Tuesday, 21 April 2015

Gordon J - the price of justice - salary & super


Gordon J and Hayne J (retired) will take home $821,078 in combined remuneration in their first High Court year. Does the taxpayer get value for money?

I found the nepotic cronyism of the appointment to the High Court of Australia of Honourable Justice Michelle Gordon galling. I wrote about it directly here and somewhat indirectly here.

Gordon J condoned the theft of my wife's superannuation in VID 1478/2011. Twenty years of superannuation savings from secondary school teaching vanquished by an inept judge.  Gordon J dismissed a claim that a company did not have the right to transfer shares back to themselves from this independent third party, my wife's super, without even a signature. An outrageous theft which Gordon J saw as reasonable for reasons best known to herself and completely unexplained. If you think Gordon J's appointment is a step forward for women, think about the ramifications of such a superannuation theft for a woman who has toiled in classrooms to improve the lives of others for a couple of decades.

It seemed Gordon J thought twenty years of my wife's superannuation was no big deal. That view makes more sense once you realise how well Gordon J is to be remunerated and superannuated as a High Court justice.

Let me meander though.

Gordon J and other High Court judges are rewarded pretty well when benchmarked against US standards. Let's work through the sums as per the current remuneration tribunal document.

For the High Court of Australia my calculations show this:


Salary Travel Car Total $
Chief Justice 536,070 31,860 10,850 578,780
Judge 486,480 31,860 10,850 529,190

Which is not too different to the $507,338 reported for the prime minister. For what it's worth, the US President's take home pay is $400,000.

A whilst the rest of the population has been forced to contribute and save for their retirement, High Court jurists get the fat cat package of a defined benefit scheme of up to 60% of their salary once they have their time done.

The Hon Justice Hayne, Gordon J's husband, has just retired and will be eligible for his 60%, so, by my back of the envelope calculations, the legal power couple will take home $821,078 combined for their first full year as a High Court powered couple. Not bad for a public service mandated 36 hour week, where Christmas to February is a holiday, and a retiree.

Gordon J was appointed to the Federal Court of Australia on 20 April 2007. The full 60% of salary for life is appropriate after ten years of service (6 years for 50% FWIW). On dual retirement they'll have to scrape by on just $583,776 per annum for the rest of the lives if they have no other sources of income. Relax, you wont have to worry that inflation may eat into their retirement income as it is benchmarked to current salaries, not what they retired on.

There also may be an anomaly that the spouse of a superannuant under the scheme gets the benefit if the superannuant passes away. Macabre as it is, Hayne J is about 20 years older than Gordon J, so Gordon J may be eligible for $583,776 per year on her own after Hayne J shuffles off the mortal coil which seems a little unfair to the taxpayer.

These gross and somewhat offensive defined benefit schemes are from an era gone by and seem unjustified in the modern world. Such schemes should be consigned to the annals of extravagant history to which they belong.

It is worth comparing to the state of play in the United States of America. The ultimate court in the US which holds the fate of some 321 million people in their grasp, is the US Supreme Court. Here is the remuneration comparison between the US judges and the Aussies:



Australia USA

High Court Supreme Court
Chief Justice 578,780 258,100
Judge 529,190 246,800

Ah, hem...

No wonder Gordon J saw the theft of twenty years of my wife's super as inconsequential. Twenty years of superannuation for a school teacher is a trifling matter when you live in an ivory tower as tall as Her Honour's own.

Legal costs for corporates are out of control. The salaries of our High Court judges are exemplars from a data set representing how the costs of the justice system are unambiguously high. Just compare the remuneration to the USA. We are missing reasonable market mechanisms to reign in such expenses. Decisions from the court often take years. There is nothing reasonable or modern about a system that takes years to prosecute basic outcomes. Perhaps in the years to come a shadow tribunal system maybe the only alternative for companies to avoid the ridiculousness of the modern anachronistic legal system of perverse precedent and little common sense.

Reform is needed.




PS: If you want to see a real hard working judge, spend a day in the family court with a friend like I did a few months ago. An extraordinary circus. I don't know how those judges survive. That is true selfless service.

Saturday, 18 April 2015

Metamako Metamux - First 10G Ethernet sub 100 ns switch

This is an awesome result worth getting excited about for the team at Metamako.

Thirty sec flood test with 10G Ethernet:
98.977 nanoseconds



It is the first device that I know of from a good vendor that will take two, or thirty, 10G Ethernet fibres and aggregate separate packets onto one fibre with a double digit nanosecond result. And it demultiplexes them on the way back at a similar speed. Perfect for the fastest possible way to interface to a financial exchange's or broker's infrastructure! If you need to aggregate to an exchange or broker and you're not using something like this then I guess you're happy with second place ;-) It's not a full L2 N x N switch but that is not what you need for those use cases.

Here is the performance news from their announcement list.

From that page we see this setup:
The fibres connected were 1 m OM1 multi-mode, and the SFP+ modules used were Finisar FTLX8571D3BCV, running at 10G. For completeness, the network cards used were Mellanox ConnectX3.  
Each test ran for 30 s. The flood ping used generated approximately 800,000 packets in that time (e.g. each sample below is around 800,000 samples).  
The measured latency is wire to wire including the SFP+s.

It supports very cool flexibility with the layer 1 reconfiguration. Timing features are baked in. My understanding is that existing customers get the improved performance with a simple firmware update. Not sure how open the 64 bit Intel processor platform is. It would be interesting to put your own bits and bobs onto that Linux management unit if they'll let you.

I used to work with a few of the Metamako team members some years ago. They are an impressive lot, so it is nice to see them get a super first like this. They truly deserve their #39 on the Global Top 50 Fintech Innovators list. A good news story.

Happy trading,

--Matt.

Thursday, 16 April 2015

Honourable Justice Michelle Gordon is a shit judge

Statue of Lady Justice on the Well of Justice
 in Bern, Switzerland.

Sculptor: Hans Gieng, 1543
Honourable Justice Michelle Gordon is a shit judge.

Le préjugé est une opinion sans jugement
Prejudice is an opinion without judgement

Voltaire (1764)

Her Honour has an excellent legal mind, is charitable, has clearly been dedicated to legal education, and has demonstrated a strong work ethic over the years. All good qualities.

Her Honour has the same arrogant streak displayed by her husband, High Court justice Honourable Kenneth Hayne. The main difference is that Haynes J's arrogance is palatable as he is usually right and his approach is often tempered with good humour. That is, his arrogance is well formed by authority and invites strong argument to rebut. You may not like it but it is earned. Hayne J has proved to be an excellent judge. Gordon J's arrogance is qualitatively different.  Her Honour's hubristic approach has resulted in judgments devoid of balance, appropriate reasoning and coloured by a flawed sense of personal righteousness.

Her Honour is a shit judge.

I've had the misfortune to be both a represented party and a self represented litigant in the Federal Court of Australia the last four years. You may like to dismiss this clarion call as an extreme bias as Gordon J ruled severely against me. I also self represented on an interlocutory application to have Her Honour withdraw for apprehended bias, because, well, of apprehended bias. Gordon J withdrew but dismissed my claims of a lack of impartiality. These claims continue to be a factor in an appeal awaiting judgment from the Full Bench of the Federal Court.

This tragedy and injustice I've been living with has let me see quite a few judges of the FCA first hand:
  1. Justice Shane Marshall – ruled against me on various leave to appeals and interlocutories
  2. Justice Christopher Jessup – ruled against me on various matters after stepping in after Gordon J withdrew
  3. Justice Richard Tracey – found me in contempt of court
  4. Justice John Middleton – ruled against me on an interlocutory but did not prevent forward progress on my final appeal attempt
  5. Justice Susan Kenny – heard a interlocutory leave to appeal attempt and denied it
  6. Justice Michelle Gordon – heard majority of the main case, including six days of trial, ruled against me
  7. Justice Jennifer Davies – heard insolvency hearing – ruled against related companies
  8. Justice Bernard Murphy – heard attempt to get leave to appeal liquidation - denied
  9. Justice Antony Besanko – sat on two day appeal of main matter and contempt
  10. Justice Jonathan Beach - sat on two day appeal of main matter and contempt
  11. Justice John Gilmour - sat on two day appeal of main matter and contempt
That's eleven out of the current forty six Federal Court judges I've had the misfortune to experience. I feel a bit like a restaurant critic that can't cook. I have some opinion on the merits of these judicial folk, at least in a relative sense, though I certainly am no expert in how they cook.

I haven't had any luck yet with no favourable rulings to speak of, so I guess I should hate them all. However, in the main I've found them to be quite impressive folk despite the public floggings I've received.

Surprisingly, I'd have to say, Gordon J was not the worst of them. That dubious honour went to Justice Jennifer Davies. Murphy J floundered incompetently in my matter but I couldn't really say he was flawed judge, just inexperienced and not at the top of his game. More about all that later. Gordon J was only the second worst out of the eleven. Tenth out of a sample of eleven should not be High Court material.

The big defect Gordon J carries around is her unwillingness to consider both sides of an argument. There is no weighing of the scales in the justice equation in her court. This is a clear failure in a judge. Consider the statue of Justitia in the picture above. The sword represents authority and the ability or right to pass sentence. The blindfold represents that justice needs to be impartial to the participants. The prince and the pauper should have their cases considered on merit. The scales represent the idea that a proper weighing needs to take place and the case of both sides needs to be properly stacked and accurately considered. After all, there is a sword involved. Now I believe in my case the Gordon J forgot about her blindfold but that is not the primary systemic failure I saw in her as a judge. The systematic failure I saw in my case, and in other cases in her court, was the inability to properly balance and assess both sides of the argument. She does not know how to use the scales. Gordon J is simply not judicial.

I could wax lyrically for hours about the injustices I perceived in my own case, but I'll resist the temptation just now as some of the circumstances were quite specific to just my case with regard to impartiality and other matters.

Consider instead the Norcast v Bradken case Gordon J ruled on. It was bizarre. The $US22.4M damages awarded to Norcast by Gordon J was deemed so unjust that both sides agreed on appeal to a common position of overturning the decision via consent orders. Yep, the team that won decided Gordon J's decision should not stand. The humorous, at first glance, thing was the full bench did not allow this consent position. You may find this strange, but the Court's approach really was pretty reasonable as the argument was that it was the court that decides these matters and not the parties. Random people can't make law via precedent. That is the role of the court. No, not the "random" aspect, the other bit about making laws. Instead the court wisely found another procedural mechanism to mete out the main justice of the consent position though the wacky Gordon decision still stood.

Gordon J's Bradken judgment smacked of a lack of professionalism in the language and approach in the text. Greiner “hoodwinked” people. He was “evasive and hostile.” Conduct was “misleading or deceptive.” The contravention was “aided, abetted, counselled or procured”. “He was evasive and hostile and eventually contended that he did not recall what he meant”. I don't know enough about the law to know if the outcome was correct or not, but I know enough to know that Gordon's judgment was shit. The inappropriate use of language, the apparent gaining of perceptive powers far in excess of any psychic, and the effective prosecution of a case without due balance made this judgment a Gordon classic. Gordon's hubristic streak results in a dysfunctional courtroom where she has to be seen to be the smartest person in the room. Counsel have to tread carefully as they have to live in the same ecosystem for the life of their careers. Furthermore, this is an ecosystem where politics and allegiances run rife in the judicial battle for status and recognition. Judges protect their own as a natural tendency and a judge like Gordon that is defective in judicial personality has to be appealed carefully if you want to have that extended career you crave. Appeals are tough when fanciful narratives and opinionated findings are pronounced by the bench and wrapped, or warped, together in a prosecutorial manner to stem the likelihood of the great judicial stain of successful appeal.

It was this kind of crap language that stood out in the bank fees case also. The Full Bench of the FCA agreed that the language used for fees for all circumstances being “unconscionable” on an ex ante basis was inappropriate. The AFR reported, “In a strongly-worded judgment running to 370 paragraphs that lambasted any notion that the fees were unjust or unfair, let alone an illegal penalty, Federal Court chief justice James Allsop said that the court should not assume the 'role of a price regulator'.” The Full Bench agreed with Honourable Chief Justice Allsops statement that there was, "no basis to conclude that … the provisions were unfair or the transactions unjust." Additionally the AFR reported one of the judges, 'tak[ing] a swipe at judges imposing personal perceptions of "desirable social goals".' Honourable Justice Middleton wrote, "A rationally based system of law needs to set out the limits of acceptable commercial behaviour in order that persons can order their commercial affairs in advance" … "Such a system cannot depend on the personal approach of a judge, based upon his or her view of commercial morality." The overturning also made it clear that specific circumstances for a specific customer may be different and indeed be extravagant and unconscionable as required by the legislation for the penalty doctrine to kick in. Specifically in that regard, Justice Allsop wrote, "That is not to say that in relation to some customer, of some bank, the particular circumstances concerning a particular account, including its terms and how the particular customer was treated, may not bespeak unfairness, unjustness or even unconscionability."

However, by far the worst thing about the bank case appeal was that I had to feel some sympathy for the banks. I hate that. It's not a comfortable position. It was classic Gordon J, overstepping and using extravagant language. Now, I've had tens of dollars charged for a credit card being a few cents in the red, due to a tiny interest charge, as a late fee, so it is hard to feel the banks were hard done by. However that anecdote just emphasises the circumstances need to be specific. I also acknowledge my situation was the consequence of the rules I'd agreed to. I didn't have to bank there. I've also had such a late fee refunded both both automajically and after complaint. I guess the idea is, if you think something specific is unfair, seek a specific remedy. Remember the cost of a default on an account is going to swamp a late fee and the question is a much more complex one than that considered by Gordon as the FCA Full Bench correctly pointed out. There may still be a different and more appropriate legal approach for remedy by class action for the plaintiff but that is a different case. The natural answer is, if you don't like your bank's rules, find another bank (or credit union). Allsop, Besanko and Middleton JJ did a good job with the case before them. Gordon's judgment was shit.
Honourable Justice Michelle Gordon

Ben Butler reported in Fairfax papers on 18 September 2012 on Gordon J failing to immediately withdraw from an ASIC case involving Bill Lewski. From a distance it was difficult to have much sympathy for Lewski's position in the case but who knows the details from afar. However neither sympathy nor the merits of the case are the issue here. The main point I'd like to make is that Gordon J was the judge dealing with the case and she had acted for ASIC as a barrister against Lewski previously! How could Gordon J think it possibly appropriate that she could properly oversee the matter without any possible perception of a lack of impartiality from the public? Remember the test is that justice must not just be done, justice must be seen to be done. The idea is that some prototypical (and mythical) reasonable layperson must not believe that there could be a question regarding the possibility of impartiality. Blind Freddy could see this was an immediate concern and not a cause for hesitation for this particular circumstance. I'm not sure what eventually happened. The point is that Gordon J should have raised the matter earlier. Gordon J should not have hesitated to do the right thing when it was eventually raised by Lewski's QC, Peter Bick.

My wife is a maths teacher being the head of the maths department at a secondary school here in Sydney. She is an excellent teacher. I'm a computer programmer and an experienced high frequency trader with some experience in machine learning and maths. My wife agrees that my maths is better than hers. We also agree that she is a much better teacher than I could ever be. Teaching is a skill in itself that transcends the subject matter. You need competence in the underlying field at hand but it is excellence in the skill of actually teaching which makes for a great educator. I would be a shit teacher. I see the same in judges. An excellent legal ability will not always translate into being a good judge. Legal ability is a necessary but insufficient quality for judicial office. This is where Gordon J, and the system, fails. The Federal Court of Australia and the High Court of Australia should not be places for judicial training. There is the unfortunate constitutional right to tenure to the appointed court for a federally appointed judge. You can't get rid of them without extraordinary circumstances. You'd better be careful in the appointment.

My particular court flirtation is a long and sorry tale. Naturally, I believe Gordon J's findings against me were incorrect. Hence my appeals. Just waiting on judgments to be pronounced on those appeals. As a self represented litigant before three judges of the FCA Full Bench, the historic case statistics tell me I don't have much chance of success. Somewhere between Buckley's and none. Even though I certainly believe my appeals had merit, I'm not sure my mumbling and fumbling and disjointed argument cut though. There is a reason you need professionals when you go to court. The hotel of self representation is a destination of last resort you don't want to find yourself in! Full credit to the court for at least allowing me the latitude to try to make my case for remedying an injustice. The process reminded me of a bad interview. And it is perhaps worth remembering that a geek like me shouldn't get hired for interview skills. Maybe the appeals can be like that bad interview where the interviewer is clever enough to see the value despite the fact that you're crap at interviews. Interviews rarely work that way, though some of my best hires have been great people that have been not so great at interviewing. Yeah, that's you Mr Lee, Apple screwed up rejecting your genius fortunately for Zeptonics :-) You never know, perhaps the gods of the Court of Chancery can somehow find the truth through the mist.

The bigger screw up was by Davies J and an appeal was not allowed to be heard on that matter by Murphy J. It was beyond wrong, or even beyond being a bad hair day. Plainly despicable. However, at the end of the day, it was all dependent on Gordon J's outcome. Here is a flavour of some of the situations in my cases:
  • Gordon J works at Melbourne University;
  • both opposing barristers were working at Melbourne University along side Gordon J;
  • the main protagonist on the other side had a wife that worked as a Professor heading a department at Melbourne University;
  • the other side donated at least $300,000 to Melbourne University;
  • other side had a relative get a prize from the Melbourne University Law School Masters, where Gordon teaches, about the time of the case was being heard;
  • information leaked from the Registry to the other side, where I got an affidavit response to an interlocutory before it was even served;
  • when I queried this possibility the stamped interlocutory for service was resent with a back dated date;
  • a Registrar acted against us and later declared a friendship with the other side, then continued to act until he had to award some unfavourable costs against the other side, and then he withdrew;
  • the case became controversial, especially as I applied to have Gordon J recused, and Her Honour withdrew mid case without stating reason, so for the insolvency action, a Registrar offered our choice of judge which was unusual, we asked for Marshall J though he had previously ruled against us, and got Davies J, a new judge working who worked and continues to work in the same small tax department at Melbourne University along side Gordon J; and
  • the other side had many connections via work, boards, friendships to both Gordon and Hayne of various degrees of familiarity, such as a significant shareholder working closely with the current Governor of Victoria, now also the Administrator of the Commonwealth, (Hayne J signed his commission) a good friend of Hayne J from their Victorian Supreme Court daze.
Crazy stuff. At least an interlocutory process did get the Gordon J recusal I needed for my sanity even if it was too late to have any effect. My goose was already cooked as liability had been judged and ordered with a dollop of injustice.

Gordon J fails the good judge test; not on technical legal capability, nor on work ethic. Gordon J is clearly a good person as I previously mentioned. Gordon fails in the being able to stack and balance the scales. Gordon J is simply not judicial. Maybe she can change? However the High Court is not a training park where should let bad judges run loose to see if they can get the hang of it and learn to be judicial.

I know many people in the legal fraternity agree that Gordon has “issues”. They are largely silent. As I'm typing this I have just seen an AFR editorial questioning the appointment. I'm not so alone. However, no one in the legal profession can ever criticize a significant judge if they value their future. Judges are for life. There is no escaping them. You won't hear the head of a law society or state bar association criticising a High Court judge. Perhaps a decision, but not the ability of a judge to be competent at their job. Indeed you'd hope heads of such bodies are politically aware enough not to commit public acts of Seppuku by criticising such a judge. So how did this dodgy judge get appointed to the High Court of Australia? How come the system has such confidence in her appointment that if she sees out her term she will rise to be the tenth longest term in office in the history of the HCA? What a frightening prospect!

Simple. It's politics. It's about favours, friends, connections and the natural consequence of being in an environment where, even though the system is adversarial, you have to act collegially and play the game to look after your own interests.

Part of the story is the about the powerful tentacles of the Melbourne Club. Part of it is just nepotism and cronyism. The Australian egalitarian ideal of a meritocracy continues to be abused by such tyranny. Justice Nettle read with Justice Hayden. Justice Gordon read with Justice Nettle. The Governor of Victoria, Honourable Alex Chernov AC, QC became the Administrator of the Commonwealth (kind of the Commonwealth Deputy Governor General), being the longest serving governor, signed in by his friend Hayne J on appointment. The two are good friends from their shared Victorian Supreme Court experience and other experiences. Howard recommended Hayne J's appointment. Brandis was the public face of putting forward Gordon J as Abbot's nominee. It can't have have harmed Gordon that Julie Bishop worked with Gordon in her early daze at a firm in WA that was eventually consumed by Clayton Utz. There are well connected supporters in the Gordon J camp.

That's a powerful political imperative for an appointment recipe. Hello cronyism. Merit begone. 

HCA appointments have always had a political dimension. I'm not sure if, in Australia's brief history of being a nation, such a bad judge has been appointed for such an extended period. The harm will last nigh on twenty years as Gordon J does not turn 51 until November this year. That leaves nearly 19 and a half years before she suffers the same fate as her husband Hayne J did this year by reaching the constitutionally mandated retirement age of 70. Gordon J is the 52nd HCA appointee and will become the tenth longest serving member of that esteemed Court with over 7000 days if she lasts the distance. That's a lot of days. Let's hope she changes and becomes a good judge somehow.

It begs the question of what alternative were there? There is a large and talented legal pool in Australia to draw from: FCA justices, State Supreme court justices and even former attorney generals and QCs to perhaps call on, though I believe judicial experience is essential for the reasons I've outlined. There are a lot of impressive jurists who could serve Australia well.

The politics dictate the person had to be Victorian, most likely, or perhaps South Australian, which is overdue for representation but less politically powerful, so somewhat less likely. This rules out, for example, FCA Chief Justice Allsop AO as His Honour has the misfortune to reside in NSW. Allsop CJ is stunningly good. Merit begone.

I can speak to the eleven FCA judges I've unfortunately experienced and we can play survivor with them to see who could be an alternative there to illustrate. This represents 11 out of 46 FCA justices.

Justice Gordon, Justice Jennifer Davies and Justice Murphy were duds. Murphy at least seemed smart and to be trying to consider balance, though he clearly floundered in the experience I had. Perhaps there is hope for him as the training wheels come off. Davies J was either really really terrible or corrupt, so let's just call her a terrible judge. I doubt Gordon and Davies will ever rise to true judicial quality. You never know. They are young for senior judges. Plenty of time.

Justice Gilmour is from WA and thus gets kicked from HCA consideration regardless of merit. Maybe His Honour will be the obvious candidate in 2017 when HCA CJ French retires as the next retiree, so it is not it is not so bleak if that is an agenda item for his career of good service. The subsequent HCA retirement is not due till 2020 which is, somewhat perversely, the most recent appointee, Nettle J from Victoria. Victoria gets another bite at the cherry soon enough.

Next on my list, Justice Tracey is Victorian and a good judge with qualities of balance that Gordon J misses. I initially thought via our initial interactions from his slow, deliberate staccato speech style he was some kind of dottering fool in need of a Zimmerframe. How wrong was I. Once he got moving, he was articulate and quick thinking and often the best legal mind in the room at the time. His judgments read well. I thought about his periods of unusual speech delivery quite a lot. It was a good lesson for me in needing to resist judging by first impressions. I noticed that the bad audio representation I heard with my ear usually read very well. The occasional and unusual staccato delivery seemed to be the experienced judge simple dictating carefully. I'd imagine being aware of the omniscient court transcription process is an art. Makes sense now. My first impressions of Zimmerframeness very very wrong! Smart really to adapt to transcription in such a way. I'd probably prefer him not to reach for the guillotine whenever he hears the word contempt. Bygones. Despite His Honour making decisions I disagreed with when he found me in contempt, I think he would be one of the most enjoyable jurists to have a red wine over dinner with as there was quite a sparkle in the soul that escaped the banal setting of the court room from time to time.

Justice Jessup is another Victorian that ruled against me. He is a very impressive and very careful jurist. Quite a black letter law judge with a good eye for detail even if I found some fault with minor elements of his reasoning in my case. I spent the most time in front of Gordon J, Tracey J and Jessup J. Jessup J was the best of this crew. Jessup J definitely is HCA material unlike Gordon J.

I found Marshall J to have an exceptional presence. He is one of those people you encounter where the brilliance just exudes and it is obvious without him barely saying a word. He is that good. Maybe I just got him on a good day. He is also perceived to lean left of centre, though I didn't see that, and he thus would never be appointed by a conservative government to High Court. He trashed my applications in court so I really ought not to like him but, alas, he is bloody good even if he is a Collingwood supporter. Nobody's perfect. Australia needs a HCA judge like Marshall but a conservative appointee he will never be.

Justice Middleton stuck me as being cut from the same cloth as Marshall and Jessup. He was also an obviously exceptionally talented jurist. Along with that talent, he had quite an impressive statesmanlike disposition. He seems a natural leader. Out of the judges that I know of from Victoria he would have been my bet for the HCA appointment. Maybe His Honour's time will come with Nettle's retirement in 2020.

Of the three judges sitting on the Full Bench of my appeal, I've mentioned Gilmour J above and he may be a front runner for the 2017 WA slot. Victoria's Justice Beach has prodigious technical abilities and not just in law. His talents rise to quantum physics and all sorts of expert matters. As a relatively new and younger FCA judge, Beach J needs more time in the oven before the world can interpret his judicial qualities properly. That just leaves Besanko J of that triumvirate to consider.

Besanko J was two giant failings. Firstly, he has the misfortune to be from South Australia. South Australia has never had a High Court appointment. Only a Tasmanian judge would be feeling less likely. Perhaps one of the next 52 appointments might be from SA though the Melbourne Club will fight tooth and nail to prevent that close proximity failure. Frankly, I thought SA origin might actually work in Besanko J's favour for this appointment as SA is definitely overdue. WA has not been always represented with a judge in the HCA, so perhaps Besanko can claim WA's spot for SA as early as 2017? Not really likely though as the politics of WA losing their representation would be difficult politics as is obvious to anyone listening to the state v state GST debate.

Besanko has the ideal qualities to fulfil such an esteemed role as a terrific jurist. He is twice the judge that Gordon J will ever be. However that brings up his second great failing. He has a penis instead of a vagina. I presume. The government is desperate to add female representation to the court given their all too public failings with gender misrepresentation in their cabinet. They already suffered some damage appointing Nettle J to replace Susan Crennan J despite Nettle J being a fine legal technician. The coalition government needed a woman and I don't really get the impression Justice Besanko qualified.

Now, I'm actually in favour of positive discrimination for gender. Women need support to break the glass ceiling and with only five HCA appointments in all of Australia's history being women, despite about half of university law graduates now being women, there is some catching up to do. Just like geography, gender has role to play in representative balance. Justice Kirby said, "Women are not just men who wear skirts." However there has to be an expectation that the appointee is suitable for the role and meritorious.

Victorian FCA judge, The Hon Susan Kenny I viewed as not quite in the same class as Besanko, Middleton, Marshall and Jessup in talent and ability. However she is an obviously better judge than Gordon J and her appointment to the HCA would not be the retrograde step that Gordon J represents. Kenny J ticks the conservative box as a Howard appointee to the FCA though I'm not sure how many years Her Honour has left until retirement beckons, perhaps ten or just under. A more reasonable term. So why not Kenny J? Perhaps she wishes to retire sooner? Was it her former role as a Commissioner of the Human Rights and Equal Opportunity Commission? Surely that is a positive and not negative?

So I thought Middleton, Marshall, Besanko, Jessup, Kenny, Gilmour were all fit for the HCA immediately and much better alternatives to Gordon J. Conservative politics and geography would rule out Marshall, Gilmour and perhaps Besanko (which seems wrong). So there were good alternatives in that very small sample. The best conservative judge, and quite a statesman, from Victoria would have been Middleton. The best female Victorian judge on my list would have been Kenny. Silly game, but it makes a point. There are plenty of other good jurists that may also fit the bill, especially in the Supremes. The government should have done its job properly. The process of appointment needs to be fixed.

Corgis are cool. I like the monarchy but I'm a Republican. I don't like having to tell my daughters that even though they are born in this country as citizens they can never rise to be Australia's head of state. They cannot be the Queen. Knowing that a citizen is prevented from station by birth is galling. Gordon J's appointment to the High Court feels like that. It is saddening that a bad judge via nepotism and cronyism can get such a prestigious and undeserved appointment. Sure there is always the politics of balanced representation but each unmeritorious appointment kill the hopes and dreams of a society that continues to have egalitarian ambitions. Gordon J's appointment kills a little of all of our happiness as the fairness is missing. There was no need. There are many talented female jurists in Australia. The bottom line is that Gordon's appointment has corrupted our society to some degree.

It is especially sad there is unlikely to be a proper debate. I've already heard of much discontent in the legal ranks as they rankle, but you're unlikely to hear it (update: maybe?). Dissidence is death where biases can shape outcomes in court and prevent appointments furthering careers. Brandis seemed to know it would be controversial by spinning out the line about how marriage should not prevent a candidate from consideration. So, the government knew it to be a fine example of cronyism and nepotism and did it anyway with the spin doctors at the heel. A nice FU to the citizenry from our democratic leaders. I'm hardly the font of all knowledge and am only scratching the surface with a very limited perspective. Out of eleven judges I'm familiar with, a tiny sample, nine have more merit than Gordon when I wear my somewhat flawed judicial critic hat. The obviousness that Gordon J is more like Joffrey than Ned Stark is unlikely to get traction in the public discourse. Those that know, wont say, and, most of those that say, don't know. Nothing will change. Gordon J is a shit judge now. Insanity is doing the same thing repeatedly and expecting a different result. Gordon J will be a shit judge at the High Court.

Whilst I'm deeply saddened Australia can allow this kind of crap to happen, I'm not sure anyone will really care. There are bigger failings afoot in society. For perspective, here are some more important issues in justice and corruption. The appointment of the wrong person to an ivory tower far from the relevance of the maddening crowd's daily routine is not a recipe for community interest. Perhaps, near enough is good enough continues to be the Australian way. A society where excellence has no place is a disturbing thought to my ideals. Much like the reaction to the new privacy and metadata laws you should expect we'll only hear the sound of one hand clapping.

I'm disappointed with Gordon J's unmeritorious appointment.

Please don't appoint shit judges to the High Court. Just stop it. Please stop. Stop it now! And, while you're at it, FIX the damn process so it doesn't happen again!

Fiat justitia,

--Matt.

__________________

Some links;


A simple statement

"As those who know me, I abhor publicity and attention," Gordon J said. "I believe that professionally a person should be judged by the nature and quality of their work, and not by any other fact or matter."                     #FAIL

Tuesday, 7 April 2015

Zomojo ceasing financial trading?

I heard some rumours in the market today that Zomojo has ceased trading operations. I don't know the real truth of the matter as it is just rumours and I'm normally the last to know. No news on the staff that are part of Zomojo's Exablaze subsidiary. The Zomojo web site was up early this morning but hasn't been accessible for the rest of the day. This would support the rumour. Their IMAP (port 993) and SSH services (port 1022) are still running.




Given pending court decisions, plus Zomojo's ripping off millions of dollars in fraudulent representations to ASIC and the ATO, they may be liable for some rather large bills. I presume they wont be disposing of any assets as, given their contingent liabilities, any such transactions may get messy being potentially subject to claw-back under Australian insolvency laws.

If any one has further information I'd love to hear some more.

Caveat emptor,

--Matt.

[Update: the web site is back on-line two days later FWIW]

Saturday, 7 March 2015

Apprehended bias and pornography

During my appeal to the Full Bench of the Federal Court of Australia this week an interesting question arose regarding apprehended bias which also relates to pornography.

Porn folder (Source XKCD)

In my submissions there were many legs to the apprehended bias allegations and Honourable Justice Beach questioned the nature of many strands leading to apprehended bias. It is a good question. I think the best answer to such a thought comes from Justice Potter Stewart of of the United States Supreme Court in 1964 when regarding pornography he uttered, “...I know it when I see it...

The full quote regarding “hard-core pornography”, which is not to be protected free speech, was famously quoted by Justice Potter Stewart in Jacobellis v. Ohio:
“I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description ["hard-core pornography"], and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that.”
A similar discretionary notion might be said to apply to apprehended bias from a court's view point. There are similar difficulties in trying to define a hard test but in an instance like the one I was facing there should really be no doubt that apprehended bias existed in the totality of the combination of circumstances.

Just as it may be appropriate if you find a $1 coin on the pavement to not feel guilt in blessing your luck and putting it in your pocket; it would be inappropriate to not turn to the authorities when finding a thousand $1 coins on the street. At some point such coin collection crosses a threshold of community standard of relevance. A similar notion exists in the old many versioned morality story of a lady being willing to compromise her morality for a large sum and being offended with a small sum. It usually ends with,
"W: What kind of woman do you think I am?
M: I thought we'd already established that. Now we're just haggling over price."
In this way, apprehended bias is indeed like pornography, although the balance of probabilities should be biased differently. In both cases caution should be the consideration.  For pornography caution means the obscenity should have clarity beyond camera focus. For apprehended bias the concern is impartiality. The balance of consideration must be that impartiality is not to be risked for public confidence in the judicial process.  This implies a different focus on the grey line. Pornography should be without doubt obvious to meet the consideration of guilt. Apprehended bias should be seen to be a likely risk in the reasonable perception of the mythical fair minded layperson. There is an awkward tension here as the perception of impartiality is not be risked but a conclusion of apprehended bias should not be too easily reached.

Thus, “I know it when I see it” seems to be a good test for both apprehended bias and pornography.

Thursday, 22 January 2015

Youtube clip: Speed Demonized: High Frequency Trading Helps, Not Hurts Investors



This is a pretty funny video on HFT I enjoyed. Not sure I agree with all the commentary but the sentiment is heading in the right direction. One thing HFT is not good at: communicating the message. Efforts like this, perhaps, help.

It makes a claim that retail is dumb money. I don't really think that is true. The wisdom of the retail crowd is often smarter than your average bear. It misses the point that HFTs need to make money every day otherwise they are just doing it wrong and their business will fail.

It also unfairly critiques institutions as investors a little. Those institutions ultimately exist to serve both their customers and shareholders which includes retail clients. Nevertheless, it is funny.

Happy trading,

--Matt.

Thursday, 15 January 2015

Mellanox Connect-X 4 details emerge: 700ns

Extract from today's Linley Wire

Mellanox Brings 100Gbps to Servers 

By Loring Wirbel

Mellanox recently introduced single- and dual-port ConnectX-4 host channel adapters that support InfiniBand (IB) and Ethernet protocols to 100Gbps. They are based on the company’s Virtual Protocol Interconnect technology for converged IB/Ethernet environments. The ConnectX-4 package also includes advanced software for configurable networking hierarchies, including RDMA over Converged Ethernet (RoCE, pronounced “rocky”) v1 and v2 and the new InfiniBand Dynamically Connected Transport (DCT).
Source: www.mellanox.com

The card can process 150 million messages per second with typical latencies of 0.7 microseconds. ConnectX-4 is intended to serve in any IB or Ethernet hierarchy, handling speeds of 10Gbps, 20Gbps, 25Gbps, 40Gbps, 50Gbps, 56Gbps, and 100Gbps. The card’s main applications include I/O Virtualization and virtualized overlay networks based on such encapsulations as VXLAN, NVGRE, Geneve, and MPLS. The single-chip ConnectX-4 VPI and ConnectX-4 EN controller ICs launched simultaneously with the PCIe card, offering a mix of 100Gbps and lower-speed connectivity, all based on a PCIe Gen3 x16 host interface.

Although ConnectX-4 is a natural follow-on to ConnectIB (IB only) and ConnectX-3 Pro (multiprotocol) for 56Gbps FDR, Mellanox’s transition strategy for Ethernet customers still must take into account existing users of 10Gbps and 40Gbps products. The company says it is succeeding in 40Gbps Ethernet adapter markets, but it also emphasizes the enhanced L3 routing capabilities and greater performance that ConnectX-4 gains from the mix of 100Gbps ports and RoCE v2 enhancements.

Networking Report subscribers can access the full article here

____________________________

25 February 2015: New performance claims for Connect-X4

"...bi-directional throughput of 195Gb/s, applications latency level of 610 nanoseconds and message rate of 149.5 million messages per second, ConnectX-4 is the highest performing adapter for the HPC, Web 2.0, cloud, machine learning, storage and enterprise applications." from HPC Wire

Saturday, 13 December 2014

Sec. 309. Procedures for the retention of incidentally acquired communications

The only thing necessary for the triumph of evil is that good men do nothing.

H. R. 4681 Intelligence Authorization Act for Fiscal Year 2015.

Passed with 325 votes to 100.

Yep, it's pretty onerous and Orwellian, as is usual. It has slipped though Congress with scant attention and virtually no debate.

Section 309 is the most damning element. It contains enough outs and weasel words to allow the US intelligence community continue to break the US constitution forever. As mentioned, it is most troubling that this Act, with such a terrible Section, seemed to slip through Congress without too many people paying attention to the detail. Where was the debate?

The text is reproduced below, but here are a couple of highlights:
(1) Covered communication 
The term covered communication means any nonpublic telephone or electronic communication acquired without the consent of a person who is a party to the communication, including communications in electronic storage. 
A covered communication shall not be retained in excess of 5 years, unless— 
(iii) the communication is enciphered or reasonably believed to have a secret meaning; 
(vi) retention is necessary for technical assurance or compliance purposes... 
(vii) retention for a period in excess of 5 years is approved by the head of the element of the intelligence community responsible for such retention...
So, what do they do if they want to keep stuff for as long as they like? They can keep it forever by simply approving the retention themselves using (vii) above. They could keep anything just for technical assurance or for their own deemed compliance reasons (vi). Also, (iii) could easily be misinterpreted to provide their own basis for whatever they wish to do.

Of course, if you're one of the planet's 6.7 billion non-US citizens, there is no change. Your data continues to be owned by the greatest back-up and archival facility ever known to man:
(iv) all parties to the communication are reasonably believed to be non-United States persons
What kind of parliament would let something like this slip through with virtually no debate? Distracted by Christmas, budget approvals and the torture debate? Quite clever of the intelligence community to manage the political agenda with enough clout to get this through. It reinforces the idea that security is a game of unrelenting persistence, patience and scheming. Well done NSA and friends.

Eisenhower would be turning in his grave.

--Matt.
________________________________

PS: A late burst from Congress managed to get 100 people to provide futile resistance but it was too little, too late. The NO vote was split fairly evenly between Democrats and Republicans.

PPS: Tim Berners-Lee on why internet freedom is important.

________________________________

Sec. 309. Procedures for the retention of incidentally acquired communications




(a)
Definitions
In this section:
(1)
Covered communication
The term covered communication means any nonpublic telephone or electronic communication acquired without the consent of a person who is a party to the communication, including communications in electronic storage.
(2)
Head of an element of the intelligence community
The term head of an element of the intelligence community means, as appropriate—
(A)
the head of an element of the intelligence community; or
(B)
the head of the department or agency containing such element.
(3)
United States person
The term United States person has the meaning given that term in section 101 of the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C. 1801).





(b)
Procedures for covered communications
(1)
Requirement to adopt
Not later than 2 years after the date of the enactment of this Act each head of an element of the intelligence community shall adopt procedures approved by the Attorney General for such element that ensure compliance with the requirements of paragraph (3).
(2)
Coordination and approval
The procedures required by paragraph (1) shall be—
(A)
prepared in coordination with the Director of National Intelligence; and
(B)
approved by the Attorney General prior to issuance.
(3)
Procedures
(A)
Application
The procedures required by paragraph (1) shall apply to any intelligence collection activity not otherwise authorized by court order (including an order or certification issued by a court established under subsection (a) or (b) of section 103 of the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C. 1803)), subpoena, or similar legal process that is reasonably anticipated to result in the acquisition of a covered communication to or from a United States person and shall permit the acquisition, retention, and dissemination of covered communications subject to the limitation in subparagraph (B).
(B)
Limitation on retention
A covered communication shall not be retained in excess of 5 years, unless—
(i)
the communication has been affirmatively determined, in whole or in part, to constitute foreign intelligence or counterintelligence or is necessary to understand or assess foreign intelligence or counterintelligence;
(ii)
the communication is reasonably believed to constitute evidence of a crime and is retained by a law enforcement agency;
(iii)
the communication is enciphered or reasonably believed to have a secret meaning;
(iv)
all parties to the communication are reasonably believed to be non-United States persons;
(v)
retention is necessary to protect against an imminent threat to human life, in which case both the nature of the threat and the information to be retained shall be reported to the congressional intelligence committees not later than 30 days after the date such retention is extended under this clause;
(vi)
retention is necessary for technical assurance or compliance purposes, including a court order or discovery obligation, in which case access to information retained for technical assurance or compliance purposes shall be reported to the congressional intelligence committees on an annual basis; or
(vii)
retention for a period in excess of 5 years is approved by the head of the element of the intelligence community responsible for such retention, based on a determination that retention is necessary to protect the national security of the United States, in which case the head of such element shall provide to the congressional intelligence committees a written certification describing—
(I)
the reasons extended retention is necessary to protect the national security of the United States;
(II)
the duration for which the head of the element is authorizing retention;
(III)
the particular information to be retained; and
(IV)
the measures the element of the intelligence community is taking to protect the privacy interests of United States persons or persons located inside the United States.


Sunday, 7 December 2014

FINRA ATS NSM Tier 1 weekly stats - week ended 10 Nov - updated 1 Dec

IEX is now #4. That Lava Flow at #6 is interesting in the context of their decision to shutdown in 2015. Credit Suisse and UBS remain at #1 and #2.

ITG is #12. One has to wonder if ITG customers know that "agency only" means that a customer's order for some names could possibly be traded against the ITG proprietary trading book which is hidden in plain sight? At least with Credit Suisse and Goldman Sachs you know of their potential to be on the other side of your trade. They don't mislead. Sometimes ITG discloses their prop trading activity in their 10-Q's, such as,
"Interlisted arbitrage trading, which accounts for most of our other revenues, generated $1.8 million in the third quarter of 2009, significantly down from the $4.4 million achieved in the comparable 2008 quarter due to a decrease in Canadian and U.S. interlisted trading volumes and an increase in competition in this area." Source: ITG - 10-Q for the fiscal period ended September 30, 2009
That, to me at least, seems to blur the common understanding of "agency only." Does this Bloomberg story hint that ITG's reputation is really as an agency-only shop without prop? I wonder what the SEC and a certain NY AG thinks? Maybe surprised customers could claim their trade fees from ITG back for the last decade or two?

Seven ATS platforms have "per trade" sizes well in excess of 1,000 shares and IEX isn't one of them. That is, despite their #FlashBoys hope to be a platform suitable for large institutional blocks, you still need to use HFT techniques to trade IEX well. IEX seem to be doing a good job but it is perhaps a little different to what Michael Lewis envisaged.

Happy trading,

--Matt.

Name Shares
Trades
Per trade
CROS CREDIT SUISSE SECURITIES (USA) LLC 332,102,591 11.25% 1,799,961 12.67% 185
UBSA UBS SECURITIES LLC 327,029,127 11.08% 2,299,498 16.18% 142
DBAX DEUTSCHE BANK SECURITIES INC. 195,254,900 6.61% 1,108,814 7.80% 176
IEXG IEX SERVICES LLC 191,720,074 6.50% 678,625 4.78% 283
MSPL MORGAN STANLEY & CO. LLC 171,558,600 5.81% 777,522 5.47% 221
FLOW LAVAFLOW, INC. 165,601,276 5.61% 834,201 5.87% 199
JPMX J.P. MORGAN SECURITIES LLC 163,801,415 5.55% 741,248 5.22% 221
SGMA GOLDMAN SACHS EXECUTION & CLEARING, L.P. 155,152,765 5.26% 839,811 5.91% 185
MLIX MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED 154,230,349 5.22% 672,986 4.74% 229
BIDS BIDS TRADING L.P. 130,247,400 4.41% 365,785 2.57% 356
KCGM KCG AMERICAS LLC 121,968,993 4.13% 709,040 4.99% 172
ITGP ITG INC. 121,452,700 4.11% 440,372 3.10% 276
EBXL LEVEL ATS 96,458,000 3.27% 616,258 4.34% 157
LATS BARCLAYS CAPITAL INC. 91,596,213 3.10% 551,491 3.88% 166
ICBX INSTINET, LLC 81,872,226 2.77% 338,540 2.38% 242
APOG CITADEL SECURITIES LLC 44,677,617 1.51% 246,816 1.74% 181
DLTA DEALERWEB INC. 43,896,832 1.49% 85 0.00% 516,433
XSTM NATIONAL FINANCIAL SERVICES LLC 42,367,701 1.44% 116,281 0.82% 364
LTPL CREDIT SUISSE SECURITIES (USA) LLC 38,513,986 1.30% 246,434 1.73% 156
PDQM PDQ ATS, INC. 37,457,924 1.27% 166,735 1.17% 225
MSTX MORGAN STANLEY & CO. LLC 34,003,400 1.15% 201,219 1.42% 169
LQNT LIQUIDNET, INC. 31,477,100 1.07% 676 0.00% 46,564
IATS INTERACTIVE BROKERS LLC 29,974,679 1.02% 95,669 0.67% 313
PULX STATE STREET GLOBAL MARKETS, LLC 25,872,846 0.88% 2,063 0.01% 12,541
NYFX CONVERGEX EXECUTION SOLUTIONS LLC 25,629,175 0.87% 38,386 0.27% 668
CXCX CITIGROUP GLOBAL MARKETS INC. 24,109,306 0.82% 140,051 0.99% 172
VRTX CONVERGEX EXECUTION SOLUTIONS LLC 17,684,595 0.60% 76,793 0.54% 230
LQFI CITIGROUP GLOBAL MARKETS INC. 13,384,483 0.45% 163 0.00% 82,113
XIST INSTINET, LLC 13,256,200 0.45% 18,602 0.13% 713
BOOK BLOOMBERG TRADEBOOK LLC 9,380,298 0.32% 41,439 0.29% 226
LQNA LIQUIDNET, INC. 7,942,400 0.27% 3,634 0.03% 2,186
MLVX MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED 3,891,300 0.13% 12,378 0.09% 314
MSRP MORGAN STANLEY & CO. LLC 2,499,700 0.08% 8,015 0.06% 312
AQUA AQUA SECURITIES L.P. 1,700,850 0.06% 181 0.00% 9,397
LEHM BARCLAYS CAPITAL INC. 1,438,933 0.05% 29 0.00% 49,618
RCSL RIVER CROSS SECURITES, LLLP 1,333,732 0.05% 5,581 0.04% 239
JEFX JEFFERIES EXECUTION SERVICES, INC. 706,586 0.02% 2,888 0.02% 245
FNBR FOLIOFN INVESTMENTS, INC. 425,410 0.01% 11,067 0.08% 38
WDNX WEEDEN & CO.L.P. 110,419 0.00% 167 0.00% 661
PROS PRO SECURITIES, L.L.C. 100 0.00% 1 0.00% 100






Total 2,951,782,201 100.00% 14,209,505 100.00% 208

FINRA ATS stats from June 2014 FWIW.
Original FINRA data