Somora Borealis (Plus Odds and Ends from Last Week) August 29, 2003February 23, 2017 Long-time readers will remember that I have been ribbing Borealis (BOREF), ‘the stock that must surely go to zero’ for some years now. It must go to zero for a lot of reasons, but the two most obvious are that it is simply too good to be true and that I own a ton of it. If it were true, and because by now I own a ton of it, I would make some really serious money, and, well, I am a truly fortunate man, but not a truly lucky man of the type who makes really serious money by buying a crazy stock like Borealis. And yet. And yet. (As always: PLEASE don’t put even a nickel into this thing that you can’t afford to lose, because by far the most likely scenario must be that you will lose it.) Borealis owns patents on technologies that would change the world – not one, but at least three separate ones. Oh, and it owns $1 billion of rich iron ore deposits, well located to supply Europe. And the whole company, 5 million shares at $4 each, is valued at $20 million. So, I mean: come on. If any of this were going to pan out, tech types who have the skill to evaluate such claims would have mortgaged their homes and their parents’ homes to buy every share they could, driving the price sky-high . . . and yet, in all these years I’ve been writing about it, the stock just sits at $3 or $4; trading, if at all, just a few hundred or at most a few thousand, shares a day. The world-changing technologies it owns have been split off into separate subsidiaries, one of which, Cool Chips (COLCF), is itself publicly traded. (Both these tiny stocks are quoted in what are called the Pink Sheets, which actually used to be printed pink.) One of you writes: ‘Cool Chips closed at $10.50, and Borealis at $3.75. Borealis is advertising that they will trade 1 share of Cool Chips for every 2 Borealis shares. Why isn’t everyone in the world buying up Borealis shares at the current price and trading them in for Cool Chip shares and selling them at a profit? Is there something I’m missing?’ The short answer is: Look . . . this is all very weird, and not like normal stuff. Theoretically, you should be able to make money that way – buy two $4 BOREF shares for $8 and trade them for one $10.50 COLCF share, and then sell that share. But if you tried to do this in any volume, your buying would drive up the price of BOREF and your selling would drive down the price of COLCF . . . and by the time you actually got your COLCF shares, who knows where it would be trading. Indeed, because each BOREF share represents ownership of slightly more than one COLCF share, the even more enticing profit to be had – at least theoretically – would come from shorting COLCF at $10, say, and buying an equal number of BOREF shares at $4, and then just waiting. Either the whole thing collapses and both stocks go to zero, giving you a $6 profit on each share (you lose $4 owning BOREF but make $10 shorting COLCF) . . . or else sooner or later, one would think, however much or little COLCF sells for, BOREF will sell for more. (Right? If each share of BOREF owns slightly more than one share of its subsidiary COLCF, then shouldn’t BOREF be worth more than COLCF? The easiest money ever!) Except that (a) it would be very hard to find a broker who would let you short COLCF, and (b) in markets this incredibly thin and goofy (these companies are headquartered in Gibraltar), who KNOWS what nutty thing could happen in the short run? In the long run, I assume either both stocks go to zero or, if Cool Chips is real, BOREF is worth a fortune (and you would be nuts to trade 2 BOREF for 1 COLCF). For more on all this, check out the Borealis annual report. You’ll see that BOREF is divided into 5 million shares, and thus, at yesterday’s $4 closing price, was valued at the aforementioned $20 million. COLCF was divided into 8 million shares (of which BOREF owned 5.2 million) and closed recently at $10.50. So its market cap was $84 million. It’s totally goofy, as I say. But I live in hope. FROM LAST WEEK: Pipe Down Diane Anderson: ‘Molly Ivins is wrong on Pipes. His position is that negotiations are useless until the Palestinians and the surrounding Arab countries clearly accept Israel’s right to exist. You can see all of Pipes’ articles at his website, danielpipes.org.’ Found Money Bob Daniels: ‘Following up on your recent column: The leading case on the taxability of found money is Cesarini v. US, 296 F. Supp. 3 (N.D. Ohio, 1969), aff’d 6th Cir., 1970. Ermenegildo and Mary Cesarini found $4,467 in old currency while cleaning a second-hand piano they had bought for $15 at an auction seven years earlier. They initially reported their find as income, but then sued for a refund of the $836.51 in income tax they had paid on their windfall. The Court denied the refund, citing tax regulation 1.61-14(a): ‘Treasure trove, to the extent of its value in United States currency, constitutes gross income for the taxable year in which it is reduced to undisputed possession.’ The Court also rejected the Cesarini’s claims that the income occurred in the year they bought the piano (a year blocked from additional tax by the statute of limitations) and that the found money should be taxed at capital gain rates.’ Redistricting Robert Neinast: ‘Regarding the redistricting in Texas, the Columbus Dispatch had a story last week that the national Republican leadership wanted to do the same thing in Ohio. So, it appears to be a national strategy for consolidating power. Fortunately, the (moderate Republican) Governor Bob Taft pretty quickly put the kibosh on the plan.’ Coming Soon: Maybe John Adams wasn’t half the hero he’s lately come to be? Happy Labor Day!
Googling the Education Gap (While Rotating Your Right Foot) August 28, 2003January 22, 2017 YET MORE GOOGLE Steve Golder: ‘An amusing Google tip. Enter a list of foods you have in your refrigerator and Google will come up with recipes that use them.’ ☞ Unbelievable. I entered: milk eggplant ketchup – and sure enough! Mike Hanlon: ‘If you have a web site and want to see what other sites are linking to yours, type link:www.TheNameOfYourSite.com into the Google search box. Example: To see who’s linking to the DNC site, you’d type: link:www.democrats.org – you’ll see that about 2,130 sites do.’ Jeff Cox: ‘Google is great for catching plagiarists. I love showing students the original essays next to their copies.’ Alan Waldock: ‘Here’s a tip I’ve never seen mentioned, even in the excellent Google Hacks book: If you have the (indispensable) Google toolbar, you can highlight any word or phrase in your current web page and ‘drag and drop’ it to the search box. No typing. Google even puts the quotes around it, if necessary.’ AN IMPORTANT QUESTION TO PONDER OR GOOGLE Alan Light asks: ‘I wonder why this works? As you’re sitting at your desk, make your right foot go in clockwise circles. OK, good. Now with your right hand, air-draw the number six. Hey, how come your foot started going the other way?!’ MATT MILLER’S LATEST If you are interested in education, Matt Miller’s latest column is worth a read. It seems that because of an accounting convention, the true gap between what we spend educating rich kids and poor kids is even greater than you thought. Click here. Also worth a click: Matt’s forthcoming book, The Two Percent Solution: Fixing America’s Problems In Ways Liberals And Conservatives Can Love. Tomorrow: Somora Borealis and Some Odds and Ends from Last Week
More Google August 27, 2003February 23, 2017 Allan Tanner . . . from Wichita! (albeit the library and not the Y): ‘Just type in a U.S. telephone number (area code first, no punctuation needed), and if it’s a listed phone number Google will give you the name and address, as well as both Yahoo! and MapQuest maps. MapQuest also has a link to an aerial photo of the address.’ Paul Lerman: ‘Google has a shopping bot cleverly called Froogle – it’s pretty good and very quick. (Generally works best, I find, if you select ‘all categories’.)’ Inadvertently Anonymous: ‘Beginning a search with the word site followed by a colon enables you to restrict your search to a specific site. For example, to find admission information on the Stanford University site, you would enter: admissions site:stanford.edu.’ John Firestone: ‘One of my favorite tools is using Google to find the lyrics to virtually any song. Enter the name of the song and the word lyrics.’ Mike Hanlon: ‘You might enjoy this column by New York Times columnist Thomas Friedman. It was headlined ‘Is Google God?’ – and he makes a pretty good case for it!’ Mike Wilson: ‘There’s also the popular free Google Alert tracking service. It automatically runs your daily google searches for you and sends an email whenever new results apppear. Great way to follow any topic on the Web.’ Jon Corbett [re my assertion that it’s been 63 billion seconds since Jesus was born]: ‘Although the current year is 2003 C.E., the currently accepted year of the birth of Jesus of Nazareth is 4 or 5 B.C.E. This is quite an interesting subject to Google on actually.’ Bill Spencer: ‘If you want to know and do even more with Google, get this book: Google Hacks: 100 Industrial-Strength Tips & Tools. You don’t have to be a programmer to appreciate the tricks explained in this book. It’s a great aid to the online researcher or the casual user.’ ☞ And/or get this simpler, cheaper one. And/or read this review (thanks, George Hamlett) and perhaps save having to buy either. You will learn about Google’s handy OR, NEAR, * and ~ search terms. Jim Dienes: ‘Google is indeed a great piece of work. However, I also keep Alltheweb.com on my favorites list just below it. Alltheweb searches about 1.5 billion more pages so it can sometimes find obscure things that Google does not.’
The Utility of Deregulation August 26, 2003March 25, 2012 It really does matter whom we elect – and ‘the guy you’d most like to have a beer with’ is not always the best criterion to use in making your selection. Click here for Greg Palast’s biting perspective on the Great Blackout. Tomorrow: Your Great Google Tips
Google Wins August 25, 2003February 23, 2017 It was already magic and phenomenal (and, naturally, the one dot-com that, being private, you couldn’t invest in) but now – and my apologies to the many of you already way ahead of me – Google is everything. Google rules. Here are things that, up until today (except for #1 and #2), I had not tried. Take 15 minutes and: 1. On the remote off chance you are not already a Google fan, go there and search on something. Anything. You’ll see. 2. Note the I’m Feeling Lucky button. I’ve met people who use Google all the time, yet somehow have never tried this button. You can be the biggest loser in the world and this button will eight times out of ten work miracles, taking you straight to exactly what you wanted. Try it. Want to know what time the bake sale starts? Type in Wichita YMCA bake sale and, if there’s a Y in Wichita (Wychita?) and it’s having a bake sale, you’ll find out when it starts. If your luck does fail, just click the BACK button to redo the search the standard way. Remember that if you search on bake sale, you will get a lot of “bakes” and a lot of “sales,” but that if you search on ”bake sale” – with quotation marks – you’ll get only hits that contain that exact phrase. 3. Add the Google toolbar to your browser. It is completely easy. On Google’s HOME page, just look for New! Add the Google Tool Bar to Your Browser. It puts Google perpetually at your fingertips whenever you’re on-line. (And it uses a little Irish shamrock icon to click if you’re feeling lucky.) Adding the Google toolbar to your browser will pique your curiosity about its features, such as: The Google Calculator. Type 2+2 in the Google search field and hit the Enter key – it equals 4! Type 25 celsius in Fahrenheit and hit the Enter key – it displays: 77 degrees Fahrenheit. Type 2003*365.25*24*60*60 (because the multiplication symbol is the asterisk) and it tells you that it’s been 63 billion seconds since Christ was born. One onethousand, two one thousand, three . . . Image search. Want to see a whole lot of photos of somebody famous, or the Eiffel Tower? Seconds later, there they are. Set up your own blog. I know: blah-g, blah-g, blah-g. Still, if you don’t want to be the last American on the block who’s blogless, Google provides an easy way to get started. There’s a lot more on the Google toolbar to explore, and “Help” to guide you through it. One nice tip: Press Alt-G any time to jump straight to Google’s search box.
Is There a Pattern Here? August 21, 2003February 23, 2017 Yesterday I ran this quote: I think there is a world market for maybe five computers. — Thomas Watson, chairman of IBM, 1943 Followed by this comment from chemistry professor Dana Dlott: Watson was almost exactly right but he was quoted out of context. What he was REALLY saying was, ‘I think there is a world market for maybe five VACUUM TUBE computers.’ The transistor would not be invented for more than a decade hence and Watson couldn’t even imagine it. There were just a handful of major vacuum tube computers built . . . To which a reader named Orval responded: ‘Gee! I feel as if I have been revised out of history. Did I imagine those hundreds of vacuum-tube computers I worked on and observed in the ’50s? Actually there were thousands of them. We shipped to Germany and Japan as well as all over the country. IBM itself was a major player. Sylvania, Sperry, Honeywell, RCA, Burroughs, GE, and many other companies, shipped business, research and military vacuum-tube computers. Watson was an ass.’ ☞ Well, maybe so. But I doubt he was intentionally trying to mislead the public. Speaking of which, I assume President Nixon was merely being wry when he said (as recalled by his Council of Economic Advisors chairman, Herbert Stein) . . . ‘Honesty may not be the best policy, but it’s worth trying once in a while.’ . . . but it’s an interesting quote as we try to figure out what to make of our current President. Is there a pattern of misleadership? ‘This is a Pinocchio President,’ Senator Bob Graham claimed, criticizing Bush about last week’s major power failure. He said the President opposed federal legislation two years ago that would have provided $ 350 million to assist states and utilities in increasing the reliability of the electrical grid. – Manchester Union Leader, 8/17/03 In his news briefing five hours after the power went off, the President said of modernizing the nation’s power grid, quote, ‘I happen to think it does need to be and have said so all along.’ But Democrats have pointed out in three separate Congressional votes in 2001, Republicans quashed bills to loan $ 350 million toward the improvement of transmission grids, mostly but not solely in California, and that the Majority Whip, Tom Delay of Texas, called the proposal by the Democrats pure demagoguery. – Keith Olbermann, MSNBC, 8/16/03 This article from the August 10 Washington Post indicates . . . . . . a pattern in which President Bush, Vice President Cheney and their subordinates — in public and behind the scenes — made allegations depicting Iraq’s nuclear weapons program as more active, more certain and more imminent in its threat than the data they had would support. On occasion administration advocates withheld evidence that did not conform to their views. The White House seldom corrected misstatements or acknowledged loss of confidence in information upon which it had previously relied . . . And this op-ed, four days later, echoed the theme [emphasis added]: The Bush Deceit By Peter D. Zimmerman Thursday, August 14, 2003; Page A19, The Washington Post It was not just 16 words. It was every word concerning Iraq’s nuclear weapons program in George W. Bush’s 2003 State of the Union speech. The president’s principal argument for going to war — to prevent a “smoking gun that would appear as a mushroom cloud” — was based on bad intelligence that was misused while good intelligence was ignored. Available evidence demonstrates that Saddam Hussein, an evil man who should have been evicted in 1991, lacked a serious nuclear weapons program in 2003. And if Mr. Bush had not held out the threat of Iraqi nuclear weapons “within months,” it is doubtful that Congress would have given him a blank check. How can one conjure up a benign explanation for the president’s assertions? The claim that Niger was selling uranium was based on disputed intelligence, since retracted by the White House and CIA. The National Intelligence Estimate on Iraqi weapons of mass destruction carried prominent warnings that knowledgeable agencies and analysts dissented from its conclusions. It is hard to believe that national security adviser Condoleezza Rice or her deputy, Stephen J. Hadley, missed or forgot about the red flags. If the Bush administration had been wrong only about the Niger purchase, it would have indicated carelessness. But the references to nuclear weapons, taken as a whole, indicate dissatisfaction with the truth of the matter and a disregard for inconvenient facts. Political leaders must not tell intelligence analysts what to write; the intelligence services cannot tell the elected decision maker what to do. The president, of course, is free to disregard intelligence, but he is not free to lie about it — either directly, indirectly or by innuendo — when making the case for war. President Bush said that in the early 1990s Iraq “had an advanced nuclear weapons development program, had a design for a nuclear weapon and was working on five different methods of enriching uranium for a bomb.” Not exactly. Nuclear weapons experts serving as inspectors for the International Atomic Energy Agency (IAEA) called the bomb “design” more of a parts list than a description of a buildable device. The five ways to enrich uranium really boiled down to two — electromagnetic separation and gas centrifuges, neither working well. Iraq’s crude experiments in the 1990s showed that it was a very long way from nuclear success. President Bush said that Iraq had sought to buy “high-strength aluminum tubes” to be used in gas centrifuges to make bomb-grade uranium. The proliferation experts at the Department of Energy could not comment publicly, but they dissented privately. The inspectors of the IAEA produced clear evidence of the truth: rocket bodies, not nuclear weapons. The tubes could be used for centrifuges only after lengthy and complex reworking. The facts had been available to the White House for months, as declassified excerpts from an October 2002 National Intelligence Estimate demonstrate. The current President Bush was not the first leader to take the United States to war with Iraq using phony intelligence. In September 1990 his father’s administration claimed that Iraq had hundreds of tanks and 300,000 troops in Kuwait massed on the Saudi border. But independent analysis by me and a colleague, using extremely sharp Soviet satellite photos, showed no evidence whatever of a significant Iraqi force in Kuwait. Nonetheless, in 1990 the American people were told that an attack on Saudi Arabia was imminent. Postwar analysis showed that the independent analysis published in this country in the St. Petersburg Times was dead accurate: There were not 300,000 but fewer than 100,000 Iraqi troops and only a few Iraqi tanks in Kuwait. George W. Bush’s backing and filling, his staff’s confused explanations, revised explanations and new explanations, plus the immutable fact that most of his arguments for war in Iraq were misleading, have seriously damaged his credibility abroad and are eroding it at home. When an American president needs to take the nation to war, Americans must be able to trust him and must believe that the case for conflict is sound. The next time Bush wants to use armed force to preempt or prevent an attack on this country, he will have to prove his case far more completely than before. Two presidents of the United States have forfeited the benefit of the doubt. The writer, a physicist, was chief scientist of the U.S. Arms Control and Disarmament Agency and science adviser for arms control at the State Department during the Clinton administration. Then, of course, there was his insider trading, selling his entire position in Harken Oil – most of his net worth – eight days before the company announced very bad news of which, being on the company’s board and its three-man audit committee, he was surely aware. He claimed that the S.E.C. had exonerated him, but this was not true. It had merely decided not to prosecute the son of the President of the United States. (His lawyer in that case was subsequently appointed ambassador to Saudi Arabia.) And there were the numbers he told us during the campaign added up, even allowing for the recession that he anticipated. We would be able to make his tax cuts for the rich (which he said in the second debate would go ‘mostly to people at the bottom end of the economic ladder,’ which was completely false) without having to dip into the Social Security trust fund (ah, but dip we do) and without sending the nation into deficit (the largest ever, in nominal terms, and no slouch as a percentage – 5.7% – of GDP). The latest round of tax cuts, we were told, was crafted with one goal in mind: maximum job creation. Any economist will tell you this claim is laughable. And then there’s the secret energy policy. Even the General Accounting Office, resorting to a subpoena, no less, could not wrest loose the list of energy executives the White House consulted in formulating its policy. In which regard, Denis Trover sends along this letter that appeared August 18 in his local newspaper, The Ventura County Star: When the novelty of the new Darrell Issa-Arnold Schwarzenegger bobblehead puppet wears off, we will still have the following timeline of events to consider how we got into this condition. 1987-1999: Population of California nearly doubles while [Republican] Govs. George Deukmejian and Pete Wilson fail to make any preparations by building any additional power generators in the state. 1996-97: Gov. Wilson (not Gray Davis) signs a bill that when the budget reaches base-line-level deficit, car registration tax automatically kicks in. 1999: First four months of Davis’ administration, Davis authorizes building of four additional power sources in the state. 2000: Bush gets his tail beat in California by a wide margin. 2001: First four months of Bush administration, energy companies, many from Texas and all heavy Bush supporters and benefactors, decide that not one, but two, power generators need to be closed for routine maintenance, causing severe deficient supply … Power companies increase California energy costs 10 times. Davis files complaint to the Federal Energy Regulatory Commission about energy price fixing, but Bush tells him it’s a ‘California’ problem. Some say he didn’t lift a finger to help California. I say his actions did raise a finger toward California. 2002-2003: Energy companies, including Enron, admit manipulating energy prices in the state. Bush administration still fails to get money back for the state. California, like every other state, has to pay for federal mandates unsubstantiated by funds. Is it possible this whole thing was orchestrated by the Bush administration and the Republican National Committee out of revenge and political opportunity to bring the right-wing Republican agenda to a progressive state that would not otherwise embrace it? Do they see a chance where they can ambush the state leadership by winning [the governorship with] 25 percent of the votes? — Bill Gorback, Thousand Oaks No, it was pure supply/demand at work, with the only solution being to bring one new power plant on-line every week for five years. And that’s why the Federal Energy Regulatory Commission refused to exercise its clear authority to temporarily cap prices and avert the crisis. Or so we were told. Except that then the crisis went away almost as quickly and mysteriously as it appeared, without building the 250 new power plants. (For some interesting background on California’s energy situation, click here.) A WORD FROM AUSTIN David Parr, Austin, TX: ‘In this country, we have a tradition of using elections to voice our concerns about power and government. If there is someone we don’t like in power, we don’t assassinate them or have a coup d’etat — we simply elect someone else. This has worked for 220 years. But it seems to me that there is a pattern going on in the past five years where the Republican party has consistently used undemocratic methods to attempt to unseat Democrats in power. In particular, we have: Delay’s Texas redistricting power grab [trying to pick up six more House seats]; the Californian gubernatorial recall the impeachment proceedings; worst of all, the stolen election of 2000. ‘It’s troubling. It’s a methodical subversion of the democratic process! I believe that it’s happening so often now, that it’s clearly planned and orchestrated.’ ANOTHER WORD FROM AUSTIN Molly Ivins noted a lot of little news clips in her August 5th column that, she said, ‘left one overwhelming impression: deception … government by deception.’ Including . . . Administration announces with great fanfare new regs to control listeria, a deadly bacteria that can contaminate certain foods. Great, they put in new regs, but first they eviscerated them so they have no real impact. New study shows 8 million mostly low-income taxpayers will get no benefit from the latest round of tax cuts, despite repeated assurances that it would help everybody who pays income taxes. “American officials are considering a plan to use Iraq’s future oil and gas revenues as collateral to raise cash to rebuild the country. Several U.S. companies, including Halliburton and Bechtel, which are jostling for the lucrative reconstruction contracts, are reportedly pushing the scheme to expedite the commissioning process.” That means there’s no Marshall Plan, we’re not going to rebuild Iraq, we’re going to going to take their oil to pay our corporations to fix what we messed up. President nominates Daniel Pipes to the board of the United States Institute of Peace. This is one of a series of cruel-joke appointments: Pipes is a Middle East expert whose vision of ending the Israeli-Palestinian conflict is no negotiation, no hope for compromise and no use for diplomacy. He wants the Palestinians defeated, period. Just the man for the Institute of Peace. On Friday, April 11, three days after “coalition” forces entered Baghdad, the Interior Department announced a settlement with the state of Utah that effectively destroys the executive branch’s key powers to protect wilderness, reversing three decades of environmental policy. Starting immediately, oil, gas and mineral companies are granted access to more than 200 million acres of public lands. Bet you saw a lot of headlines about that one. “And I said on my program, if, if the Americans go in and overthrow Saddam Hussein and it’s clean, he has nothing, I will apologize to the nation, and I will not trust the Bush administration again.” — Fox News commentator Bill O’Reilly on “Good Morning America,” March 18. “The White House today defended the decision of congressional negotiators to deny millions of minimum-wage families the increased child tax credit, saying the new tax law was intended to help people who pay taxes, not those who are too poor to pay.” The poorest people in this country pay exactly the same percentage of their income in payroll taxes as wealthy people do in total taxes. “Ain’t gonna happen,” said House Republican Majority Leader Tom DeLay. The only way DeLay would support tax cuts for the working poor would be if for every $1 in tax cuts to the working poor, rich people got another $22 in tax cuts. Lends new meaning to phrase “without DeLay.” The “death tax,” as the Republicans so cleverly misnamed the estate tax, which affects 2% of all Americans, has now been replaced by the Bush birth tax — if you’re born in this country, you’re in debt — you have to help pay back the money the Bushies took out of Social Security, plus the interest on the debts they’re running up. Charlie Mac: ‘I’ve recently returned from duty in Jordan and Iraq. Though normally a moderate libertarian who usually votes Republican, this administration has me convinced to vote Democrat in the next election. Truly amazing, I never would have believed it if someone had told me this only 2 years ago. Ignore all those who say your column is ‘too political/liberal/etc’. I like it even when I fully disagree.’ REGIME CHANGE David Bruce: ‘Have you seen this site which gives over 1,000 reasons to dump Bush?’ In case you don’t favor a complete right-wing lock on all three branches of our government, click here. [No column tomorrow. After this, you deserve a very long weekend.]
A Maniac for Two Bits Lying in the Street August 20, 2003February 23, 2017 Dana Dlott: ‘I was looking at your web page today and this quote was given: I think there is a world market for maybe five computers. — Thomas Watson, chairman of IBM, 1943 ‘Watson was almost exactly right but he was quoted out of context. What he was REALLY saying was, ‘I think there is a world market for maybe five VACUUM TUBE computers.’ The transistor would not be invented for more than a decade hence and Watson couldn’t even imagine it. There were just a handful of major vacuum tube computers built, with great names like Eniac, Univac and Maniac, and today there are just a few carcasses in museums, so he was quite accurate.’ Mike Groenendaal: ‘I’m sure you’ve probably gotten plenty of email about this so sorry for the redundancy but found money is subject to the income tax (there’s not much that isn’t). Of course, whether people actually report it is a different question.’ ☞ Yeah, yeah, but if I found $200 in the street – the most I can conceive of finding in the street, inasmuch as $20 is the most I have ever found in the last half century (and I’ve been looking) – I would not report it as income because (a) gifts up to $11,000 are not taxable (and not taxed to the recipient, in any event, no matter the amount) and I would consider this a gift from the gods; or (b) because I would consider it nothing more than an offset to all those dollars I have lost over the years in the washer/dryer, where they get transformed to greenish gray lint (although, technically, that would be a casualty loss, subject to a giant threshold before any of it became deductible). Michael Spencer: ‘My childhood memory of pirate reading (Treasure Island) recalls the Spanish coins: ‘pieces of eight’ because of their eight sided shape. Translated into the US dollar of 100 cents, the result is 12.5 cents per ‘bit.’ Wasn’t that the heritage?’ ☞ Pirates never held any appeal for me. Too much ‘har-har-har,’ not enough showering. Robinson Crusoe was my seafarer. He was ingenuity incarnate. But, yes: I do think our notion of ‘two bits’ and the like, referenced yesterday, derives from the Spanish milled dollars that (my trusty copy of The Early Paper Money of America tells me) were the units in which Maryland denominated its currency as early as 1767, and to which New York and North Carolina switched (from the British) in 1775 as an act of patriotism, joined the following year by New Hampshire, Virginia, South Carolina and Georgia. I don’t think the Spanish coins were octagonal, but they were called ‘8 reales’ ‘and were the world money standard from the last 1530s to the 1850s,’ according to the web site cited above. (How many sites could a web site cite if a web site could cite sites?) To take one of a zillion possible examples, I am looking at a $20 bill issued in 1779 by the state of North Carolina: ‘This bill entitles the bearer to receive TWENTY Spanifh milled Dollars, or the value thereof, in Gold or Silver, agreeable to an Act of Affembly paffed at Smithfield, the 15th Day of May, 1779.’ It is numbered (#1956) and hand-signed by two North Carolinians. To the left of their signatures is the legend, ‘Peace on Honorable Terms’ and, in the margin, Death to Counterfeit. And they weren’t kidding.
Found Money August 19, 2003February 23, 2017 An extra hundred bucks earned is very nice. Subtract $15.30 in FICA, if you’re self-employed, and perhaps another $25 in federal income tax, and you have nearly $60 left. The same hundred bucks from dividends or capital gains is nicer still, as you can earn it even while asleep, and it is less than half as heavily taxed. Ah, but a hundred bucks in ‘found money’ is the very, very nicest – and not taxed at all. Mark Murphy sends along this observation from Mark Twain’s Autobiography: I remember the time I found a battered old-time picayune* in the road, when I was a boy, and realized that its value was vastly enhanced to me because I had not earned it. I remember the time, ten years later, in Keokuk, that I found a fifty-dollar bill in the street, and that the value of that bill also was vastly enhanced to me by the reflection that I had not earned it. I remember the time in San Francisco, after a further interval of eight years, when I had been out of work and out of money for three months, that I found a ten-cent piece in the crossing at the junction of Commercial and Montgomery Streets, and realized that that dime gave me more joy, because unearned, than a hundred earned dimes could have given me. In my time I have acquired several hundred thousand dollars, but inasmuch as I earned them they have possessed nothing more than their face value to me and so the details and dates of their capture are dim in my memory and in many cases have passed from my memory altogether. On the contrary, how eternally and blazingly vivid in my recollection are those three unearned finds which I have mentioned! Perhaps this is why some of us work so hard at finding it. Like the company that just discovered the shipwreck it’s spent 12 years searching for, 100 miles off Savannah, with what may be more than $100 million in gold coins on board. AND SPEAKING OF FOUND MONEY . . . Heather: ‘My husband recently inherited some investments (primarily common stocks) that are worth about $90,000. We would like to use this money for a down payment on a house in about 3 years and to pay off some debt over the next year. We are not very experienced financially. We are trying to figure out the best way to sell the stocks for cash. We are concerned about selling the stocks all at once because we risk selling when prices are low. We are concerned about selling off the stocks over time for a set amount of money each month (e.g., $1000 worth each month) because it seems like on average we will be selling more stocks when they are priced low and fewer stocks when they are priced high. How do people deal with this issue? We can’t figure out the best approach.’ ☞ I would just sell the stock and pay off your debt. Even if stocks were generally cheap here (and with the Dow at 9400, I don’t think they are), the market is a rotten place for money you will need in the next year or two or three. Yes, the shares could certainly go up after you sell; and you will hate me if they do. But they could also go down. How wonderful to be able to pay off debts and to know that you have the down payment for a house when you need it. I’d leave it at that. Sell, pay the debts, and put what’s left someplace really safe, like a bank. *A ‘picayune’ is defined in Webster’s 1913 Dictionary as ‘a small coin of the value of six and a quarter cents.’ Which reminds us that a quarter used to be called ‘two bits’ (‘shave and a haircut – two bits’). Back then, dollars were divided into eight bits, which may be why stocks until a couple of years ago were quoted in fractions – ‘buy me 100 shares at 21-and-three-eighths or better’ – rather than decimals. So 12.5 cents, an eighth of a dollar, was one bit, and 6.25 cents was half a bit. How picayune is that?
Timber 2 August 18, 2003January 22, 2017 SAVINGS BONDS WITHOUT THE MILES Alan Waldock: ‘I just noticed that from the end of this year, Savings Bond Direct will no longer be available for online credit card purchases of bonds (ref. your column of, inter alia, May 16, 2002). We will still be able to buy online from TreasuryDirect, but they don’t accept credit cards. No more frequent flier miles. Ah, well, it was fun while it lasted.’ THURSDAY’S TIMBER SUGGESTION Jim Maloney: ‘Re your reference Thursday to ‘the increasing irrelevance of paper in a world ‘ pixels,’ I’d have to agree with Steve Jobs, who upon the launch of Macintosh in 1984 said, ‘The paperless office is about as likely as the paperless bathroom.” Lak: ‘Finally, a column about personal finances, although if the job market persists the way it has, I won’t have too much money to invest … I advise corporations on technical stuff besides my job at an university, and opportunities collapsed around March 2001. So, I see your point about how the macro stuff affects us, but still … a personal finance column once in a while is good.’ Sue Hoell: ‘I know a little bit about timber investment having been the senior staff appraiser for the Montana Department of Natural Resources for the past several years. Plum Creek Lumber is a large land owner in Montana. It may be a good choice for investment in that PCL acquired ownership of vast areas of historical railroad lands. Unlike some timber, logging, and milling operators, PCL isn’t dependent on logging U.S. Forest land which can be restricted by environmental impact policy. ‘Buying raw timber land directly may also be a good choice since it often sells for prices lower than logged land. While a savvy investor would prefer un-logged land, ‘Parked out’ selectively logged land with slash removed is preferable for rural residential use. After a tract has been logged, the logging roads allow new rural residential buyers to actually look at the property up close and personal to make a purchasing decision. One caveat regarding buying timberland directly is that the cost of gaining access to the trees while minimizing environmental impact can sometimes be greater than the income generated from logging. Stay away from steep slopes, areas near surface water and areas a long distance from a mill.’ BISHOP’S ROOK TO DIVORCE COURT Uther: ‘Tell Gloria that the Episcopalian church was founded on divorce. Henry VIII founded the Church of England in order to divorce his then wife (Catherine of Aragon) to marry Anne Boleyn as the Pope at the time wouldn’t grant him a decree of divorce. Makes it hard to argue that a bishop shouldn’t have gotten divorced.’ Mark D Hiatt: ‘Not to put too fine a point on it, Gloria, but there wouldn’t *BE* an Episcopalian Church if it weren’t for divorce. I’ve never been so proud to be an Episcopalian.’
Doing My Taxes By Candle Light August 15, 2003February 23, 2017 Well, perhaps the first thing to say is: Imagine what it must have been like for your crowded rush-hour subway suddenly to lose all power and light (and air conditioning), in the middle of a pitch black tunnel 100 feet below ground . . . not realizing power was out all the way from Toronto to Detroit . . . and then eventually to grope your way out (with the small worry, I would imagine – although I was safely on the phone at home at the time – that you’d be touching the Third Rail just at the instant power came back on). You might think it would be a good idea to employ a lot of folks installing emergency lights and communications systems down there, powered by a separate generator . . . and to supply our first-responders around the country with things like walkie-talkies and, as appropriate, haz-mat suits and such . . . but the money for such an enterprise went to cutting taxes for the super-rich, so that’s that. I would actually go further and say that our long-term success as a nation depends on our raising terrific, well educated, well nurtured kids, so that we should be employing even more people to refurbish run-down schools, reducing student-teacher ratios, funding rather than cutting a wide variety of art and enrichment and after-school programs (yes, midnight basketball), increasing rather than cutting back Americorps, and coming up with yet new programs like this* in a virtual celebration of youth and their – which is our – future. The only losers, it seems to me, would be those who profit from an ever growing prison population. But we’ve made the choice to cut taxes for the rich instead, so that’s that. It could be neat to invest in alternative-energy research and in incentives that would reduce our long-term dependence on imported oil (empowering our friends the Saudis, who it’s worth remembering had nothing at all to do with September 11) . . . a policy and that would help make us a leader in what will surely be a huge business opportunity of this century – the ‘environment’ business. It would be nice, also, to engage our wealthy allies in a massive Marshall Plan / Manhattan Project, whose goal were little short of eradicating much of the world’s preventable hunger and disease over the next 20 years (and in doing so, help to jumpstart prosperity that will, in turn, increase our own).** But we’ve made the choice to cut taxes for the rich instead, so that’s that. Anyway, the lights should be back on here in New York well before you wake to read this, and I still have 54% of my laptop battery power remaining – oops, make that 53% – so I will get off my high horse and back to doing my taxes, due tomorrow (today, as you read this), on extension, knowing that next year, when I do them, they will be dramatically lower. (Ah, to live in a country with no taxes and no government. Liberia!) *I’ve got one! How about employing more young doctors and nurses to give all kids great health care? **This is admittedly difficult to do and fraught with a huge potential for unintended consequences, just as our own well-intentioned War on Poverty decades ago brought with it so many casualties; but that’s the Manhattan Project aspect of it – to get the world’s best minds to figure out ways to use resources wisely.