Gideon Rachman

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As we sip our drinks, there is still time for one last dark warning about the future of Europe. Leaning forward, the president says: “Our generation have lived in such certain times, secure times, that we cannot imagine how it was in the past. But nothing is excluded. Nothing. We have banished the demons of the 20th century but we have not eliminated them: hatred, racism, anti-Semitism, nationalism. Look at what’s happening in Hungary. Young students in Budapest are painting on the door of a professor – ‘Jew’. These are students doing this, not football hooligans. We have the privilege that we have never seen such people in power but there is no guarantee it will not happen. My protection against them is a strong European Union.”

After that, there seems nothing much left to say so I call for the bill. Earlier in the evening, Schulz had said that he must pay, explaining that parliamentarians are not allowed to accept hospitality. I counter-explained that while our guests choose the restaurant, FT journalists are obliged to pay. It is one of those British rules. So, a trifle reluctantly, Schulz lets me settle the bill and heads back to his Strasbourg hotel – and his diary.

The Economist:

CALL it hyperactivity, call it the temptation to fiddle. Chief executives have a tendency to make acquisitions just to show they are doing something. Similarly, fund managers, sitting at their desks all day, have the urge to trade. Otherwise why go into the office at all?

But these trades inevitably incur costs, and not just in the form of fees disclosed to mutual-fund investors as part of a fund’s total expense ratio. When a large fund sells its stake in a small company, for example, the share price may fall significantly as supply overwhelms demand. A recent paper* in the Financial Analysts Journal (FAJ) found these hidden costs were, on average, higher than the funds’ declared expenses and had a significant negative impact on returns.

The academics looked at the record of 1,758 American equity mutual funds between 1995 and 2006. They estimated trading costs by looking at changes in portfolio holdings (which are revealed every quarter), checking the bid-ask spreads for the stocks concerned and making an allowance for the price impact of trades.

Dan McCrum:

The Berkshire Hathaway annual meeting is like Woodstock for capitalists. It draws tens of thousands of shareholders, value investors, groupies and the curious to the midwestern city Omaha, Nebraska.

They make the pilgrimage each spring to sit at the feet of Warren Buffett and Charlie Munger, the two men who have spent half a century building a sprawling $260bn conglomerate.

The FT’s Dan McCrum was there to capture the weekend festivities and the wise words from the pair of octogenarian sages.
3:53pm

I’ve landed in chilly Omaha, a big open city spread along the Nebraska side of the Missouri River, and its starting to fill up with eager investors from around the world. You can spot some of them carrying the 2013 annual report, required reading among the faithful, and by sound of discussion of the great man.

Matthew Goldstein:

Michael Marchillo, a plumber, has been trying and failing for months to buy a bigger home for his family here in Sin City. He was pre-qualified by a bank for a $130,000 mortgage, which a year ago would have landed a typical three-bedroom home in the area. No more. Now, the 36-year-old says, it’s hard to compete with “greedy investors” who come to the table flush with cash for quick deals.

Marchillo is on to something. The once-beleaguered Las Vegas housing market has been on fire since investment firms led by Blackstone Group LP, Colony Capital and American Homes 4 Rent began buying homes here some eight months ago, backed by $8 billion in investor cash to spend nationally.

These big investors and a handful of others have bought at least 55,000 single-family homes across the U.S. in the past year. In the Vegas area alone, they have accounted for at least 10 percent of the homes sold since January 2012, according to a Reuters analysis of housing transactions.

Tom Foremski:

Google’s dirty little secret is that its commercial algorithm is broken and it can’t distinguish between quality content and spam. Which is why it is backing big brands in a big way because that’s the easiest way to sort things out.

That’s too bad for small mom and pop businesses and the backbone of the economy.

Nicholas Retsinas @ HBR:

The United States housing market is no longer the boat anchor dragging down economic growth. Data from the S&P/Case-Shiller Home Price Indices show that average home prices in an assortment of American cities have been on the upswing, increasing by almost 7 percent across the country in 2012. Recent reports that sales of new single-family homes rose in March are proof points that “the housing market recovery remains on track.”

We asked Nicolas P. Retsinas to reflect on the re-emergence of the housing industry, what it means to the rental market, and the future of the mortgage interest tax deduction. Retsinas is a senior lecturer in real estate at Harvard Business School, director emeritus of Harvard University’s Joint Center for Housing Studies, and former Federal Housing Commissioner.

Q: What factors have been contributing to the housing recovery?

Steve Coll:

In the summer of 1960, Sidney Gottlieb, a C.I.A. chemist, flew to Congo with a carry-on bag containing vials of poison and a hypodermic syringe. It was an era of relative subtlety among C.I.A. assassins. The toxins were intended for the food, drink, or toothpaste of Patrice Lumumba, Congo’s Prime Minister, who, in the judgment of the Eisenhower Administration, had gone soft on Communism. Upon his arrival, as Tim Weiner recounts in his history of the C.I.A., Gottlieb handed his kit to Larry Devlin, the senior C.I.A. officer in Léopoldville. Devlin asked who had ordered the hit. “The President,” Gottlieb assured him. In later testimony, Devlin said that he felt ashamed of the command. He buried the poisons in a riverbank, but helped find an indirect way to eliminate Lumumba, by bankrolling and arming political enemies. The following January, Lumumba was executed by the Belgian military.

For Eisenhower, who had witnessed the carnage of the Normandy landings and the Battle of the Bulge, and later claimed to “hate war as only a soldier who has lived it can,” political assassinations represented an alluring alternative to conventional military action. Through the execution or overthrow of undesirable foreign leaders, the thinking went, it might be possible to orchestrate the global struggle against Communism from a distance, and avoid the misery—and the risks of nuclear war—that out-and-out combat would bring. Assassination was seen not only as precise and efficient but also as ultimately humane. Putting such theory into practice was the role of the C.I.A., and the agency’s tally of toppled leftists, nationalists, or otherwise unreliable leaders is well known, from Mohammad Mosadegh, of Iran, in 1953, and Jacobo Árbenz Guzmán, of Guatemala, in 1954, to Ngo Dinh Diem, of South Vietnam, in 1963, and Salvador Allende, of Chile, in 1973. Not all the schemes went according to plan; a few seemed inspired by Wile E. Coyote. The C.I.A. once planned to bump off Fidel Castro by passing him an exploding cigar.

Charles Pierce:

There is no clearer example of the uselessness and essential decadence of our courtier press than the annual White House Correspondents Association dinner, which will be fouling the reputation of the craft of journalism this very weekend. Putative journalists pretend they’re Academy Award nominees while squiring around actual Academy Award nominees, many of whom can’t tell one red carpet from another, and everybody acts as though there’s seemingly nothing wrong with journalism-as-celebrity, and with journalists claiming the same sort of celebrity as the people they cover. This is a medieval papal court for whom its Luther never was born. It’s Versailles without Robespierre.

Figure on paying big time for a semi-glamorous locale; an embassy will do (but only one for a major country). Then, add in food and booze – about $100 a head. Plus entertainment, security, cleanup, insurance. Valet parking for a few hundred could cost roughly $6,000. Want a celebrity at your event? Of course you do. First-class flight to Washington, a hotel suite and limo for the weekend: Count on $4,500 or so more per glamourpuss, not including his or her posse, which you may have to include.Add it up. When all is said and paid for after all the parties surrounding the White House Correspondents’ Association Dinner this weekend, some media organizations will drop as much as $200,000 each to entertain an elite list of guests.
These would be the same “media organizations” that are laying people off by the carload, slashing the benefits of those they don’t lay off, and making people do more work in less time for smaller salaries. But, that aside, the annual competition in the category of Best Performance By A Media Outlet In The Role Of A Corporate ‘Ho is likely to be spirited again this year, but The Atlantic’s David Bradley is making a strong run at it.

Jaron Lanier:

When copying is easy, there is almost no intrinsic scarcity, and therefore market value collapses. There’s an endless debate about whether file sharing is “stealing.” It’s an argument I’d like to avoid, since I don’t really care to have a moral position on a software function. Copying in the abstract is vapid and neutral.

It would be unfair to demand that people cease pirating files when those same people are not paid for their participation in very lucrative networks.
To get ahead of the argument a little, my position is that we eventually shouldn’t “pirate” files, but it’s premature to condemn people who do it today. It would be unfair to demand that people cease sharing / pirating files when those same people are not paid for their participation in very lucrative network schemes. Ordinary people are relentlessly spied on, and not compensated for information taken from them.

While I would like to see everyone eventually pay for music and the like, I would not ask for it until there’s reciprocity.

What matters most is whether we are contributing to a system that will be good for us all in the long term. If you never knew the music business as it was, the loss of what used to be a significant middle-class job pool might not seem important. I will demonstrate, however, that we should perceive an early warning for the rest of us.

Copying a musician’s music ruins economic dignity. It doesn’t necessarily deny the musician any form of income, but it does mean that the musician is restricted to a real-time economic life. That means one gets paid to perform, perhaps, but not paid for music one has recorded in the past.

George Will:

Two of the three most infamous Supreme Court decisions were erased by events. The Civil War and postwar constitutional amendments effectively overturned Dred Scott v. Sandford (1857), which held that blacks could never have rights that whites must respect. Plessy v. Ferguson (1896), which upheld legally enforced segregation, was undone by court decisions and legislation.

The third, Korematsu v. United States (1944), which affirmed the president’s wartime power to sweep Americans of disfavored racial groups into concentration camps, elicited a 1988 congressional apology. Now Peter Irons, founder of the Earl Warren Bill of Rights Project at the University of California at San Diego, is campaigning for a Supreme Court “repudiation” of the Korematsu decision and other Japanese internment rulings. Such repudiation, if it occurred, would be unprecedented.

An essay Irons is circulating among constitutional law professors whose support he seeks is timely reading in today’s context of anti-constitutional presidencies, particularly regarding war powers.