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The fool John Kerry as SecState has been a perfect compliment to his boss. Throw in Hagel as SecDef and we have a hat trick of ignorance. The Pollard gambit was too much and is receiving the world’s opprobrium. It was kinda like a foreign policy “stinkburger.” Jonathan Tobin starts our look at Kerry.
It was just a couple of months ago that Secretary of State John Kerry was being lauded as, in the words of CNN, “a surprise success.” He was hailed by the chattering classes as having exceeded Hillary Clinton’s record by showing daring instead of her instinctive caution. After all, hadn’t he managed to preside over a nuclear deal with Iran, saved President Obama’s face by negotiating a good deal with Russia about Syrian chemical weapons, and made progress on a withdrawal agreement in Afghanistan? Most of all, his audacious decision to restart Middle East peace talks when everyone was warning him it was a fool’s errand was seen as having great promise. As the Atlantic gushed, “It’s looking more and more possible that when the history of early-21st-century diplomacy gets written, it will be Kerry who is credited with making the State Department relevant again.”
But that was then. Today, Kerry is being rightly lambasted by the left, right, and center for his idiotic decision to introduce the issue of convicted spy Jonathan Pollard’s release into the Middle East peace negotiations. …
Tobin also posts on what he calls “the disturbing Pollard debate.”
… Anyone listening to the debate about Pollard being conducted in the last week must understand that his name is synonymous with charges of dual loyalty against American Jews who serve in both the U.S. government and its armed forces. As I detailed in my 2011 article, the damage that the cynical decision to employ a foolish and unstable person as a spy has done to American Jews and to the vital alliance between the U.S. and Israel is incalculable.
While after serving so much time in prison he is deserving of clemency, I stand by my previous conclusion about what should be the final word about this subject:
Long after his release or death, Pollard’s behavior will still be used to bolster the slurs of those who wish to promote the pernicious myth that there is a contradiction between American patriotism and deep concern for the safety of the State of Israel. It is this damning epitaph, and not the claims of martyrdom that have been put forward to stir sympathy for his plight, that will be Jonathan Pollard’s true legacy.
Which brings us to Krauthammer’s column for the week – “Kerry’s Folly – Chapter 3.”
When has a secretary of state been involved in so many disastrous, self-initiated negotiations? First, John Kerry convenes — against all advice and holding no cards — Geneva negotiations to resolve the Syria conflict and supposedly remove Bashar al-Assad from power. The talks collapse in acrimony and confusion.
Kerry’s response? A second Geneva conference that — surprise! — breaks up in acrimony and confusion.
Then, even as Russian special forces are taking over Crimea, Kerry goes chasing after Russian Foreign Minister Sergei Lavrov — first to Paris, then Rome, then London — offering a diplomatic “offramp.” Lavrov shrugs him off. Russia annexes Crimea.
The crowning piece of diplomatic futility, however, is Kerry’s frantic effort to salvage the Arab-Israeli negotiations he launched, also against all odds and sentient advice. He’s made 12 trips to the region, aiming to produce a final Middle East peace within nine months.
It is month nine. The talks have gone nowhere. But this has been a fool’s errand from Day One. There never was any chance of Palestinian leader Mahmoud Abbas concluding a final peace. …
… To keep stringing along the Israelis, some genius decided to dangle Jonathan Pollard. What’s he got to do with anything? Why is he being offered as an incentive for Israel to accept otherwise unacceptable conditions?
Normally, the United States facilitates agreements by offering Israel compensation for the security risks it takes upon giving up territory, because the Arabs either cannot or will not offer security guarantees of their own. Thus the United States might try to re-establish the military balance with advanced weaponry or access to timely intelligence.
But Pollard? He is an American traitor who is up for parole next year anyway. It has long been a mistake for Israel to agitate for his release. He disgracefully betrayed his country. What kind of corrupt and cynical quid pro quo is this? …
We have been treated to the breathless accounts by Michael Lewis about the Wall Street skullduggery in High Frequency Trading. Lewis’s claims that we’re all cheated have been repeated for the week since he was interviewed on 60 Minutes. It is time for some grownups to consider these claims. Craig Pirrong of Streetwise Professor is first.
Michael Lewis’s new book on HFT, Flash Boys, has been released, and has unleashed a huge controversy. Or put more accurately, it has added fuel to a controversy that has been burning for some time.
I have bought the book, but haven’t had time to read it. But I read a variety of accounts of what is in the book, so I can make a few comments based on that.
First, as many have pointed out, although this has been framed as evil computer geniuses taking money from small investors, this isn’t at all the case. If anyone benefits from the tightening of spreads, especially for small trade sizes, it is small investors. Many of them (most, in fact) trade at the bid-ask midpoint via internalization programs with their brokers or through payment-for-order-flow arrangements. (Those raise other issues for another day, but have been around for years and don’t relate directly to HFT.)
Instead, the battle is mainly part of the struggle between large institutional investors and HFT. Large traders want to conceal their trading intentions to avoid price impact. Other traders from time immemorial have attempted to determine those trading intentions, and profit by trading before and against the institutional traders. Nowadays, some HFT traders attempt to sniff out institutional orders, and profit from that information. Information about order flow is the lifeblood of those who make markets.
This relates to the second issue. This has been characterized as “front running.” This terminology is problematic in this context. Front running is usually used to describe a broker in an agency relationship with a customer trading in advance of the customer’s order, or disclosing the order to another trader who then trades on that information. This is a violation of the agency relationship between the client and the broker.
In contrast, HFT firms use a variety of means-pinging dark pools, accessing trading and quoting information that is more extensive and obtained more quickly than via the public data feeds-to detect the presence of institutional orders. They are not in an agency relationship with the institution, and have no legal obligation to it. …
Joe Nocera is next.
There is always something just a little frustrating about reading a Michael Lewis book. On the one hand, Lewis’s core point — whether it is that left tackle has become the second most important position in football (“The Blind Side”), or that the stock market has become rigged by high-frequency traders, as his new book, “Flash Boys,” claims — is almost always dead-on. His ability to find compelling characters and tell a great story through their eyes is unparalleled. He can untangle complex subjects like few others. His prose sparkles.
On the other hand, there usually comes a point in a Michael Lewis narrative when it all starts to feel just a little too perfect. “Flash Boys,” which is excerpted in The New York Times Magazine, is no exception. The book’s hero, Brad Katsuyama, is a young executive at the Royal Bank of Canada who realizes that something has gone awry with the stock market.
As he digs deeper, he realizes that secretive high-frequency trading firms, taking advantage of lightning-fast computers, willing accomplices in the stock exchanges and some poorly thought-out federal regulation, have effectively hijacked the equity markets. Roused to action by what he has discovered, Katsuyama quits his job and starts up a new exchange, IEX, which includes a clever “speed bump” that levels the playing field for investors.
So far, so good. But Lewis doesn’t stop there. To make his hero appear even more heroic, he casts Katsuyama as the only person on Wall Street to figure out the high-frequency trading scam, and the only person with the courage to do something about it. That’s not quite the case.
Nearly two years ago, Scott Patterson of The Wall Street Journal wrote a book titled “Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market,” which also exposed the scam. The book is structured remarkably like Lewis’s — Patterson’s got a heroic central character who learns the tactics of the high-frequency bunch and then acts on it by going to the Securities and Exchange Commission. Except Patterson’s hero isn’t Brad Katsuyama; he is Haim Bodek. When I caught up with Bodek, he groused about how Katsuyama had only part of the picture, and how there were other elements of high-frequency trading that needed as much if not more exposure. …