business people. These departures were happening repeatedly, in Pittsburgh and elsewhere. All too often the technologies, the companies and even the venture capital dollars flowed out of town to places that had a bigger and better stock of talented and creative people...

"Then came the real stunner. In 1998 I met Gary Gates, then a doctoral student at Carnegie Mellon. While I had been studying the location decisions of high-tech industries and talented people, Gates had been exploring the location patterns of gay people...When we compared the two lists with...statistical rigor, his Gay index turned out to correlate very strongly with my measures of high- tech growth. Other measures I came up with, like the Bohemian index--a measure of the density of artists, writers and performers in a region--produced similar results. My conclusion was that...economic growth was occurring in places that were tolerant, diverse and open to creativity--because these were places where creative people of all types wanted to live. While some in academe were taken aback by my findings, I was amazed by how quickly city...leaders began to use my measures and indicators to shape their development strategies."

Richard Florida, The Rise of the Creative Class, Basic Books, 2002, pp. xxvii-xxviii

Wednesday, June 14, 2006 06/14/06-Derivatives

In today's excerpt, one of the most pronounced trends in current financial markets, corporations hedging risk through derivatives, which are sometimes highly standardized and thus exchange- traded, but which are increasingly customized and over-the-counter. This trend is, in many respects, similar to and an extension of the dramatic rise of futures and options in the late nineteenth and early twentieth century. Think trillions:

"...derivatives (are) financial instruments whose values are tied to the performance of assets such as individual stocks and bonds, or to benchmarks such as interest rates. Investors use them to hedge risk. An investor can buy a derivative, for example, to neutralize the effects of rising interest rates or fuel prices, of declining bond values, of swings in the price of a commodity like corn, even the effect of weather on crops.

"...The over-the-counter market is far larger than the exchange-traded ones. Derivatives traded in this market had a total face value of about $285 trillion at the end of 2005, up from about $94 trillion five years before, according to the Bank for International Settlements, an association of international banks based in Switzerland...In comparison, exchange- traded derivatives had a total face value of about $58 trillion at year-end, according to the bank group."

David Reilly, "An Arcane Corner of Finance Creates a London Billionaire," The Wall Street Journal, June 8, 2006, A1, A15

Wednesday, June 07, 2006 06/07/06-the Radio

In today's excerpt, the radio becomes the most successful product in America as part of the new age of electricity:

"By 1896, electricity had become such an accepted part of life that people were familiarly referring to it as juice...(and) electrical products began to come onto the market.

" product was more successful than the radio. Radio, in the form of radio-receiver, entered the language in 1903. Earlier still there had been such specialized forms as radiophone (1881) and radioconductor (1898). As late as 1921 the New York Times was referring to the exciting new medium as 'wireless telephony.' Others called it a 'loud- speaking telephone' or simply a 'wireless' (as it is still often called in Great Britain). When a leading golf club, the Dixmoor, installed radio speakers around the course so that its members could listen to church services (honestly) while playing their Sunday- morning round, it referred to the system simply as a 'telephone.' Radio in the sense of a means of communication and entertainment for the general public didn't enter the language until 1922, and it took a decade or so before people could decide whether to pronounce it ray-dio or rah-dio."

Bill Bryson, Made in America, Perennial, 1994, pp. 225- 6

Tuesday, June 06, 2006 06/06/06-Elizabeth Bishop

In today's excerpt, the poet Elizabeth Bishop (1911-1979):

"John Ashberry's praise for Bishop as a 'writer's writer's writer', whose work 'inspires in writer's of every sort' an 'extraordinarily intense loyalty' seems apt.

" the time of her death, she had assembled fewer than ninety poems...she could mull over a draft for more than a decade in wait for the right line or word...Bishop's reticence seems less a matter of timidity and more of perfectionism, a trait now synonymous with her name...part of Bishop's appeal involves the contrast between the work published in her lifetime...and the pain and disorder of her often very messy life..."

Excerpts from her work:

The art of losing isn't hard to master.
So many things seem filled with the intent
To be lost that their loss is no disaster

from One Art

The intimidating sound
of these voices
we must separately find
can and shall be vanquished:
Days and Distance disarrayed again
and gone
both for good and from the gentle battleground.

from Argument

Elizabeth Bishop, The Complete Poems, 1927-1979

Commentary from Gillian White, Awful but Cheerful, London Review of Books, 25 May 2006, pp. 8-9

Friday, June 02, 2006 06/02/06-the Upper House

In today's excerpt--why we call the Senate the upper house and the House of Representatives the lower house, a designation made at the start of the first Congress, March 4, 1789:

"So there was fear and expectation, excitement and hope as the elected members of Congress filed into Federal Hall, a building at the corner of Wall and Nassau streets, which served as New York's City Hall. Major Pierre-Charles L'Enfant (later to gain fame as the architect of the city plan for Washington, DC), a young French architect and engineer who had fought in the revolution as a volunteer, had been hired to convert the building into a handsome and appropriate site for the nation's new government...Rather strikingly, the building marked the beginning of the country's commitment to the uniquely Federal style of architecture.

"As congressmen entered the building, they found a three-story central vestibule with a marble floor and a splendidly decorated skylight under a small cupola. The House chamber was located off this vestibule...Senators found their chamber on the second floor via two stairways, one of which was reserved for congressmen, and was almost immediately referred to as the upper house. 'It is very true,' wrote Peter Muhlenberg to Benjamin Rush, 'that the appellation of Lower House will perfectly apply at present to the House of Representatives, but in this case, the upper and lower House derive their different rank from the whim and pleasure of the Architect.'

"...Some sixty-five representatives were expected on that first day but only thirteen showed up......And many of the arriving members found New York 'a dirty city,' with pigs roaming loose to eat garbage thrown in the streets. The stench, especially for those from country areas, was 'so apparent,' wrote Representative Elias Boudinot of New Jersey to his wife, 'as to effect our smelling Faculties greatly.'

"...Not until April 1, 1789, with the arrival of Thomas Scott from western Pennsylvania, did the House finally have a quorum of thirty. It was April Fool's Day, noted Boudinot."

Robert V. Remini, The House, Collins, 2006, pp. 10-13

Thursday, June 01, 2006 06/01/06-Changes on Wall Street

In today's excerpt, Wall Street investing legend Leon Levy comments on the changes since his start in the business in 1948:

"Although America was poised for a great boom, most people did not know it. When I joined Wall Street, we were in the middle of the longest bear market of the post-World War II period...The bear market was a gift of the Federal Reserve Board, which had raised margin requirements to 100% to head off a speculative frenzy after the war. It is difficult to overestimate the degree to which the psychological legacy of the Depression weighed upon the market in those days. Memories of the role of margin debt in the 1929 crash were fresh in people's minds. The Fed not only raised margin requirements from 40 percent to 100 percent, which forced speculators to sell stock to meet margin calls, but it also imposed a regulation that sellers of stock who had margin debt could use the proceeds of the sale only to further reduce that debt. This knocked the Dow Jones Industrial Average down by 25 percent in the span of three months.

"The investment climate was deeply conservative...Trust funds in New York State could at best keep only 25 percent of their holdings in stock, but most trustees opted to stash their entire portfolios in bonds. The logic of this analysis was that stocks are inherently more risky than bonds and thus should provide their holders with a 'risk premium.'

"Those who did trade stocks were few and did so rarely. In the 1950s, only 5 percent of Americans owned stocks, in contrast to over 50 percent who own stocks today. Tape watchers had to be a particularly patient breed then, as Dow Jones computed its industrial average only once every hour, and even then it was often late."

Leon Levy, The Mind of Wall Street, Public Affairs, 2002, pp. 42-3