Monthly Archives: July 2010

The Energy Future

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Ed Wallace:

The winter of 1979 in southern California reminded people why they had migrated to LA over the decades. The daytime temperatures were in the mid-70s, and the LA basin’s summer smog had disappeared, revealing the snowcapped San Gabriel Mountains.


At Neonex Leisure that day, we were brainstorming the recreational vehicle of the future. At the time we built America’s largest RV, the Arctic Sun, a combination van/pickup truck pulling a 55-foot-long 5th-wheel trailer. Now Neonex Canada had put our California division in charge of designing the company’s next Class A Motorhome.


Each of the other five U.S. managers gave their impressions of the future of the recreational vehicle, disclosing visions of startling grandeur. I was more flippant: “I bet it’s a Honda with a Coleman tent.” Three months later the Second Energy Crisis hit. We shut down our RV plant in two days flat, and I was back in Texas in five.


My point is that, if you had asked every energy or automotive issues guru what the future would hold for automobiles just before the winter of 1978 – 79, the answer would have been completely different if you’d asked them the same thing just 12 months later. That’s what an energy crisis can do.



My joke about a Honda with a Coleman tent was weirdly prophetic. But my fellow managers’ visions of million-dollar motorhomes would also turn out to be spot on — 20 years later.

Insider Trading Inside the Beltway

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Professor Bainbridge:

My new article, Insider Trading Inside the Beltway, has been posted to SSRN. Now it just needs to find a nice law review home somewhere in the top 50.


Abstract: A 2004 study of the results of stock trading by United States Senators during the 1990s found that that Senators on average beat the market by 12% a year. In sharp contrast, U.S. households on average underperformed the market by 1.4% a year and even corporate insiders on average beat the market by only about 6% a year during that period. A reasonable inference is that some Senators had access to – and were using – material nonpublic information about the companies in whose stock they trade.


Under current law, it is unlikely that Members of Congress can be held liable for insider trading. The proposed Stop Trading on Congressional Knowledge Act addresses that problem by instructing the Securities and Exchange Commission to adopt rules intended to prohibit such trading.

Michael Hastings of Rolling Stone on the Story that Brought Down Gen. McChrystal and Exposed Widening Disputes Behind the U.S. Debacle in Afghanistan

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Democracy Now:

In a rare extended interview, we speak to Michael Hastings, whose article in Rolling Stone magazine led to the firing of General Stanley McChrystal. Hastings’ piece quoted McChrystal and his aides making disparaging remarks about top administration officials, and exposed long-standing disagreements between civilian and military officials over the conduct of the war. The Senate confirmed General David Petraues as McChrystal’s replacement on Wednesday, one day after McChrystal announced his retirement from the military on Tuesday after a 34-year career.

Lunch with Luca Cordero di Montezemolo

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Richard Milne:

Screaming down the home straight of Ferrari’s test track at 200kmph an hour in a classic red 458 Italia, I suddenly don’t feel like lunch. The Fiorano track near Bologna in central Italy is, at 3km, not long. But, partly in an attempt to impress the test driver next to me with some fast cornering, I feel as if I have left part of my stomach on one of its hairpin bends. Matters fail to improve as, in heavy fog untypical of early summer, I take the car off the track and, rather more slowly, on to the winding roads of the Apennines, heading for Ferrari HQ in nearby Maranello.



I am still spinning slightly when we pull into the car park just before the company’s elegant and aristocratic chairman, Luca Cordero di Montezemolo, who somewhat incongruously arrives in a small Fiat. He explains that his journey from Rome has been a nightmare as fog diverted his helicopter and forced him to take trains and cars – hence the Fiat. Nevertheless he appears in characteristically enthusiastic mood. “I’ve just been to a conference at the Vatican [on the financial crisis]. Fantastic,” he explains. “Fantastic” is a word Montezemolo uses a lot. Ferrari is “fantastic”, Italian food is “fantastic”, his new high-speed train company, NTV, is “fantastic”, as is the 458 Italia I have been driving.

On my way out he hands me a white postcard. “This is what I give to all new employees at Ferrari,” he says. Looking at it in a Ferrari 599 on the way back to Milan, it looks to me like the perfect credo for Montezemolo. It starts: “The real secret of success is enthusiasm. You can do anything if you have enthusiasm … With it there is accomplishment. Without it there are only alibis.”

Clusty Search: Luca Cordero di Montezemolo