Monday Morning Mortification

The always fascinating Michael Lewis (Liar Poker and more) goes back to his Wall Street for an article on catastrophe bonds - bonds linked to earthquakes, hurricanes and the like - as part of the financial markets evolution in response to Katrina.

However... in the course of neatly illustrating a point about pricing two independent events, Mr. Lewis and the star of his article, Mr. Seo (a hedge fund manager in Westport, CT) provide an example which is over-simplified to the point of glaring inaccuracy.  I have no doubt Mr. Seo spotted the error immediately; I suspect that Mr. Lewis was also aware of the problem, but pressed on in pursuit of a broader point.

But we don't press on in pursuit of broader points around here - if "No nit left behind!" is not already the unofficial site motto, it will be soon.  So let's discuss on Sunday what Mr. Seo's clients will be ribbing him about on Monday:

The logic is what Seo stumbled upon back in 2000 at Lehman Brothers after someone handed him a weird option to price. An industrial company had called Lehman with a problem. It operated factories in Japan and California, both near fault lines. It could handle one of the two being shut down by an earthquake, but not both at the same time. Could Lehman Brothers quote a price for an option that would pay the company $10 million if both Japan and California suffered earthquakes in the same year? Lehman turned to its employee with a reputation for being able to price anything. And Seo thought it over. The earthquakes that the industrial company was worried about were not all that improbable: roughly once-a-decade events. A sloppy solution would be simply to call an insurance company and buy $10 million in coverage for the Japanese quake and then another $10 million in coverage for the California quake; the going rate was $2 million for each policy. “If I had been lazy, I could have just quoted $4 million for the premium,” he says. “It would have been obnoxious to do so, but traders have been known to do it.” If either quake happened, but not both, he would have a windfall gain of $10 million. (One of his policies would pay him $10 million, but he would not be required to pay anything to the quake-fearing corporation, since it would get paid only if both earthquakes occurred.)

But there was a better solution. He needed to buy the California quake insurance for $2 million, its market price, but only if the Japanese quake happened in the same year. All Seo had to do, then, was buy enough Japanese quake insurance so that if the Japanese quake occurred, he could afford to pay the insurance company for his $10 million California insurance policy: $2 million. In other words, he didn’t need $10 million of Japanese quake insurance; he needed only $2 million. The cost of that was a mere $400,000. For that sum, he could insure the manufacturing company against its strange risk at little risk to himself. Anything he charged above $400,000 was pure profit for Lehman Brothers.

Hmm.  So Lehman pays $400,000 for a policy that will pay off $2 million if an earthquake hits Japan.  If there is such an earthquake, they will then take the $2 million and buy $10 million of coverage for California.  If no earthquake hits California, Lehman breaks even; if a subsequent earthquake does hit California, Lehman collects $10 million on the conventional California policy and pays $10 million on the double-whammy policy.  Fair enough, but - what happens if the first relevant earthquake that year hits California?

As I read it, Lehman is underinsured - if an earthquake hits California, Lehman will then want an additional $1.6 million to top up its Japan policy from $2 million to $10 million.  Where is that coming from?

As a first pass to the correct answer, let's extend Seo's strategy a bit - in addition to the $400,000 premium paid to buy $2 million of protection in Japan, let's double up and also buy enough California insurance to provide for a $2 million payout if a quake hits California; the intention is that the proceeds will be used to buy $10 million of coverage in Japan following a California quake.

That suggests a final answer double that presented here, but a further adjustment is necessary.  If a first quake hits in Japan, the Japanese policy will provide enough to buy $10 million of coverage in California.  But Lehman will have already bought $2 million of coverage in California, so there is a $2 million of excess coverage here.  The right answer will have Lehman buying something less than $10 million in each market.

In fact, given the relative simplicity of this problem, since the payouts are 5 times the premium, Lehman ought to buy 1/6 the target coverage amount for both Japan and California, or roughly $1.67 million for each.  Then, if a first earthquake hits at one site Lehman can buy 5 * $1.67 = $8.33 million for the other site, add it to the $1.67 million already held, and have a total of $10 million in insurance for the as-yet unhit site.

By that reckoning, the correct premium would be for coverage of $3.33 million, or $666,666 - a devilishly clever answer indeed.

Obviously, this strategy does not work if the independence of the events break down.  For example, if insurers decide that Pacific rim earthquakes are geologically correlated, or that (based on the experience of the first quake) building codes have been inadequate throughout the region, an earthquake in Japan might increase pricing in California, or vice versa.

PUNS WE WOULD NEVER DARE, UNLESS, WELL... :  Did I read this in the Times?  Props to Mr. Lewis for sneaking it past the editor:

First, we get some of Mr. Seo's family history:

But when John [Seo] told [his mother] that he was leaving the university for Wall Street, she wept. His father, a hard man to annoy, said, “The devil has come to you as a prostitute and has asked you to lie down with her.”

Quite a colorful dad.  In the next paragraph:

Tail risk, broadly speaking, is whatever financial cataclysm is believed by markets to have a 1 percent chance or less of happening. In the foreign-exchange market, the tail event might be the dollar falling by one-third in a year; in the bond market, it might be interest rates moving 3 percent in six months; in the stock market, it might be a 30 percent crash. “If there’s been a theme to John’s life,” says his brother Nelson, “it’s pricing tail.”

Pricing what, and who is lying down with whom now?  Geez, what kind of clown would slip that into a seemingly-serious endeavor?

Comments

[hit and run]

From: Hit and Run
Sent: Monday, August 27th, 2007 2:45 PM
To: Waxman, Henry
CC: Fielding, Fred;
Subject: Subpoena Duces Tecum

Dear Congressman Henry A. Waxman:

I will turn over all emails requested. Except any from Karl Rove, which I am not saying there are any, and I'm not saying there are not. But if such emails did exist, and you don't know if they do because I am not saying, I would not give them to you. I will neither confirm nor deny their existence, but do hereby confirm that I would deny your ability to see them, if they existed.

By the way, what does the "A." stand for? Is it anatomical in nature?

At your service,
hit and run

[danking70]

"Another defendant in the case, oilman David Chalmers, owner of Houston-based Bayoil (USA) Inc., filed a separate request asking Chin to exclude evidence that might find him guilty."

[SunnyDay]

Deeeeeeeeeevious dems. I'm in VA 2nd district. Just got a recorded call from Thelma Drake - someone is calling everyone in the district inviting us to a townhall meeting with Thelma Drake - and she isn't having any townhall meeting.

She said it's MoveOne.org using her name without her permission.

[SunnyDay]

MoveOne.org = MoveOn.org

[David]

I have been in the cat reinsurance businesss. I liked Lewis's article, but that example was not particuarly realistic, for several reasons.

One is that EQ coverage normally includes "1 reinstatement at 100%." That means if a company bought $10m of reinsurance for $2m and the reinsured event occurred, they would collect only $8m, becauase $2m would be deducted from their $10m recovery to pay for insurance against the next covered catastrophic event.

Also, the reinsurance market has long sold "Second Event" covers. As the name implies, this type of reinsurance covers the second event in the reinsured layer, but not the first event. The price of a second event cover is much less than the price of a first event cover.

A third problem is that the solution of only buying coverage after the first event occurred is that it would leave the risk that the second event occurred so quickly that additional reinsurance couldn't be put in place in time.

A fourth point related to Lewis's hypothetical plan is that if the first event occurred half way through the policy period, it would cost less to buy more coverage, since it would only apply for around half as long a period.

A 5th picky point is that the buyer needed to worry about two large EQs in the same country, as well as a large one in each of 2 countries.

[Clarice]

Moody's just downgraded the NYT to negative from stable.

And Durham is in a lot of trouble:
"DURHAM - The spectre of massive civil lawsuits has put the future of a special committee probing the police’s handling of the Duke lacrosse case in limbo.

The city’s insurance provider advised last week that continued investigation by the panel could provide ammunition for a civil lawsuit, Mayor Bill Bell confirmed Monday.

Falsely accused Duke lacrosse players David Evans, Collin Finnerty and Reade Seligmann have hired powerful attorneys in anticipation of suing the city.

Seligmann has retained Barry Scheck, a prominent New York City lawyer whose high profile clients include O.J. Simpson and British nanny Louise Woodard. Evans and Finnerty have hired Brendan Sullivan Jr. and Chris Manning of Washington D.C.

The former players’ attorneys will meet with City Attorney Henry Blinder and other legal advisers next week.

Based on the outcome of those meetings, City Council members then will decide whether to allow the committee to continue or to suspend their activities indefinitely, Bell said.

“The nut of it is they’re suggesting we might want to stop right now,” he said.

Durham has a $5 million liability policy with The Insurance Company of the State of Pennsylvania with a $500,000 deductible.

A clause in the city’s insurance policy says that there will be no coverage if the city “ elect[s] a third party to investigate, defend or settle such claims or suits"

http://www.newsobserver.com/news/story/684138.html

It's a lovely day here.

[Topsecretk9]

here is more on the diary notes --

The notes, dated Jan. 27, 2003, were allegedly found in the diary of Mubdir Al-Khudhair, a former official with Iraq's State Oil Marketing Organization, or SOMO. Prosecutors say they record a meeting Wyatt had with Al-Khudhair.

Written mostly in Arabic, the notes, according to an English translation provided to the government by Al-Khudhair, read: "The current schedule is that the bombing will start on 2/15. At that time there will be 160,000-180,000 American soldiers. The ground attack will start at the beginning of March."

Al-Khudhair is expected to testify at the trial.

Prosecutors say the notes show "Wyatt was still traveling to meet with SOMO officials and requesting oil allocations (without the necessary license) as late as January 2003 — merely six weeks before the war began and well into the period of time that SOMO officials were awarding oil allocations only to political allies of the Hussein regime."

[Topsecretk9]

and more background

Since his U.S. refineries were optimized for high-sulfur, or "sour," crude, Wyatt was a natural customer for Iraqi oil, which he began buying in 1972. In fact, he had a history of diving into markets others avoided. In 1979, after the U.S. established diplomatic relations with Beijing, Wyatt began importing Chinese crude. In the 1980s, he traded with Libya even as its mercurial leader, Moammar Gadhafi, was involved in near-constant confrontations with the Reagan administration.

His close ties to Iraqi officials paid off in the run-up to the first Gulf War when he and former Treasury secretary John Connally flew to Baghdad, over the State Department's objections. After meeting Saddam, the men flew to safety with 21 American hostages who had been held as "human shields."

The United Nations had imposed economic sanctions on Iraq after its August 1990 invasion of Kuwait. By 1996, concerned that the sanctions were hurting Iraqi civilians more than their rulers, the world body authorized Iraq to sell oil so long as it used the proceeds to purchase food and medicine.

But in a decision that opened the way to fraud, the U.N. allowed Saddam to select the participating companies. Wyatt received the first allocation of oil.

By mid-1998, Iraq began denying oil contracts to American, British and Japanese companies to punish their governments for opposing the lifting of sanctions. Wyatt was a "rare exception," receiving a total of 74 million barrels over the life of the controversial oil-for-food program, according to the independent committee chaired by former Federal Reserve Board chairman Paul Volcker that investigated the program.in the middle of 2000, Iraqi officials informed their customers that they would have to pay a "surcharge" to continue buying oil. Many buyers balked. But the illegal payments, or bribes, eventually totaled "several hundred million dollars" and were paid to front companies or Iraqi government bank accounts outside of Iraq, the indictment alleges.

"When asked directly at the end of 2000 if he would be willing to pay surcharges, Mr. Wyatt initially responded that he had to think about it," said the committee report, quoting Iraqi officials. Eventually, Wyatt agreed to pay the illegal fees, the report said.

In January 2001, Wyatt met with Oil Minister Amir Rashid and received an additional allocation of 4.5 million barrels of oil. After the 2003 invasion, Rashid, the former director of Iraq's missile programs in the 1990s, became the eight of diamonds in the playing card deck of "most-wanted" Iraq officials. His wife was the chemical weapons specialist nicknamed "Dr. Germ."

That same month in Cyprus, two new companies were incorporated, Nafta Petroleum Trading and Mednafta Trading, which Wyatt used to buy the oil once surcharges were required, the indictment says.

In the second week of May 2001, Wyatt and his Swiss partners Catalina Miguel, a longtime close friend, and Mohammed Saidji, arranged for $590,000 to be deposited in an Iraqi government account at the Jordan National Bank in Amman, the indictment says. It was just one of several large payments.

During this period, Wyatt also donated furniture to the Iraqi U.N. mission in New York and a car to the country's Washington embassy. When Nizar Hamdoon, a diplomat who had been the public face of the regime on U.S. television for much of the 1990s, developed non-Hodgkin's lymphoma, Wyatt arranged to pay some of his medical bills, the committee report says.

Six days before U.S.-led forces invaded Iraq in March 2003, he paid a $44,705 bill by credit card at New York's Memorial Sloan-Kettering Cancer Center, according to the report. Hamdoon died that year on the Fourth of July.

[Barney Frank]

--I have been in the cat reinsurance businesss.--

Wouldn't it just be cheaper to put them in a burlap bag with some rocks and, well you know...

[Rick Ballard]

Barney,

I think it's the nine lives thing.

You can only be sure they're really gone when you receive the insurance check.

[Topsecretk9]

Rocco could probably make better sense of this but

...Some clarification of [Joe] Wilson’s “murky” affiliation with Rock Creek Corporation has been offered at greater length elsewhere, but it will suit present purposes to highlight how Rock Creek’s interests coincided with Wilson’s African investment interests. Rock Creek was controlled by Mohammed Alamoudi, whom Wilson had met in 1997 through a reception organized for the World Bank by Westar Group, a Westar Energy affiliate which managed Alamoudi’s interests in Washington and like Wilson was involved with the Corporate Council on Africa. Alamoudi was a member of the Saudi-Ethiopian Alamoudi dynasty, which was heavily invested in the segments of the African economy Wilson was seeking to penetrate. The Alamoudi oil empire, centered around the Saudi-based company Delta Oil, included African ventures such as Arab-African Petroleum Company (ARAPCO), created in 2002 to buy oil concessions in Africa and develop them with foreign partners. Alamoudi investments in African telecommunications included a Pan-African telecommunications project launched in 2001 by Pan African Communications Network (PACONET) with financing from a fund chaired by former South African President Nelson Mandela and cofinanced by the International Finance Corporation (IFG), the American International Group (AIG, a group including the Houston-based company El Paso Energy Corporation), and the African Development Bank (ADB). -------From Fedora (clipped from the draft of my article)| 11/05/2005

---------

...By the late 1990s, after nearly half a century in the business, Wyatt was ready to slow down. He retired from Coastal in 1997 and started buying, of all things, produce farms. The Wyatts ceded the social stage to Houston's newer new rich, selling their River Oaks mansion in 1999. And in January 2000, as a member of the board, Wyatt okayed the sale of his beloved Coastal to El Paso for a whopping $24 billion. The combined company boasted more than 58,000 miles of pipeline and was the third-largest U.S. natural-gas producer. But a few months after the acquisition closed in 2001, Wyatt started to wonder if he had made a huge mistake...Even after the final vote is tallied, El Paso will still have plenty of drama. For one thing, Wyatt's class-action lawsuit isn't going away. People familiar with the matter say that even if Wyatt wins, he'll continue to push forward with the lawsuit. Which means, in yet another bizarre twist, that Zilkha and Wyatt could end up on opposing sides. "The nicest thing that has happened to me in the last year is to have met and gotten to know Oscar Wyatt," says Zilkha, smiling. Then the smile fades. "But even if Oscar is on the opposite side of the table, I only have one single interest--El Paso shareholders," he adds, punctuating his point by banging his fist repeatedly on the table. So yet another battle looms--and we all know how much Wyatt likes a good fight.

Over on the west coast, another El Paso shareholder was experiencing similar qualms. Following El Paso's 1999 merger with Sonat, Los Angeles businessman Selim Zilkha had become the largest individual shareholder in the company, with a 1.5% stake. (Sonat had acquired Zilkha Energy Co. a year earlier.) He now had a seat on El Paso's board.

In many ways Zilkha is the anti-Wyatt. He is charming and refined, has a booming voice, and is prone to infectious cackles of laughter. Zilkha was born in Baghdad, the son of a successful banker. When he and his brothers came of age, Zilkha's father sent them abroad to expand the family's business to Paris and London. In 1960, Zilkha left banking and launched Mothercare, a chain of British retail stores that catered to mothers-to-be and babies. The chain flourished and expanded rapidly. In 1982 he sold the company and again changed course. This time he invested in Towner Petroleum, an Ohio exploration and production firm that he moved to Houston and renamed Zilkha Energy. He bought oil leases in the Gulf of Mexico and made Zilkha one of the first companies to use 3-D seismic data for exploration. The business grew quickly, and in 1998, Sonat offered $1 billion for it. Zilkha accepted. Like Wyatt, he came to regret the decision once his company ended up in El Paso's hands....

-------

990 : (RICHARD BRANSON & SIR EDWARD HEATH FLY TO IRAQ TO RETRIEVE HOSTAGES THAT IRAQ TOOK : BRANSON MEETS WITH SADDAM HUSSEIN - SEE VIRGIN AIRLINES; OTHER VISITORS INCLUDE RAMSEY CLARK, JOHN CONNALLY & OSCAR WYATT OF COASTAL CORP) "Richard [Branson] met Saddam briefly in 1990 when he flew out to Baghdad with Sir Edward Heath to bring home 43 injured and sick hostages before the first conflict. "He was convinced Bush [* My note: Pop or son, which one?] would go to war in Iraq but he was always sceptical about the weapons of mass destruction. He was saddened when the plan was overtaken by events" ------- "BRANSON: MY PLOT TO STOP IRAQ WAR (Nelson Mandela Rescue Mission)," by Richard Smith, Daily Mirror (U.K.), 12 18 2004 *** He [former ambassador Joe Wilson?] mentions [ Sir Edward ] Heath's visit [accompanied by Virgin Airlines' Richard Branson] on p. 145 of his book, though he gives the impression he and the embassy disapproved of Heath's action. Incidentally in the same passage he lists American visitors, including Ramsey Clark and John Connally; he doesn't mention it, but Connally went there with Oscar Wyatt of Coastal Corp. (there's a bit on this in Chapter 2 of the final Volcker Report).--------------- Posted by Fedora to piasa , On News/Activism 11/04/2005 11:42:42 PM PST · 204 of 204 [See thread "Is this the "French Connection" we were looking for?"]

all via fedora and piasa, industrious freepers

[freeper]

What a joke this place has become.

shame.

[Rocco]

ts...have you seen anything connecting Bayoil to Ritter yet? Forgive me if this is redundant. (I couldn't find the original article from the FT.)

[Sue]

What a joke this place has become.

?????

[Topsecretk9]

A copy of a handwritten fax dated July 10 2000, the same month that Mr Khafaji began funding Mr Ritter's film, shows Mr Giangrandi passing on Mr Khafaji's contact details to Mr Chalmers.

The note says: "Dear David. This is the partner of S. R. with whom I am negotiating now the 5M B-L. He is a very influential person here, and we can do many things in the future with him. Regards, A. G."

Mr Giangrandi confirmed that "S. R." referred to Mr Ritter.

Mr Ritter insists he was never offered any allocations by the Iraqi
government. But he does relate an incident when an Iraqi official from the UN mission in New York said he might be able to get funding for his film by "sending an oil contract through a French oil company". Mr Ritter says he "terminated the conversation at this point".

Mr Ritter was having trouble finding a backer for his documentary until he met Mr Khafaji at a congressional hearing...

... "I called him and asked him," says Mr Ritter. "He said he had never received any money. He said it's all BS. He said he doesn't know why his name is on there."

"I choose to believe (him) over anyone else ... Until someone demonstrates
this man has done something wrong, he is a hero in my book."

Asked how he would characterise anyone suggesting that Mr Khafaji was offering allocations in his name, Mr Ritter replied: "I'd say that person's a fucking liar. Quote unquote. And tell him to come over here so I can kick
his ass."

Chalmer's of Bayoil pled guitly a few weeks ago...

Al Khafaji admitted to the Financial Times to selling oil he received from Hussein's government to Italtech, an Italian company which then sold the oil to Bayoil, a Houston company. The newspaper estimated he made around $1.1m from the oil for food programme.

[Ralph L]

What do mean "become", freeper?

[Barry]

fixit

[hoosierhoops]

What a joke this place has become.

_________________________________
Well some of the most informed, passionate, mature, well mannered and witty people blog here..In my opinion.
It has been my great pleasure to read and learn from the JOM community these last 6 months or so.
They support and inform those that ask.
They defend American values.
They defend our troops in more than words, but with prayer and deed.
The sitemeter records citizens of the world visit here often..So i'd say they are global. ( They care about our world.)
I believe they often speak truth without predjudice to others.
Those values are rare anywhere..and i'm proud to have been welcomed here.
Unlike many left learning sites..all posts are generally allowed.. unlike say FDL where a moderator only allows like-minded postings..wanna be a lemming? go there.
This blog is a living testiment to the dreams, thoughts and ambitions of all america..not just one view of america.
If that's a joke...then we all need more jokes in our world.

[Jane]

"freeper" is a troll no doubt.

[boris]

I like turtles.

[hit and run]

Well, hit and run jr started kindergarten today. Quite the big boy and all.

Of course, then my joy at this event is greeted by this post in the Corner, from Peter Robinson:

In an eariler post I noted that, after two days in kindergarten last week, our five-year old announced that she had no intention of returning. (The mood passed.) Noticing this, Fr. George Rutler, our unofficial chaplain here on the Corner, offers his own views on the proper education of the very young. "I'd encourage your youngest one to abandon kindergarten altogether. Almost everything I learned was learned outside the classroom, and school itself interrupted my education.
...
Formal lessons would only be required for accuracy in spelling and proficiency in public speaking, for which the public speakers in our culture are not models, and in exchange for performing some menial services a child could learn the violin, harp, and piano from musicians in one of the better cocktail lounges, or from performers in the public subways….So I urge you to keep your child out of kindergarten, because kindergarten will only lead to first grade and then the grim sequence of grade after grade begins and takes its inexorable toll on the mind born fertile but gradually numbed by the pedants who impose on the captive child the flotsam of their own infecundity."

I Question The Timing.

And yes, I've googled it, there is no record of the phrase "flotsam of their own infecundity" having been used before.

[cathyf]

From the Boy's Own Book of Outdoor Sports (early 1900s):

One of the branches of angling which is generally practiced at mid-water or thereabouts, and includes spinning with a live, a dead, or an artificial bait, with a small fish generally, or its representative. When neither fly fishing nor bottom fishing can be practiced, in consequence of certain forbidding circumstances of water and season, trolling can be resorted to as an excellent substitute. The fish most commonly taken by any sort of trolling in our rivers are pike, perch and trout. Trolling is divided into three parts, viz: sinking and roving, trolling with gauge and snap-hooks and spinning. Sinking and roving is practiced with a live bait; a minnow or a loach for the common trout or perch; bleak, gudgeon, dace or roach for pike or large trout. The best general bait for all sorts of trolling is the gudgeon. The rod used should be a long bottom one, with a good winch, and prepared plaited silk trolling line. For foot-line, about a yard and a half of the best gut. The link to which the hook is tied, should be of fine gimp, if pike are sought fore; but gut, or three-twisted hairs, will do for trout and perch. The baits must be strong and lively, and placed on the hooks with as little injury to them as possible. Allow the bait to swim, here and there, generally at mid-water, but in deep places, deeper, drawing it up gently to the surface now and then, letting it sink again and guiding it to the best looking spots of the locality. Snap-baits are mostly used at seasons when pike do not feed with sufficient voracity to pouch their baits promptly. Their merit lies in allowing the troller to strike quickly, before the fastidious fish suspecting something wrong, has time to eject the bait from his mouth. The rod used must be short and stiff; that known as the punt barbel rod being the best. Snap-baits are two-fold - one, which does not spring when you stroke the fish, and the other which does.

The first-named consists of three hooks - two large ones, tied back to back, with their barbs pointing different ways and one smaller hook tied on at the top of the shanks of the others, and pointing straight out from them. The spring-snap is generally used with dead bait; it requires deep insertion in the bait to allow the spring to act, which it will not do without some considerable resistance. Spinning is a dashing, killing method of angling, and the practice of it requires considerable muscular exertion. The best spinning rod is made of a single piece of East India mottled cane, fourteen or sixteen feet long, well ringed, with a screw winch, requiring no winch fittings. With a rod of this description, salmon and large trout can be trolled for in the deepest and widest waters. In narrow streams, the angler can spin with a very small portion of line out and almost avoid casting, the length of the rod allowing the bait to be dropped noiselessly wherever it is wished, and to spin it accordingly. The baits used in spinning should be of the most brilliant colors; the brightest minnows, gudgeons, you can procure. The hooks used in spinning should be of the bright steel color of the wire, no changed to the ordinary blue line of hooks; and they should be whipped on with light-colored silk, waxed with white wax. Artificial spinning baits are sold at the various tackle stores. They all kill fish more or less successfully; but the majority of them are inferior to the natural bait. A small sail boat, or skiff is used, with an attendant to manage the boat as you direct. You can sue the live bait, or an artificial bait, as most convenient. Some sportsmen are very fortunate with the artificial bait. A stiff rod and reel, with the same tackle as before described, and no sinker - is all that is requisite. The boat should move gently, and let your line drag far in the rear. With artificial bait the fish is hooked almost instantly. If you use live bait, be exceedingly careful in determining when the fish has gorged it. You should give him several minutes after he has seized it, for this purpose. On seeing the bait, the pickerel will generally run off with it, and will then stop to gorge it, but does not always do so. The sign that he has swallowed it, is a peculiar slackening of the line, which experienced anglers can easily understand. But if he has gorged the bait, he will soon start off a second time, and sometimes will stop and start off the third time. In these cases, you should never be in a hurry. When you are convinced that he has taken down the bait, draw a tight line, and strike for your fish. If he is large, you should play with him until he is quite exhausted, or you may lose him in the attempt to land. The difficulty of taking a pickerel from the hook may be obviated in a measure by gagging. For this purpose some anglers provide themselves with prepared sticks of various lengths. If the hook is completely swallowed, as is frequently the case, open the stomach in the middle, cut away the hook, and unslipping the knot that holds the gimp, draw it out that way rather than through the mouth.

"Trolling with dead bait." Yep, just the phrase I was looking for...

[Extraneus]

Good one.

[Rick Ballard]

"flotsam of their own infecundity"

Dammit, H & R, I tossed that in the ol' metamixer and now its jammed tighter tighter than Dick's hatband. I hold you personally responsible for this 24 carat trainwreck.

[Clarice]

Thnkx for posting that HIT. You should have seen my son's face when at 2 1/2 he learned that preschool wasn't a one day thing like a birthday party. He asked how many more years of this he had to endure and boy was he pissed to learn the truth.

[RichatUF]

TSk9-

One entry says Wyatt persuaded Sen. Edward Kennedy, a Massachusetts Democrat, to deliver a speech against the Iraq war, Shargel wrote. A Kennedy spokeswoman didn't immediately return a call seeking comment...

Its nice to know that Sen. Kennedy can be rented out by Big Oil, when the firm is allied against the US.

[cathyf]

No, no, Rich, you've got it mixed up. Sen. Kennedy can be rented out by Little Oil. Big Oil gets so much attention, it's way harder for them to approach the levels of corruption that their relatively anonymous counterparts can manage.

[RichatUF]

TSK9-

Its been a while since I've followed the ins-and-outs of the OFF trials, but IIRC, the current guilty pleas involved Chalmer, Dionissiev, and BayOil and the Wyatt charges are scheduled to go to trial sometime in September.

[Ralph L]

"a small fish generally, or its representative"
This experiment in republican government has gone too far.

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