I'm mostly familiar with those that throw darts at private companies.

If you're in the world of the hedge fund or the like, it's not the one whereof I speak.

Bullshit
 

I can see an argument for that. There's also a some law on both sides of the issue. It's something the Service has issued Revenue Procedures for guidance on, but it's still working itself out.

Of course, if I can anticipate your next point...no, the value of the carry isn't zero on day one. It's the NPV of the estimated payout. Based upon the manager's past record and the market conditions, someone much more mathematically adept than I could produce a value. But then, your guys would be paying tax on dry income, years before they see the cash.

Don't be stupid. I advise the funds, not the principals.

Bullshit
 

Not my next question at all.

My next question was what you valued the partnership interest at the day you started a new law firm?

Remember, these guys started the Company (or Fund, as the case may be), and they have a separate stream of income in the management fee to pay salary to all the service providers. The Company buys all the assets after the day they get their interest.

If your new law firm happened to buy a little office condo, would you expect to pay ordinary income when you sold it? Would it have affected the amount you took into income when you started the firm?

So none of your clients will ask the question of "how do we structure for capital gains" if the bill passes?

Bullshit
 

How much would you pay to buy in to Blackstone?

I told you, the math is out of my range of ability. The concept is not. If you mean to suggest that the carry is worth zero because thee limiteds haven't paid in their capital yet, that's absurd. If you are sugggesting that a valuation expert couldn't look a the historic returns, the implied values from the Blacksotone IPO and the other IPOs being bandied about, and the size of the fund and come up with a value, you're either being disingenous or naive.

Or cyring, for that matter.
 

some guy:

• [N]o one seems to be pointing out that Bush spent the whole press conference say we are fighting Al Queda, then concluded by disagreeing that Al Queda is stronger then it was in 2001. In 2001, they highjacked four airliners using box cutters and today, according to administration spin, they have the entire United States Army bogged down! How do people sit there and not start laughing, I don't know.

Not within the scope of their current engagements. I deal in transactions, not in general business counseling.

Bullshit
 

You're not answering my question.

As to yours, I view the math as about as meaningful as the folks who calculate the odds of who will win the next Presidential election.

All I am suggesting is that when someone starts a company, any company, and puts nominal cash in, even no cash, and then builds up a business over a long period of time, that business is a capital asset. Whether they take a bank loan or do an equity financing to get more capital doesn't change the fact that the business is a capital asset as a whole. (note that this is different than the points assuming we have a partnership with flow-through taxation - this argument is on your turf and looking at the partnership as an entity).

The fact that someone has built up many companies before and are quite good at it, doesn't change that fact.

This sounds comfortable.

Bullshit
 

Damn, for once GGG sounds rational. Maybe it's just in comparison to Wonk.

Bush:

• "The same people that attacked us on September the 11th is the crowd that is now bombing people, killing innocent men, women and children, many of whom are Muslims, trying to stop the advance of a system based upon liberty."

Which is worse: That he believes this, or that he doesn't?

Bullshit
 

If it makes you feel better, I'd happily eliminate the entire benefit of the capital gains rate and tax it at ordinary income rates.

I just don't want to do so selectively in a way that will dry up venture investment. Like Clinton, I would favor venture investment.

Bullshit
 

I understand what you are saying, and I disagree with you. What the PEs are doing is not building a business. They are managing money. They buy businesses built up by other people, then they sell them, usually at a profit. Sometimes, they send in operating partners to clean the business up a bit. Sometimes they just infuse a little money. Sometimes they just flip them.

But they are not being compensated for running their portfolio companies. They are being compensated for making their investors money.

We may agree to disagree. But you have yet to say anything that convinces me that the model is any different than what I just described.

It isn't comfortable or not comfortable. I work for a Big 4 firm in their transaction advisory practice. It's what I do.

Bullshit
 

This is something we do agree about. I've been on record for years as being opposed to tax breaks on capital gains.

But if you think that taxing carried interests as compensation is going to dry up PE, you're not remembering your history very clearly. This is exactly the same issue that was fought over profits interests in real estate and leasing limited partnerships in the 80s and 90s.

Pavlov indeed. That we're debating the few billions people like Schwartzman keep, the Federal Government wastes and loses multiples of his worth every single day.

Go onto any website and compare the numbers we wste on pork every day to the numbers we lose to private equity's shrewd tax structuring.

It's a joke we're even having this debate.

OK, I'm just an asshole sometime. (Yeh, it's what I do.)

Bullshit
 

I'm not worried about drying up the current mega-deals mainly funded by the hot debt market; I am worried about further drying up the early stage venture deals that are already struggling.

A comparison to real estate is, um, perhaps unfortunate at this point in time. It's not exactly a thriving sector.

Bullshit
 

I have to say, there's not much of this that hangs together logically for me. This analysis is riddled by false dictomies (like the idea that they are either running portfolio companies or making investors money - these are related elements!) and assumptions (like that they are being "compensated" for doing one or the other - the carry is, philisophically, a piece of the action, a way to allign interests between investors and management - just like the founder's stock others get).

But if you think what they do is equivalent to a mutual fund manager, you have to be fairly far from the boards of those portfolio companies, where these guys may be a royal pain in the ass much of the time, but where they are clearly doing something fairly intensive.

Nails.
 

Dibs on Lenny Dykstra!

Bullshit
 

Most of the early stage venture deals I see tend to be funded with preferred stock and the VCs inject capital and don't buy the company outright. The managers of those funds may sit on the boards of the businesses in their portfolio, but they aren't exactly "building the business."

Bullshit
 

When I say thatt PE managers are being compensated for making money rather than running the portfolio companies, I mean that is what their investors pay them for. The investors don't generally give a shit what specific companies the funds invest in, as long as they make money. Witness the growth of the blind pools that PE funds are opening up now.

What's the matter with Georgia?
 

• A Georgia man is scheduled to be executed by lethal injection on Tuesday for killing a police officer in 1989, even though the case against him has withered in recent years as most of the key witnesses at his trial have recanted and in some cases said they lied under pressure from police.
  
  Prosecutors discount the significance of the recantations and argue that it is too late to present such evidence. But supporters of Troy Davis, 38, and some legal scholars say the case illustrates the dangers wrought by decades of Supreme Court decisions and new laws that have rendered the courts less likely to overturn a death sentence.
  
  Three of four witnesses who testified at trial that Davis shot the officer have signed statements contradicting their identification of the gunman. Two other witnesses -- a fellow inmate and a neighborhood acquaintance who told police that Davis had confessed to the shooting -- have said they made it up.
  
  Other witnesses point the finger not at Davis but at another man. Yet none has testified during his appeals because federal courts barred their testimony.
  
  "It's getting scary," Davis said by phone last week. "They don't want to hear the new facts." . . .
  
  At the heart of Davis's difficulties is a law passed by Congress and signed by President Bill Clinton in the wake of the Oklahoma City bombing -- the Antiterrorism and Effective Death Penalty Act of 1996.
  
  The legislation was aimed at bomber Timothy J. McVeigh but has had far broader consequences: It limits the reasons for which federal courts can overturn death penalty convictions. In Davis's case, it has helped block the exploration of witnesses' statements that they had lied at trial. . . .
  
  The Burger King where the shooting happened is next to a Greyhound bus station, on a ragged edge of this city's touristy historic district. As the restaurant was closing at 1 a.m., a fight over a beer was erupting in the parking lot between a homeless man named Larry Young and another man who, some witnesses said, threatened to shoot him.
  
  After the man pistol-whipped Young, a police officer doing an off-duty shift in uniform as a security guard came out. The officer told the man to halt, witnesses said. Before Officer Mark A. MacPhail could unholster his gun, the man shot him once in the chest, then once in the face.
  
  Lacking a gun or other physical evidence, police were forced to rely on witness accounts to determine the shooter.
  
  Davis and a friend were at the Burger King that night; so were several others. After the shots were fired, they scattered.
  
  In the hours after the shooting, several people at the scene told police that it was too dark, or that it happened too quickly, to know who was who.
  
  But the day after the shooting, a person at the parking lot that night, Sylvester "Red" Coles, came to the police with a lawyer. Some witnesses would later say that Coles was the shooter. But in his meeting with police, Coles implicated Davis.
  
  A manhunt for Davis began. He turned himself in to the police four days later.
  
  At the same time, police were working the streets, asking anyone who might have been there, or who knew Davis, to talk.
  
  "The police came over here four or five times," said Jeffrey Sapp, 38, a neighborhood acquaintance of Davis. "They said, 'You know, your friend is on the run, so he must be guilty.' They said, 'If you don't talk, we can take you to jail for withholding evidence.' "
  
  Sapp eventually told them that Davis had bicycled by his house and confessed to shooting MacPhail.
  
  "It was a lie," Sapp said.
  
  Other key witnesses have told a similar story -- that police prodded them to implicate Davis. The affidavit from Darrell Collins, the friend who was with Davis that night, was typical.
  
  "I told them it was Red and not Troy who was messing with that man, but they didn't want to hear that," Collins, who was 16 at the time, said in his 2002 statement. "The detectives told me, 'Fine, have it your way. Kiss your life goodbye because you're going to jail.' After a couple of hours of the detectives yelling at me and threatening me, I finally broke down and told them what they wanted to hear."
  
  Adding to the confusion, the Georgia attorney general's office, which later looked into the case, portrays Coles as threatening to shoot the homeless man; the district attorney who tried the case has repeatedly said that Davis made the threat.
  
  In late August 1991, a jury convicted Davis in the slaying. He was sentenced to death. . . .
  
  "I just think they made a mistake in the investigation," Davis said by phone last week. "I'm just trying to hold up. . . . I'm trying to maintain my faith that God will step in and soften the judge's heart."

WaPo

What's the matter with Georgia?
 

This is a typo, right?

What's the matter with Georgia?
 

That said, I guess we could have a worse system:

from the Telegraph

What's the matter with Georgia?
 

I have never understood why states that seek to impose the death penalty also seem to insist on its imposition with particular fervor where the convicted has plausible claims of innocence or of substantial procedural error.

Why do these states not instead focus their resources on the cases in which guilt is clear and the trial was fair? Surely there are a few of those as well.

What's the matter with Georgia?
 

2

What's the matter with Georgia?
 

I think it's because, like other polarizing issues (abortion, the environment, etc.), the issue become quasi religious in nature and must be pursued with like vigor.

What's the matter with Georgia?
 

If so, doesn't that make it even more troubling? I understand the pursuit of the availability of the death penalty on such terms--it is important to our system of justice to have the possibility of the ultimate penalty--but why in the individual case? It almost violates the oath of office to become so personally attached to a matter that one cannot pursue justice dispassionately.

very smart high-school students
 

• President Bush got a lesson from a group of recent high school graduates. They were Presidential Scholars, a program designed "to recognize and provide leadership development experiences for some of America's most outstanding graduating high-school seniors."
  
  The 141 Presidential Scholars were being honored at the White House. One of them, Mari Oye, from Wellesley, Mass., describes what happened: "The president walked in and gave us a short speech saying that as we went on into our careers, it was important to treat others as we would like to be treated. And he told us that we would have to make choices we would be able to live with for the rest of our lives. And so, I said to the president, 'Several of us made a choice, and we would like you to have this,' and handed him the letter." It was a letter Mari had handwritten. It read:
  
  "As members of the Presidential Scholars class of 2007, we have been told that we represent the best and brightest of our nation. Therefore, we believe we have a responsibility to voice our convictions. We do not want America to represent torture. We urge you to do all in your power to stop violations of the human rights of detainees, to cease illegal renditions and to apply the Geneva Convention to all detainees, including those designated enemy combatants."
  
  The letter was signed by close to 50 of the students, more than a third of the Presidential Scholars.
  
  Mari described Bush's reaction to the letter: "He read down the letter. He got to the part about torture. He looked up, and he said, 'America doesn't torture people.' And I said, 'If you look specifically at what we said, we said, we ask you to cease illegal renditions. Please remove your signing statement to the McCain anti-torture bill.'
  
  "At that point, he just said, 'America doesn't torture people' again."

link

What's the matter with Georgia?
 

I think it's a combo of local prosecutors not wanting to look like they're soft on crime and pressure from so called "Victim's Rights" organizations that put pressure them to not give an inch to anyone who has ever been convicted, even if that conviction is wrong and/or the victim's family isn't on board with the prosecution.

There was an interesting article on one of those organizations in the Houston Press a few years ago.

very smart high-school students
 

Geo-political states don't torture people, people torture people.

What's the matter with Georgia?
 

This is the same fucking state whose Atty General just appealed a conservative state judge's overthrowing a 10 year sentence against a kid for getting a blow job from his underage girlfriend. The appeal was based on the grounds that, although the judge said the sentence was despicable and the law had since been changed to avoid such a travesty again, the fact remains that the law was the law at the time, and the changes to it are not retroactive.

Stated otherwise, "Keep that nigger in a cell. I don't want no uppity fuckin' Northeners filing papers and writing in the New York Times about what we can and can't do here in Georgia."

Sorry to be coarse. I can't say it more plainly. I hope that prosecutor gets a slow case of stomach cancer.

What's the matter with Georgia?
 

I say let those assholes watch the execution. The best thing we can do with capital punishment is put it on television. Let all the assholes with the kill-em-all-let-god-sort-em-out swagger see a guy piss his pants and heave agonal breaths in front of them.

See how long it lasts then.

What's the matter with Georgia?
 

It's so short cited. The legitimacy of the death penalty depends entirely on the proposition that innocent people are never executed. If they are, it becomes basically indefensible--the only way to allow it is to assure everyone that any person executed is certainly guilty of the crime.

I suppose it's a collective action problem. An individual prosecutor doesn't really care about the overall legitimacy of the system. On the other hand, by the time it's in the Supreme Court (state or fed.), it's the state AG handling it, and they should have a systematic view.

very smart high-school students
 

Maybe Bush held up his fingers and said, we don't "torture" people.

What's the matter with Georgia?
 

Vigor's the wrong word. "Ignorance" is better. Of all the things that infuriate me most about this Neocon 70s Democrat we've elected, its his co-opting Malcolm Gladwell's "Blink." I hate academic overthinking like I hate eggplant and cheap tequila, but The Age of Certainty we've come to, characterized by the "Vigor" you cite, is an age of idiocy. In so many ways we're striding ahead, and then you read this shit and recall, "Oh, yeh. A lot of us are still devolving, and plumbing new depths toward the neanderthal."

What's the matter with Georgia?
 

Nothing that is man made is perfect, by definition. That is known and understood and never argued. Philosophically, we pay lip service to your standard, but in practice, though no one ever says it, we know we've killed innocents. Some are proven. There's a margin of error. The zealots don't care. "They're all guilty a sumpin."

Idiots on parade
 

How utterly "clever" of them.

Meanwhile, had she tried that photo-op "gotcha" with the president of - well, say any country that actually does engage in torture - these kids probably would have been immediately shot in the head. Try that with Putin, for instance.