August 31, 2007

Labor Day Celebrated Through Not Working

SO FOR THE FIRST TIME in six years, I'm celebrating Labor Day by ... not working.

At first, this seemed pretty bloody cool. Since I now have Mondays off at the office, I'd get to put the holiday "in the bank" while still getting to do all the things I normally do on a Monday. This Monday, I had plenty of things planned -- I was going to take down all these boxes of books down to the library, take care of some financial transactions I needed to do, and so on.

Then I realized everyone else had the day off.

All the Government institutions will be closed. All the banks will be closed. The national financial markets will be closed. Plus, a lot of private businesses will be closed, or have reduced hours. As Loyal Rant Readers might expect, this realization was accompanied by a particular nine-letter profanity.

I mean, crikey. I'm not gaining a holiday, I'm losing a good productive day. Even worse, there's no football. So what the hell am I supposed to do, anyway? Go fishing? Have a barbecue? Enjoy the bounty and goodness of a late summer day? Please. You think I'm back home in Michigan? I don't have a canoe or fishing gear, I don't have a grill or a patio, and if I go outside I'll end up wheezing due to the hay fever, and --

What's that? Fried clams? Chowder? A coffee frappe? Say, that's a pretty good idea. OK, so I'll spend my labor day chilling out after I go out and have a high-quality, old-fashioned New England lunch. Yeah, that's the ticket. Also I will -- eh, I'll vacuum the apartment or something. It may be a holiday, but it's still Monday.

Posted by Benjamin Kepple at 08:57 PM | Comments (0) | TrackBack

August 30, 2007

Let the Stomping Begin

OK, SO IT'S HALFTIME and the No. 10 University of Louisville Cardinals are beating the hapless Murray State Racers 63-10. Yes, that's right. Louisville has managed to rack up nine touchdowns in the first half. You've got to love the first week of college football.

With a few exceptions, I always root for the underdog in these early games of the season, just because I think it would be fabulous if one of them actually managed to knock off a school that in all likelihood paid the underdog hundreds of thousands of dollars to appear. That goes double if the favorite is a ranked team, because that will mean one less competitor to challenge the University of Michigan for the national title. And although I detest the SEC and would almost never root for any of its teams (except Vanderbilt), I enjoyed it last year when the No. 23 Tennessee Volunteers crushed the No. 9 California Bears in the season opener. Especially because Lee Corso had picked the Bears as the year's putative national champions.

Oops.

There will be no such knock-outs tonight. I have been rooting for the Mississippi State ... uh ... Bulldogs to defeat the evil LSU Tigers in a first-week SEC game, but that looks very unlikely at this point, because the Bulldogs' quarterback sucks. Amazingly, here in the opening minutes of the third quarter, LSU is only up 17-0, even though the Bulldogs QB threw FOUR interceptions in the first half and LSU spent practically the entire game in the Bulldogs' territory. Oops -- now it's 24-0. Shit.

Still, while this may seem like a stomping -- and in a way, it is -- it really isn't, because LSU should have scored about 50 points in the first half, and the Bulldogs' defense played really well, all things considered. In short, this isn't the type of play one would expect from the nation's No. 2 ranked team. I can only chalk it up to the fact that the SEC sucks, and LSU particularly sucks, and I hope they lose to ... uhhh ... crikey, look at this powder puff schedule these guys have. It's not nearly as pathetic as Wisconsin, but still. Anyway, I hope they lose to Florida, because even though I hate Florida, it could shut up LSU boosters for as long as 48 hours.

Now let's look at the other scores. Third quarter: Louisville 70, Murray State 10. Oooooh. C'mon, Murray State! No. 16 Rutgers ... oh, wait, I like Rutgers, so never mind. Cincinnati 59, SE Missouri State 3. Yeeeouch. No. 24 Boise State 42, Weber State 0. Boy, it's not even half-time in that one. Where the hell is Weber State, anyway? What's that? It's in Ogden, Utah? Well, that's explains why -- oh, here's their Web site. Uh oh. It looks tragically hip and with it -- that can't be a good sign.

Anyway, like I said, no knockouts tonight. But hope springs eternal. So this weekend, you'll find me rooting for the Washington State Cougars and the Oklahoma State Cowboys and the East Carolina Pirates and the Western Kentucky Hilltoppers and the Youngstown State ... uh, Penguins? The Penguins? Are you kidding me?

Boy. Oh, and look, the Bulldogs QB threw ANOTHER interception. And now it's 31-0. Will someone please stick a fork in this guy?

UPDATE: I mean, TJ on the Sonic commercials is throwing better than this guy. Jumbo popcorn chicken, everybody!

Posted by Benjamin Kepple at 10:49 PM | Comments (0) | TrackBack

August 29, 2007

These People Are Completely Insane (Part II)

LOYAL RANT READERS know I am not much of an outdoors person. This is because the wild contains all sorts of things I would rather avoid, such as angry woodland creatures, mosquitoes, non-potable water, mosquitoes, rather nasty diseases and mosquitoes. Still, even I about choked on my Diet Cherry Coke when I read this wretched story about upscale "camping" trips from the Los Angeles Times:

GREENOUGH, Mont. -- When 6-year-old Ethan Bondick told his mom and dad he wanted to go fly-fishing in Montana, his well-heeled parents were stumped.

"We looked at each other and said, 'Oh, God, now what?' " said Gigi Bondick, 37, of Massachusetts.

"We're just not the camping kind of people. We don't pitch tents. We don't cook outdoors. We don't share a bathroom. It's just not going to happen," she said. "This is a kid who has never flown anything but first class or stayed anywhere other than a Four Seasons."

After typing "luxury" into a Google search along with "camping" and "Montana," the couple settled on The Resort at Paws Up, a 37,000-acre getaway in the heart of Big Sky country. It's a place for affluent travelers who want to enjoy the outdoors but can't fathom using a smelly outhouse.

The Bondicks, who live in a sprawling home outside Boston and hire a personal chef at home, shelled out $595 a night, plus an additional $110 per person per day for food.

It's a hefty price to sleep in a tent, but the perks include a camp butler to build their fire, a maid to crank up the heated down comforter at nightfall and a cook to whip up bison rib-eye for dinner and French toast topped with huckleberries for breakfast.

The number of visits to U.S. national parks is declining, but "glamping," or glamorous camping, is on the rise in North America after gaining popularity among wealthy travelers in Africa and England, where luxury tents come with Persian rugs and electricity to power blow dryers.

I suppose my thoughts on this can be summed up as follows: these people are completely insane.

I mean, I don't know about you, but when I was growing up, my brother and I Most Certainly Did Not get to decide where the Kepple family went on vacation. We went where Mr and Mrs Kepple decided we were going, and that was that. True, the vacations were all extremely enjoyable, and we went to some pretty cool places, but that does not take away from the point that the kids were not in charge. Furthermore, the idea the kids would be in charge would have sent my parents into hysterics. (In fact, I think it still does*).

So the fact the Bondicks -- who would be from Massachusetts -- actually spent precious vacation time on a faux-camping trip at their son's direction leaves me -- I don't know, a bit stunned. It shouldn't, I know, because these people clearly have more money than sense. I mean, the fact the mother is actually named Gigi -- oh dear -- is telling enough in that regard, but the fact they went camping even though they're not camping people is just weird.

Besides, if you're actually going to go camping, you may as well rough it and teach the boy a bit about the joys of material sacrifice, self-discipline and wanton suffering. For a boy, these are good things to learn, because they will help him adapt to the uncaring, cruel and unpleasant world that awaits him. As amazing as it may seem to many people these days, the real world requires that one develop these types of survival skills or one will be ground into the dust. So they may as well start teaching the kid now. Then, they could move on to more advanced lessons in survival, such as flying coach. It would suck at first, but before too long the kid would get excited at the little joys in life, such as when they serve the red snack box. (Yay red snack box!)

Of course, I should note that I don't begrudge the parents any of their expenditures. They're adults, after all, and it's their money. If they want a cook (that's the old name for a "personal chef") and weekly maid service and all that fun stuff, then that's their business. If they want to spend $900 a night on a camping trip that's not really a camping trip, that's their business. In fact, generally speaking, I like it when the rich spend a great deal of money on overpriced things. That spending boosts the economy, which boosts the stock market, which boosts my bottom line. I approve of things that boost my bottom line. So I encourage the rich to spend. Come on, spend. I'm not getting any younger here and I've only got 29 years, five months and change before I retire. Chop chop!

However, while I approve of adults spending on a profligate basis, I don't see why they extend that to their young children. At the rate the Bondicks are going, before they know it their boy will announce that he's skipping college and heading off to Europe backpacking. (Quelle horreur!) It doesn't help the kid become self-sufficient and it doesn't help him learn that he's going to have to work to earn his keep. Once that lesson gets lost in the shuffle, the specter of downward mobility can't be far behind.

(via The Bitch Girls)
------------
* As evidenced by the fact my father still refuses to let me buy he and Mom dinner.

Posted by Benjamin Kepple at 08:41 PM | Comments (0) | TrackBack

August 28, 2007

Methinks the Man Dodged a Bullet

THE RANT WOULD like to extend our heartfelt sympathies to the Houston Astros fan who paid $300 for great seats at Minute Maid Park and had the in-field cameras focused on him for his marriage proposal to his beloved. After going down on one knee and presenting her with the ring, she looked surprised. Then she looked angry. Then she dumped her popcorn over his head and stormed out of the stadium.

The identity of the unlucky suitor wasn't immediately known, but if you ask me, it sounds as if the guy dodged a bullet. A really big bullet. One can only hope the guy will do the smart thing now, and go on national television to gain the respect and admiration he deserves. Not only will that mean Valuable Prizes and Other Consideration, it will almost certainly get him at least a few dates. So, I hope the Houston Astros fan will snap out of what must be an awful case of depression and realize that, you know, people like him and stuff.

Posted by Benjamin Kepple at 08:32 PM | Comments (0) | TrackBack

Real Men of Genius

BUD LIGHT'S "REAL MEN OF GENIUS" advertising campaign is perhaps one of the funniest commercial campaigns I've heard in ages. Proof of this can be seen in the fact the commercials have been running for seven years now -- and they're still really funny. Scroll down on this page for one of my favorites: "Mr Hot Stock Tip Giver Outer."

Posted by Benjamin Kepple at 08:23 PM | Comments (0) | TrackBack

August 27, 2007

Your Stuff Isn't Worth What You Think It Is

SO I WAS SURFING around the Internet tonight and I stumbled across the story of a Kansas City couple who have admitted to the world they are in dire need of a financial makeover. They get one courtesy of The Kansas City Star. Interestingly enough, though, the reporter on the story lets go unchallenged one particular datum from their financial health-chart. See if you can guess which one it is:

---------------

ASSETS:
Cash and cash equivalents, $4,615;
retirement savings, $16,220;
cars, $10,000;
home, $142,040;
personal property, $50,000.
TOTAL: $222,875

LIABILITIES:
Credit cards, $62,410;
student loans (currently in deference), $45,000;
mortgage, $132,015.
TOTAL: $239,425

NET WORTH: ($16,550)

--------------

I'm sure you've guessed it, because it's so blooming obvious -- that ridiculous $50,000 number for personal property. Nor am I the only one to question this: over at Boston Gal's Open Wallet, where I found the story, Boston Gal herself also raises an eyebrow:

Just like the last Kansas Star Money Makeover couple, this one seems to have a large dollar figure for "personal property" which may not be very realistic. Either that or giving myself just $5,000 for everything I own is vastly under valuing my personal property...

I for one doubt that Boston Gal is undervaluing her own personal property, just because personal property has a way of depreciating far more quickly than one might otherwise hope.

I myself only value my own personal property at $1,000. In part, this is because I don't have a lot of stuff, but it's also because the stuff I do have has depreciated to the point of no return. For instance, the computer desk on which I'm writing has a broken drawer and a whole bunch of scratches from moving. I bought it new at $200; if I ever get rid of it, it's free for the taking to anyone who will just pick the damn thing up.

I also have a nice leather recliner in my apartment bought new at $500 or so. I'd be lucky to get $75 for it at this point. The davenport/futon, which I bought for $300 new, is probably worth about $20. (It's been used). My swell new television, which I bought a while back, also for $300, is also probably worth about $50. My books and CD collection are great but their resale value is practically nil. You see where I'm going with this -- if I was lucky, I could get $1,000 for the contents of my apartment.

So to be perfectly blunt, if this family has $50,000 in personal property, I'm the Queen of England. And about the only way they could get $50,000 for their personal property is if Gene Wilder and Richard Pryor suddenly stumbled upon the scene with a zany, madcap plan to evade the federal authorities and get out of Kansas City. Something like this:

------------

GROVER: That's a bad sofa! Give you $700 for it!
MAN: It's yours!
GROVER: Pay the man.
GEORGE: What!
GROVER: Pay the man!
GROVER: Give you $300 for the coffee table!
MAN: Sold!
GROVER: Pay the man!
GEORGE: These plans of yours are getting awfully expensive!
MAN: I've got a television here if you want it.
GEORGE: No, we're fine!
MAN: You want this Cuisinart?
GEORGE: NOTHING!
MAN: Can't blame a man for trying!

-------------

So, knowing nothing other than the numbers presented above, it seems to me it would make sense to adjust the family's personal property number significantly downward. $10,000 would seem generous, and $5,000 is probably more on target. That also makes their financial picture far more dire -- they're now $56,000 or $61,000 in the hole, as opposed to $16,000 -- but it is also far more accurate.

And how these folks managed to ring up $62,000 in credit card debt is beyond belief. Lots of families have credit card debt these days but you would think after hitting a certain number the alarm bells would have gone off and they'd have adjusted their spending accordingly. Hopefully they will be able to adjust now -- because those student loans will come due eventually, and you can NEVER get rid of those except through paying them off.

That aside, though, the whole "personal property" number is a vague and imprecise one. So if you do include it in your financial calculations, the number should be an extremely low one, unless you've got a whole bunch of antique furniture around the place. After all, in the event you DO have to hock everything, you might as well get a nice surprise on the upside.

Posted by Benjamin Kepple at 09:52 PM | Comments (0) | TrackBack

Getting Our Dollars Back, One Way or the Other

LATE LAST WEEK I was talking with a colleague at work about the mess in the lending markets. We had just received word the Bank of China Ltd. was stuck with billions of dollars of debt backed by sub-prime mortgages, and I said something to the effect of, "We're getting our dollars back, one way or the other!"

Well, as it turns out, that's exactly what's happening -- and it's happening all over the world. Ambrose-Evans Pritchard -- yes, who else would it be -- blogged about it over at The Telegraph. Mr Evans-Pritchard writes:

In a warped sense, one has to admire the cool way that Americans – who save nothing, in aggregate – tapped into the vast savings pool of thrifty Germans to finance their speculative excesses, and then left the creditors holding a chunk of the subprime losses.

Was it sharp practice, in the same way that foreigners were recruited by Lloyds of London in 1986 and 1987 – before the impending asbestos losses were known – and placed like cannon fodder on “spiral syndicates” to absorb crippling losses? (Lloyds denies this occurred).

I am endebted to Randall W. Forsyth from Barron’s for this delicious quote from a hedge-fund operator, recounting with disgust what happened this time in a letter to clients:

" 'Real money' (U.S. insurance companies, pension funds, etc.) accounts had stopped purchasing mezzanine tranches of U.S. subprime debt in late 2003 and [Wall Street] needed a mechanism that could enable them to 'mark up' these loans, package them opaquely, and EXPORT THE NEWLY PACKAGED RISK TO UNWITTING BUYERS IN ASIA AND CENTRAL EUROPE!!!!

"These CDOs were the only way to get rid of the riskiest tranches of subprime debt. Interestingly enough, these buyers (mainland Chinese banks, the Chinese Government, Taiwanese banks, Korean banks, German banks, French banks, U.K. banks) possess the 'excess' pools of liquidity around the globe. These pools are basically derived from two sources: 1) massive trade surpluses with the U.S. in U.S. dollars, 2) petrodollar recyclers. These two pools of excess capital are U.S. dollar-denominated and have had a virtually insatiable demand for U.S. dollar-denominated debt . . . until now."

Mr Evans-Pritchard sums up his feelings in one word: "Shameless." And it was.

But then, what else would you expect from Wall Street, which has been doing that type of thing for years? It's like the bond-selling scenes from Liar's Poker on a grand scale. Plus, there's something to be said for caveat emptor here. While I'm sorry these folks are losing their shirts in this whole mess, I have to say I feel a bit like the counter-point guy in "Airplane!" -- "They bought the paper. They knew what they were getting into. I say, let 'em crash!"

Now, a benign view of all this might note these types of things seem to happen on a cyclical basis. Back in the Eighties, when everyone was in an uproar over the seeming Japanese domination of our economy, many Japanese came over with their dollars and bought trophy properties in the United States. They also managed to lose a bundle on these but at least they got to enjoy a bit of golf in the meantime. This time around, it's China's turn -- and they don't even get to golf. (Maximum suckage).

Mr Evans-Pritchard, however, does not find this benign. Apparently the Germans have been hit especially hard due to the subprime mess, with at least one German bank being sold in a fire sale as a result of its sub-prime issues. Another one had to be bailed out. Plus, the jump in interest rates has apparently put a real squeeze on corporate borrowing, and it seems there's a very real likelihood this whole mess will spill over into the larger economy. And that, Mr Evans-Pritchard writes, could mean recession.

I sure don't know what the future holds, but I do know this. The idea of a recession around the corner doesn't mean one should panic. It does, however, mean one should position oneself for the possibility, and be ready to strike when the iron is hot. To my way of thinking, that means building up cash reserves in the meantime, paying down or paying off debts, and being ready to invest when the time seems right. A recession, if it comes, would end eventually, and it seems to me one could do very well if one bought the right investments when things seem at their bleakest.

Posted by Benjamin Kepple at 07:35 PM | Comments (0) | TrackBack

August 26, 2007

For God's Sake, People, Go West!

WE LEARN FROM the Associated Press that Montana, of all places, is experiencing an economic boom so fierce employers are finding it pretty much impossible to fill jobs. The boom, as one might expect from the West, is due to heavy investment in resource extraction. With unemployment at just 2 pc, that's left other employers looking around and wondering where the hell all the job applicants went:

HELENA, Mont. -- The owner of a fast food joint in Montana's booming oil patch found himself outsourcing the drive-thru window to a Texas telemarketing firm, not because it's cheaper but because he can't find workers.

Record low unemployment across parts of the West has created tough working conditions for business owners, who in places are being forced to boost wages or be creative to fill their jobs.

John Francis, who owns the McDonald's in Sidney, Mont., said he tried advertising in the local newspaper and even offered up to $10 an hour to compete with higher-paying oil field jobs. Yet the only calls were from other business owners upset they would have to raise wages, too. Of course, Francis' current employees also wanted a pay hike.

"I don't know what the answer is," Francis said. "There's just nobody around that wants to work."

Well, the problem here is pretty obvious, and so is the answer. The problem is a fundamental imbalance in the local labor pool's supply and demand. The demand from employers is high, while the supply is low. Thus, employers who want to attract workers must raise their wages to equilibrium, or they're not going to have any workers. Mr Francis' complaint is thus disingenuous -- there's just nobody around who wants to work at the wage he wants to pay them.

Of course, one way for Mr Francis and his business-owner colleagues to fix this problem is to find more workers, of which there are plenty. Perhaps they should advertise. Heck, my home state of Michigan, where unemployment is higher than seven percent and even higher in the major cities, has oodles of idle workers who would like nothing more than to get back into the labor force. Oh, and it would appear there are some folks in Iowa who will soon be looking for work. The New York Times has the story:

NEWTON, Iowa -- THE LAST of the Maytag factories that lifted so many people into the middle class here will close on Oct. 26. Guy Winchell and his wife, Lisa, will lose their jobs that day. Their combined income of $43 an hour will disappear and, soon after, so will their health insurance. Most of the pensions they would have received will also be gone.

The Winchells are still in their 40s. They can retrain or start a business, choices promoted by city leaders in a campaign to “reinvent” Newton without its biggest employer. But as they ponder their futures, the Winchells are uncertain about how to deal with a lower standard of living. “I’m not wanting to go waitress,” said Mrs. Winchell, who, at 41, drives a forklift and earns $19 an hour, “but I can do what I have to to make money.”

Mr. Winchell, 46, having earned $24 an hour as a skilled electrician, seems paralyzed by the disappearance of his employer. He imagines that there is work for electricians in central Iowa but he hasn’t looked. “Lisa is always on me because I’m so angry,” he said. “She says, ‘What would your mom have said?’ My mom would have said, ‘Worrying is not going to help.’”

Newton’s last day as a manufacturing mecca comes a century after Fred L. Maytag built his first mechanical washing machine here. Over time he also located his headquarters, research center and most production in Newton, changing it from a rural county seat into a prosperous city of 16,000. Absent Maytag’s high pay, overall hourly earnings last year for other workers in the county would have been $3 an hour less, according to Iowa Workforce Development, a state agency.

I am not entirely unsympathetic to Mr Winchell's frustration. When one has invested one's whole life in a particular job or company, that really becomes part of one's identity and to have that taken away can really throw one for a loss. But it's one thing to be angry about losing one's job, and another thing entirely to let that keep a man from picking himself up, dusting himself up, and getting back in the race.

Of course, getting back in the race can mean a lot of life changes. Mr Winchell has spoken of looking for jobs in central Iowa, but I don't see why he would limit himself to just central Iowa. As a tradesman, he can pretty much go wherever he wants and find work -- and relocating for work can do a lot in terms of one's getting ahead in life.

I know this through my own experience, as I moved from Los Angeles to New Hampshire solely for the work, a move which took place three years after I moved to Los Angeles solely for the work. When my work here ends, I'll depart New Hampshire for better (and, God willing, warmer) climes. That could be when I retire from my present job (the Granite State is not the best place to retire tax-wise) or it could be when circumstances change and I find I've been made redundant. Sure, I could have stayed in my hometown of Kalamazoo, Mich. all these years, but the opportunities for which I was looking weren't there.

I fully admit it may be easier for me to say this, as when Mr Kepple was working, my own family moved solely for the work. So I'm used to the idea -- and used to the idea of not growing up near one's extended family, or the social networks that one has in a place where one's family has lived for a long time. But you keep up with your family as best you can and build new relationships and do what you have to do. That is the way of things in this day and age.

Personally, if I was in Mr Winchell's shoes -- or any of those about-to-be-unemployed Maytag workers, I'd get the hell out of Iowa while the getting was good and go where the grass was greener. Like, say, Montana. (It's pretty country up there and not unlike Iowa culturally, I'll bet). And although I feel secure in my own position here in New Hampshire, I definitely have my running shoes at the ready. It's easy but dangerous to take things in life for granted and so I've made plans should the unthinkable happen. These plans include the following:

1. Go out for a good steak dinner.
2. Take a good long vacation. A very good, very long vacation. Like, a drive around the country vacation in which I visit all my friends and family and go places where I've never been. Hey, when the hell am I going to get this type of free time again?
3. Four or six weeks later, come back and file for unemployment.
4. Start looking for work the next Monday.

Perhaps that's a bit idealistic on my part -- after all, there's something to be said for hitting the ground the very next morning -- but it sounds like a plan and I'm going to stick with it. Besides, if worse came to worst, I could always head out to Montana.

Posted by Benjamin Kepple at 06:27 PM | Comments (0) | TrackBack

The ($143 Million) Man

MICHAEL VICK COULD lose as much as $143 million over the next several years thanks to his involvement in dog-fighting, the Atlanta Journal-Constitution reports. That includes $71 million in salary over the next seven years, roughly $50 million in endorsement money and $22 million in bonus money the Falcons had paid him since the start of his latest contract. Summed up, that's $143 million. $143 million.

It's amazing to think Mr Vick, through his admitted involvement with a dogfighting operation, threw all that money away. It's even more amazing to think he didn't consider that would happen if he was eventually caught, or had advisors who would tell him, "Say, Mike. You know, this might -- I don't know -- COMPLETELY RUIN YOUR CAREER if it ever got out." But that is all water under the bridge and Mr Vick now faces a prison term.

We won't know the answer to the major question I have for some time, but what I want to know is how Mr Vick will end up after he loses the $22 million the Falcons are going to claw back from him.

Unless he went completely overboard with his spending, it seems certain he would have the money to pay back the Falcons. It would be difficult even for a person with expensive tastes to spend more than $1 million or $2 million per year, and he has undoubtedly sunk at least some of his pay into good tangible assets, like his home. One can also imagine (hope?) he had some pretty good money managers, as the NFL has made a point over the years of educating its players about financial discipline. Plus, some estimates have put his total earnings thus far at $60 million, so unless he really emulated MC Hammer, he's got the cash.

Still, $22 million is a lot of money no matter how you look at it, and I have to think that loss will have at least some impact on Mr Vick's lifestyle. For losing it would mean Mr Vick would also lose out on the considerable annual income that money could conceivably generate. Even if we assume Mr Vick has $15 million or so left after the Falcons claw back his bonuses, he'll probably have to ratchet down his spending in the years to come, because he will never ever make the money he had been making again. (If Mr Vick has any future football career left, it seems likely that will involve him being up in Calgary playing for the Stampedas).

Again, amazing to think he threw it all away, and for nothing.

However, I do think all those Falcons fans out there crying in their beers should cheer up, as from a team perspective this might be the best thing that's happened in a while to Atlanta.

Like most non-Falcons fans out there, I consider Mr Vick a mediocre quarterback whose passing is unremarkable and who was remarkably overpaid for the benefits he brought to the team. (Simply put, we don't understand why Atlanta considered him the best thing since sliced bread). Let's recall the Falcons have only had one decent season since Vick joined the team -- that would be 2004, when they went 11-5 -- and his overhyped style has not helped the Falcons escape subpar performances in 2003, 2005 and 2006. This year, to be perfectly blunt, would have been no different. Even if the Falcons had somehow made it to the Super Bowl with Vick in charge, they would have been blown out by the better AFC team.

But now that the Falcons are freed from having to pay the man his exorbinant salary, they can focus on building their squad and eventually hire a good quarterback for a reasonable sum, as opposed to the oxygen-sucking package that Mr Vick received. The long and short is that every cloud has a silver lining, and the Falcons would be remiss if they didn't take the opportunity Mr Vick's forced departure has given them.

Posted by Benjamin Kepple at 12:17 AM | Comments (0) | TrackBack

August 25, 2007

Spirit Willing, Flesh Weak

SO I HAVE had quite a week here. I made a marathon drive down to Washington for an old friend's wedding, had fun at the wedding and drank a lot, made the drive back up to New Hampshire, had a very productive week at the office, and completed a bunch of chores around the house while still managing to blog up a storm.

Naturally, this was the perfect time for my fibromyalgia, which had been dormant for YEARS, to make a surprise return and leave me in constant physical pain.

Fibromyalgia, for those of you unfamiliar with the syndrome, is what they now call muscular rheumatism, which I personally think is a much better name for the wretched condition. For that matter, most of the old names for disease are better. Nobody's going to think twice if they're told they have "Hansen's disease," but tell 'em they have leprosy, and they'll sit up straight at hearing that. Similarly, tuberculosis is inferior to consumption, pertussis is inferior to whooping cough, and so on. But I digress.

The good news here is that the pain is so far tolerable. In some, the syndrome can result in excruciating and disabling pain, but for me it is neither. However, I do feel as if I just got in a car accident the day before, as my entire body just aches. My shoulders ache; my legs ache; my ankles and feet ache; and my hands really ache. That last part is the most annoying thing about this. Dammit, I type with these hands, and it's no fun typing when my wrists and fingers are constantly aching.

At this point, I feel about all I can do is take bunches of over-the-counter pain relievers to help mitigate the situation, and take rational steps to address the underlying causes of the pain. This basically means that I need to sleep more, eat right and generally relax. So blogging will be a little lighter over the next few days as I try to get my body back in the swing of things. However, as I've worked hard to get back into the swing of things with my blogging, and my readership numbers have gone up as a result, I still plan to keep at it. I've beat a lot of things in my day and I'm sure as hell not letting this lay me up.

Posted by Benjamin Kepple at 06:45 PM | Comments (0) | TrackBack

August 24, 2007

Football Season: You Know I Love It

AH, FOOTBALL SEASON. A time when families gather together; a time when new dreams are born and old rivalries are renewed; a time when drunken fans allegedly commit cringe-inducing felonies of the highest order against their enemies, and fans from other conferences look on and say, "Whoa! Whoa whoa whoa! That shit's just WRONG."

This year's first Drunken Football Fan Award may well go to Allen Michael Beckett, 53, of Oklahoma City, provided a jury of his peers finds him guilty of, uh, "sacking" a University of Texas fan who made the mistake of wearing Texas gear into an Oklahoma City bar. Fanblogs.com has the scoop:

This year's Texas - OU rivalry is off to a bloody start, thanks in part to Oklahoma Sooners football fan Allen Michael Beckett, 53, of Oklahoma City.

Beckett is charged with aggravated assault and battery for causing "extensive damage to another man's scrotum".

It all started when Beckett began harrassing Texas Longhorns fan Brian Thomas for wearing a UT shirt into Henry Hudson's Pub.

The post then quotes The Oklahoman newspaper, which reports:

Thomas said Beckett, whom he had never met, called him "everything under the sun" for wearing a Longhorns T-shirt into the bar.

He said he and his friend sat at a table in the corner and tried to ignore the other man, but other man -- who apparently is a University of Oklahoma fan -- kept screaming at him.

Thomas said he decided he'd had enough after about 20 minutes of Beckett's abuse so he went to the bar to pay his tab. When he turned around, he said Beckett grabbed his crotch and refused to let go.

Thomas hit the other man several times before several bar patrons intervened, but Thomas said Beckett didn't let go until Thomas heard his scrotum tear and blood ran down his leg.

GOD! GOD GOD GOD! That gives me the shivers just thinking about it! Even worse, it took SIXTY stitches to sow up Mr Thomas, an ordeal I can only imagine was about as bad as the initial injury. Then again, I can't imagine it. My brain won't let me go there.

Amazingly, according to The Oklahoman, Mr Beckett faces up to just five years in prison if convicted of the charge against him. You would think in a God-fearing state like Oklahoma, the penalty would be something more fitting, like death. I mean, you don't DO that to another man. I don't care if he walked into the bar wearing Texas colors -- that's just uncivilized. You don't mess around with the meat-and-two-veg, if you know what I'm saying.

Now, this is not to say there might not be times when a "bit of fun" might be allowable on General Principle Grounds. For instance, if some lunkhead Michigan State fan walked into a Michigan bar and started cheering like a dumbass just because his crappy team managed to score a touchdown, it would be perfectly permissible for a Michigan fan to take the Spartan's Zima and dump it over the Spartan's ill-bred, ill-mannered, 80-IQ, backward-cap-wearing frat boy douchebag head. Along those lines, if a group of Ohio State fans wandered into a Michigan bar and started insulting the Maize and Blue fans within, it would be perfectly permissible for the waitstaff to spit on their nachos and give their order to the surliest, angriest cook in the back. (Ohio State fans are notoriously lousy tippers and never ever recognize good service).

But even if Michigan went 6-6 in a year, and lost to Michigan State AND Ohio State, it would never be permissible for a Michigan fan to assault them. In part, that's because Michigan fans rule and as such have no need to engage in such unsporting behavior. We will eventually have our revenge, because we always do. That's why so many fans from other teams fear and loathe us. We are Michigan. We are the winningest team in college football history. We have the largest stadium in the United States. We have 42 conference championships. Plus, if we do lose, our extensive alumni network will fan out around the country and make life miserable for graduates of the institutions that somehow manage to defeat us. ("It says here you're a USC graduate, Mr Smith -- I'm sorry, we haven't any positions open right now. Oh, and no, you can't have a loan.")

Other fans of Big Ten schools -- even Michigan State -- would also not stoop to such wretched levels. Even though their teams are not Michigan, and as such not as cool as we are, they are members of the Big Ten and the Big Ten doesn't condone that shit. We are not, after all, the SEC. Nor are we the Big Twelve, the conference of which Texas and Oklahoma are a part. (And just what the hell is wrong with Oklahoma, anyway? My God).

And I daresay Mr Beckett's alleged action would make even the barbarians in Florida give pause for a moment. It's one thing to try and kill opposing players with your helmets in an on-field brawl, but another entirely to go after some fan's manhood.

I trust the justice system will move swiftly and try Mr Beckett in all due course, and if he is convicted, I am sure it will mete out a proper punishment, even if it is not death. For what Mr Beckett did not apparently think about, prior to the incidents in question, was that his actions would tarnish the honor of the University of Oklahoma, its football team, and its fans. I mean, my God. EVERYONE was going to root for Oklahoma against the goddamned Longhorns. EVERYONE. But now? Who wants to root for a team whose fans would ... God! The horror! The horror!

Posted by Benjamin Kepple at 09:08 PM | Comments (0) | TrackBack

Prosperity Gospel, Part II

If someone expresses interest in investing in Guanajuato, we don't let them get away.

--Vicente Fox

GIVEN ALL THE business and finance writing I have been doing over the past few months, I daresay Loyal Rant Readers could be forgiven if they thought I had become -- well, a bit calculating in my outlook on life. Indeed, were one to say my writing on these topics has been a bit cold, unforgiving and ruthless, I don't think I would disagree.

However, when dealing with financial matters, I don't think these traits are all that bad to possess. Since these transactions necessarily involve working with strangers, one ought not reward incompetence, forgive stupidity or allow oneself to be taken advantage of just because one wants to be nice or avoid confrontation.

After all, no one cares more than you about your own money, and unless you operate along those lines you are inviting trouble. So if that means questioning the fees paid to the managers of your retirement funds, or criticizing the rationale of an investment strategy, or witholding your proxy vote for a clueless company director, or not buying the tru-coat at the used car lot, then those are the things you have to do. It's far better to be conscientious of these things than to be taken for a chump.

But the wonderful thing about capitalism is that, even as one must deal with the back-and-forth of the markets and the minefields of business, there are so many opportunities to help one's fellow man. Our system lends itself to coming up with new and creative ways to help those less fortunate, whether it's through one's own investing decisions or through one's charitable endeavors. Increasingly, it's possible to combine those two seemingly unrelated objectives and offer a dignified helping hand to those who need it.

Perhaps one of the most inventive combinations out there is Kiva, a Web site that allows people to offer no-interest loans to small businesspeople in the developing world. Since people are offering loans and not grants, it is not really charity, but at the same time, providing these small firms with working capital is very much doing good. Back in May, I wrote about the small investment I had made in the site and why I was happy to do so -- because the approach treats borrowers with dignity and as equals, not as charity cases.

At the time, I invested a total of $50 into my loan pool and made two $25 loans to two small businesses in Mexico, whose owners are widows working to raise their families. This investment worked out to 2.7 pc of a $925 loan made to a shoeseller in Monterrey, and 2.5 pc of a $1,000 loan to a small grocery in Cd. Acuña.

Four months later, I am pleased to report my borrowers have repaid me a total of $18.37 and are well on their way to repaying the loans in full. While God knows things happen in business, it sure looks like my borrowers are going to repay me on time. This is, if I may say so, pretty bloody cool. The opportunity cost to me was practically nothing* and I've helped them accomplish their goals. And when the loans are eventually repaid, I could cash out and get my money back -- but you know, I don't really want to do that. I'd rather plow the money back into new loans and keep the virtuous cycle going.

But I am certainly not the only one getting repaid. According to Kiva, the two microfinance groups that handle the loans in Mexico have turned in downright stellar performances. In total, they have loaned out more than $1 million over the past year or so. NOT ONE loan has gone into default. NOT ONE loan has even been delinquent. This is downright amazing when you consider more than 1,700 loans have been made. With that amount of activity, it would be reasonable to expect a default rate of 1 to 2 pc and a delinquency rate a bit higher, but EVERYONE has been paying back and paying back on time. Even if I wanted to find fault, I couldn't do it.

But what I really like about Kiva's approach is that it creates wealth without any of the distorting economic effects one often sees with well-intentioned relief efforts. Plus, I would like to think that eventually, that wealth creation -- through increasing trade and other economic activity -- will help folks here in the United States. If that grocery in Acuña does well enough, its owner may well be shopping over in Del Rio before we know it.

And that's enough to warm even my cold, calculating heart.

-----------
* Arguably, the opportunity cost of making the loans is the measly amount of interest I would have earned had I put the $50 into a stingy U.S.-based savings account. That works out to like 17 cents. These days, you can't even buy penny candy with 17 cents.

Posted by Benjamin Kepple at 12:45 AM | Comments (0) | TrackBack

August 23, 2007

Commodity Fetishism

SO I WAS TOOLING AROUND on Yahoo! Finance and much to my amazement I saw a column from one of their financial "experts" proclaiming --- wait for it -- silver as the next great investment. Yes, you read that right. Silver. Silver, which is down 16 pc over the last 15 months. Silver, which has historically traded around $4 to $5 per troy ounce. Silver, which since its recent historical lows in the Eighties and Nineties has seen a big run up to $13 per troy ounce or so, meaning you should have bought it back when it was cheap.

The author of this essay, one Robert Kiyosaki, is the author of the "Rich Dad, Poor Dad" series of books. He has sold about 26 million of these, proving at the very least he is an excellent salesman. As I have not read his books, I can't offer any real criticism of these works, although Wikipedia sure does. Still, I must say I admire the man's guts, because I have a feeling his words are going to come back to bite him like a pack of pit bulls. Mr Kiyosaki writes:

But as much as I love real estate, I believe the biggest opportunity today is in silver. I think this precious metal is about to become the most spectacular investment in recent history -- bigger than oil, even bigger than Google.

The Rant believes this statement is the stupidest thing we've read in years. Nearly as mindless is Mr Kiyosaki's statement about the potential upside appreciation one might find in the precious metal. He writes:

As I write, silver is approximately $13 an ounce. If industrial consumption continues and monetary panic sets in, who knows how high the price will go? Between 1979 and 1980, silver went to $48 an ounce. In today's dollars, that would be the same as $80 an ounce.

And recently, exchange traded funds in silver have been added as a way for investors to hold silver. The reason I find the silver ETF so intriguing is because an ETF represents real money -- not fake money like the U.S. dollar.

I don't mean to be rude, but it might be slightly important to mention the reason silver hit $48 an ounce back in the day -- actually, $49.45 per troy ounce at its peak -- was because the Hunts were scheming to corner the silver market. Of course, the economy was teetering on the brink of ruin at that point (Death of Equities!) and precious metals were a popular investment; but the idea that silver would have hit such a lofty height without the Hunts' machinations seems a bit much. Besides, once things got better, silver went on to crash spectacularly, losing two-thirds of its value over the next two decades. The S&P 500, meanwhile, went on to achieve more than a seven-fold return.

I have to say I just don't understand the commodity fetishism mindset that exists among economic doomsayers. If you look at the long-term trends and believe that all is lost -- an argument of which I am highly skeptical -- there are far better and more stable places to put your money. Real estate is probably the best of them, because they ain't making any more land and people always need places to live and work. Real estate is a good hard asset with tangible value. It also can't be stolen and melted down.

Plus, because God has blessed America with a stable system of laws and regulations governing the ownership and transfer of real-estate, the only way you'll truly lose out with real-estate is in the event of a nuclear holocaust (in which case we're all screwed) or some neo-Bolshevik movement seizes power (in which case we're all screwed). It should be worth noting that in the cases in which we are all screwed, NO investment -- except a plane ticket to Switzerland or Bermuda or the Caymans -- will save you. Those bars of silver and gold will only come in handy for getting one or two good swings at your local commissar before his socialist minions drag you off to be shot.

Of course, I realize some readers may look at this and complain that inflation is eating their dollars and the Government cannot be trusted and They -- whomever They are today -- Are Going to Sell Us Down the River. But here's the thing.

Let's say that all the above items are true. Let's say inflation is a bit higher than normal; let's say the Government is weak and ineffectual; and let's say the Trilateral Commission has somehow managed to spread its tentacles throughout the world of international finance, and its directors are spending their meetings looking at the stock tickers and laughing maniacally. As long as the returns on one's investments outpace inflation, there's no reason to switch to metals, because you're still making money in real terms and that is what counts at the end of the day. Real-estate and Treasuries and other investments would be far safer -- and arguably more liquid -- in such a situation. That's because if things improved -- as they almost certainly would -- they would still keep appreciating, whereas gold and silver would fall accordingly.

Besides, what if the doom one expects never arrives? Then you're really out of luck. Think of all those gold and silver bugs who held on to their metals portfolios throughout the Eighties and Nineties, expecting the crash that never came? The value of their holdings slowly diminished even as those who invested in more mainstream investments made a killing.

Now, I do not mean to completely dismiss metals enthusiasts here. Clearly, many are very smart and there's no denying there are some long-term trends extant that are cause for concern. But I have to wonder if a lot of these folks aren't perhaps being too clever for their own good, and thus extrapolating scenarios from their analyses that are possible, but certainly not very probable.

After all, the banking panics of the 19th and early 20th centuries are no more. There is no more wide demand, as the hotel operator in "The Good, the Bad and the Ugly" put it, for "gold, not paper dollars!" The gold standard has been sundered, even in Switzerland. Fiat money rules the world and there seems little chance that will change any time soon. Plus, the U.S. dollar still remains a great store of value -- after all, that's why so many foreigners hold dollars as a hedge against their own, far weaker, currencies.

So for the life of me, I can't see any reason to think silver is suddenly going to be the next big thing. Perhaps if things got really bad and there was a huge flight to quality, gold and silver would do well. But even then, those gains would only be temporary. Markets turn; that is their nature, and those who are accustomed to seeing the glass as half empty should always be prepared to accept the glass is actually half full.

Posted by Benjamin Kepple at 01:01 AM | Comments (0) | TrackBack

August 22, 2007

My Kingdom for a Working Comments System

AS LOYAL RANT READERS KNOW -- all too well, I am afraid -- The Rant's technological capabilities are a bit limited. Let us compare The Rant to a car and you'll see what I mean. The engine might run flawlessly, and its horses might plow through any and all obstacles placed before it, but there's no denying the body is a little rusted, and has chipped paint, and a huge scratch some wretched little hellion dug into the side of it with his skate key.

Perhaps the most obvious outward sign of wear and tear is The Rant's comment system. Like a smashed passenger-side mirror, it is not essential to the machine's overall operation, but it leaves people who see it wondering why the hell the owner doesn't get it fixed.

My friends, I can assure you I have no idea how to fix it; the programming skills required to do so are far beyond me. But its present state is not my fault. The comment spammers -- God damn them! -- forced my hosting provider to impose some strange technical requirements that would supposedly allow me to have comments whilst keeping the spammers at bay. But I can't figure them out and so I must go without.

This state of affairs has not gone unnoticed. Loyal Rant Reader Matt (REDACTED) recently wrote me an e-mail to complain about the situation. By the way, Mr (REDACTED) has an interesting blog of his own -- for instance, you know that guy who rants about free money* on late-night infomercials? No, not Jim Cramer -- this guy. Anyway, it turns out That Guy Who Screams About the Free Money has had some Strange Cosmic Role in Mr (REDACTED's) long-running relationship with his girlfriend.

But anyway. As I was saying, Mr (REDACTED) recently wrote me an e-mail to complain about the lack of comments on The Rant. He writes:

----------------

FROM: Matthew (REDACTED)
TO: Ben Kepple
RE: The techonological disgrace that continues to be your Web site

Ben, if you are going to continue to put a "comments" link on your
blog entry - every blog entry - then you have a legal obligation to
make sure that that comments link works! I am sick and tired of not
being able to leave a witty comment on your latest witty post!

Your loyal reader,

Matt

------------

Well, Matt, if you have any ideas as to how to reprogram my Movable Type comments scripts to make the comments work again, I'd love to hear them -- because I'll need step-by-step directions. I would, however, take issue with your statement that I have a "legal obligation" to provide comments.

I have consulted with my legal team and they have assured me that, although my continued failure to fix them could be considered "arbitrary and capricious" in certain jurisdictions, I can't be held liable for this state of affairs, except in southern Illinois. And under The Rant's articles of incorporation, I don't have to take Illlinois seriously until they beat Michigan in football. So until the Fighting Zooks measure up, I think I'm safe.

While I certainly think getting the comments working again would be a net good for the site, I have to admit that I have found minor advantages in not having them. These advantages are spelled out in a naughty and profane educational video from collegehumor.com, viz. and to wit:

So, in summary, if I can restore the comments, I will -- even if there might be something to the relative peace and quiet of a comments-free blog.

------------------
* Oh, and last time I checked, "free money" is only "free" when it is voluntarily lent out at zero percent interest. This would seem to preclude the idea that money is "free" when the Government redistributes it.

Posted by Benjamin Kepple at 07:40 PM | Comments (0) | TrackBack

Beautiful

THE ONION: "Neither Person In Conversation Knows What Hedge Fund Is."

Posted by Benjamin Kepple at 01:35 AM | Comments (0) | TrackBack

Joyous Fun With Tax Statistics

SO HOW WAS YOUR TUESDAY EVENING? I spent mine boxing up more books. Then I took a break and started reading The New York Times. Unfortunately for my continued book-distribution project, I read an article in the NYT about national income statistics that first puzzled me, then annoyed me, and then got my Scotch-Irish up. So I spent the next couple of hours doing some on-line research to see whether I could gather up enough information to analyze the analysis, and in fact, I did.

First, though, let's look at what NYT scribe David Cay Johnston wrote for the Paper of Record:

Americans earned a smaller average income in 2005 than in 2000, the fifth consecutive year that they had to make ends meet with less money than at the peak of the last economic expansion, new government data shows.

While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1 percent less than the $55,714 in 2000, after adjusting for inflation, analysis of new tax statistics show.

The combined income of all Americans in 2005 was slightly larger than it was in 2000, but because more people were dividing up the national income pie, the average remained smaller. Total adjusted gross income in 2005 was $7.43 trillion, up 3.1 percent from 2000 and 5.8 percent from 2004.

Total income listed on tax returns grew every year after World War II, with a single one-year exception, until 2001, making the five-year period of lower average incomes and four years of lower total incomes a new experience for the majority of Americans born since 1945.

The White House said the fact that average incomes were smaller five years after the Internet bubble burst “should not surprise anyone.”

The growth in total incomes was concentrated among those making more than $1 million. The number of such taxpayers grew by more than 26 percent, to 303,817 in 2005, from 239,685 in 2000.

These individuals, who constitute less than a quarter of 1 percent of all taxpayers, reaped almost 47 percent of the total income gains in 2005, compared with 2000.

People with incomes of more than a million dollars also received 62 percent of the savings from the reduced tax rates on long-term capital gains and dividends that President Bush signed into law in 2003, according to a separate analysis by Citizens for Tax Justice, a group that points out policies that it says favor the rich.

The group’s calculations showed that 28 percent of the investment tax cut savings went to just 11,433 of the 134 million taxpayers, those who made $10 million or more, saving them almost $1.9 million each. Over all, this small number of wealthy Americans saved $21.7 billion in taxes on their investment income as a result of the tax-cut law.

The nearly 90 percent of Americans who make less than $100,000 a year saved on average $318 each on their investments. They collected 5.3 percent of the total savings from reduced tax rates on investment income.

The I.R.S. data showed that the number of Americans making less than $25,000 a year shrank, down by 3.2 million, or 5.5 percent.

Nearly half of Americans reported incomes of less than $30,000, and two-thirds make less than $50,000.

The number of taxpayers making more than $100,000 grew by nearly 3.4 million and accounted for more than two-thirds of the growth in the number of returns filed in 2005 compared with those in 2000.

The fact that average incomes remained lower in 2005 than five years earlier helps explain why so many Americans report feeling economic stress despite overall growth in the economy. Many Americans are also paying a larger share of their health care costs and have had their retirement benefits reduced, adding to their out-of-pocket costs.

OK, so that's pretty much the entire article, but I'm analyzing it, so I had to post that much. I left out the bits at the end, which include the White House's response to the statistics and some policy analyst saying the data shows supply-side economics doesn't work. Discuss amongst yourselves.

Naturally, the Times' article has been on the receiving end of some pretty heavy firepower. Tom Blumer fired back a response saying the newspaper was twisting the facts to make things look bad. Randall Hoven also fired back, pointing to other Government data that apparently contradicted Mr Johnston's analysis. This prompted Mr Johnston to issue a response, which can be seen at Mr Blumer's site.

Anyway, based on my reading of the data, Mr Johnston oversimplifies and exaggerates the situation. He does not help matters by not explicitly mentioning where the data came from and how it was collected, leaving analysts no choice but to run around looking for it. After a while, though, I found it.

The data Mr Johnston cites comes from the Internal Revenue Service's Statistics of Income -- Individual Income Tax Returns report. (Publication 1304). The report, if you really want to download it, can be found here. It contains a bunch of PDF and XLS files which you'll then have to slog through. However, I did this for you out of the goodness of my heart. You're welcome, I'm sure.

Anyway, it would have been nice if Mr Johnston had mentioned this, as well as the fact the SOI report's figures "are all estimates based on samples." It also would have been nice if Mr Johnston had made clear that his average income statistics were based on the number of income tax returns filed. Thus, given the various filing options people have, they can only be quoted as being on an income-tax return basis. This isn't clear in the story and Mr Johnston should have taken care in pointing this out, even if it meant cutting out a quote from the policy wonk.

Furthermore, Mr Johnston's article could have certainly used a good bit of perspective. Yes, incomes have been down over the past five years. However, they're only down $476 on average, as his own data show. That works out to a whopping $1.90 per day, if we assume 250 working days in a year. My God -- people might have to give up their morning crueller to compensate. However will America's middle class survive this body blow to its way of life?

The drop also isn't all that much when one considers 2000 was something of a banner year, and over the next few years we had the Sept. 11 attacks, myriad corporate scandals and conflicts that sent the price of oil through the roof. All these things had a way of depressing income growth. As such, I have to agree with Mr Johnston's critics that the real story here was the recovery in average incomes over the past few years and not the drop from 2000.

Along those lines, I don't understand how Mr Johnston could present his data about the effect of the 2001 and 2003 tax cuts without mentioning that, you know, the rich pay the lion's share of the taxes in America. In 2006, the Tax Foundation projected that nearly 41 percent of Americans paid no federal income tax at all. In another 2006 examination, the Foundation found the top 1 pc of earners -- those making more than $328,000 per annum -- paid nearly 37 pc of the nation's income taxes! The top 10 pc -- those making more than about $100,000 per year -- were carrying more than 68 percent of the load.

I don't know. You would think, given the data Mr Johnston is dealing with, mentioning how income tax payments are already skewed would be slightly important. Just give it a line if that's all the space you've got, but put it in for Christ's sake. It also might have been nice if he mentioned that after the tax cuts, the wealthy were actually carrying a higher proportion of the tax burden than ever before -- at least in 2004, anyway.

Anyway -- overexaggeration and simplification. Not good things. Especially not when dealing with numbers.

Posted by Benjamin Kepple at 01:07 AM | Comments (0) | TrackBack

August 21, 2007

Nothing From Nothing Leaves Nothing

Oh No!
It's Time for Yet Another Installment of ...
YOUR SEARCH ENGINE QUERIES ANSWERED!

An occasional Rant feature

IN ALL THE PRESIDENT'S MEN, there's a scene in which one of the Watergate plumbers is being arraigned and he is asked his occupation. "Anti-Communist," he responded. It was not an accurate answer but one that expressed how he saw himself in his heart. Along those lines, my occupation can be summed up in those great lines from Billy Preston: don't you remember I told ja / I'm a soldier / in the War on Poverty.

For the most part, I'm devoted to fighting that in the financial sense of the phrase, but any poverty will do -- particularly if it's intellectual poverty. Based on the search-engine queries I get here at The Rant, there exist in the United States and elsewhere giant reserves of intellectual poverty. These are so vast, in fact, that if we were able to refine that intellectual poverty and use it to power our automobiles, the Middle East would wake up tomorrow and discover it was suddenly broke.

Sadly, however, those reserves only serve as grist for the blog-entry mill, and as such really can't be monetized. This is a shame because intellectual poverty these days is in such great supply that it is the intellectual equivalent of solar power -- cheap, efficient and inexhaustible. Still, the situation isn't all bad, as stupidity makes for great blog entries, and hoo boy did I receive some lulus in the search-engine log this month. So let's get to it!

QUERY: the philadelphia eagles rap song for 2004

ANSWER: The last Eagles song I ever heard of was, "I Saw Mommy Booing Santa Claus," so I really don't have an answer to this one. However, I'm sure the chorus has some variant of the phrase, "We blew it again."

QUERY: what high did mary lou retton attend?

ANSWER: Mary Lou Retton is high on life and as such would never attend any gathering where illegal activities were being conducted, much less take part in those activities. Although that DOES remind me of that old "In Living Color" sketch where Mr Rogers went around committing all sorts of acts and was able to get away with it because he was Mr Rogers, and no one believed he would do such things. I mean, can you imagine if Mary Lou Retton -- Mary Lou Retton, for God's sake -- ever got in trouble? It'd be like when Elvis died all over again.

QUERY: bengals cake

ANSWER: To properly decorate a Cincinnati Bengals-themed cake, make sure to include the phone numbers of all your local bail bondsmen as part of the decorative icing.

QUERY: how many bengals have been arrested

ANSWER: I lost track after the first dozen.

QUERY: what is wrong with brady quinn

ANSWER: How much time do we have?

QUERY: brady quinn is an ass

ANSWER: Well, let's just call that Item No. 1 on the list.

QUERY: how to get brady quinn s autograph

ANSWER: First, remove your wallet from your pocket and put all your currency on a table. Next, reach over and grab your ankles. You'll get it eventually. Let's call that Item No. 2 on the list.

QUERY: photos of ben roethlisberger being sacked by the colts

ANSWER: You have SO come to the wrong blog.

QUERY: saskatchewan roughriders fans are idiots

ANSWER: I'll hear no talk against my beloved Melonheads, who are clearly so starved for football action up on the prairies that they root for the Saskatchewan Roughriders.

QUERY: consider yourself one of the lucky ones

ANSWER: I do. As Mayakovsky might have put it had he lived in a better age: "You now -- read this and envy: I am a fan of the Pittsburgh Steelers."

QUERY: oakland can still win wild card

ANSWER: Well, yeah, the season hasn't started yet. Give it a few weeks.

QUERY: ace of base foreign affairs

ANSWER: OK, that's an important safety tip for Americans who might have to call upon the services of the Swedish Government in hostile countries -- you may be subjected to bad dance music.

QUERY: shots of jose cuervo country song

ANSWER: Fifteen shots of ... uh ... gee, there's a worm in this and everything!

QUERY: 1980 s song- chorus goes woo oooooooo

ANSWER: Oh, well that REALLY narrows it down, pal. Honestly, I can't -- hey, wait. That actually does narrow it down! It's "Stuck on You" by Huey Lewis and the News!

QUERY: vehicular vandalism missouri punishment

ANSWER: Death. Well, it should be.

QUERY: how many ounces does a punch bowl hold

ANSWER: 256.

QUERY: physical imperfections are also beautiful

ANSWER: Um, no, they're not. Trust me -- as a physically imperfect person myself, I know this full well. I've got to rely on my wit and charm and intermediate knowledge of the financial markets, and all that said, I think my physical stature counts for a hell of a lot more in those equations. Unfortunately.

QUERY: kate winslet weighs

ANSWER: That's about the last thing on my mind when I see a picture of Kate Winslet.

QUERY: does ladies night mean ladies only?

ANSWER: No. That said, you probably shouldn't let that answer get your hopes up.

QUERY: 36 000 americans wear what per good housekeeping magazine

ANSWER: Hmmmm. Well, it's got to be one of two things -- either "nothing" or "thong-th-thong-thong-thong!"

QUERY: shannyn sossamon no longer dating dallas clayton

ANSWER: My God. The horror.

QUERY: why do women have more pairs of shoes than clothes

ANSWER: I suspect it has something to do with the fact that women need lots of shoes to go with their outfits. I am not an expert on this subject because I order my shoes through the mail. Well, I would if I didn't ask for a new pair of shoes every Christmas and got them. I have bad feet so I wear one brand/type of shoes pretty much constantly; they're nice enough for work but also good for wearing around the house.

QUERY: engagement ring he dumped me and wants it back

ANSWER: Uh, you might want to check your local laws, but I don't think you have to give it back. He's the one who broke the promise, not you, so I'd say you get to keep the ring on general principle grounds. Whether you can do so on legal grounds is another question, though.

QUERY: lauren jones has signed off from the ktyx-tv eye of east texas

ANSWER: I'm glad to see that Texas' broadcast journalism standards may soon get back to their formerly high station. She was quite pretty, though. Maybe Fox News has an opening!

QUERY: men who disappear then reappear in dating

ANSWER: Gee, I wonder what they're after!

QUERY: reasons to date a journalist

ANSWER: As Jacobs once put it, "Journalists are two inches taller, better dancers and much more fun to be with." We're useful at dinner parties, know all the good restaurants in town and have plenty of roguish charm. Which is good since we're all broke.

QUERY: valentine smart remarks

ANSWER: If you want your Valentine's Day to be, uh, memorable, you'll steer away from the sarcasm, son.

QUERY: contracting scabies from a motel

ANSWER: Next time, stay at a place that doesn't charge by the hour.

QUERY: jury duty is fibromyalgia an excuse

ANSWER: No. You'll just have to get a good's night sleep beforehand.

QUERY: the most insane qdro ever written

ANSWER: Heh, she got you GOOD, didn't she? Sorry, buddy, but I think you're out of luck.

QUERY: \ capital one\ \ bomb

ANSWER: Dear God! The mortgages! What's happened to the mortgages?!

QUERY: foreign currency cds

ANSWER: I had a long post on this a while back. Do a search in the search box for it. The long and short of that post, though, is that you're better off sticking with boring old dollar accounts because the higher interest rates aren't worth the risks one will take with the currency fluctuation.

QUERY: are coffee drinkers wealthy or poor and middle class?

ANSWER: But everyone loves coffee!

QUERY: us culture of nivea skincare products

ANSWER: The success of the Nivea line of skincare products shows that even if you hire the most smarmy-sounding announcer in the world, a guy whose very voice wants to make you punch him in the face repeatedly, it will not stop you from selling bunches of product.

QUERY: diarrhea mcdonald s salad

ANSWER: No, you can't sue.

QUERY: expensive yuppie drinks

ANSWER: Cosmoapplevodkatini! Yay cosmoapplevodkatini!

QUERY: will sell grade hardwood for pre-1964 silver coin

ANSWER: Howard Ruff? Call your office!

QUERY: how to currency speculate

ANSWER: That you're asking this question suggests you should stay very far away from the exciting and volatile world of forex trading.

QUERY: is it stupid to use a large brokerage firm?

ANSWER: Well, that all depends on how much money you have. If you have only a little, it makes sense to start with a firm that caters to your needs appropriately, and doesn't ding you here and there with fees. Brown & Co. had a great advertising campaign to this effect a while back -- to the point where "free tcotchkes!" became a private Kepple catch-phrase.

QUERY: movie hardcharging stockbroker

ANSWER: Aren't they all? I mean, I never heard of a good movie in which the main stockbroker character cleared out at 4 p.m. every day and went home to the family.

QUERY: i can t afford living room furniture

ANSWER: Go to a decent second-hand shop and see what you can pick up. If you're like me, and you don't particularly care about furniture, a second-hand shop should get you some great bargains. I once bought a good sofa that way and it was all of $130 or so. Barring that, contact your local social-services agency, who have furniture for even cheaper. DO NOT go to some rent-to-own place, because you're going to pay three times what the furniture is worth when all is said and done.

QUERY: rich person who gives away money

ANSWER: You have SO come to the wrong Web site.

QUERY: broker small investor ~$1000

ANSWER: You want to find a good broker that doesn't charge you up the wazoo for fees and caters to small investors. Consider Scottrade -- they have low minimum balances and very low commissions.

QUERY: america what if you don t tip

ANSWER: It is very bad if you don't tip. For more on this, see Quentin Tarantino's "Reservoir Dogs," specifically the scene where Mr Pink refuses to put in a buck for the breakfast waitress. Consider the reaction he receives -- from HARDENED CRIMINALS. Friend, that is the best-case scenario for you. Be a man and tip at least 15 pc of your bill, preferably 20 pc.

QUERY: spoilt milk upset stomach

ANSWER: Oy vey.

QUERY: this is to bring to your notice that we are delegated from the united nations in central bank to pay 150 victims of scam $500 000 usd five hundred thounsand dollars each. you are listed and approved for this payment as one of the scammed victims to be paid this amount get back to this office as soon as possible for the immediate payments of your $500 000 usd compensations funds.

ANSWER: Is it just me, or could spammers make off with like half of the nation's wealth IF ONLY they learned how to write a proper letter?

QUERY: all the email adress and names of peoples associated in privet companies in america

ANSWER: Oh, sure, that's easy. Let me check.

QUERY: chubsy from geico commercials

ANSWER: Chubsy was from the Capital One commericals. And the answer is always No.

QUERY: suing your stockbroker?

ANSWER: God help you! You probably can't. This is because investment firms are clever and usually force their customers to go through arbitration.

QUERY: kalamazoo internet creeps

ANSWER: Well, that's the least surprising search-engine string of the day.

QUERY: why is michigan a part of the midwest

ANSWER: Gee, I don't know. Maybe it has something to do with the fact that it's IN THE MIDDLE of the bloody region.

QUERY: lloyd carr retiring?

ANSWER: Oh, God, I could only wish. Then Ron English could be Michigan's football coach. Then we could get a coach who could ACTUALLY WIN A BOWL GAME.

QUERY: yeah though i walk through the valley of the shadow of death i shall fear no evil for i am the toughest and meanest son of a bitch there ever was.

ANSWER: Yeah, well, the laws of physics don't care. So you can be tough and mean all you want but if someone has an equalizer than you're out of luck.

QUERY: turn off the seat belt noise from 90 accord

ANSWER: I thought those type of annoying safety features were considered benefits among those who owned Japanese cars.

QUERY: speed trap somerset pennsylvania turnpike 55mph

ANSWER: The whole bloody Pennsylvania Turnpike is a speed trap. Still, thank you for letting everyone know about this. Important driving tip!

QUERY: how many shots of novocaine for deep cleaning

ANSWER: Three -- and my God, the third one was a doozy.

QUERY: fourthmeal wrong message

ANSWER: Of course it's the wrong message. It's a Taco Bell advertisement. Everything about Taco Bell advertisements send the wrong message -- particularly the idea that one can be slim and sexy while eating calorie-laden and fat-laden crap that tastes ... well, it doesn't really have any taste, now does it?

QUERY: stolen recipe collection

ANSWER: Despite your suspicions, Mrs Johnson down the way did not steal your recipe for sausage with sausage and sausage gravy casserole.

QUERY: ben kepple wikipedia

ANSWER: I do not have a wikipedia entry. However, if I did, it would read something like this: Benjamin Kepple is a native of Kalamazoo, Mich., and later attended the University of Michigan. He is the Alpha and Omega, the First and the Last, and woe bestride those who do not recognize his genius.

QUERY: nerd in high school

ANSWER: Oh, yes. I remember those days well, for I too was a nerd in high school. It may be tough getting through these next few years, but remember -- the wonderful days of college will soon be here. Also, remember that success is the best revenge. One of the cool things about my high school experience is that, as far as I know, I am the only member of my graduating class to have appeared on television. This was a situation that my good friend Simon From Jersey, channeling Chevy Chase, summed up as, "I'm Ben Kepple, and you're not."

So that DID provide a bit of satisfaction -- but to be perfectly honest, only in a very marginal, that's-just-kinda-cool way. You see, when you get older you really don't think about high school. Like, at all. Because it was high school and so penny-ante the idea that you worried about all that crap is just amazing. So content yourself with the knowledge that you'll soon be out in the world and get to take advantage of all its blessings.

Well, that's it for this edition of Your Search Engine Queries Answered! Until next time, this has been Benjamin Kepple, saying, "My God. Look at all this crap. Who are these search-engine people, and how did they get here?"

Posted by Benjamin Kepple at 01:25 AM | Comments (0) | TrackBack

August 20, 2007

Ding Dong! The Witch is Dead!

------
Death of Leona Helmsley Prompts Minor Furore
As Hell Has Trouble Finding Appropriate Punishment

------
Fourth, Fifth, Eighth, Ninth Circles All Make Claim
on Departed Hotelier

------
Demonic Hordes, Little People "Reacted With Glee"
at News of Helmsley's Impending Arrival

------

SECOND CIRCLE, UPPER HELL -- Recently deceased hotelier Leona Helmsley's arrival through the Gates of Hell prompted a minor bureaucratic crisis here on Monday, as authorities struggled to decide just what the appropriate punishment for Helmsley, 87, would be.

Helmsley, a one-time model known for terrorizing her domestic staff and other employees, fighting with her family and her insatiable greed and miserliness, among other myriad sins, arrived to the home of eternal pain with great fanfare. After initially refusing to board Charon's "dingy, dusty rattletrap of a boat," Helmsley received a "tremendous blow to the head" from the ferryman's oar. She was then dumped in a heap before Minos, the terrible demonic judge of the evil dead, who dispatched her to the Eighth Circle's thieving fire. But even after that, Minos said Helmsley "was still managing to cause trouble."

"Oh, not her again," grumbled Minos upon being asked about Helmsley's status. "After long and careful consideration, I dumped her off to the Chasms of Fraud, as it seemed the most appropriate place for her to suffer eternal torment. But just a few hours after I did that, I starting getting e-mails from the Department of Inmate Control and Persecution telling me the demons were so enthused at being able to sink their pitchforks into her that dozens of other souls were escaping the boiling pitch and fleeing for more hospitable climes."

"It's not my fault DICP can't control the savage impulses of its rank-and-file personnel," Minos added. "But now I'm getting bombarded with demands from DICP to send her down to Caina. Meanwhile, the Department of Inmate Processing and Location is demanding she get moved up to the fourth circle to suffer the tortures of the misers and wasters, and the Department of Savage Retribution wants her down on Level Five, where the wretched souls she disdained in life can claw out of the muck and tear her to shreds. It's a complete disaster."

"Meanwhile, the Operations Directorate is fighting with everyone, and -- oh, dammit, hold on, I have to take this," said Minos, as he consulted his BlackBerry.

It's not clear just how many souls managed to escape the Chasms of Fraud when Helmsley arrived; official statements from four separate departments put the numbers at 13, 23, 89 and 4, respectively. According to those on scene when Helmsley arrived, the demonic hordes welcomed Helmsley with "a downright alarming display of savage glee."

"I remember one of the demons said, "Oh! Well! Leona Helmsley! We'll make sure to make your stay here as comfortable as we can!'" said escapee Irving Jones, a former Buffalo resident who was sentenced to the eighth circle for barratry upon his death in 1973. "Then they all started jabbing her with their pitchforks."

"You've got to help me," Jones added. "This has all been some sort of mistake."

"I didn't have any idea who this person was," said fellow escapee Manuel Rodrigues, a 19th century grafter whose greed indirectly contributed to the death of 27 miners in Brazil's Minas Gerais in an 1847 accident. "But some of the other men here told me she had great disdain for the -- how you do say it -- "little people." The demons were so happy to see her. Apparently they had been expecting her for some time. Anyway, when they all started going after her, that's when we all took our chance."

"And never mind this scoundrel here!" Rodrigues said. "So the supports were substandard. It wasn't my fault. Surely you can see I deserve to be on the third circle."

Attempts to contact Hell's higher-level officials were unsuccessful. Hell's corporate policies, which make a point of treating the underworld's human souls with utter contempt and complete disdain, discourage supervisory personnel and forbid executive personnel from discussing the status of inmates in the eternal prison. Only a few of Hell's personnel, such as Minos, are directly authorized to speak with the press.

However, depending on how Helmsley holds up through the tortures, observers believe Helmsley may soon be temporarily relieved from suffering the torments of the damned and work her way up to an entry-level job as a torturer and overseer. That could take place in as few as five thousand years, according to Hell's Personnel Department.

"While the loathesome, horrible witch would still suffer through indescribable pain in such a position, Hell has always taken a utilitarian view of these situations," said Malsueno, a demon who works in the department's processing office. "If she can make the torments meted out to the damned even more horrible, she may well be in line for a position in our demonic-training program for particularly evil souls. Since the third century, we've had a good 100 to 200 souls go through the program and so far, we've had great success with it."

The demon said Helmsley could be considered for the program "as soon as 7380, or maybe 9621" and that much would depend on her competency at filling out the reams of paperwork, forms, liability releases and other documents that are part of the application, believed to be thousands of pages long. She will also have to find a working ink pen, which Malsueno warned are "almost always out of stock" in his department.

When asked if taking part in this program would actually deepen Helmsley's torments once the Final Judgment was at hand, Malsueno just chuckled.

Posted by Benjamin Kepple at 08:03 PM | Comments (0) | TrackBack

Barron's: Screaming Madman's Picks Result in Negative Alpha

BARRON'S MAGAZINE, one of America's top business publications, has published a beautifully nasty article about Jim Cramer, America's favorite business pundit.

Mr Cramer, as many readers may know, has his own show, "Mad Money," on CNBC. On "Mad Money," Mr Cramer essentially runs around screaming and imparting his market wisdom amidst a bevy of sound effects and calls from enthusiastic stock traders. And Mr Cramer's picks, Barron's found, made money: 12 pc over the last two years. Unfortunately, the magazine also found the NASDAQ made 14 pc, the S&P 500 made 16 pc and the Dow Jones Industrials were up 22 pc over the same period of time.

Oops.

But it gets better. Oh, does it get better.

Barron's Bill Alpert goes after Cramer and his CNBC bosses with every tool in his journalist's arsenal, whether it's neatly dissecting Cramer's stock picks with surgical precision or beating up Cramer and CNBC with a sledgehammer for their reactions to Mr Alpert's investigative efforts, which range from contempt to calculated evasiveness. Mr Alpert writes:

When we asked Cramer and CNBC for their own records of Mad Money's stock-picking performance, they had more excuses than a Tour de France cyclist dodging a blood test. They complained that the list from YourMoneyWatch.com contained some stocks from the program's "Lightning Round," in which Cramer gives a quick analysis and a buy or sell decision on stocks phoned in live by viewers. These, they argued, shouldn't count in our tally.

CNBC officials also said that viewers should buy Cramer's picks a week after they're aired. They said that the show is mainly educational, and not just about stock-picking. In the end, they said we should focus only on the tiny universe of stock selections -- about 12 a week -- that Cramer researches the most. And we should do it only for the issues picked this year. CNBC analyzed these stocks, and said that if held for one month, they beat the S&P by 0.8%, or 1.7% after two months. They offered no results for the year-to-date.

If the show's "mainly educational," why does it have a legal disclaimer that runs prior to the show -- for like thirty seconds? Come on, now. Also, CNBC's analytical criteria are a bit -- well, let's just say they're a bit selective. This inspires about as much confidence as CNBC's afternoon crew does. Two months' history. Christ. Mr Alpert's response to this, as you'll see in the story, is to tell CNBC to put up or shut up. "Even cheerleaders," Mr Alpert writes, "need to be held accountable." Ouch.

But perhaps the nastiest part of the story comes when Mr Alpert tells his readers they could have made between 5 pc and 30 pc per year using a trading strategy entirely based on shorting Mr Cramer's stock picks. Now that's poetic justice, particularly given Mr Cramer's background in hedge funds.

Speaking of which, Mr Alpert also cheerfully looks at Mr Cramer's own trading past and some of the techniques he used to make money over the years. Mr Alpert writes:

If Mad Money offers unconvincing proof of Cramer's long-term stock-picking prowess, so does his account of his hedge-fund activities. His memoir suggests that some of Cramer Berkowitz's profit came from clever trading. The $300 million fund might execute hundreds of trades a day, some of them a bit gimmicky. Cramer describes how they'd find a stock in which selling had petered out, then build a position. Next, they'd hunt up some bullish news on the company and feed it to sellside analysts and reporters. On the subsequent rise, Cramer could profit by selling out his position. "Buzz merchandising," his book calls it. Smart and effective, but definitely not in the fuddy-duddy style of Graham & Dodd.

In December, Cramer made a video for TheStreet.com describing the ways his hedge fund had used tricky trading techniques. He said hedge funds could pass negative rumors to "bozo" reporters. When the video circulated through Wall Street and caused an uproar, Cramer said that he'd only been talking hypothetically, to blow the whistle on the hedge-fund industry's bad actors.

I don't know why the video would have caused an uproar, unless it was the typical reaction people have when one of their own sells them down the river for no appreciable gain. Of course hedge funds and other insiders peddle shit to reporters -- and supposedly objective equity analysts. Why these reporters and analysts do not properly account for their sources' motivations is beyond me -- in business, the cui bono question is not just an old saying -- but that is a post for another day.

But let's get back to the matter at hand. The gist of all this is that Cramer made you 12 pc and the NASDAQ made you 14 pc and the S&P 500 made you 16 pc over the past two years. While Mr Alpert's story doesn't have the technical numbers to say this with absolute certainty, it would seem probable that Mr Cramer's stock-picking results in negative alpha for "Mad Money" viewers. Meaning that it would be entirely mad to watch Mr Cramer with the idea of getting some winning stock-market picks.

However, even I won't deny Mr Cramer is fun to watch on television -- if only because his antics are so outlandish. It is arresting television viewing -- and I'll admit I've watched segments for far longer than I otherwise would have because I want to see if, finally, this is the day Mr Cramer throws out his back, goes into cardiac arrest, beats up one of his producers or does something really outlandish, like challenging Bob Pisani to pistols at dawn. YAAAAAAAAARGH!

Posted by Benjamin Kepple at 10:58 AM | Comments (0) | TrackBack

August 19, 2007

A Note of Thanks

WHILE I'M CERTAINLY GLAD to be back and blogging again, I should note that a technical snafu nearly prevented all this swell blogging from taking place tonight. The log-in script somehow got fouled up and I couldn't sign into my blog, even though all my files were still there. I reacted like any blogger would do in such a situation -- I completely panicked and called Dean Esmay, my technical guru and all-around good guy -- to get his take on the situation.

Dean graciously took time out of his Sunday night to assist me through the process. This despite the fact that it was a) Sunday night, b) he is recovering from breaking two ribs, c) it was something that was easily solved with a note to the technical assistance people at my hosting service and d) I am a notorious technofeeb. So on behalf of everyone here at The Rant, I'd like to thank Dean for his gracious help and understanding. It was greatly appreciated.

Posted by Benjamin Kepple at 11:57 PM | Comments (0) | TrackBack

"With God, All Things Are Possible"

THAT MAY BE TRUE, but if I lived in Ohio's Cuyahoga County -- hi Mom! hi Dad! hi Jesse! -- I would be somewhat concerned knowing my county government basically cribbed its entire civilian evacuation plan from Kansas City. Here are the key quotes from the The Kansas City Star:

While he found the imitation flattering, D.A. Christian, Kansas City emergency management director, said Cuyahoga County might have been misled.

The alliance’s report, he pointed out, is based largely on the relative abundance of highways leading out of Kansas City.

“They didn’t even look at the evacuation plan,” he said.

Melissa Rodrigo, manager of Cuyahoga County Emergency Management, said she figured that if Kansas City scored high enough on the study to gain national attention, the city probably had an evacuation plan worth checking out, even if the two are not directly related.

Last week, Cuyahoga County commissioners unanimously adopted the plan, which has been in the works for more than a year.

But two commissioners, now worried that the plan is not tailored to the county’s needs, said it needed to be re-evaluated, the newspaper said.

For example, Kansas City’s plan includes nothing about being sandwiched between two nuclear power plants. Nor does it factor in Lake Erie blocking all possibility of a northbound escape.

Yeah, those things might be SOMEWHAT IMPORTANT for Cleveland and its surrounding environs to consider, if only because of the high probability the nuclear power plants will be directly responsible for the events requiring a mass evacuation. After all, the same geniuses running these plants blacked out half the eastern U.S. a while back.

So, Mom, Dad, Jesse -- you might want to look into mooring a boat somewhere along the Cuyahoga River, so you can steam out into Lake Erie ahead of the screaming, desperate mobs of angry citizens who can't figure out why authorities are telling them to take I-35 out of the city. Barring that, you might want to stock up on canned goods, plywood and that plastic sheeting stuff, just in case disaster strikes and you end up under the benevolent dictatorship of the Pepperwood North Homeowners Association until the federal Government gets around to restoring order.

Posted by Benjamin Kepple at 11:45 PM | Comments (0) | TrackBack

Turning the Corner?

WELL, I HAD A great weekend away attending the wedding of my friends Greg & Ann. It was a wonderful ceremony, the bride looked beautiful and all went according to plan. They are now enjoying a short honeymoon out in Nevada, with a longer honeymoon to follow later this year.

The trip was especially nice considering that I got to catch up with Greg for a while -- it had been a couple of years since I had seen him, and it was great to spend time shooting the breeze prior to the ceremony. It was also nice because the ceremonies forced me to take my mind off the news in general -- to say nothing about the turmoil in the markets, which I had been following pretty closely throughout this past week. When I focus on something, I really focus, and so it was nice to take a short break.

But I'm back and it's Sunday night and the big question will be whether the U.S., and to a lesser extent the European markets, will rebound over the next couple of days. I am hopeful that if we do get a rebound, it will mean the worm will turn. It seems to me that if we get a few days on the upswing, at least some of the scoundrels now cleaning up on their short-selling will take their profits, and since that would mean they'd buy stocks, that would force the market even higher and start a virtuous cycle. Also, folks who are now sitting on the sidelines with cash might decide to plow back into the market, helping out the bulls.

And THAT, my friends, would mean more pictures like this:

BULL! ALWAYS BULL! Investor Benjamin Kepple reacts as the market finally has a good day on Friday. The rally came after several turbulent and losing days in the market, which caused Mr Kepple to gnaw off his other thumb down to the stump.

Heh. Pretty cool picture, eh? A friend of mine got a new lens for his camera; he was hoping to try it out; so he obliged my request for a couple of photos. I was quite pleased to find them waiting in my home e-mail box when I returned, and --

READER: Hey! What's that thing taped up on your desk?

What's that? Dude, there are LOTS of things taped up around my desk. That's part of how I keep organized. Plus, I have funny stuff up there. Like the e-mail I once got that advised, "Dear Ben: there are financial and emotional benefits to planning ahead for your funeral." Oh, really? Does this man know something I don't?

READER: No, no. I mean, that thing taped at the bottom of your computer monitor.

Oh, that! Well, it's just a little something I put up related to football. You know the season's coming up, and I'm really looking forward to it, since the Steelers are going to have a great year, and --

READER: Ben! If I squint I can see that it's referring to Super Bowl XLI, so that doesn't wash.

What? You can make that out? Shit!

READER: Stop stalling! Now come on! Let's see it!

All right, all right --

READER: Dude, you need help.

Yeah? Keep it up and I'll sign your melon, pal! Besides, it was the best post-Super Bowl headline I saw, and unapologetic in its seething anger, so I put that bad boy up there. Priceless.

But back to the markets. Friday's rally in the U.S. markets was nice to see. I do my best to be dispassionate about my investments but watching my hard-earned slowly evaporate day after day was particularly not fun.

For planning purposes, I track the underlying value of my investments using a not-all-that-complex formula with two components. The first component is the overall value of my portfolio minus a few percent -- it works out to a round number. I call this the Retrenchment Number. It prevents me from having to re-enter the numbers on a daily basis on my main spreadsheets, and it also ensures that no matter how the market did, the number is a somewhat-precise representation of my portfolio's value. I also have a second number, called the Baseline Number, that represents the minimum value my portfolio can reach before countermeasures are put in force. Should the value of my investments fall below the Baseline Number, I start shifting disposable income into savings.

Over the past two weeks or so, as the market fell, I adjusted the Retrenchment Number down 17 percent in an attempt to stay ahead of the carnage, and the Retrenchment Number -- formulated based on the possibility of continued whipsawing -- came perilously close to the Baseline Number. Suddenly, my steak dinners and gourmet shopping and bookstore visits were in danger. But the uptick on Friday put a halt to the slide and I must admit I'd like it were that the start of a trend.

I'm hopeful that will happen. As of 10:30 EDT, pretty much every Asian market is going gangbusters -- New Zealand is up more than 2 pc, Australia more than 3 pc, Japan more than 3 pc, and Korea, Singapore and Taiwan are all up about 4.5 pc. Even the Shanghai Composite is up -- it had been down earlier -- although it is Shanghai and it's a weird exchange.

Those numbers are obviously drawing steam from the U.S. markets' great day on Friday, but I'm hoping against hope their strength will carry over into Europe and then back into the U.S. We shall see. The European papers are screaming about continued turmoil, particularly as a major German bank admitted that it got a huge bailout due to losses on US subprime debt. (Schadenfreude. Gotta love it). Meanwhile, an important Swiss banker has gone on record saying the roller-coaster ride ain't over yet.

I still think a lot of this turmoil is panic talking. It would appear a lot of this sub-prime debt was snapped up by foreign investors, and as such I wonder how much the U.S. economy would really be damaged because some of our citizens are engaged in non-traditional ways of taking back dollars -- hopefully, petrodollars -- from abroad. However, the situation in Europe may well prove far bleaker than here -- here's a commentary on that very matter you may find interesting.

Also interesting is the theory these market troubles may force the Federal Reserve and the ECB to cut interest rates over the next several months to stave off an economic downturn. Hmmmmmm. That could make certain investments more valuable than they have been recently. We shall see. In the meantime, perhaps we should keep our seatbelts fastened.

Posted by Benjamin Kepple at 10:55 PM | Comments (0) | TrackBack

August 17, 2007

The Rant Returns on Monday, Aug. 20

I'M OFF TO A WEDDING this weekend. What's that? No, I can assure you it is NOT my own, and there is no Mrs Kepple waiting in the wings someplace. Anyway, I've got to go pack. Blogging will resume once I return, which at this point is expected to be on Monday, Aug. 20. Until then!

Posted by Benjamin Kepple at 12:01 AM | Comments (0) | TrackBack

August 16, 2007

How the Market Really Did Today

SO AT THE OFFICE TODAY I kept half an eye on the stock market, watching as it went down, and then up a bit, and then down a lot more. About three o'clock, as the market was on yet another downward spiral, I stopped looking at it entirely and figured we'd all get whipsawed again. Fast forward a bit, and I was deeply involved in my work when one of my colleagues exclaimed, "It's up!" Naturally, I was stunned at this -- although perhaps I shouldn't have been -- and opened up my Web browser. Sure enough, there it was -- a teeny gain in the Dow Jones, plus a somewhat nicer gain in the S&P 500. When the tickers finished adding up the numbers, the Dow ended essentially flat for the day.

Well, as you can imagine, I thought this was rather nice. The only trouble with this equation, though, is that the Dow is an extraordinarily narrow gauge, with just 30 total listings. The entirety of the New York Stock Exchange has more than 3,300. The NASDAQ has more than 3,200 listings and the AMEX has close to 1,400. Even the over-the-counter stock listings -- which range from crap penny stocks to banks and various foreign companies -- number more than 2,000. What did we see on these?

As it turns out, Yahoo! Finance -- an excellent business site, actually -- has a full listing of "advancers and decliners," which show just how all those equities did in the aggregate. On the NYSE, decliners beat advancers by a 6-4 ratio; on the NASDAQ, decliners beat advancers by a 54-43 margin. The AMEX really had a bad day, with declining issues outnumbering advancing issues by a 3 to 1 margin. Perhaps most telling was the ratio of stocks which hit new yearly highs compared to those that hit new yearly lows -- on the NYSE, new lows outpaced new highs by 100 to 1!

I do think people -- and especially journalists -- pay far too much attention to the Dow Jones Industrials. Perhaps it's because it's an easy benchmark and all the companies are downright huge; but most people, especially those who own any sort of mutual fund, need to look deeper to get a handle on how things are going. Bookmark that Yahoo page and check it frequently; I think you'll find it worthwhile.

Speaking of which, the Asian markets are DOWN AGAIN right now, after getting their heads handed to them the day before. For more on this, take a look at The Telegraph's business pages, which being at the center of the financial universe do a much better job at covering European and Asian markets than pretty much all of the American press, even if they are a bit more, ah, emotional about it. Ambrose Evans-Pritchard -- a favorite here at The Rant -- has filed reports on the latest market mayhem and the apparent unwinding of the yen carry trade. (Not. Good.) Oh, here's another AEP story on the Fed's recent actions.

The Telegraph's James Quinn also has a story on how the hedge funds have been doing. They have taken more than a trim, Mr Quinn writes.

Posted by Benjamin Kepple at 09:55 PM | Comments (0) | TrackBack

I've Seen Stranger Things Than This in My Day

-- BUT NOT BY MUCH. The key quote in this story? That would be this: "(Accused robber Kasey) Kazee also had a T-shirt pulled up around his head during the robbery attempt. (Store employee Craig) Miller says it reminded him of the "Cornholio" character from the "Beavis and Butthead" cartoon."

Well, that and the bit about the duct tape police charge Kazee wrapped around his head in what apparently was an ultimately futile attempt to obscure his identity.

Posted by Benjamin Kepple at 12:47 AM | Comments (0) | TrackBack

And Just What Trickery is This?

FULLY 94 PERCENT OF AMERICANS are either very satisfied or somewhat satisfied with how things are going in their lives, according to a recent edition of The Harris Poll, while 92 percent of Americans believe their own lives will stay about the same or get even better in the next five years.

The poll also found that young people and people in my age bracket were even happier and more optimistic about their lives and the future than the population at large. As one might expect, I found these results surprising to say the least. Actually, to be perfectly blunt, I was stunned to hear about them.

Utterly gobsmacked. Completely dumbfounded. Totally amazed.

I mean, I don't know about you, but I only know a few people who are very satisfied with how things are going in their lives, and not all that many who are somewhat satisfied. Certainly I'm not, and I think I have a pretty good existence compared to most people. I mean, if I really wanted to dwell on things, I think I could come up with a good list of things I'm not happy about, even though my doing so would be unmanly and tiresome. (I wouldn't say I'm really unsatisfied with how things are going, but I'm kind of in this middle ground where I'm annoyed and alienated and full of vinegar and in a bad mood a lot. This makes for good blogging, so let's not upset the apple cart too much).

And I'm not the only one either. I mean, I think most people I know are feeling kind of blahed out right now for whatever reason(s) and are vaguely hoping or looking for improved circumstances, but they're certainly not expecting them to come down the pike anytime soon.

But a big reason I don't understand these results is that they come from The Harris Poll, which is conducted by one of America's best and most well-respected polling outfits. Normally, the company's data are beyond reproach, its methodologies are sound, and its questions are so thought-provoking and lively that no one would ever think to question their results.

We know this because The Harris Poll from Sept. 26 proved conclusively that the Pittsburgh Steelers are America's favorite football team. Fully one out of six football fans root for the black-and-gold, a ratio I would note beats out those of the goddamned Dallas Cowboys and the wretched Indianapolis Colts. The poll also found only four percent of the American football public are fans of the Cincinnati Bengals and even fewer like the Baltimore Ravens.

Sure, I know what you're thinking: "But how could it be otherwise?" Well, I agree this poll wasn't really necessary, as everyone knows the Pittsburgh Steelers are America's Team and the Baltimore Ravens are evil. But the fact the poll results squared so well with the reality on the ground speaks volumes about the polling company's inherent soundness, professionalism and commitment to the truth.

This was again shown in a separate Harris Poll on Jan. 9 that found football was America's most popular sport. Fully 42 percent of Americans selected professional or college football as their No. 1 Sport, while baseball was the favorite sport of just 14 percent of Americans. Professional or college basketball ranked third with a combined 12 percent, while auto racing was America's No. 4 Sport. (Hockey was tied for fifth, along with men's golf). The poll also found football fans were better educated, made more money, and were generally much more fun to be around than fans of other sports. (Despite what I wrote above, I am fun to be around during football games).

So I'm faced with the disturbing dilemma that faces all non-believers. For, as Graham Greene might have put it, could what these men say possibly be true? Could it be possible that nearly everyone in America is happy and I am but an outlier on the graph, stewing in relative solitude along with the few other angry and embittered souls out there? My God, what a disturbing circumstance that would turn out to be.

But until I can be convinced otherwise, I must believe that some sort of inadvertent error -- perhaps some results were counted twice, or Harris did its polling at Disneyland -- contributed to these wacky and strange findings. For although Tertullian's old maxim is ringing in my mind -- it is certain because it is impossible -- I just have to think there's a perfectly rational explanation for all of this. And once I figure out what that is, I'll be able to enjoy some peace of mind. Ahhhh, peace of mind ...

Posted by Benjamin Kepple at 12:01 AM | Comments (0) | TrackBack

August 15, 2007

A Victory So Sweet

SIXTY TWO YEARS AGO today, the Allied Powers, led by the United States, threw down the cruel Empire of Japan, putting an end to that nation's decades-long reign of terror over much of eastern Asia. It took nearly four years and cost untold lives and required incredible sacrifice, but we did it.

I was pleased to learn today that Rhode Island -- who knew? -- actually had a state holiday commemorating the day when Japan finally surrendered, but less pleased to learn some in the Ocean State would rather not celebrate it at all. Opponents argue that Japan later became an ally of the United States and surely it is time to bury the hatchet. Besides, they argue there's no holiday for beating the Nazis, something we accomplished a few months earlier.

There is no denying that Japan -- like Germany -- has markedly changed for the better over the past several decades, and there is something to be said for not burdening sons with the sins of their fathers. But unlike Germany, which has wholeheartedly repudiated its Nazi past, Japan has not fully apologized for the crimes it committed during the war. (Here's a list of the major atrocities -- you won't find a dull sentence in it). Until the Japanese can muster the courage to fully put their wartime atrocities behind them, and make full apologies to the people who deserve them, Americans should continue to politely remind Japan that these things happened, and that there are some accounts which still need settled.

(Photo credit: U.S. Navy, from the surrender ceremony of Sept. 2, 1945)

Posted by Benjamin Kepple at 05:58 PM | Comments (0) | TrackBack

What Price for Danger?

Mary had a little lamb
and when she saw it sicken,
she shipped it off to Packingtown
and now it's labeled chicken.

-- Anon.

THE NEW YORK TIMES has an interesting story on people who, for reasons I don't entirely understand, prefer to drink raw milk and engage in clever strategems to procure it, despite its general illegality throughout most of the United States. The Times is sympathetic to the plight of raw-milk devotees, even going so far as to tag the story with a headline of: "Should This Milk Be Legal?"

After thinking about it, I have to say I don't see why not, even though I consider drinking the stuff -- or eating some of its by-products, such as fresh raw-milk cheese -- somewhere between excessively risky and downright insane. After all, we do live in a free society and a society that values free markets, so why not let people voluntarily buy the stuff? We let people buy organic foods that have not been treated with germ- and insect-killing pesticides, so why not fully open the market and give people the choices they desire?

That is not to say that I shall be joining the raw-milk devotees any time soon. Raw milk, not being subjected to the glorious and wonderful scientific process of pastuerization, contains bunches of germs. As such, those who drink it run the risk of contracting pestilence and disease each time they a take a sip. To me, raw milk is no different than raw eggs -- another food that scares the life out of me.

I generally eat eggs once a week, when I go to my local watering hole for a good breakfast and get one of their great omelettes, and one thing I like about this place is they cook my eggs the way I want them to do so -- cooked through. If I get fried eggs, I order them over hard and if I get scrambled eggs, I don't want them runny. This is because I want any foul bacteria that may have sprung up in the things to be dead, dead, dead before I eat them, and I'll be damned if I end up getting sick because I just had to have the eggs runny.

Of course, some readers who know may be scratching their heads and saying, "But Bennnnnnnnnnnn! You like your steak Pittsburgh style (black and blue) and you have always been a fan of carpaccio and tartare and sushi and caviar and what have you." This is all true but I take precautions accordingly. When I'm in Los Angeles, I don't order sushi from any place with less than an A health rating, and when I'm at a steakhouse I figure I can trust them to keep their beef in the best possible conditions.

In short, when I do order these products, I know I'm receiving both the benefits of the supplier's expertise -- getting sick at a sushi place doesn't tend to encourage repeat visits -- and the regulations of the local board of health. There is always the possibility I could get sick but I think the risks are minimized. I would argue the precautions with steak, sushi and what have you benefit from having middlemen in the mix. (For instance, steak is aged). But there are few precautions one can take with raw milk, which goes pretty much from the cow to one's lips. The same goes for eggs, which go from their shells to your plate with little in the way of precautionary measures one can take. (A bad egg is a bad egg).

But hey. If I can arguably risk my health ordering rare steak and raw tuna -- even if those risks are small -- I don't see why others shouldn't be able to take somewhat larger risks and "enjoy" raw milk or raw-milk cheese or what have you. We all know what we're getting into, and so if we get sick it is our own fault.

While I can certainly understand the concerns of the food regulators over allowing these sales, I have to say I'd rather have them focus on making sure the industrially-produced food and milk we buy is safe. When people buy factory-processed meat and milk, they expect and deserve that food to be safe. The last thing they want is to hear the factories are operating in conditions that inspired the nursery rhyme noted at the start of this essay. However, if people are willing to take on additional risk and do so with the knowledge of what they're getting into, then why not let them?

Posted by Benjamin Kepple at 12:01 AM | Comments (0) | TrackBack

August 14, 2007

And It's a Steal at Just $419,900!

AN AFFORDABLE Bay Area starter home? Or a training ground for Marines heading to Fallujah? The folks at Burbed want YOU to decide!

By the by, the price works out to just $423.71 per square foot of this cozy two-bedroom, one-bath bungalow style home. Plus, as you can see from the photos, there aren't any unpleasant outdoor maintenance issues, like a lawn, to deal with. Also, I don't know WHO made the $156,000 through selling the home in 2004 after owning it for just six weeks, but I want to shake his hand.

Posted by Benjamin Kepple at 12:29 AM | Comments (0) | TrackBack

Oh, No He Didn't

THERE'S NOTHING LIKE having the tranquility of one's weekend shattered. Here I was, sitting back and enjoying a nice dinner, when I stumbled upon a wretched and foul essay from Stephen Bainbridge, a professor at the University of California at Los Angeles. Prof Bainbridge was apparently annoyed at coverage of the Iowa GOP's straw poll and as such wrote an essay that not only condemned Iowa, but also South Carolina and New Hampshire.

Prof Bainbridge essentially argued that New Hampshire was small and full of white people, and as such the state shouldn't have such a powerful say in choosing Presidential nominees. Instead, he argued, California should have a powerful say in the matter:

As I watch the coverage of the Iowa straw poll, I can't help once again feeling incredibly annoyed with the political process.

I live in California. Our population is over 37 million, representing 12% of the total US population. Indeed, if we were a separate country, our population would be larger than that of all but the 34 biggest countries in the world! We're responsible for 13% of US GDP. Indeed, if we were a separate country, we'd be the 7th largest economy in the world. We produce cutting edge technology, world class wine, and much of the nation's food crop. We ought to matter. And yet, we're virtually irrelevant to American politics other than as source of money that candidates then go spend in places like Iowa, New Hampshire, and South Carolina.

Now, others from all over the nation have said similar things before, so that itself wasn't really worthy of writing about. But then, at the end of his essay, Prof Bainbridge delivered the coup de grace:

How is it that we persist in allowing these unrepresentative, yahoo infested, pissant states decide who gets to run for President? The notion that the Ames straw poll matters would be preposterous were it not so pernicious.

I about choked on my broccoli when I read that. Unrepresentative? Yahoo infested? A pissant state? My reaction, after I performed the Heimlich maneuver on myself for a couple of minutes, can be summed up in four words: Oh, no he didn't. So, as a Michigan native who once lived in California but who has lived in New Hampshire for more than six years now, I would like to say the following to Prof Bainbridge:

You can kiss my freedom-loving, clean-air-breathing, ten-minute-commute-driving, no-sales-or-income-tax-paying, unrepresentative fat ass.

Now, in a follow-up post commenting on the reaction to his article, Prof Bainbridge tried to play down his remarks, saying he had been sarcastic and those who didn't originally see that ought lighten up.

Unfortunately, Prof Bainbridge has apparently forgotten Machiavelli's old maxim that wars start when you choose, but they do not end as you please. Furthermore, as a one-time Angeleno myself, I believe I'm in a perfect position to counter Prof Bainbridge's argument that California -- California! -- ought have a big say in choosing the nation's Presidential nominees.

I mean, my God. What a horrible idea. California? That wretched, bloated bastion of criminality and corruption? The same California where, as the state's present governor once described it, the legislative process thrives on "dirty money, closed doors and back-room dealing?" The same California which has ungovernable cities, appalling schools and pollution so thick that in summer you can practically cut it with a knife? California should have a big say in choosing the nation's Presidential nominees? Why? So the rest of the country can be as unlivable as the Golden State?

For that matter, I am sorry, but I do not see how a state's prowess in agricultural and vinicultural matters should have any bearing on its place in the Presidential nominating process. Prof Bainbridge, in noting California's accomplishments in food and wine production, apparently thinks these things are important. But there are plenty of other states that do just fine in those fields. Plus, when it comes to cutting edge technology, there are other states that also produce lots of it -- and given California's miserable business climate, their importance is increasing even as the Golden State's declines.

Indeed, it is telling that Prof Bainbridge offers no political rationales for his argument other than to say that California has a whole bunch of people. That's not as surprising as one might think. After all, compared to Iowa and New Hampshire, where the citizenry are actively engaged in political matters and study candidates as thoroughly as Prof Bainbridge studies one of his precious cuvees, California's public is largely apathetic towards the political process. Since California's Government has arranged things so that each party has a lock on the state's legislative districts, and major public policy matters are decided through interest-group-backed referenda, this malaise is perhaps to be expected. However, even I was surprised that Prof Bainbridge would so cavalierly try to brush California's dysfunctional political environment under the rug.

Besides, to be perfectly blunt, California's political process hasn't exactly produced a lot of winners over the years. Generally speaking, the leaders who emerge from this vapid rathole are second-rate at best, and more often than not are enslaved to the interest groups who support them and the close friends who leech off them. I mean, a look at California's leaders throughout the years is to examine a Gallery of Political Mistakes, a bipartisan collection of mediocre and ultimately useless officials.

----------

GOOD DECISION! Over the years, California has produced several politicians who, in retrospect, might not have been the best men for the job.

-----------

Of course, depending on one's point of view, history notes one California politician who governed the nation through a time of relative peace and prosperity, a time when our nation served as a city upon a hill to the rest of humanity. However, as this politician got his professional start in the unimportant state of Iowa, I am confident the people of California would not attempt to use his success as a way of bolstering their credentials.

Posted by Benjamin Kepple at 12:07 AM | Comments (0) | TrackBack

August 13, 2007

Now Send the Man His Tchotchkes

SO THIS WEEK'S EDITION of the Carnival of the Capitalists is up, and lo! my post on the Chinese saber-rattling over the yuan's value was not only included, but listed as one of the carnival's "Top Picks for the Time-Challenged." Yeah. The Rant would like to thank Mr Mike DeWitt, of the Spooky Action blog, for hosting this week's carnival and appreciates his kind words.

Of course, the Carnival of the Capitalists has myriad posts about finance matters and here are some of my favorites:

MAN GETS STOCK CERTIFICATES in mail by mistake. Man sees if he can get free tchotchke (specifically, a mug with the logo of the corporation in question) as consideration for doing the right thing and mailing them back. This request seems reasonable enough, but even more reasonable when one considers the certificates were worth EIGHTY MILLION DOLLARS.

I don't know about you, but if I was an executive at ShoreTel, one of those Internet telephony providers, I'd send the guy one of every goddam tchotchke the company has. Since the company is an Internet telephony provider, it is reasonable to assume the company has an entire warehouse set aside for storing the myriad pens, mouse pads, bath towels, plastic cups, coffee mugs, key chains and other crap emblazoned with its logo. ShoreTel should do the right thing and send him a nice care package full of company crap, because while there was practically no chance the man could actually have cashed in on the stock certificates, his action undoubtedly saved them bunches of headaches.

Especially considering he sent them via FedEx back to the transfer agent. FedExes aren't cheap, you know.

As it happens, several years ago -- when I was living in Los Angeles -- I got a wad of stock certificates delivered in the mail. They had been intended for my neighbor, but the mailman had screwed up and put them in my box instead. Naturally, I returned them. I did not, however, ask the natural question -- "What the hell were you thinking having the stock certificates sent in the mail, in this day and age?"

I remain hopeful that someday, someone will accidentally send me a cache of bearer bonds. That's not because I would, say, take the bonds and flee to central Mexico and live like a king on the proceeds, but because I am sure the rightful owner of the bonds would reward me handsomely for doing the right thing, which I would of course do anyway. Hey, I once turned in a $100 bill I mistakenly got from a self-service grocery store checkout station; I would do the same if vast wealth were to suddenly but erroneously appear in my hands.

GENERAL MOTORS is ending its sponsorship with the U.S. Olympic Team. The SportsBiz blog argues the move is a result of the automaker's financial troubles. I would argue the move is a result of the fact that most people who actively watch the Olympics drive Japanese cars.

IF YOU'RE NOT PLANNING to make any decisions, stop following your stocks day in and day out, argues Warren Wong at Interpersonal Development. Well, I wholeheartedly agree with that -- God bless it, the market was down again today! Oh, for crying out loud!

PERSONAL FINANCE TIPS from The Beatles -- because really, when you get right down to it, that "all you need is love" idea was rather bolshy.

Lastly, The Rant would note with disapproval one post included on the CotC list, which argues that small investors ought leave buy-and-hold strategies to the billionaires. The key quote in Michael K. Dawson's argument is this: "Has buy and hold worked for anyone other than Warren Buffett? I abandoned it after almost being wiped out during the internet implosion."

Without getting into the details of it, I can assure Mr Dawson that not only has buy-and-hold worked for me, but it has worked for several people I know. A big advantage of that strategy is that it defers capital gains taxes, and that alone explains why Mr Buffett is worth tens of billions of dollars as opposed to a few billion. Plus, if you reap significant gains in a stock, it makes sense to hold on to it despite downturns because selling will mean a huge tax bill that wipes out a good fraction of any gain one would otherwise book.

For instance, let's say an investor buys 100 shares of Stock A at $10 per share. After seven years, Stock A has appreciated to $100 per share. That's a profit of $9,000. But since long-term capital gains would mean taxes of at least 15 pc (and likely more, depending on where one lives), the tax bill means it makes more sense to hold on during downturns. If we assume taxes on a sale would eat up 20 pc of the gain, selling the stock at $100 per share equals an effective net price of just $82 per share. If the stock goes down 15 points in a bad week, selling still might not be the best move, because you'd get still hit with a pretty big tax bill.

Of course, that's not to say there isn't a proper time and place to sell any particular equity. But as one commenter at Mr Dawson's site pointed out, buy-and-hold works when the company is a value proposition. It does not work so well if one is screwing around with NoBusinessPlan.com. If you're engaged in outright speculation in those types of stocks, of course you should sell if the waters look choppy ahead. But there's a difference between investing and speculating and I'm not entirely sure Mr Dawson has got the memo on that yet.

Before I close, I would also note Mr Dawson quoted some CNBC talking head who "suggests selling until you can sleep." Folks, investing is not something one ought do with scared money, and neither is speculating on the market. If your stock market losses are causing you sleepless nights, you should reanalyze your financial position and see if there aren't ways you can bolster your core holdings to help you sleep better. Perhaps that means paying down that home equity loan or putting more of your savings in cash. You see, despite what the philosophers say, you can put a price on having a good night's sleep.

Posted by Benjamin Kepple at 09:17 PM | Comments (0) | TrackBack

Fool, Money, Soon Parted; You Know the Drill

A FLORIDA MAN who bought a $400,000 Lamborghini is facing charges after crashing the automobile just shortly after buying it, according to the Orlando Sentinel and bunches of other Florida media outlets.

According to authorities, Orlando-area dumbshit motorist Ronald Tridico was speeding when he went around a curve on State Road 429. Upon losing control while maneuvering through the curve, the Florida Highway Patrol said Mr Tridico overcorrected and his car skidded 1,200 feet before crashing. That's nearly a quarter of a mile, and suggests that Mr Tridico was traveling awfully fast when the incident occurred. Mr Tridico faces was arrested on two charges, according to the Sentinel: police arrested him on "suspicion of driving under the influence" and on a charge of leaving the scene of an accident. Here's the key quote from the story:

The 39-year-old Windermere resident told troopers that another vehicle had cut him off. But judging by the skid marks, authorities didn't believe him.

"Just because you can afford a $400,000 car doesn't mean you know how to drive it," said Sgt. Jorge Delahoz, a Highway Patrol spokesman.

Tridico was arrested on suspicion of driving under the influence and leaving the scene. The man's wife suffered a minor injury to her arm but refused medical treatment, Delahoz said.

While I am glad to see that no one got badly hurt in the wreck, I do think it necessary to say to Mr Tridico: SMOOTH MOVE, RON. That should make you real popular down at the country club, or whatever upscale establishments of which you are a member. Hopefully in future he will learn to a) respect the machine that he's driving and b) not drive like a maniac. And he's damned lucky the crash was a single-vehicle accident; if it had involved another vehicle, God knows how serious it might have been.

Posted by Benjamin Kepple at 12:38 PM | Comments (0) | TrackBack

August 12, 2007

Common Sense

WHILE THE BRITISH PAPERS are screaming about the onset of a new wave of economic gloom, I've noticed that American writers are far more sanguine about the present market volatility. Ben Stein, writing in The New York Times, notes the turmoil has come during a time when economic conditions remains strong. For some reason he does not really mention the impact hedge funds have had on the trading that's gone on these past few weeks, but he does make a strong case to individual investors that there really isn't a lot to panic about.

The key quote? "But for now, the sell-off seems extreme, not to say nutty. Some smart, brave people will make a fortune buying in these days, and then we’ll all wonder what the scare was about." Yeah, that sounds about right.

The Times also has a story about company insiders' buying and selling decisions that makes for a good read. Prof H. Nejat Seyhun -- of The University of Michigan -- argues these now indicate a bullishness among executives about their own firms. The Times writes:

For historical comparability, Professor Seyhun argues, insider sales need to be weighed according to whether they occur immediately after the exercise of an option.

In unpublished research, he has done just that. And he has taken into account other factors he has found to be important in interpreting insider behavior. These include the type of insider who made the transaction, the size of the transaction, and whether it occurred in the context of a rising or falling stock price. A good summary of that previous research is in his book, “Investment Intelligence From Insider Trading” (M.I.T. Press).

While I am not familiar with Prof Seyhun's research, it does make sense to discount insider selling, if only for the insiders' tax purposes alone. Since the Government taxes non-qualified (i.e., non-incentive) stock options at the moment one exercises them, it makes sense to immediately sell a portion of the shares one receives simply to cover the tax bill one has acquired as a result. (The rules for ISOs are summarized here). That especially makes sense when one considers what happened to all those poor bastards in Silicon Valley who held on to the entirely of their options, saw the value of their NQSOs evaporate during the collapse of the tech bubble, but found to their horror the Government still wanted its money anyway.

Posted by Benjamin Kepple at 08:15 AM | Comments (0) | TrackBack

And in Other News, The Sun Rose in the East

THE SUNDAY TELEGRAPH'S HEADLINE for its latest story on the turmoil roiling the financial markets gave me a good chuckle: "Hedge fund panic was behind global stock markets collapse." Gee, you don't say. The hedge funds have been controlling the day-to-day market flows for God knows how long now and as such the news they were behind the latest rout isn't a surprise -- especially considering the BNP Paribas news was what kicked off this week's carnage.

Still, despite the headline, and some real bonehead comments within the story left unchallenged, there's some good information in The Sunday Telegraph's article. Apparently, the so-called "quantitative funds" -- those that use sophisticated computer programs to crunch out returns -- have really been getting whipsawed in this latest debacle. As their Wall Street bankers have been upping their margin requirements, a lot of quants have been been forced to sell their positions at a loss. This led one anonymous banker to tell the paper:

The increased payments forced hedge funds to sell assets to cover their losses. One London banker said both Thursday and Friday were characterised by remarkably light but very volatile trading in London with those who didn't have to sell staying at home while those who were forced to sell were badly punished.

"This is a one-in-a-100-year event in which there are extremely unusual correlations that no one prepared for," warned one banker. "We are in a situation where everyone is very scared."

Well, I can't deny that folks didn't prepare, but what a shocking statement -- a one-in-a-100-year event? Let's see, that puts us back to ... oh, 1907. Leaving aside the problems that went along with spectacular crashes such as those in 1929, 1973 and 1987 -- and, for that matter, 1907 -- it seems a bit much to make that statement when Long-Term Capital Management blew up just ten years ago. LTCM was perhaps one of the best quant funds out there before things all went to hell.

Still, there's no denying that many hedge funds are going through a world of pain right now, and the paper has interesting news on this:

Financial stability was further shaken as hedge funds' losses mounted, compounding fears that some funds could collapse. Goldman Sachs's Global Alpha fund, the US fund AQR and New York-based Tykhe Capital were rumoured to be in particular trouble, although this could not be confirmed.

Many so-called quantitative funds with supposedly low-risk strategies involving investment in both debt and equities were particularly hard hit because weeks of turmoil in the credit markets made it impossible for them to sell debt, forcing them to sell more stable equity assets at a loss.

"In the last week people have had to meet margin calls by selling equity positions. The quant strats [quantitative funds] have been hit hardest and it's become a bit of a perfect storm. Prime brokerages are increasing margin requirements so you have a self--fulfilling prophecy and spiral down," said one senior banker.

"The black boxes [funds' computerised investment strategies] are all similar. They are getting completely crushed," added another.

It has also emerged that many funds had invested in the same companies, causing prices in otherwise unconnected companies to fall dramatically.

Because hedge funds borrow much of the money they invest from banks, the concern is that contagion could spiral again when the markets reopen.

Just for the record, I'm cool with contagion right now. I've reached the acceptance phase with contagion. This is because of one statement in the story which was thrown in almost as an afterthought, but that I think is the most important of any of them: "It has also emerged that many funds had invested in the same companies, causing prices in otherwise unconnected companies to fall dramatically."

It stands to reason those companies are now more attractive buys than they were just a few weeks ago and may become even more attractive in future. Clever investors, as a result, may well make a nice profit when all is said and done. Dan Roberts, The Sunday Telegraph's business editor, has written a good story on buying low that readers may find interesting.

One potential outcome of this whole mess, I think, is that we may see a shift away from badly-performing alternative investments into equities, provided those equities are seen as relatively cheap. Alternative investments, of course, are no deal in themselves; and to be perfectly blunt, they're the upscale financial equivalent of backing a pool hustler. You're staking the hustler to beat some sucker and in return the hustler gets a cut of the win; and hedge funds, with their 20 percent shares of the profit and their hefty management fees, work the same way.

One can expect that as hedge funds continue to fail -- here's a nice site, the Hedge Fund Implode-O-Meter, that's tracking them -- investors, even at funds that are doing well, will seek to redeem their funds just to ensure they won't get caught up in the turmoil. Those outflows will turn into piles of cash, but that cash will eventually have to go somewhere, and what better place for that money than the equity markets?

On a final note, I would note with all due cynicism the story's last paragraph, in which our correspondents note some potential political fallout from the mess:

Gavyn Davies, Gordon Brown's former economic adviser, warned yesterday that central bankers around the world would need to address serious deficiencies in the regulatory system once the crisis had blown over. Meanwhile the Financial Services Authority began to audit London banks to assess their exposure to the US sub-prime mortgage crisis and to highly leveraged corpor-ate loans following a similar move by the US Securities & Exchange Commission.

Heh. I wish Mr Davies luck in convincing others of that. There is nothing the central bankers will be able to do to regulate hedge funds. If the industrialized nations do try to impose regulations, the hedge funds will simply change their own internal rules and regulations accordingly to avoid them. If that doesn't work, they'll simply go off-shore to jurisdictions where there are no regulations and work from there. Capital and people can easily move across borders, and when all is said and done the regulators won't be able to overturn two axioms of modern financial life: a fool and his money are soon parted, and let the buyer beware.

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IMPORTANT DISCLAIMER: Nothing in the above post is intended as financial advice. Always consult with a certified professional before making investment decisions. People can and do lose money -- a shocking amount of money -- on the financial markets and this should be kept in mind when investing.

Posted by Benjamin Kepple at 12:46 AM | Comments (0) | TrackBack

August 10, 2007

A Rose by Any Other Name ...

TEXAS RESIDENT LEROY GREER, of Missouri City, is not the brightest bulb in the lamp store. We know this because some time ago, Mr Greer sent his mistress flowers using the 1-800-FLOWERS order-gathering service. He naively told them to keep the transaction private. However, some time later, the marketing folks at 1-800-FLOWERS apparently sent a thank-you card to Mr Greer's marital home, where the long-suffering Mrs Greer came across it. She was then able to get a receipt for the purchase and promptly filed for divorce proceedings, according to the Above the Law legal blog.

Oops.

However, this being the United States of America, Mr Greer has done what any philandering, unfaithful husband would do in such a situation. He has filed a lawsuit against 1-800-FLOWERS and wants ... ONE MILLION DOLLARS! ... for his troubles. The whole story can be found here and here.

We shall see, I suppose, whether Mr Greer's case has any legs. However, one can certainly lambaste the cad for his poor judgment. Here at The Rant, we consider adultery a particularly pernicious and vile sin on moral and general principle grounds. Sundering the holy bonds of matrimony is wicked enough, but not having the guts to break things off beforehand is classless and wretched.

As such, this debit far outweighs the minor credit one would have to give Mr Greer for sending a dozen-long stemmed roses arranged with filler and greens, as well as a stuffed cuddly animal thingy, to his mistress. For this, he paid $100.64, including tax and service. The guy may be a louse, but he's a clever louse because he knew enough to send roses. A pity he had not sent the roses to his wife!

Interestingly enough, on the bottom of the receipt, Mrs Greer scrawled a nastygram to her soon-to-be ex-husband, which reads: "Be a man! If you got caught red-handed then don't still lie. Your T-Mobile has her number so why still lie?" I would suggest that Mrs Greer not hold her breath waiting for Mr Greer to suddenly reveal his chivalrous side, but also note this item suggests Mr Greer was not exactly the most careful guy in the world.

Indeed, had Mr Greer been a bit more sharp, he would have used a local florist. For one thing, local florists accept something called "cash," which leaves no records for the investigators. For another, local florists would have ensured he got the best possible bouquet -- both in terms of the bouquet's design and the flowers' quality and freshness -- and for a cheaper price.

When I was younger, I used order-gatherers to send flowers but now I always stick with local florists. In part, this is because of two bad experiences I had with an order-gathering service.

A few years ago, I had sent my mother flowers for her birthday and the bouquet was in such poor condition that my mother sent it back and got a new one delivered. I was downright mortified, as you can expect. My mother, thankfully, realized that her son was not the source of the problem, but as you can imagine it was highly embarrassing for me nonetheless. I mean, it's my Mom, for God's sake.

Another time, I had sent flowers to my mother but was horrified to learn from my father, late in the afternoon on the day they were supposed to arrive, that the flowers had not arrived on time. Fortunately, they arrived just a few minutes later but as you can imagine I was embarrassed and enraged at the whole situation.

Later, I learned a bit about how the floral business works, and how local florists don't make much money on the orders they receive from the big conglomerates. That helped me see why I had faced such troubles beforehand. Since local florists' own customers were far more valuable to them than the business from order-gatherers, it made sense they would pay the most attention to their own customers and then focus on those of the order-gatherers.

That's not, of course, to say that local florists would purposely give short-shrift to a faceless order: that is business and revenue, after all, and local florists are a hardworking and decent bunch. But let's say you had a situation where supply (of flowers, delivery drivers, etc.) was somehow limited, and a florist had to prepare bouquets for a few local customers and a few orders from outside. The florist would have every incentive in the world to do the best job with the local customers, while doing just a passable job with the outside orders. That's just simple economics. So the lesson for me was: to ensure the best possible service and quality, one ought go with a local florist. Even though the end result would be the same 98 times out of 100, I could rest assured knowing that in the event of a calamity, the local florist would make the maximum effort to treat my order as best he could. Plus, I wouldn't have to pay the $12.99 service fee.

The benefits of this strategy were made clear to me this past Valentine's Day, when New Hampshire was struck with a particularly awful blizzard. I'd had my eye on a beautiful girl and had been looking for the right time to ask her out. A few days prior to the holiday, she had mentioned in the course of conversation that she'd never been sent flowers, and I was shocked and horrified to learn this. So about half an hour later I went down to my local florist and innocently arranged for a bouquet to be delivered to her at work for Valentine's Day. (It was a nice bouquet, but nothing TOO forward, and I made sure to consult with the ladies at the shop about what exactly to send, and what to put on the card given the situation, because I'm a stickler about all things flower-related).

About the same time, a colleague of mine at the office had arranged, through an order-gatherer, to send flowers to his significant other.

A couple of days before Valentine's Day, I got a call from my local florist informing me about the blizzard, and they asked if they could deliver the flowers on Feb. 13. I was fine with this, as I figured it was better they arrive early than not at all. As it happened, the blizzard hit around noon on the 13th, but my flowers had already been delivered, MUCH to the delight of the girl to whom I had sent them. My friend, however, had not been so lucky. His flowers got delayed and when they eventually arrived AFTER the holiday, they had sadly perished. The constrasting outcomes cemented the lesson in my mind.

Sadly, my gambit did not work out in the end -- as it happened, the girl whom I thought was single was actually in a relationship. (Since then, I've met him; and based on that one meeting, I can say he's actually a really nice guy). But that's the way things go in life. Plus, when the next time for me to send flowers to a girl comes around, I have a hell of a good local florist on standby.

Posted by Benjamin Kepple at 08:47 PM | Comments (0) | TrackBack

I'm Biting My Lip Right Now, Really I Am

THE RANT WOULD LIKE to extend its sincere condolences -- *snicker* *guffaw* -- to football fans in southwestern Ohio, after the Cincinnati Bengals SOMEHOW BLEW A 16-POINT LEAD and managed to lose to THE DETROIT LIONS in the teams' pre-season opener. While football fans here in New Hampshire were treated to the boring national telecast between the Dallas Cowboys and the Indianapolis Colts, there was apparently a hell of a good game going on in Detroit that practically no one got to see.

I had kept half an eye on the Lions game this evening via my computer, as a sort of salve against having to watch the broadcasters fawn over Peyton Manning. When the Bengals made it 26-10, I stopped keeping an eye on it and started blogging, because the Dallas-Indy game blew chunks. I figured I'd check back in to see if the Lions had made any progress, and found to my astonishment the score had somehow become 27-26. Not only did the Lions block a punt, they managed to recover an onside kick and those tipped the balance in Detroit's favor, as the team went on to score 17 points in the fourth quarter.

So, first things first -- I must congratulate my good friend Simon From Jersey, a devoted Lions fan who also probably didn't get to see the game but still must be pleased about it. However, I would offer my sincere sympathy to all the Bengals fans who settled in to watch their team play this past evening. Even though it was a meaningless pre-season game it had to have been tough to watch the Bungles' second- and third-stringers bungle things once again. Also, one of your running backs got hurt and that certainly won't help things, particularly since he's not in trouble with the law.

So, I'm sorry, Bengals fans. Sorry, Rev. Uncle Dave. It must be hard knowing the game could well be an omen of things to come this season. But that's just the way things go sometimes, I guess.

Posted by Benjamin Kepple at 12:01 AM | Comments (0) | TrackBack

August 09, 2007

Brag About Next Year and the Devil Laughs

YOU CAN TELL THAT old proverb was coined before God created program trading and tranches of collaterized debt obligations, because it needs an update for the modern age. Such as, "Brag about next week and the devil laughs." Or perhaps, "Brag about the next trading session and the devil laughs." And on especially bad days, "Brag about how the market will do well prior to the last hour of trading and the devil will laugh so hard he collapses on the floor shrieking with laughter, holding his sides and trying desperately not to wet himself."

Not that I'm bitter. Of course, I'm trying to look on the bright side of all this volatility as of late. As a buy-and-hold, long-term investor, I must watch the markets knowing that the hedge funds and speculators and Wall Street traders are gaming the market day in and day out, aiming for the lightning-quick kill. This means two things. First, the S&P 500 might go up 1.8 percent one day and down 1.9 percent the next, but there's nothing I can do about it, so there's no point in worrying. Second, all this volatility must mean that somewhere, at least a few hedge funds must be getting whipsawed like nobody's business, which means the investors in them are getting whipsawed, and the hedge fund managers are watching their accumulated gains (and their potential for future fees) go up in smoke. That's kind of cheering, in the way that hearing Pol Pot died was cheering.

Now, many investors know that in times like this, the only thing you can really do* is hold on tight. If the next Great Depression comes tomorrow than everyone is lost and we'll all be fighting in the bread lines; but if the market reverses itself eventually and people start looking for gains on the long side, things will improve and so will one's investments. That's far more likely to happen than the bottom falling out of the market. The time for selling, if there truly was one, was before the correction, not during it, and selling now just to get back in when things improve makes no sense at all.

Of course, I'll be the first to admit things are a lot more fun when values go up, as God and nature intended. It's Particularly Not Fun to watch one's investments slowly decline in value for absolutely no reason other than people are panicking. That's what's causing this whole mess right now. Oh, sure, you can talk about CDOs and credit crunches and all that, but the root of this is panic. As with all panics, people eventually wake up and look around and wonder what the hell they've done and why they've just woken up in New Orleans.

Which brings us to the interesting news of the day -- word that horrible godless spammers are engaged in a massive pump-and-dump operation targeting some no-name pink-sheet penny stock company out of Florida, and clogging everyone's e-mail boxes with spam promoting it. However, the spammers stupidly sent out so much spam that it got everyone's attention -- to the point where on the official Pink Sheets site there's a little skull-and-crossbones next to the symbol. (Now THAT'S a bad sign, when even the Pink Sheets guys are like, "Uhhhhhh ...").

With the turmoil in the regular markets as it is, I have no doubt there are some inexperienced investors out there hoping they can make a big score and thinking some penny stock is the way to do it. Please, trust me on this one -- DO NOT BUY PENNY STOCKS. It is extraordinarily risky because there are no listing requirements and the companies in question don't generally file reports with the SEC. Don't take my word for it, either. Look what the SEC has to say. Simply put, you're asking for a beating playing around with them. Go buy a flat-screen television instead, or some Grey Goose vodka, or one of those truck bed liner things. You'll still be out your money but will have actually received goods and services in exchange.

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* This is not intended as investment advice. This is because I, although very much interested in financial matters, am not a certified finance professional or investment advisor, even though I like to think I could make a bit of money at doing that. Remember, equities are just like those plates you buy from the Franklin Mint, and their value can go up or down. So talk with your investment advisor, or whomever you consult with, prior to making any decision. Or listen to this guy, who is an expert on all things related to the market.

(Also, in the interest of full disclosure, he is my first cousin once removed, although we've never met. But he's been at this longer than I've been alive).

Posted by Benjamin Kepple at 11:03 PM | Comments (0) | TrackBack

August 08, 2007

Report: Expected Johnson League Fines "Could Fall Dramatically"

By FLIP ARGENTI
The Sporting Rant

NEW YORK -- The National Football League confirmed yesterday it was considering layoffs of "non-essential office staff" after an internal report suggested fine income from Cincinnati Bengals wide receiver Chad Johnson "could drop precipitously this year."

The expected drop comes as the Bengals face vastly-improved opponents within the AFC North Division as well as outside it. NFL researchers believe the Bengals could fare as badly as 4-12 this year as their offensive production stalls against tough defenses, particularly in Pittsburgh and Baltimore. Less offensive production means fewer touchdowns for Mr Johnson -- and that's a key metric analysts use to predict the fine income the NFL will reap from the flamboyant wideout. Mr Johnson is believed to pay 75 to 80 percent of his salary in fines to the league office.

"While there is no indication Johnson will be any less effective a player this year, the troubles facing an alarming portion of the Bengals squad on and off the field make it probable Johnson will score fewer touchdowns, and as a result, engage in far less of the zany antics that have proven such a revenue-generator for the head office," wrote Steve Lashinski, a revenue analyst with the NFL's accounting department. "Any significant fall in these revenues will force the NFL to consider a reduction-in-force, perhaps as soon as October."

"As such, managers should start considering which personnel could be downsized in the event of a layoff. I've already focused on Billy Weston, the lowly-paid intern who screwed up my lunch order and got me tuna fish instead of pastrami. He has failed me for the last time," Mr Lashinski wrote.

While a natural solution would be to markedly increase the fines assessed against Mr Johnson -- for instance, a $250,000 fine for mocking a cornerback following a touchdown -- league officials believe that won't fly, as the NFLPA would complain of disparate treatment. As a result, league officials are considering creating new fines that could be meted out against any and all players or other staff. These include:

* A FINE for coaches having a "constant look of amazement and befuddlement on their faces," particularly when "faced with circumstances everyone else figured out five minutes ago."

POTENTIAL REVENUE: $100,000 per season from Tom Coughlin alone.

* A FINE for players "vainly attempting to swing a penalty call in their favor, or otherwise crowding the officials."

POTENTIAL REVENUE: $50 million.

* A FINE for players "who engage in unsportsmanlike actions in response to good plays, even though their team is behind by three touchdowns."

POTENTIAL REVENUE: $3 million ($2.95 million from Florida State alums).

*A FINE for players who try, "despite all reason and common sense," to imitate the Ickey Shuffle after touchdowns.

POTENTIAL REVENUE: $2.1 million.

League officials also considered handing out fines against broadcasters for using hackneyed, tired catch-phrases, a manuever they believed could raise millions of dollars per year, particularly if Brent Musburger returned to calling pro games. But they decided against this after realizing it could damage the value of the league's television rights.

The NFL will continue exploring the issue as the pre-season goes on, but are quite cognizant the clock is ticking. While they search for a solution, the league is already warning staff to prepare for the worst.

"Save us, Ocho Cinco!" wailed file clerk Ted Casper as he filed papers in the windowless basement of the NFL's New York office. "They said if I could make it here, I could make it anywhere -- but I'm stuck living with three roommates in a one-bedroom, three-story walkup in Queens! If I lose this job, I'll -- I'll have to go back to Des Moines! I can't take Des Moines!"

Posted by Benjamin Kepple at 09:39 PM | Comments (0) | TrackBack

Let's Not Push the Envelope on This One, Fellas

AND NOW, TO THE LIGHTER SIDE of the news.

Debenhams PLC, the British department store chain, has revealed that British women have spent £1.4 billion on clothes their partners know nothing about. The Telegraph naturally turned to a crack female reporter to explain the situation. Writes Lesley Thomas:

Research by Debenhams has uncovered the fact that British women own £1.4 billion worth of clothes they feel guilty about and the purchase of which their husbands or partners know nothing.

My own husband, a former student of maths and logistics, appears not to have made the connection between having lots of clothes and buying them - but then, I am very careful. Hiding clothes at the back of a wardrobe is a common tactic. Other prevarications include claiming designer-labelled items were bought in a sale or were second-hand.

One of the women surveyed said she always took a red pen on shopping trips so she could mark the labels of her purchases to look as though they were from the bargain bin.

I have often made several purchases look like one by stuffing them all into one large Gap carrier bag - sometimes, cunningly, a Baby Gap one. I have even left bags of shopping from Joseph and Selfridges in the boot of the car, to be brought into the house one at a time over the course of several days.

Only around one in five of my new purchases is officially presented - usually the genuine bargains. The rest are gradually assimilated into the secret wardrobe. Other women apply different strategies, including the pretence that they've owned the new clothes for years - "since before we were married, darling".

According to Debenhams, 17 per cent of Britons pretend to their spouses they've owned new clothes for years. I know of one woman whose fripperies appear on the joint credit card statement and who has convinced her husband that Hobbs is a hardware store. Some adopt a high-risk strategy - high risk for the clothes - of putting the new purchases straight into the wash to age them instantly.

Luckily, my husband isn't too label-savvy. He may be aware of Prada, but Marc Jacobs might as well be Mark One; the word Issa means no more to him than River Island.

Why all this subterfuge? Few men are in a position to complain about spending levels. In most cases, it's our own money we are wasting (investing, in my case) on overpriced handbags (I prefer to call them heirlooms).

It is, I think, worth noting that Mrs Thomas and several other female Telegraph writers not only think so little of their husbands that they obscure the nature of their purchases from them, but openly write about doing so in a national newspaper. What was the point of all that? Or did they engage in other trickery, such as hiding the paper from their spouses and replacing it with The Sun? (That actually might have worked).

It is obvious, though, why women conceal the nature of these purchases from their husbands. It's easier. After all, as one of the surveyed writers said of her spouse, "He and I disagree about how many pairs of shoes and handbags are really necessary. Straight men just don't understand that one can never have too many." No, we bloody well don't.

However, I do not mean for this post to be critical of women's spending habits. Yes, women spend more on clothes and shoes than men do, and sometimes spend amounts on these goods that are unfathomable to men, particularly when it comes to shoes (no man ever looks at a woman's shoes, unless they're knee-high boots). But these spending habits, when examined rationally, are more reasonable than one would think.

After all, when women buy clothes, they're actually getting and keeping useful goods. Plus, society demands far more sartorial elegance from women than it does from men. And let's be honest -- men want their ladies to look good and draw attention. If that means the lady must spend a bit on a nice outfit, then it's arguably worth it, even though the expense may seem a bit excessive at first blush.

I can't say I think it's healthy for women to hide their purchases from their husbands, though. After all, fiscal harmony is quite important in a relationship, and as a result it makes sense for men and women to sit down together and budget what will be spent on what. That would not only reduce future friction when it came to clothes purchases, but also when it comes to the coarser half's own expenditures, which will almost certainly prove more extravagant and less useful than his partner's. Men might get annoyed with their ladies for buying expensive clothes, but I would suggest the converse reaction is far more fierce when the man of the house comes home and announces he has bought a new riding mower. Because he could.

Along those lines, I would strongly discourage my fellow men from publicly drawing any conclusions from The Telegraph's story. Because I know what you're thinking right now. You're narrowing your eyes and thinking thoughts along the lines of, "I knew it! My girlfriend's shopping trips are just allowing her to channel her inner Imelda Marcos!" And some men may even be considering whether to raise this very topic when they spy their ladies in a new dress or something.

Don't do it, guys. Just don't.

After all, the last thing we need is for women to start looking at our own wasteful spending habits, which generally speaking are far less justifiable than theirs. I mean, crikey. They don't have any idea. Or if they do, they don't have a full picture of just how many billions upon billions of dollars men waste annually -- and the things we waste that money on:

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These purchases are all far less justifiable when one considers that women, aside from their spending on clothes, are generally much better at the nuts and bolts of saving money than men are. And let's face it -- it is far easier to ask for forgiveness rather than permission. If you think that's not the case, just approach your significant other and announce you want to spend several hundred dollars on a Star Wars chess set.

However, I do think this shows the value of having both husband and wife on the same team when it comes to financial planning, budgeting and expenditures. There's no reason why both parties can't work out an arrangement that allows the lady to buy some Prada shoes and the man to buy a flat-screen television, while still reaching towards their shared financial goals. That goes especially when one considers hidden expenditures can not only cause trust issues, they can have a deleterious effect on a couple's bottom line. Men and women are supposed to spend their lives together, not surrounded by the accumulated detritus they've managed to acquire over decades of secret acquisitions.

What's that? No, I'm serious. What d'you mean I'm a hopeless romantic? Oh, quit already. Now go read the next post about the Chinese saber-rattling.

Posted by Benjamin Kepple at 12:09 AM | Comments (0) | TrackBack

August 07, 2007

Moneyball

SO THE CHINESE WANT TO PLAY HARDBALL. According to The Telegraph's Ambrose Evans-Pritchard -- who is a hell of a journalist, I might add -- the Chinese Government has suggested ever so slightly it might liquidate its immense cache of U.S. Treasury bonds if the U.S. Congress passes punitive measures related to the value of China's currency, the yuan. Since the Chinese have a trillion dollars worth of these, Mr Evans-Pritchard explains, this would a) cause a dollar crash, b) force interest rates through the roof, c) hammer our housing market and d) perhaps throw us into a recession.

Drudge has a huge screaming headline on this right now. But let's not panic.

First, let's look at the underlying issues. The main complaint on our side is that China's currency, now trading at about 7.5 to the dollar, is artificially and unfairly undervalued. This is because China, which once pegged the dollar at 8.28 CNY to the dollar, now lets the currency trade in a very limited range. As the currency is undervalued -- and China keeps its foot on the brake despite the trade band -- the trading curve has been a pretty much straight downward path, but it is still nowhere near fair value. This annoys our manufacturers, who complain mightily to anyone who will listen that they're getting swamped by a flood of cheap Chinese imports.

Congress, for its part, has long complained the yuan is unfairly undervalued (as we have seen, it is) and there have routinely been efforts to impose trade sanctions against Chinese goods as a result. Congress has also demanded the Treasury Department take various actions against the Chinese for their unfair currency manipulation. One thing not mentioned in Mr Evans-Pritchard's article, but worth noting in context, is that Sen. Joseph Lieberman, I-Conn., on Tuesday basically told China that Congress was losing its patience and the Chinese needed to act soon, or else. Last week, a key Senate committee voted, 20-1, to require the Government to pursue currency manipulation cases before the IMF.

As such, it was no surprise that China fired back today. The Chinese Government is awfully touchy about these types of things, because they have a bunch of issues they're working through right now and it's not exactly helpful when the lazy decadent foreign devils want to throw a wrench into the works.

China, after all, has 1.3 billion people. Hundreds of millions are trapped in rural poverty, while untold millions have fled to the cities and are looking for work. The Chinese economy must create millions of jobs each year just to keep pace with the growth in its labor force. Meanwhile, the banks are a mess, petty officials are robbing the place blind, everyone and his brother has spurred the Chinese stock markets into a speculative frenzy, and the property markets are as bad as they were here a few years ago. Compared to all these things, the plight of American manufacturers -- whom the Chinese undoubtedly think are crazy -- doesn't measure up. So to have the American barbarians come over and lecture China, in a move that gets widely reported in the press and causes much loss of face, probably didn't go over too bloody well. Thus, the conveniently timed announcements from the Development Research Center and the Chinese Academy of Social Sciences.

One sincerely doubts the U.S. Government -- it is, after all, the U.S. Government -- has worked together on crafting a unified strategy on dealing with the Chinese. This is unfortunate. After all, Congress could have its uses in agitating for sanctions and all sorts of other things, provided that in the end they never came to pass. This would then give Secretary Paulson the leverage to convince China to do the right thing that satisfies everyone; namely, have the Chinese widen the yuan's trading band -- and/or at least take its foot off the brake. (That's kind of how things are going now, but China's not moving because they don't think they have to do so). The US and China could then get together, have a great party and drink a lot and everyone's face would be maintained and the Olympics would go off without a hitch. Perfect.

But what if that doesn't come about, and the situation turns out like the end of Dr Strangelove and just when we think we've won, we've lost? Well, my own personal feeling is that if the Chinese really want to play hardball, we should give it to them. Sure, their dollar maneuvering might throw us for a big loss, but their problems are a hell of a lot worse than ours. Plus, they have those pesky issues about "repressing their people" and repression, combined with the economic downturn their move would bring about, tends to make people angry. Perhaps angry enough to revolt. So if the Chinese really want to play tough, we should give them back everything they dish out, because any victory they attain will prove pyrrhic and temporary, and we'll emerge the stronger.

However, I'm confident the Chinese won't push the nuclear button, as this is being described. They'd prefer not to screw things up either. Besides, I have a feeling they know well the old banker's cliche that when you lend a little, you have a borrower, but when you lend a lot, you've got a partner. China and the U.S. are as close as lips and teeth and changing that state of affairs would prove grievously harmful to the Middle Kingdom.

Posted by Benjamin Kepple at 09:38 PM | Comments (0) | TrackBack

August 06, 2007

Jim Cramer Has Gone Bye-Bye, Egon

YOU KNOW, EVEN IF THE MARKET entirely collapses and we're all fighting over canned goods in a year, there's no reason to fly off the handle like this on national television. Even for Jim Cramer. The best bit comes at the end.

Posted by Benjamin Kepple at 12:18 PM | Comments (0) | TrackBack

You're in Steelers Country, Baby! Steelers Country!

"Shoot, I don't care if it's pre-season -- Raiders are 4-and-0, baby!"

-- The Raiders guy

THE TROUBLE WITH the NFL pre-season is that it's not a reflection of how teams will perform in the regular season. For the starters, after all, it's a glorified warm-up. The reason to watch the pre-season is because you get to see farther down in the roster; how the guys who may be called upon to play will perform, and whether any of them will perform well enough to get elevated to a squad's first or second strings. So one ought always take a team's pre-season performance with a container of salt. (After all, look at the Raiders this past year).

That said, holy cow did the Pittsburgh Steelers look good in the Hall of Fame Game. Crikey. The Steelers managed to rack up more than 300 yards in the first half on their way to a 17-0 lead at halftime, while holding the New Orleans Saints to about one-fifth of that total. On the Saints' six first-half possessions, they punted the ball six times. Drew Brees went one-for-six and got all of six yards. But it wasn't just our defense that played great, so did our offense. Ben Roethlisberger played one series, and marched the ball down the field like he was playing against a high school team.

Perhaps the most impressive offensive performance came from running back Carey Davis, No. 38. Davis had a stellar run for more than 50 yards during the game and did some fabulous work throughout. If he keeps that up he'll get the No. 3 running back spot for sure and I think could challenge Najeh Davenport for the No. 2 spot. He looked THAT good. Davis is an Illinois alum and has played on practice squads throughout his short NFL career. For that matter, Davenport looked great too -- on one run, he powered through about six Saints players to pick up five post-contact yards, all through sheer will.

Also looking good: our starting cornerbacks, which was a bit of a shock. Defense, as I said, looked great although in the second half there was some weakness among players one assumes are still trying to make the team. Our new offensive coordinator, Bruce Arians, did well. Lastly, I was quite pleased with Mike Tomlin -- not just his coaching, but his attitude. Anyone who responds to a question about the pressures of the head coach job with a remark that real pressure involves providing for one's family, is OK in my book.

Final score: Pittsburgh 20, New Orleans 7.

Oh, a couple of other things. Bryant Gumbel is already annoying the hell out of me. This evening, I was quite gratified to see Gumbel, after pontificating about how Pittsburgh kick returner Willie Reid clearly fumbled the ball, had the referees again shoot down the claim upon a New Orleans challenge. If Mr Gumbel must blather on, he could at least look at the footage objectively and make comments to that effect ("Well, it looks like the ball came out, but we'll see what the referees say.") rather than spouting off like a dummy. For those of you who don't get NFL Network, consider that not having to watch Mr Gumbel as the play-by-play guy is a silver lining on an admittedly really big cloud.

Also, the Steelers apparently got a mascot this year. My response to this news can be summed up as follows: WTF?

We're the Steelers. We don't have mascots. We don't even have cheerleaders.* That's yet another reason why the Steelers rule. Other teams can have stupid mascots (*cough* Pat Patriot *cough*) and cheerleading squads -- we do not. We focus on blue-collar, smash-mouth, grind it out football. However, if we must have a mascot, I do hope he ends up with a good name. Like "Rebar."

Yeah. Rebar the Steeler, who uses his Steel Bar of Justice to Fight for First Downs, a Decent Union Pension, and the American Way. Also he must be Generalissimo of Franco's Italian Army and stomp on an effigy of Peyton Manning.

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* What's that? The Steelers were the first pro football team to have cheerleaders? Yeah, during the Sixties, and look where that got us. I like cheerleaders but not at the expense of our tough-as-nails image.

Posted by Benjamin Kepple at 12:01 AM | Comments (0) | TrackBack

August 05, 2007

These People Are Completely Insane

THE NEW YORK TIMES has a bizarre story out today about millionaires in Silicon Valley. Apparently, plenty of folks in Silly Valley have managed to amass millions of dollars. Yet instead of doing the smart thing -- retiring to Fargo or some place where they can live like kings -- they're still living in Silicon Valley. Even worse, they're apparently doing so for the sole purpose of trying to keep up with the Joneses down the street, who are even richer.

As such, here's a sampling of key quotes and suggested remedies for this problem:

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GARY KREMEN, founder of match.com: "You're nobody here at $10 million."
SOLUTION: Move to some place -- like, say, Fresno -- where you're somebody at $10 million.

DAVID KOBLAS, computer programmer with net worth in high seven figures: “I’d be rich in Kansas City. People would seek me out for boards. But here I’m a dime a dozen.”
SOLUTION: Move to Kansas City.

TONY BARBAGALLO: The Times says, "Over the years, he has tried to live off his salary, but not always successfully." His wife says: "Poor Tony, he’ll never be able to retire.”
SOLUTION: Leave. Retire.

UMBERTO MILLETTI -- once worth $50m, now worth $5m, has giant house: "We could move. But if you do that, then you’re admitting defeat. No one wants to go backwards.”
SOLUTION: Swallow pride. Move. Reap real-estate appreciation. Dump seven-figure mortgage.

Mr MILLETTI, again: “Here, the top 1 percent chases the top one-tenth of 1 percent, and the top one-tenth of 1 percent chases the top one-one-hundredth of 1 percent. You try not to get caught up in it, but it's hard not to."
SOLUTION: Quit rat race. Move.

------------

I think I speak for most right-thinking folks when I say these gentlemen are completely insane.

This is not to say that I don't appreciate their drive or their work ethic -- I very much do. After all, it is just and right that men toil for their daily bread. That is what men do. But my God! why would people with such money subject themselves to a life of slavery to their debts and consumption? It's one thing if they're willingly in the hunt and it's the drive to succeed and build that's pushing them -- but to keep up the payments on a white elephant of a house? That's madness!

It seems to me these folks have lost sight of a key thing. The primary reasons to gain wealth are to a) provide for one's family, b) achieve peace of mind and c) achieve true independence. We can deduce, through the millions these men have earned, that Item A isn't much of a concern, as they could easily provide for their families if they just decamped to some place less expensive, where they would be the envy of their friends and neighbors. Yet instead of doing that, and realizing Items B and C in the process, they've completely thrown out those things. In exchange, they work 70 and 80 hours a week at jobs they don't seem to enjoy all that much -- and at an age when they shouldn't be working 70 to 80 hours per week. Those are hours for young men, not folks in their 50s.

I mean, there's something fundamentally wrong when I look at my own situation and see it as far preferable to those these men are facing. Like all financially-minded people, I have my Magic Number and I fully admit it may change as time goes on -- but right now, I'm on target to reach it at age 55. Everything else will be gravy for when I do plan to retire from full-time work, around age 62 or so. The best part is that I'm on target without making any huge sacrifices -- I have a job that I enjoy, a job that pays me very well for my field and moderately well compared to other professions, a job that gives me an actual weekend.

And I'm dealing with numbers two orders of magnitude less than these folks. These folks have golden handcuffs and golden or silver parachutes. I've got bronze handcuffs and a bronze parachute*. They're stressed and panicking and wondering how they'll pay their kids' private school tuition, and I'm walking around like Alex Masterley. (Well, actually, a lot more like Greg Masterley, except for the twice-yearly adjustments of my bronze parachute's value. But you get the idea).

IT'S NOT SUPPOSED TO BE THIS WAY. The only reason it is this way is because I live below my means and they're living at or above them. From the story, it sounds that if these folks got made redundant it would be an absolute financial disaster. A while back I also made contingency plans in the event of the unthinkable -- and they involve me taking a nice, long vacation. It sounds like these folks could use a nice, long vacation -- during which they could downsize accordingly -- and then get back into the swing of things, confident of their future success.

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* Lest anyone get the wrong idea, I'm serious when I say bronze. It is a nice sum of money for me but certainly nothing that would knock any businessman's socks off -- or most professionals, for that matter. In fact, it would cause most senior businessmen to snicker and snort while trying to contain their laughter. ("Ooooooooh, you're excited about THAT?") But when you keep your expenses under control you find the money goes a hell of a lot farther than it would otherwise.

Posted by Benjamin Kepple at 09:18 AM | Comments (0) | TrackBack

The Panic of 2007

SOMEWHERE BETWEEN the speculative bubbles of the early-modern era (Tulip Mania, the Mississippi Company, the South Sea Bubble) and the economic disasters of our present advanced age (the Great Depression, the Paperwork Crisis, the Bear Market of 1973-74, etc. etc.) somebody hit upon a great name for a financial crisis: a "panic."

Sadly, this usage has become archaic for reasons I don't entirely understand. Perhaps, long ago, people decided we were living in the modern era -- "Gee, we've got electricity and automobiles and bathtub gin and the shoeshine boy has a brokerage account!" -- and so the word went out that Panics Were Out and Descriptions With Gravitas Were In. After all, if you've got to lose your shirt, would you rather lose it in a panic, where everyone was running around screaming, or something sounding more advanced, like the Asian Financial Crisis?

But still, panics are panics and this latest market hiccup sure seems like a panic to me. It also seems that way to others -- such as Prof Robert Bruner, the dean of the business school of the University of Virginia. He was quoted in The New York Times today in a story on our latest mess.

The Times writes:

Hedge funds, which had been major buyers of complicated securities that financed leveraged loans and mortgages, have also pulled back. Some investors have tried to pull money out of such hedge funds, leading Bear Stearns to stop investors from making withdrawals from three of its funds.

“That is the core of a financial crisis, when too many people head to the exits simultaneously,” said Robert Bruner, the dean of the business school at the University of Virginia.

Mr. Bruner is the co-author of a book on the Panic of 1907, to be published next month, and he sees similarities between then and now. “It was a time marked by the rise of new financial institutions and new financial instruments,” he said. “It marked the end of a period of extraordinary growth, from 1895 to 1907.”

The credit market has changed drastically in recent years, as banks grew far less important and credit rating agencies like Standard & Poor’s and Moody’s became the essential players in the new financial architecture.

Many loans, whether mortgages or loans to corporations, were financed by selling securities. It was the credit agency ratings that determined if those securities could be sold, and deals were structured to meet the criteria set by the agencies.

Those criteria turned out to be very generous. The agencies figured that even very risky loans were unlikely to cause big losses, and so most of the securities backed by loans to poor credit risks could get AAA ratings — the highest available — as long as those securities had first claim on loan payments. Investors bought the securities thinking they were completely safe, and some did so with borrowed money.

Now, however, there is fear even about those securities. The rating agencies are changing their criteria for the loans, and many investors no longer trust the ratings.

The markets are “very panicked and illiquid,” said Mike Perry, the chief executive of IndyMac Bank, the ninth largest mortgage lender in the first half of this year, as he announced plans last week to curtail lending sharply. It is very difficult, he said, to find buyers even for the AAA securities.

All this has happened with few defaults. Mortgage delinquencies are up, particularly on loans made in 2006 when credit standards were very low, but the real problem is that lenders and investors fear things will get much worse.“This is what we would characterize as the first correction of the modern neo-credit market,” said Mr. Malvey of Lehman Brothers. “We’ve never had a correction with these types of institutions and these types of instruments.”

All this has happened with very few defaults. Yeah, that sounds like a panic, all right.

Of course, the real question is what will happen in future. If the gloom-and-doom crowd is right, we're all going to be eating cat food and holding off mobs of angry and desperate citizens as the economy tanks and no one can get a loan to save his life. If they're wrong, however, then the ship will eventually right itself and the credit crunch will ease and the money that has currently flowed out of the market will flow back in. It would be pretty cool, actually, if a whole bunch of money were to flow from expensive hedge funds and other alternative investments back into relatively cheap equities. Jeremy Siegel, a finance professor at the Wharton School, has noted the S&P 500 now has a price-earnings ratio of 16.5 -- and by the standards of history, that ain't bad.

The Panic of 1907 also wasn't all that bad by the standards of history. This was primarily due to the influence of J. P. Morgan, who saved the day and whom investors of the time hailed as a hero on the streets. By early 1908, the ship was once again righted and we would soon see the development of the Federal Reserve System.

It's fair to say Wall Street doesn't have any J.P. Morgans anymore. However, there are a lot of smart people there, and we can fairly make two assumptions about that Wall Street crowd. First, some of them -- and, one suspects, more than one might think -- undoubtedly were clever enough to not buy into all this crap. (They sold it, of course, but they're good at selling crap). Second, all of them are going to do everything they can to avoid losing their shirts in this mess. So we can thus deduce that, no matter how things turn out, Wall Street is going to do everything it can in the meantime to right the ship. We can further deduce that, like all financial crises, that this too shall pass. Thus, in the medium-term and long-term, valuations will probably increase as a result.

For obvious reasons, I should note my scribblings here aren't intended as investment advice, and no one should make a decision without consulting their financial advisers and reading the prospectii and carefully weighing potential risks and understanding that past performance is never indicative of future results. All that said, though, this is a situation that can best be described as interesting, and interesting market situations always offer the potential to somehow, someway make money. So keep a close eye on it. Also, read Floyd Norris' smart story on the whole tempest -- it's a good primer on this whole issue and good business journalism.

Posted by Benjamin Kepple at 08:45 AM | Comments (0) | TrackBack

The Daily Show on Subprime Loans

KEY QUOTE:

"But if you don't pay back, you lose your house."
"Yeah, but they lose a trillion dollars."

(via Steve Silver)

Posted by Benjamin Kepple at 08:40 AM | Comments (0) | TrackBack

August 04, 2007

Thrown for Such a Loss

THE MANCHESTER WOLVES' season was not supposed to end this way. An experienced playoff team that outplayed and outfoxed and outgunned its rivals through the waning weeks of the season was not supposed to lose to a relatively untested squad that it outplayed and outfoxed throughout Friday night's game. But the unthinkable happened and Manchester fell to the Central Valley Coyotes, of Fresno, Calif., in a heartbreaker of a game that was lost as time ran out.

Perhaps the hardest part about the loss was that Manchester beat themselves. In the aggregate, Manchester outplayed its opponents from Fresno. The team pulled off key defensive stops in the second half, the offense generally played well and so did the special teams. But Manchester, despite generally leading the game by one to two touchdowns throughout, just couldn't put the game away when it needed to do so. That gave Fresno the opening to come back and win with a last-second field goal that flew straight and true and beat the Wolves 42-41.

It is hard to determine where the blame, if any, should be laid. Our quarterback, Mark Radlinski, threw two crucial interceptions as we were within striking distance of Fresno's goal line -- and one of them was a true lulu, an amazingly horrible pass right into the waiting arms of a defender. But there was also a fumble and a missed extra point and an on-side kick that we should have recovered but didn't. Wherever the blame lies, it is hard to be too upset about it, because I know the team even now is beating itself up over its loss more than any of its fans can ever do. Plus, it's a local team filled with hard-working guys who make a nominal wage and play for the love of the game, and that salves a lot. That alone makes it easy to forgive.

It can be tough to forgive when your team blows it, and when the stakes are high I fully admit I do not easily forgive when things go down in flames. I will never, for instance, forgive former Pittsburgh Steelers Kordell Stewart or Tommy Maddox for their failures over the years. That's not to say I think they are bad people, of course, and when I speak of not forgiving it is not a personal thing. Rather, it is more in line with military discipline, where failure is not an option and the punishment is being relieved of command (or worse).

I have no doubt Messrs Stewart and Maddox are wonderful and God-fearing people, but in both cases I felt they had forfeited their rights to wear the Steelers uniform long before they eventually left the team. Coach Lloyd Carr, of the University of Michigan, is a similar case; his continued failure to win crucial bowl games, and his recent failures to beat the Ohio State Buckeyes, cannot be easily washed away. His only saving grace is the national championship Michigan won in 1997. It's one thing when you're making $250 a game but when you're making seven or even eight figures a season, the bars are necessarily far higher.

On the other hand, though, continued success must be commensurately rewarded. Jerome Bettis and Hines Ward and Ben Roethlisberger and Troy Polamalu and Bill Cowher will always be in my good book football-wise for their accomplishments as Steelers. I don't care if Roethlisberger leads the Steelers to a 2-14 season this year; for two years, he gave me hope and in one year he gave me a Super Bowl victory. At Michigan, old-school quarterback Tom Brady and cornerback Charles Woodson and defensive coordinator Ron English will similarly always be in my good book football-wise.

And the Wolves have consistently been a good football team. Their games have always been enjoyable and everyone in the organization works hard and they generally do what they set out to do. As a fan, I owe them a debt of thanks for making my normally soul-crushing summers filled with a bit of joy. So even though I'm feeling rather disappointed right now, I certainly can't call for the type of changes I would be demanding if Pittsburgh or Michigan had dropped the ball.

Still, it does hurt. On a scale of 1 to 10, where "1" indicates the CFL's Saskatchewan Roughriders lost a close game and I note this fact wth disapproval but feel no emotional loss, and where "10" indicates the Pittsburgh Steelers losing the Super Bowl in a horrible, soul-crushing finish that saps the very life out of me, this ranks about a 6. I'm going to be down about this all tonight and all day tomorrow and much of Sunday -- right until about 8 p.m. or so, when I focus on the Steelers playing in the Hall of Fame Game in Canton, Ohio, and the NFL pre-season kicks off. For then I will have to put these feelings aside, stand up and root, root, root for my team.

Because there is always next year. And when it arrives, you can't focus on the past. You've got to stand up, wipe off the grit and focus on the present and the future. That goes for teams and fans alike. So on Sunday I will have my Terrible Towel at the ready and cheer on my Steelers and when next April rolls around, I'll be back and cheering for the Manchester Wolves.

Posted by Benjamin Kepple at 12:06 AM | Comments (0) | TrackBack

August 03, 2007

My New Air Conditioner Could Freeze the Sahara

SO THE AIR CONDITIONER at Casa Ben finally kicked the bucket last week after six good and dedicated years of service (and perhaps more). Naturally, this happened on the first day of a heat wave and so I mentioned this to my landlord. My landlord, who is shockingly good about dealing with these types of matters, switched out the old unit within hours, and when I came home from work my apartment was nice and cool.

I was pleased with this, but even MORE pleased when I learned later my landlord had simply put in a temporary spare, and that I would be getting a NEW air conditioner on Thursday. Well, I came home this past evening and fired the thing up. I can assure you this air conditioner, a Kenmore 12,000 BTU Multi-Room Air Conditioner, which retails for $339, could freeze the frickin' Sahara.

I mean, there are various items on top of my computer desk slowly swaying in the breeze of this beast, even though the unit is a good eight feet away. But not only is it nice and cool in my apartment, the story gets even better. Since it's a new air conditioner, it is an "Energy Star" rated device that should cut my summer electricity costs by at least a third and probably more. It has a special "energy saver" mode that, were I to use it, would likely cut my bills even further. It has a timer and I can set the actual temperature I want the room. IT EVEN HAS A REMOTE CONTROL. What a brilliant idea THAT was. Now, I don't even have to get up to turn on the air conditioner -- I can just click a button and on it goes.

I daresay this example is a good instance of how living below one 's means is actually a pretty clever idea, because you're constantly impressed with the wonders of new technology when you do get it. Plus, the new stuff -- when you finally get around to getting it -- is so often cheaper than the old stuff.

For instance, I figure my new air conditioner will cost me $130.73 to use per year, based on this handy formula. I know that my air conditioner usage last year effectively doubled my electricity consumption. At 13 cents per kWh and an average use of 13 kWh per day, that works out to $1.69 per day or $50.70 in an average summer month, which works out to $202.80 in total for the four months I used it. (The best $202.80 I ever spent, but that's another story). Anyway, I ran that old rattletrap constantly and so I can imagine this one will save me some change over the next few months, and that's quite nice. Plus, unlike my old unit, this will apparently cool down my entire apartment as opposed to just the main room.

And boy, it didn't come a moment too soon, either. It's 79 degrees outside and humid -- and it's past midnight.

Now if you'll excuse me, I've got to dig out my gloves from the winter storage bin.

Posted by Benjamin Kepple at 12:23 AM | Comments (0) | TrackBack

August 01, 2007

The Culling of the Books, Part II

Of the pleasant and mighty inquisition held by the journalist and the writer on the library of our imaginative correspondent, Benjamin Kepple ....

THE WRITER, holding up a volume: Behold the beauty of the literary franchise, for it brings great wealth to writers near and far, and lets them pay their kids' college tuitions! Truly this book, "Foundation's Fear," with its blatant attempts to capitalize on a masterwork, should be kept among the elect!

THE JOURNALIST: It's worth 25 cents.

THE WRITER: Vile cur! Surely even you cannot dispute the beauty of this fine work that only seeks to continue the wonderful stories of Isaac Asimov. Why, you can see right here it is authorized by the estate and that alone suggests it is worth keeping.

THE JOURNALIST: I can't believe this cost $7.50. What was he thinking when he paid $7.50 for this?

THE WRITER: Fool! How you can dispute the thoughts of our master, for whom money was no object when given the chance to buy books? Why, clearly his devotion was on par with Kung I-chi, except he held to basic principles like "fair exchange" and "property rights."

THE JOURNALIST: Out it goes!

THE WRITER: Fair enough. What's next?

THE JOURNALIST: "Freehold," by Michael Z. Williamson. Oh, yes, I remember this one. It looked like a good adventure story at first but ended up being this politically-minded screed where the United Nations got control of Earth --

THE WRITER: No!

THE JOURNALIST: -- and then went and attacked a peaceful society that was kinda set up -- well, imagine if Ron Paul was President. IN SPACE.

THE WRITER: But that doesn't make any sense. I mean, the United Nations can't even police Haiti, much less manage to create a giant superstate. And even if they did, why would they attack the one place in the galaxy where they would have put all the money they ... uh, received as gifts? Yeah. Gifts. And consulting fees. I mean, a place like that is going to have bank secrecy laws like you wouldn't believe.

THE JOURNALIST: Yeah, I'm the High Commissioner of Graft and Unpaid Parking Tickets, reporting for duty! Well, that'll make a good one for the library to sell. OK, what's next?

THE WRITER: Hey, wait a minute! You know politics is off limits. Why are you mentioning Ron Paul here? Is this some kind of trick to get your page rankings up, like all those other bloggers have been openly and blatantly doing, even to the point of writing joke posts about it?

THE JOURNALIST: No.

THE WRITER: Oh, well, that's all right then. Let's see what's next -- ah, "Invasion" by Eric Harry. Oh, this one clearly got picked up in LAX. It's anti-Communist like James Clavell was anti-Communist, except Clavell was clever and witty and saved his disgust for the Russians.

THE JOURNALIST: I like Clavell but he depicts all the reporters in his books ... accurately. Um. Never mind. Let's move on.

THE WRITER: OK, John le Carre's "The Honourable Schoolboy." Uh, this was published in October 1978. How exactly did he get a hold of this?

THE JOURNALIST: He probably got it from his father, who was clearing out his OWN books at the time and is much better at clearing stuff out than his son.

THE WRITER: Wow! Isn't that ironic?

THE JOURNALIST: Actually, in this case, it kind of is. Plus, I don't think Mr Kepple would mind if this went out. So out it goes! Hey, look here -- "Gotti: Rise and Fall" from Capeci and Mustain.

THE WRITER: I wonder if they ever updated the book with all the stuff about the family's reality show. Boy, and here the Mob thought RICO was bad for their recruiting prospects.

THE JOURNALIST: Heh heh heh. Oh, here's a short story anthology -- "Armageddon." Short science-fiction stories about the end of the world. Not on Amazon for some reason, but computers aren't perfect.

THE WRITER: Oh! This was the one where one of the stories had the end of the world taking place in Delmont, Pa. Now that was a weird coincidence, wasn't it?

THE JOURNALIST: Yeah. I mean, talk about unexpected. I mean, you would normally think that Delmont wouldn't realize the world had ended until folks couldn't get the Steelers on television. It's a nice place, but it only has -- what -- 2,000 people or so?

THE WRITER: Something like that. Boy, I'm beat. Let's just send out the rest in this box along with the ones we've already looked at.

THE JOURNALIST: Sounds like a plan. Well ... let's see. At 10 paperbacks to a column and four columns to the box ... hey, that makes like 40 paperbacks we've managed to purge. And they said it couldn't be done! Amazing!

(with deep and sincere apologies to the late Miguel de Cervantes)

Posted by Benjamin Kepple at 08:33 PM | Comments (0) | TrackBack