Fed Judge Rebukes U.S. in Guantanamo Case

Just when you think it can't get worse, it does. A federal judge has accused the United States government of withholding evidence in a Guantanamo Bay case:

http://online.wsj.com/article/SB123127182296258253.html

U.S. District Judge Emmet Sullivan said he was forced to delay ruling on whether to free Aymen Saeed Batarfi because as many as 10 documents of classified information were withheld from the court until recently.

So here's what we know: the U.S. sought to deny Guantanamo detainees habeas corpus rights; it specifically placed them in Guantanamo, outside of the U.S., to bolster its argument that the detainees didn't deserve Constitutional rights; it detained them on secret evidence for years; and now it's hiding evidence?

It appears even after Justice Antonin Kennedy, attorney Seth Waxman, and Boumediene v. Bush, the U.S. Constitution is gasping for its life.

Here is an interesting documentary on Guantanamo:

http://www.gwu.edu/%7Ensarchiv/torturingdemocracy/program/

There is also an excellent, must-read article in Transcript, a UC Berkeley School of Law journal (Fall-Winter 2008, Vol. 40, No. 2). I can't find an online link, but it includes an article by Jon Jefferson titled, "Life After Gitmo," and an interview with Moazzam Begg.

Update on January 14, 2009: the Washington Post reports that some Guantanamo Bay detainees were tortured:

The interrogation, portions of which have been previously described by other news organizations, including The Washington Post, was so intense that Qahtani had to be hospitalized twice at Guantanamo with bradycardia, a condition in which the heart rate falls below 60 beats a minute and which in extreme cases can lead to heart failure and death. At one point Qahtani's heart rate dropped to 35 beats per minute, the record shows.

Americans should oppose torture because it's in our own self-interest. The next time an opposing country captures one of our military personnel, our moral authority to object to his/her torture may not exist.

Update: excellent WSJ Op-Ed (12/22/08) by Thomas Wilner.

Swiss Helvetia Fund on U.S. Economy

The Swiss Helvetia Fund, Inc. (SWZ) issued its quarterly report. Here are Rodolphe Hottinger and Rudolf Millisits' thoughts on our current economic situation--and it's not a pretty sight:

It is now apparent that the so-called "debt super-cycle" of the the U.S. economy has gone into reverse and that, consequently, savings must be rebuilt. As a result, much lower consumption levels have to be expected for years to come.

Mssrs. Hottinger and Millisits take a dim view of recent government intervention:

While government efforts are addressing the liquidity issue for now and some of the solvency issues, these efforts have not yet resulted in making private credit more available.

I kept waiting for the silver lining, but to no avail:

The world economic order is being structurally re-balanced away from growth driven by the U.S. consumer. The current process of de-leveraging is the result of a reduction in the U.S. current account deficit, a condition that had been pushed to the extreme. During this adjustment period, accidents are prone to happen.

As more investors seek safe havens, the Swiss franc (FXF) may receive a boost. This would allow Swiss companies to increase M&A activity, strengthening their future competitiveness. Roche's expected acquisition of Genentech (DNA) is one example.

If you're looking to invest in Swiss shares, the iShares Switzerland ETF (EWL) has outperformed SWZ over the last two years. Today, for example, SWZ dropped over 3%, while EWL declined by less than 1%. As it happens, I own SWZ. I am unsure whether to add to my SWZ positions, or open a new position in EWL.

Good Times for SCU Grads

I graduated from Santa Clara Law School in 2002. It looks like Santa Clara University grads are doing well under Obama:

http://www.scu.edu/news/releases/release.cfm?month=0109&story=Panetta

Leon Panetta will take over the Central Intelligence Agency. He will work with another SCU grad, Janet Napolitano, who is the current appointee for Director of Homeland Security.

You smell that? Yup, that's change in the air.

Update: https://willworkforjustice.blogspot.com/2018/04/santa-clara-universitys-law-school-dean.html

From Brooklyn to Minnesota

I don't own a home. I view big homes as money pits. Once you factor in the property tax, possible HOA fees, and maintenance costs, stocks and bonds don't seem too shabby. Here's an interesting article about one couple's journey to homeownership:

http://escapebrooklyn.blogspot.com/2009/01/dhs-long-awaited-guest-post.html

Religious Profiling

A t-shirt with Arabic script? 10 dollars. TSA costing taxpayers 240,000 dollars because of its ignorance? Well, 240,000 dollars. Government ineptitude in action? Timeless.

I wish the article mentioned the name of the attorneys handling the case [Update: according to the ACLU's website, the attorneys were Aden Fine, Reginald Shuford, Dennis Parker, Director of the ACLU Racial Justice Program, and Palyn Hung of the NYCLU]. Raed Jarrar was the plaintiff.

I was laughing at the TSA's stupidity until this line: "Last week, nine Muslims, including three children, were ordered off a domestic US flight after passengers heard what they believed were suspicious remarks about security...[E]ight of them [were] US citizens, were cleared by the FBI, [but] they were reportedly still barred from the AirTran flight."

"If the pilot is uncomfortable with someone flying on their plane, that's their decision," said Christopher White, a federal Transportation Security Administration spokesman. Is the TSA serious? Under their logic, if you pay for a ticket, and you say something the driver/pilot doesn't like, or you just happen to look at him the wrong way, s/he has the complete discretion to kick you off. Sounds like another lawsuit is in order.

Update: here's a link to more information, including a neat vid:

http://www.aclu.org/freespeech/gen/jarrar.html

Hat tip to Political Colors for the link.

Law Students: Caveat Emptor

This WSJ article, from 9/24/08, has information for aspiring attorneys:

http://online.wsj.com/public/article_print/SB119040786780835602.html

He's making less money than at his last job and has thought about moving back to his parents' house. "I didn't think three years out I'd be uninsured, thinking it's a great day when a crackhead brings me $500."

Bankruptcy Filings Show Consumer Overspending

UC Davis Magazine (Winter 2009) published an interesting study on bankruptcy filings:

Simple overspending has driven most personal bankruptcies in recent years, a change from previous decades when illness and unemployment were major factors, concludes a new study from the University of California, Davis, Graduate School of Management.

"The reasons people file for personal bankruptcy indeed have shifted during the past couple of decades," says Ning Zhu, the study's author and an associate professor of management at UC Davis. "Although our research supports the notion that adverse life events, like losing one's health or job, contribute to personal bankruptcy filings, excessive consumption contributes more to the recent increase in personal bankruptcy filing."

According to the American Bankruptcy Institute, 2,039,214 personal bankruptcies were filed in 2005, up nearly five-fold from the 412,510 bankruptcies filed in 1985. Indeed, personal bankruptcies jumped from 0.3 percent to 1.8 percent of all U.S. households during the same period.

The UC Davis study looked at all personal bankruptcy filings in Delaware in 2003, because the state was among the first to make its bankruptcy filings available through the Public Access to Court Electronic Record system and its demographics closely resemble those nationwide. The year 2003 was chosen because it allowed the study to follow cases to their conclusion, and permitted observation of filing patterns before 2005. (Filings may have been accelerated in the months leading up to October 2005, when the federal Bankruptcy Abuse Prevention and Consumer Protection Act took effect, by households wanting to avoid the new act's stricter requirements.)

So that he could compare bankrupt households with solvent ones, Zhu also collected information from the Federal Reserve Board's national Survey of Consumer Finance about households that had never declared bankruptcy.

Overall, Zhu concluded that debt accounted for more than 50 percent of recent bankruptcies, while medical problems caused just 5 percent and unemployment led to only 13 percent.

Zhu found that bankrupt households have bigger mortgages, car loans and credit card balances than solvent ones, but make less than half as much money.

Among bankrupt homeowners, mortgages were 3.21 times higher than annual household income, versus 1.73 times for solvent households. Auto loans were double the annual income for bankrupt households, versus 0.4 times for solvent households. And bankrupt households carried credit card balances that almost equaled their annual household income, while the average credit card balance for solvent households was 6 percent of annual income.

In addition, bankrupt households had a median annual income of $25,738, versus $43,341 for solvent ones. (The median is the midpoint in a set of values; a median income of $25,738 for bankrupt households means that half of the bankrupt households in the study made higher salaries and half made less).

Interestingly, more than 5 percent of bankrupt households owned at least one luxury automobile (average age of the car was 7 years), compared with 8 percent of solvent households (average age was 8 years).

The study also suggests that some Americans deliberately spend beyond their means with the intention of using the bankruptcy system to erase some or all of their debt, and recommends reforms to discourage such abuse.

"Our results emphasize that bankruptcy law reform should aim to address the issue," Zhu writes. "Current means test focusing on income, rather than consumption patterns or adverse events, may not set the best criteria for sorting out the households who truly need bankruptcy protection from those that consume beyond their means to take advantage of the system."

The research has been presented at Boston College, the Massachusetts Institute of Technology, UCLA and Yale, and will be published in an upcoming issue of the Journal of Legal Studies, a publication of the University of Chicago Law School. The working paper is online at [PDF file]:

http://www.gsm.ucdavis.edu/Faculty/Zhu/PersonalBankruptcy [PDF file]

Zhu earned his doctorate in finance from Yale in 2003. He specializes in individual behavior in financial markets, bankruptcy and distress, and investments.

Media contacts:

* Ning Zhu, Graduate School of Management, (852) 9848-2096, nzhu@ucdavis.edu (Ning is on sabbatical in Hong Kong; note time difference when calling his cell phone.)

* Tim Akin, Graduate School of Management , (530) 752-7362, tmakin@ucdavis.edu

* Claudia Morain, UC Davis News Service, (530) 752-9841, cmmorain@ucdavis.edu