David Einhorn

I'd like to congratulate David Einhorn on writing a fascinating book. I've been reading through it quite quickly.

The book is "Fooling Some of the People All of the Time: A Long Short Story" published this year by John Wiley & Sons.

The central narrative thread of the book is Einhorn's effort to make money by short-selling the stock of Allied Capital. The subtitle, as you'll notice, is a subtle pun on the terms "long" and "short" as used in finance versus the same terms as used in publishing.

This book is 356 pages long even before the end matter, so it surely isn't a "short story" as publishers use the phrase. It is of course a story about trying to short stock.

The main narrative thread of "FSOTPAOTT" concerns Allied, and its dubious or fraudulent accounting. There are subplots, though, and there are preliminary materials with which Einhorn has to deal, such as the formation of his short-selling hedge fund, Greenlight Capital.

There's also this neat bit about Lanny Davis. Allied brought in Davis as an advisor on pubklic relations when Einhorn began going public, and going to the authorities, with his analyses of their books. Hiring Davis sounds a bit like bringing in the junkyard dog.

Davis, as former White House counsel to President Clinton, was in charge of the successful defense of the impeachment trial in the Senate. Some of his subsequent causes haven't been so successful, though. His private sector p-r clients have included at least three blatantly fraudulent operations: Seitel, a seismic data licensing company whose CEO received a five year prison sentence in 2002 (Lanny's spinning couldn't prevent that); Lernout & Hauspie, a speech-recognition technology company that unravelled as its multi-billion dollar fraud became public; and HealthSouth, an Alabama based health care service provider whose former CEO, Richard Scrushy, was convicted of bribery charges in June 2006.

Davis had better luck protecting Allied and its bosses from the fate of Messr Scrushy.

And he has in recent months repeatedly appeared on television as a surrogate for Presidential candidate Hillary Clinton. That gig appears to be at an end. I wonder who he'll work for next?

Either way, Einhorn has written a fascinating book.