I’m not quite dead

Dead Collector: Bring out yer dead.

Man: Here’s one.

Dead Collector: That’ll be ninepence.

Dead Body: I’m not dead.

Dead Collector: ‘Ere, he says he’s not dead.

Man: Yes he is.

Dead Body: I’m not.

Dead Collector: He isn’t.

Man: Well, he will be soon, he’s very ill.

Dead Body: I’m getting better.

Man: No you’re not, you’ll be stone dead in a moment.

Dead Collector: Well, I can’t take him like that. It’s against regulations.

Dead Body: I don’t want to go on the cart

Man: Oh, don’t be such a baby

- Monty Python and the Holy Grail

I just wanted to inform everyone that I haven’t abandoned the blog and I am quite alive (I was far away from the meningococcal meningitis scare). I have been busy juggling a few tasks the last couple of weeks that have left me without the necessary hours I require to think and compose a post for the blog. For the last couple of weeks, not only had I been trying to keep up with the blistering pace of the schoolwork (it seems all my professors had conferred and decided to include as much material before the spring break vacation) but I also had to contend with splitting my time between my search for an activity to occupy my summer and attempting to coordinate a research project (or at least a start to one). Coupled with the general winter malaise (why is there snow outside my window?), I just seemed to be too busy with my daily tasks.

Don’t fret, that all changes in a few days. Spring break for Penn starts this Friday (Thank God!) and with the much-needed break, I can actually complete some of the items of my agenda. I will be updating the blog with new content within the next few days and over the break. Taking a look at the economy and the stock market since my last post on February 12th, there is much to discuss.

Till then…

The Subprime Credit Crisis Explained

In case you needed another explanation of the credit crisis, I stumbled across this hilarious homemade clip and I thought it was only appropriate to share.

See it here

The Rise and Fall of Oil Prices: OPEC’s practical example of Game Theory

Over the summer, the price of oil hit a high of $147 a barrel driving the price of gas at the pump to a near high of $4.00 a gallon in some markets. Prices were rising due to the increased demand for oil over the summer months and the geopolitical conflict occurring in the Middle East. Due to the high price of a barrel, there were numerous calls for increased production of oil along with calls for a reduction in the demand of oil and increased investment in alternate forms of energy.

The high price of oil did correlate with a decrease in the market demand for oil as consumers started to fear the damage of $4.00 a gallon gas price on their income. As market demand for oil fell, the price of oil started to drop at an alarming rate. To counter the falling price of oil, the Organization of Petroleum Exporting Countries, OPEC, decided to cut back on the production of oil. Since OPEC operates as a cartel of twelve countries, all the countries must agree to cut back on their individual production.

For many of the countries in OPEC, the revenue from oil accounts for a substantial portion of their GDP and these countries’ government depend on the oil revenue as a necessary source of income. With the drop in oil prices, these countries experienced a broad constraint on their governmental expenditure. For all the OPEC countries, especially the ones described above, the necessity to increase the revenue from their oil exportation is essential.

If all the OPEC countries were to cut their oil production, the available supply of oil in the global market would decrease causing an upward pressure on the price of oil. Yet each individual OPEC country faces a different equilibrium than that of acting in the best interest of the group. If the said country chooses to cheat and produce at a higher level than the OPEC mandate, it stands to earn greater revenue. Each country lacks power to substantial influence the price with increased supply (market supply would still drop), but the increased supply by the country would contribute to overall revenue and profit. The problem inherent in this logic reasoning is that all the countries actually face the same incentives and are quite aware that other countries face this equilibrium as well. The below results are then possible:

	Individual Cheat	Individual Don’t Cheat
OPEC Cheat	Market – High supply, low price, low profit Individual – High supply, low price, low profit	Market – High supply, low price, low profit Individual – Low supply, low price, lower profits
OPEC Don’t Cheat	Market – Low supply, high price, high profit Individual – High supply, high price, higher profit	Market – Low supply, high price, high profits Individual – Low supply, high price, high profits

 

 

 

 

 

 

 

 

 

Although the fourth quadrant is the efficient equilibrium in that it benefits all OPEC countries if everyone cooperates, the incentives would lead to actions in the first quadrant. So, when OPEC announces its intention to cut supply, the news is widely ignored because it is now assumed that OPEC lacks the power to enforce the countries to produce in the fourth quadrant. So even with OPEC’s announcement, oil prices continued to decline. It seems the only thing today that can increase the price of oil is the increased demand of oil by consumers and a threat (or assumed threat) of increased geopolitical conflicts in OPEC countries that could potential disrupt oil production. 

Broker-Banking Model No More

With Morgan Stanley’s decision to re-file as a holding company and Goldman Sach’s compelled decision to follow suit, the end of the large independent broker-banking model of investment banking is finally over. With this switch in designation to holding companies, these banks now have access to the Federal Reserve’s vault to secure their balance sheets but this also places these banks under the regulatory arm, scrutiny and restrictions of the Federal Government. As it follows, the more regulated an industry, the lower the profit margin of that industry. The newly enacted federal oversight will mean that these banks can no longer highly leverage their positions as they had operated in the past (it was rumored that Goldman was 36X levered, compared to the ailing insurance giant AIG at 11X and commercial banks at 10X)*.

It was the highly leverage balance sheets of the banks such as Lehman and Bear Stearns coupled with the bad positions of their bets on the subprime mortgage loans that contributed to their demise. So with federal regulation, there will be some much needed risk management injected into these banks at the opportunity cost of reducing overall industry margin (profits).

What should the future hold for students looking to enter into the industry in the upcoming years?

While no one is able to predict (accurately) how the industry will react or adapt to this recent crisis, it is clear that the notion of the broker-bank model will undergo a metamorphoses – the future of the giant broker-bank seem unsustainable. As investment banks rush to sell themselves to commercial banks or develop commercial banking arms, we can assume the financial industry will somewhat reflect the state of the industry before the existence of the Glass -Steagel Act. With the past success of banks such as JP Morgan Chase and UBS (commercial bank and wealth management firm respectively with substantial investment banking division), the future is not as gloom as Main Street anticipates, although still unpredictable. The job market will be tight as the overall available positions have suddenly contracted, but the future of investment banking is not doomed. There will still be roles and functions for these banks, as long as they are willing to adapt to the direction that the market is now leading them.

As for me, I will continue down my set path. I can hope that the four years that I will spend in school will be adequate time for the market to rid itself of the toxic assets out there, free up credits for transactions and allow deal making to resume. Until then, I will keep my eyes on that prize and keep on chugging along.

 

 

* These numbers are estimates that come form word-of-mouth information. These numbers are not backed by any data.

With All Apologies To The Writers Of Traffic

As Bill Shakespeare tells us, “All’s well that ends well.” Tomorrow, the conclusion of the dog days of July, my official resignation will become effective and I will quit my position in hopes for a new direction in life. By resigning from my post, I am hoping this is the first yet necessary step towards that transformation – that metamorphoses – of my vision of work and my underlying expectation of it. Alas, the disclosure of my need for a change in scenery is not the intent of this post but instead, I wish to divulge my coup de grâce, with all apologies to the writers of Traffic (the movie).

I have made no effort in the past to hide the fact that I am disappointed with the direction my career had headed during these last two years. I held high expectations of the legal field in general and the paralegal position in particular, but after my two year sabbatical in the field, I have been persuaded to flee.

So for my coup de grâce, I have drafted two letter (and a note) that I will leave to my successor before I depart tomorrow. The story is below.

 

[Paralegal] <– Name withheld

Please take this as my apologies for what probably seems as a terrible way to transition the responsibilities of maintaining the liquor licenses of the 180+ hotels to your watch. It has been the company’s methodology to handle the transition in this manner and I can only wish you the best of luck in my absence. The examples of my prior work might prove to be an exceptional guide, but its usefulness will be only as effective as you make it.

While you will strive to learn the nuances of liquor license laws and regulations across the continental United States in hopes of applying your knowledge in preventing a disaster in one of the numerous hotels, I can tell you that there will come a day when your best efforts will fail. On such a day when your best of intentions ultimately fail, you will no likely feel like you have been scapegoated and thrown under the proverbial ‘bus’ as you will now experience the wrath of the bigwigs from Finance, Operations, Development, and the Legal Department who had stood idly by before when you successes had first been evident without taking note. 

Have no worries. During this, your first liquor license disaster, you would probably realize that there are no quick fixes to liquor license problems and you’ll be forced to issues a cease and desist order of all liquor operations at the hotel in question. It is at this time of duress, I want you to do only one thing and that is to open this letter.

The second time another issue arises in one of those states with inane liquor laws you tried to so hard to master (think Texas, California, Pennsylvania, New Jersey, and Illinois) and yet another hotel is forced to shut down liquor operations and severely disrupt the hotel’s profitability, you will no doubt experience the barrage of bigwigs yet again. You’ll be forced to relive the work conditions that you spent the last six months trying to avoid (and trust me, it will be in exactly six months) and your first intention will probably be to stress the success you have had over the last six months and how you have tireless and successfully worked to prevent similar disaster in the past with little to no fanfare. While this might be your first thought of action, I want you to quick dismiss that impractical action and remember the second letter. Open it.

I Finally Went Over to the Cat Side

I have studied many philosophers and many cats. The wisdom of cats is infinitely superior – Hippolyte Adolphe Taines

 

After many years of dedicated support to Microsoft and its operating system, Windows, I have finally decided that the time has come for a change. I remember starting on my first operating system, Dos, and the subsequent conversion over to Windows 95, then 98 and finally settling with XP. Well, after my Sony Vaio decided to give up the ghost, I decided to abandon the notebook along with XP operating system that came with the machine. With much reservation, I walked into the nearest Apple store and talked with one of the representatives about Apple’s creative yet tritely named operating system, Leopard. (Just as an aside, how introverted masochistic does one really have to be to start nicknaming operating systems after cats? I personally do not trust cats, I can see it in their eyes, always scheming and plotting. Those cats will take over the world one day, but I digress). After a brief conversation with the representative, I was assured that switching to Apple’s operating system would be painless if not beneficial to my sanity, if only switching would conclude the obligatory yells I at time launch at my notebook.

Apple was more than joyous to separate me from my hard earned money. Immediately seconds after placing the order, I was overcome with buyer’s remorse. Can this notebook really be worth the $1500+ price tag I just paid? I was convinced at the store, but with a lighter wallet, I wasn’t quite sure any longer. I would just have to wait for the notebook to arrive before I could be certain.

A few days later, the notebook arrive and my first impression was that this notebook appeared like any other notebooks I had owned in the past, but after powering the computer on and playing around with Leopard, my buyers remorse subsided. I could easily see that this was a well built operating system and its developers had its convenience, functionality and style in mind during development. Practically speaking, this notebook simply works. It does what I ask of it without the yells and it does it well. All my hardware were easily detected by the notebook without having me running around installing softwares and drivers. Everything just worked, including my printers, my camera and my usb drive. The only hassle I had was having to download Pocket Mac in order to sync my blackberry with the notebook, but it has flawless synced since the installation.

But alas, I am a practical man and I understand that Microsoft still control 90% of the operating system market and as such, most programs are still designed with Microsoft’s OS in mind. This didn’t present a problem in the new Intel Apple notebooks as the Intel chip allowed me to either run a copy Windows natively through boot-camp or as an emulation through Parallels or VMare Fusion. I did both. There are still many programs that I would prefer to run on the windows platform and now I at least have the choice to boot XP only when I require it.

Its now been about three (3) weeks since the notebook arrived and I’ve got to hand it to Apple, this operating system is well designed. I’ve seen found innovative software bundled with the notebook such as Front row and Spaces that I adore and even discovered numerous open source softwares I now have installed on my notebook. I still will never believe or accept that this notebook is worth its over inflated price tag, but I do agree with the necessity to make the operating system switch. 

Don’t fret though dear readers, I will do my best to stay away from the cultish fan boy culture that Apple user seem to have easily adopted. It would take more than a well designed operating system to get me to run around as a living advertisement for Apple.

Underpants Gnomes

It is about one o’ clock on this day and I am already lethargic, even at this early hour. My usual morning cup of coffee does not seem to perform its usual trick today and that upcoming migraine that I am already feeling hints that it is best to avoid another cup. Out of nowhere, I am hit with a sudden rush of vigor as I bust into an uncontrollable laughter that must have reverberated at least six or seven cubicles deep as it brought concerned paralegals to my desk wondering what possibly could be the matter. I sit there and, through muffled chuckles, try to reassure my coworkers that I still have my mental faculties about me. Either eased by my sanity, or discouraged by the lack of excitement, they all scurry back to their respective desks to resume the humdrum I had so rudely interrupted. Meanwhile, back at my cubicle, I still sat there in this stress induced, sleep deprived, comatose existence and smiled to myself. I had underpants gnomes on my mind, and dare I say it, I was maturing.

The underpants gnomes were first introduced on the hit comedy central show South Park in Season 2, Episode 17. The underpants gnomes are a group of gnomes that collect underpants (duh) from the South Park children at 3:30am. Kyle, Stan, Cartman, Kenny, and Tweek (the children on the show) follow the gnomes to their cave in order to learn from the gnomes about how corporations work. Once there, the children venture to ask the gnomes why they are stealing the underpants of the South Park children. The gnomes’ answer is seen below:

Phase 1: Collect Underpants

Phase 2: ?

Phase 3: Profit

Click here for the clip. I could not find a way to embedded the video into the blog.

The clip satirizes the dotcom business of the late ‘90s as well as any ill-conceived business plan. Basically, as the show hints, all these ill-conceived business plans were created with an idea and the dream that having this idea was all that was required to create wealth. In essence, these businesses were collecting as many underpants as was humanly (or gnomishly) possible, assuming the next phase of the operation would be magically conceived, and wealth would be automatically generated for themselves and their shareholders. As we all know from the end of the dotcom era, many of these businesses without an economic moat imploded at the burst of the bubble, leaving only those corporation and business that had an economically viable Phase 2.

 As I reminisced about this clip, I started to draw up examples in my own life where I had devised such ill-conceived plans similar to that of the underpants gnomes. I sat and considered how many times I had idealized a plan of action due to the promise of the great profit I would reap in Phase 3 (metaphorically speaking of course), without actually considering the difficult steps between Phase 1 and Phase 3. At the end of the day, I usually found myself grasping for straws trying hard to achieve that oft romanticized Phase 3 due to my inadequate preparation. Phase 2 is the difficult phase and without a viable design for this stage, it becomes difficult to continue to plow ahead when the unexpected challenges arise. Take for example my childhood dream to attend medical school. I was young and had a dream and at the time, I believed that was all I needed. There was no need for a viable Phase 2 and I approached my situation as such;

Phase 1: Attend Johns Hopkins University

Phase 2: ?

Phase 3: Attend medical school.

As the years drew on though, I paid a penalty for the lack of Phase 2. When difficulties arose, I often wondered why I had undertaken Phase 1 in the first place. Being the young, bright scholar that I was, I ventured to learn exactly what Phase 2 encompassed: I would have to attend a university notorious known for grade deflation. I would have to succeed in an environment known for it vicious back stabbings. I would have to jump through numerous hoops that admission committee had predetermined. I would have to enter a profession that our political leaders are constantly destroying. I would have to sacrifice years before I could practice independently. I would have to work under a health care system that is slowly crumbling. I would have to wait years before I was financially compensated for my toils. As I learned more about this Phase 2, I began to regret plowing so hard into Phase 1. (Intro, One, Two, and Three). 

As I sat there smiling to myself, I knew that this self revelation was only a testament to my maturity. It was a hard lesson to learn, but I knew this lesson would teach me to look beyond the over-glamorized Phase 1s and Phase 3s and consider the Phase 2s before I take additional steps. By knowing what each Phase 2s of all the actions I undergo, I will be sure to limit any surprise that come my way and would rarely have cause for regret in the future.

What happened to Shane?

One word, PROXY. Okay, it is really two words because it is a proxy statement but I like to call it the black hole that sucks all the fun out of work. How many shareholders of the company are really going to read this proxy statement? Short of a few institutional holders who are going to request a research analyst to summarize the details, no one is going to bother to open this crap. In short, the culmination of my last couple of weeks at work will be a stack of paper that will be thrown out as soon as it is received by ninety percent (90%) of its recipients. Well, there you have it; the proxy statement has sucked all the enjoyment (and time) out of my life and my work. And there was not that much to begin with.

What really irks me about the proxy statement is the manpower and man-hours it takes to put together this piece of document (remember, no one reads it) that doesn’t really bring in any additional revenue for the company. Rather, my work on the proxy actually prohibits me from completing tasks that actually bring in value. The proxy has undergone so much rework even its plastic surgeon will barely recognize it. All this to be either more SEC or NYSE complaint compliant so we do not get penalized or worse, made an example of . (Kudos to Applied Materials Inc.. I would have loved to work there only to put out this proxy as a sort of practical joke). If either of the agencies (I’m really just looking to you SEC but I thought I would be passive aggressive) could stop changing the rules every year, maybe, just maybe, I might get some sleep at night.

It is almost over now. The final version of the proxy was sent to the printers yesterday and I received a draft of the proof this morning and lo and behold, the printer screwed up the format. If the printer was trying to prove a point to me (that the last weeks spent staring at the proxy until late into the night was not worth it), they might as well have sent blank pages back except for the “Loser” sign stamped on each page’s right bottom corner.

It’s almost over now. There is light at the end of the tunnel. Maybe after the proxy is finally complete, the executives will remove the chain that binds me to my desk and I’ll be allowed to see the sun again. Oh, I miss the sun. After all this, I tell myself, “It’s just a job.”

Then, Now, Later

This is my first blog post in the 2008 year. As such, I’ll try to fit multiple items into one blog post that I have entitled; Then, Now, Later.

Then

The year 2007 was a trying year for me. After I graduated college in 2006, I decided I was going to join the workforce for a few years, gain some experience and apply to medical school when I was ultimately ready. As time went on though, I began to pursue other interest outside of the pursuit of medicine. All throughout undergrad, I had always heard of careers in investment banking and management and strategic consulting, but with my pre-medical blinders on, I chose to ignore those career routes even though I had expressed early interest in them, evident by my ultimate choice to pursue an economic degree. In 2007, I sought to pursue this interest and attempted to transition into a new career in the banking industry. I pulled my application from medical school and sought instead to apply to business school (b-schools). I choose to apply to b-schools because I truly believe that b-schools were the path that would provide me the knowledge and expertise in the most accelerated, rigorous and structured path to allow for a success transition into a new career in the mergers and acquisition advisory at an investment bank. The problem with my hasty decision though, is that business schools search for different qualities in their students than do medical schools (which hitherto, I had been aim to meet medical school requirements) and now I’m struggling to show to the admission committees my story as to why I am a desirable candidate deserving of a seat in their business school.

Other aspects of my life did fall into order in 2007. Due to a renewed determination to better my current lot in life, I became serious about the decisions that affect my life, my finances, and my future. In 2007, I really began talks with my girlfriend in order to coordinate and manage our lives post (her) graduation. She, like I, is very ambitious and this ambition is driving her to medical school (bless her soul). So far, the conversations are going well and we’re working to collaborate and coordinate the directions that our passions are now pulling us towards.

In terms of finances, I started a Roth IRA in 2007 and I plan to continue that trend in the future. I also opened a taxable account to complete my desired asset allocation. My 401(k) at work will soon become available and I look forward to putting more funds in that cash deferred account.

While all my goals and aspirations were not met in 2007, I’m looking forward to pushing ahead in 2008 to try to achieve those goals.

Now

I’m contemplating what contingency plan I’ll engage if I don’t gain admittance to business school during this cycle. I’ve accepted the reality that the possibility exists that this might not be the year for me, but I know I can patiently wait and build up my candidacy for the day when the opportunity to enter into the career I desire arises (whether or not that path leads through business school). I’m currently awaiting the decisions from the schools I applied in the second round. I have decided that this is the last round that I will submit an application to, and if not successful in this round, I’ll accept that I need and can add to application by staying in the workforce and gaining extra work experience. Since I am unsatisfied in my current work position, I’ll seek to lateral into a new position if that is the route I am compelled to take.

For the first time since I carried a credit card, I’m carrying a balance from one month to the next. This is due to the application fees of the business schools I applied to. All of the balance is on a 0% interest card (currently) so I’m not too worried about carrying the balance from month to month. I’m paying down the principal with all available funds so as to avoid paying interest charges when the introductory rate expires. I’m still allocating and dollar cost averaging (DCA) into the market funds I own. The next couple of months will be a strain on my budget allocation as I continue to pay off this credit card debt, pay down my student loans, continuing adding to my Roth and taxable accounts and start a 401(k) plan. I’ve chosen an asset allocation plan (shown below) that I try to DCA into every moth. Hopefully, starting early in life, I can take advantage of compound interest to secure a financially independent future.

AA- 95% Equities, 5% Fixed Income

40% Vanguard Total Stock Market (VTSMX)
30% Vanguard FTSE All-World ex. US (VFWIX)
15% Vanguard Small Cap Value (VISVX)
10% Vanguard REIT (VGSIX)
5% Vanguard Inflation-Protection Securities (VIPSX)

Later

I have to consider what my options are in trying to ultimately end up in career in mergers & acquisition advisory at an investment bank within the next 5 to 10 years. I know if I follow stepwise a diligent plan, I will ultimately end fulfilling this desire.  I just have to find such a plan; that coordinated strategic plan that will make this desire a reality.

I do also have to factor in the fact that heading down this route will lead my life down a narrowly defined path, and I need to make sure that the path allows enough room for one more: my girlfriend. With her aspiration to enter medical school, I need to expect some difficulties that will come with combining both our lives.

So 2008 will be an interesting year. This is the year that I plan to make radical changes, whatever they may be. Here is to a new year, at least a 24 day old one.

Baseball Dirty Little Secret

I try to keep sport discussion out of this blog, but the report by George Mitchell on the state of steroids in baseball is worth noting. Here is a link to an ESPN article. Apparently, just about all our favorite players have been exposed to either steroids, growth hormones, or performance enhancing drug.

Mitchell report: Baseball slow to react to players’ steroid use

ESPN.com news services

Updated: December 13, 2007, 3:32 PM ET

NEW YORK — Roger Clemens, Miguel Tejada and Andy Pettitte were among 75 players named in the long-awaited Mitchell report on Thursday, an All-Star roster linked to steroids and other performance-enhancing drugs that put a question mark — if not an asterisk — next to some of baseball’s biggest moments.

Barry Bonds, already under indictment on charges of lying to a federal grand jury about steroids, and Gary Sheffield also showed up in Major League Baseball’s most infamous lineup since the Black Sox scandal.

The report by former Senator Majority Leader George Mitchell, who was hired by commissioner Bud Selig to examine the Steroids Era, blamed both players and management for the problem. Among the detailed conclusions of Mitchell’s 20-month investigation:

• “For more than a decade there has been widespread anabolic steroid use” in baseball, he said.
• “Everyone involved in baseball over the past two decades — commissioners, club officials, the players’ association and players – shares to some extent the responsibility for the steroids era,” Mitchell said. “There was a collective failure to recognize the problem as it emerged and to deal with it early on.”
• Mitchell and his staff interviewed former New York Mets clubhouse attendant Kirk Radomski on four occasions. Radomski identified a number of former and current players he said he sold steroid and human growth hormone to. Checks and money orders, mailing receipts or shipments, and statements of other witnesses were used to back up Radomski’s allegations. Much of this was found in Radomski’s seized telephone records.
• Brian McNamee, a former New York Yankees trainer who worked with pitchers Clemens and Pettitte, was interviewed three times by Mitchell, with a personal lawyer and federal law enforcement officials in the room.
• Clemens, whose Hall of Fame-esque credentials include 350 victories, seven Cy Young Awards and the 1986 AL MVP award, was singled out in eight pages, with much of the information on him provided by McNamee.

Page 169 of the report reads, “According to McNamee, from the time that McNamee injected Clemens with Winstrol through the end of the 1998 season, Clemens’ performance showed remarkable improvement. “During this period of improved performance, Clemens told McNamee that the steroids ‘had a pretty good effect’ on him.”

McNamee also told investigators that “during the middle of the 2000 season, Clemens made it clear that he was ready to use steroids again. During the latter part of the regular season, McNamee injected Clemens in the buttocks four to six times with testosterone from a bottle labeled either Sustanon 250 or Deca-Durabolin.”

• The report says Pettitte, from April 21 to June 14, 2002 when he was on the disabled list with elbow tendonitis, he “wanted to speed his recovery and help his team.” The report says “McNamee traveled to Tampa at Pettitte’s request and spent about 10 days assisting Pettitte with his rehabilitation. McNamee recalled that he injected Pettitte with human growth hormone that McNamee obtained from Radomski on two to four occasions. Pettitte paid McNamee for the trip and his expenses; there was no separate payment for the human growth hormone.”

It continued: “According to McNamee, around the time in 2003 that the BALCO searches became public, Pettitte asked what he should say if a reporter asked Pettitte whether he ever used performance enhancing substances. McNamee told him he was free to say what he wanted, but that he should not go out of his way to bring it up. McNamee also asked Pettitte not to mention his name. McNamee never discussed these substances with Pettitte again.

“After the 2001 season, Pettitte, like Clemens, continued to use McNamee’s services and to serve as a source of income after McNamee was dismissed by the Yankees. In a 2006 article, Pettitte ‘acknowledged an ongoing relationship’ with McNamee. Pettitte was quoted as having said that he still talked to McNamee about once a week. ‘ “

“After we read the report, we will have something to say,” said Randy Hendricks, the agent for Clemens and Pettitte.

• Several former MLB players and strength and conditioning coaches were also interviewed.
• Each player named was invited to meet with Mitchell if their name came up in his investigation. Mitchell said almost all current players refused to meet with him.
• Response to the problem from both baseball and its players was slow to develop and was initially ineffective.
• There is evidence the problem wasn’t isolated to one club. Many players were involved. Each club has had a player involved.
• Mitchell’s investigation found that some players were given a heads-up to drug tests.
• In his report, Mitchell wrote he was against commissioner Bud Selig disciplining players — those named in the report or not — for past violations of baseball’s rules against using performance-enhancing substances “except in those cases where he determines that the conduct is so serious that discipline is necessary to maintain the integrity of the game. I make this recommendation fully aware that there are valid arguments both for and against it.”

George Mitchell bio

• Age: 74
• Former US Senator (D-Maine), May 1980-Jan. 1995
• Chairman, Walt Disney Company, March 2004-Dec. 2006
• Currently Chairman of the Global Board, DLA Piper (law firm)
• Chaired negotiations for Belfast Peace Agreement in Northern Ireland (1998)
• Director, Boston Red Sox

• Head of investigation into past steroid use by MLB players

• Mitchell’s conclusions:

There has been a great deal of speculation about this report. Much of it has focused on players’ names, how many and which ones. After considering that issue very carefully I concluded that it is appropriate and necessary to include them in this report. Otherwise I would not have done what I was asked to do: to try to find out what happened and to report what I learned accurately, fairly, and thoroughly. While the interest in names is understandable, I hope the media and the public will keep that part of the report in context and will look beyond the individuals to the central conclusions and recommendations of this report. In closing, I want to emphasize them:

• 1. The use of steroids in Major League Baseball was widespread. The response by baseball was slow to develop and was initially ineffective. For many years, citing concerns for the privacy rights of the players, the Players Association opposed mandatory random drug testing of its members for steroids and other substances. But in 2002, the effort gained momentum after the clubs and the Players Association agreed to and adopted a mandatory random drug testing program. The current program has been effective in that detectable steroid use appears to have declined. However, that does not mean that players have stopped using performance enhancing substances. Many players have shifted to human growth hormone, which is not detectable in any currently available urine test.

• 2. The minority of players who used such substances were wrong. They violated federal law and baseball policy, and they distorted the fairness of competition by trying to gain an unfair advantage over the majority of players who followed the law and the rules. They  the players who follow the law and the rules  are faced with the painful choice of either being placed at a competitive disadvantage or becoming illegal users themselves. No one should have to make that choice.

• 3. Obviously, the players who illegally used performance enhancing substances are responsible for their actions. But they did not act in a vacuum. Everyone involved in baseball over the past two decades  Commissioners, club officials, the Players Association, and players  shares to some extent in the responsibility for the steroids era. There was a collective failure to recognize the problem as it emerged and to deal with it early on. As a result, an environment developed in which illegal use became widespread.

• 4. Knowledge and understanding of the past are essential if the problem is to be dealt with effectively in the future. But being chained to the past is not helpful. Baseball does not need and cannot afford to engage in a never-ending search for the name of every player who ever used performance enhancing substances. The Commissioner was right to ask for this investigation and report. It would have been impossible to get closure on this issue without it, or something like it.

• 5. But it is now time to look to the future, to get on with the important and difficult task that lies ahead. Everyone involved in Major League Baseball should join in a wellplanned, well-executed, and sustained effort to bring the era of steroids and human growth hormone to an end and to prevent its recurrence in some other form in the future. That is the only way this cloud will be removed from the game. The adoption of the recommendations set forth in this report will be a first step in that direction.

Also:

• On page 121 of the report, under a heading “players requested to be interviewed,” Jason Giambi is the only player in the Bay Area Laboratory Co-operative probe who participated in Mitchell’s investigation. This portion of the report read:

“Concerning BALCO and Major League Baseball I requested interviews of all the major league players who had been publicly implicated in the BALCO case: Marvin Benard; Barry Bonds; Bobby Estalella; Jason Giambi; Jeremy Giambi; Armando Rios; Benito Santiago; Gary Sheffield; and Randy Velarde. Jason Giambi agreed to be interviewed, and Randy Velarde provided information through his attorney. All the other players implicated in the BALCO case refused my requests to be interviewed or did not respond to them. Gary Sheffield initially declined my request for an interview. Sheffield later said that he would agree to an interview, subject to the availability of his lawyer who was undergoing medical treatments.”

Clemens, Miguel Tejada and Pettitte were named in the report, an All-Star roster linked to steroids and other performance-enhancing drugs that put a question mark — if not an asterisk — next to some of baseball’s biggest moments.

Eric Gagne, Troy Glaus, Gary Matthews Jr., Brian Roberts, Paul Lo Duca, Rick Ankiel and Jay Gibbons were among other current players named in the report. Some were linked to Human Growth Hormone, others to steroids. Also mentioned in the report is Tejada, who was dealt from Baltimore to Houston Wednesday.

“We identify some of the players who were caught up in this drive to gain a competitive advantage,” the report said. “Other investigations will no doubt turn up more names and fill in more details, but that is unlikely to significantly alter the description of baseball’s ’steroids era’ as set forth in this report.”

Mitchell released his report at a news conference in New York City. Selig will hold his own news conference at 4:30 p.m. ET.

Barry Bonds, already under indictment on charges of lying to a federal grand jury about steroids, also showed up in baseball’s most infamous lineup since the Black Sox scandal.

It was uncertain whether the report would result in any penalties or suspensions.

Several stars named in the report could pay the price in Cooperstown, much the way Mark McGwire was kept out of the Hall of Fame this year merely because of steroids suspicion.

“Former commissioner Fay Vincent told me that the problem of performance-enhancing substances may be the most serious challenge that baseball has faced since the 1919 Black Sox scandal,” Mitchell said in the 409-page report.

“The illegal use of anabolic steroids and similar substances, in Vincent’s view, is ‘cheating of the worst sort.’ He believes that it is imperative for Major League Baseball to ‘capture the moral high ground’ on the issue and, by words and deeds, make it clear that baseball will not tolerate the use of steroids and other performance-enhancing drugs.”

Information from The Associated Press is included in this report.

Among those the media already claiming are named are key star both current and retired such as Brady Anderson, Manny Alexander, Rick Ankiel, Jeff Bagwell, Barry Bonds, Aaron Boone, Rafaeil Bettancourt, Bret Boone, Milton Bradley, David Bell, Dante Bichette, Albert Belle, Paul Byrd, Wil Cordero, Ken Caminiti, Mike Cameron, Ramon Castro, Jose and Ozzie Canseco, Roger Clemens, Paxton Crawford, Wilson Delgado, Lenn y Dykstra, Johnny Damon, Carl Everett, Kyle Farnsworth, Ryan Franklin, Troy Glaus, Rich Garces, Jason Grimsley, Juan Gonzalez, Eric Gagne, Nomar Garciaparra, Jason Giambi, Jeremy Giambi, Jose Guillen, Jay Gibbons, Juan Gonzalez, Clay Hensley, Jerry Hairston, Felix Heredia, Jr., Darren Holmes, Wally Joyner, Darryl Kile, Matt Lawton, Raul Mondesi, Mark McGwire, Guillermo Mota, Robert Machado, Damian Moss, Abraham Abraham Nunez, Trot Nixon, Jose Offerman, Andy Pettitte, Mark Prior, Neifi Perez, Rafael Palmiero, Albert Pujols, Brian Roberts, Juan Rincon, John Rocker, Pudge Rodriguez, Sammy Sosa, Scott Schoenweiis, David Segui, Alex Sanchez, Gary Sheffield, Miguel Tejada, Julian Tavarez, Fernando Tatis, Maurice Vaughn, Jason Varitek, Ismael Valdez, Matt Williams and Kerry Wood. – Source of names unknown

This report confirms what I, and most fans, already know to a reality. Steroids and performance enhancing drugs are prolific in baseball. Now that this is out of the woodworks, let’s just sit back and enjoy a new era of steroid-improved sports.

I’ve accepted it. So will America.

See the complete report here.