Boring Money Stuff September 30, 2005January 17, 2017 But first . . . MASSIVE WEST WING SCREW-UP I am so sorry to impose, but I somehow missed the first two episodes – how could I have allowed this to happen?!!! I need one of you to FedEx me the tapes. If you can, please meMail me so we can set this up. HAIL TO THE CHIEF Meanwhile, we’ve got a wonderful new president – Geena Davis, ABC Tuesday’s at 9PM. If you missed the premier, find someone who taped or TiVo-ed it . . . it was fantastic . . . and going forward, stay home next Tuesday and every Tuesday thereafter for Commander In Chief at 9pm followed by Boston Legal at 10pm. (The problem with kids these days – they don’t watch enough television.) MISCHIEF So the Republican House Majority Leader has been indicted, the Senate Majority Leader is under investigation for insider trading, the Deputy Chief of Staff and others are under investigation for blowing a CIA agent’s cover, the top federal procurement officer was arrested, the former attorney general is being called to testify about torture abuses, and who knows what happened in the secret energy policy meetings Dick Cheney held before the sudden California energy crisis appeared just long enough to drain tens of billions of dollars from California to Houston and then, nearly as fast, disappeared. And on and on and on. In the current instance, former House Majority Leader Tom DeLay was indicted for funneling illegal corporate money to local Texas races. What makes this significant is that he did this in order to gain enough power in the state legislature to be able to gerrymander Congressional districts. And he did that in order to pick up several House seats and thereby strengthen the Republican stranglehold on Congress. It worked. And now . . . SELLING CMCSK TO BUY CBH, DD, GE I know nothing about Comcast, which I originally bought because Warren Buffett and a very sharp hedge fund manager I know had bought it. But it’s down about 10%, and I’ve sold the half that’s in my taxable account (keeping the retirement account half) for a short-term loss, and in order to buy CBH ($30.68), which a friend advises me to put away for 10 years as it just keeps growing its model ever larger. I am also buying some DuPont ($38.61) and GE ($33.65). Stodgy, stodgy! Of course, if we get a financial meltdown (they do occur periodically and we haven’t had one in quite a while), or if the Avian flu pandemic hits and shuts down the world economy (we will be hearing more and more about this risk), there will be . . . how to put this delicately? . . . further buying opportunities at even more attractive prices. AFFORDABILITY Peter: ‘Well, looks like Affordable Residential (ARC) is getting more affordable by the day – the stock, that is ($10.20). I didn’t get out at the recent blip up to $12. Should I get out NOW?’ ☞ Sorry about this clunker. I don’t know. If I find out more, I’ll let you know. TXCO I updated this mid-morning yesterday – it’s now up about 60% from 18 months ago. I’m not rushing to sell the other half. NTMD My Guru: ‘This is such a stupid market. Looks like Monday’s prescriptions were strong, so up NTMD goes. Of course, to make anything like the required sales numbers, these scrips would need to be 10 times as big!’ ☞ Mondays always seem to be strong (some pharmacists reporting the weekend’s sales?). Apparently, there were an estimated 208 prescriptions reported Monday in total, of which 139 were new customers and 69 were refills. Well, they had to have a FEW refills after 10 weeks. No one expected the drug to sell ZERO. The company is spending $10 million a month, and it’s not clear that doctors will write, or insurers cover, enough prescriptions to justify the expense and the current $550 million market cap. So I say: don’t sell your puts. (The stock closed at $18.13, down from 22 or so when we bought them.) But, as always, understand that puts are risky. Even good bets sometimes don’t work out. BOREF Well, speaking of bets. All I can say is . . . the plane moved. So, much as I wish further news would follow fast and furious, I sit patiently imagining great riches. They may never materialize; but at $16 or so, Borealis remains, I think, at five times what we paid for it, a terrific little lottery ticket.
Profit Taking- 11 a.m. Update September 29, 2005March 25, 2012 I’m taking a day off, but wanted to note that TXCO jumped to $6.56 yesterday, from $4.50 when suggested here February 16, 2004. I sold half mine. Back tomorrow . . . 11am EST: Well, or back now with second thoughts. I think I was dumb to sell half yesterday. The guy who brought this one to my attention in the first place told me he was selling a lot of his — and I think he may have been dumb also. My thinking had been simply that a 45% gain in a year and a half isn’t terrible, and this stock had been such a laggard in its group . . . well, “sell on the news,” and all that. But look at the news: “NEW YORK (AP) — Shares of Exploration Co. of Delaware Inc. ran to a fresh 52-week high Wednesday on news that the company sold off about 20 percent of its production assets in the Maverick Basin for $80 million.” This tells me that someone who actually knows something about oil thought 20% of TXCO’s assets were worth more than $80 million (if not, why pay $80 million?) — so the 80% TXCO has left may be worth more than $320 million. Yet at the current $7.50+ share price (up a buck dollar from where I sold half yesterday), the company is valued at less than $250 million (including its long-term debt). Point being, I hope you didn’t sell half first thing this morning — because if you waited even an hour or so you would have made more like 65% than 45%. And I am not rushing to sell the rest. Back to my day off.
Books, Looks, and Schnooks September 28, 2005March 2, 2017 DEWY DECIMALS Judy: ‘Have you already found Library Thing? I think it’s pretty cool – a way to catalog your library online. A while back I considered buying a cataloging program but they seemed too expensive and/or too complex for my purposes but this is really cool. It’s in BETA and you can list up to 200 books free or pay a lifetime fee of ten bucks for unlimited listing. All sorts of neat features.’ THE WORK PENALTY John Chamberlain: ‘Your little piece on the Work Penalty doesn’t tell half the story. Consider the case of a self-employed single mother with two children and a net income of $30,000 per year. Her marginal federal income tax rate is 15%, but she also has to pay 15.3% self-employment tax. (Being self-employed she gets to pay both the employer’s and the employee’s share of Social Security and Medicare taxes.) On top of that, her Earned Income Credit is ‘phased out’ at a rate of 21% of every additional amount she earns, so her total marginal tax rate is 51.3%.’ ☞ True, but the Republican leadership believes that by eliminating the tax on $600 million estates our society will be more just. It’s a different way of looking at the world. David McCorkhill: ‘Is it my imagination, or has it become the primary agenda of the modern Republican Party to create an American aristocracy? Based on their proposals for the estate tax, I could easily devise a family tax shelter for a super-wealthy clan (mere millionaires need not apply) which would virtually guarantee a large supply of money for all heirs at a vanishingly small tax rate (especially if the long-time dream of GOP tax-policy strategists of eliminating the tax on dividends were to be realized). It seems like some of these people are out to create a class of people supported by the rest of us who neither work nor pay taxes. Sounds like aristocracy to me.’ John Seiffer: ‘What most people who work for their money don’t know and too many of the wealthy won’t admit is that serious wealth is often due as much to luck or opportunity as it is to work. How hard did the heiress you mentioned work to choose her parents? Do the people on the Forbes 400 really work THAT much harder than the rest of us? Would Bill Gates [Forbes #1] be as wealthy if he’d been born in Uganda? or even France? Would Steve Balmer [#11] be as wealthy if he’d gone to Stanford rather than Harvard where he met Gates? Were the people who also invented the telephone, but were hours later to the patent office, more lazy than A.G. Bell or just less lucky? It makes sense to me that they should be taxed at least as much as those who work as hard but aren’t as lucky.’ ☞ Not to mention the luck of being born good looking, the luck of being born smart, or the luck of being born healthy. All of which might be considered rewards in and of themselves, but which tend to lead to higher incomes – even after progressive taxation – as well. The idea is certainly not to penalize people for their good fortune, but to ask them to shoulder more of society’s load. Yet not so much more as to kill incentives or take the fun out of the game. Taxation under Clinton/Gore struck what proved to be a very good balance. The rich got richer, the middle class prospered, millions were lifted from poverty, and the deficit disappeared. Republican priorities are different, and as a result the rich have become much richer, middle class workers are earning about $1,700 a year less than they were five years ago (adjusted for inflation), millions have fallen back below the poverty line, and we have added trillions of dollars to our debt. Another contrast is how Clinton/Gore professionalized FEMA – long a backwater of cronyism – and how the incoming Republican regime quickly restored it to its former state. It is to that general theme that Molly Ivins addresses her latest column. If it starts out a little too sarcastic for your taste, press on anyway – you may find in it facts that will surprise you. COMPETENCE By Molly Ivins AUSTIN, Texas — So here are all the liberals going into a giant snit just because George W. Bush appointed a veterinarian to head the women’s health section of the Food and Drug Administration. For Pete’s sake, you whiners, the only reason he chose the vet is because Michael Brown wasn’t available. If you recall, Ol’ Heckuva-Job Brownie had to go home, walk his dog and then hug his wife after exhausting himself in his triumphal handling of Hurricane Katrina. Otherwise, he’d have been Bush’s first pick. Now, even the veterinarian doesn’t get the job — just because those professional feminists raised such a stink. What’s wrong with a vet? They know a lot about birth and udders and stuff. If the mother is having trouble giving birth, you grab the baby by the legs and pull it out — it’s not brain surgery. Then you worm ’em, you tag ’em and you spray for fleas. Why the fuss? The only reason Bush even needed a new head of the Office of Women’s Health is because the last one, Susan Wood, quit. She was upset because the political hacks who run the agency refused to allow over-the-counter sale of the emergency contraceptive pill Plan B. True, that decision was made against the advice of the FDA’s own scientific advisory panel and will unquestionably result in more abortions and almost certainly damage to some women’s health. But why would anyone expect the Bush hacks to pay attention to scientific and clinical evidence, fully evaluated and recommended by the professional staff? Just like the folks at FEMA, they got their jobs because they know how to set up photo-ops for Bush. There’s a doctoral dissertation to be written about Bush appointees named during the administration’s frequent fits of Petulant Pique. These PP appointments are made in the immortal childhood spirit of “nanny-nanny boo-boo, I’ll show you.” Susan Wood resigns in protest over the politicization of women’s health care? Ha! We’ll show her — we’ll put a vet in charge, instead. The PP appointments are less for reasons of ideology or even rewarding the politically faithful than just in the old nyeh-nyeh spirit. You could, for example, put any number of people at the Department of Labor who are wholly unsympathetic to the labor movement — Bush has installed shoals of them already. But there is a certain arch, flippant malice to making Edwin Foulke assistant secretary in charge of the health and safety of workers. Republican appointees who oppose the agencies to which they are assigned are a dime a dozen, but Foulke is a partner from the most notorious union-busting law firm in the country. What he does for a living is destroy the only organizations that care about workers’ health and safety. Here’s another PP pick: put a timber industry lobbyist in as head of the Forest Service. How about a mining industry lobbyist who believes public lands are unconstitutional in charge of the public lands? Nice shot. A utility lobbyist who represented the worst air polluters in the country as head of the clean air division at the EPA? A laff riot. As head of the Superfund, a woman whose last job was teaching corporate polluters how to evade Superfund regulations? Cute, cute, cute. A Monsanto lobbyist as No. 2 at the EPA. A lobbyist for the American Petroleum Institute at the Council on Environmental Quality. And so on. And so forth. The Federal Trade Commission was finally embarrassed enough by demands from Democratic governors to start an investigation into recent price gouging by oil companies. But the investigation will be headed by a former lawyer for ChevronTexaco. Is this fun or what? Nanny-nanny boo-boo. The terrible lesson of Hurricane Katrina is that public policy is not a political gotcha game. The public interest is not well-served by appointing incompetents or anti-competents to positions of responsibility. Public policy is about our lives. Here’s another example: The Violence Against Women Act expires on Oct. 1 and must be reauthorized before then. It doesn’t look good. For 10 years, this law has helped improve criminal justice and community-based responses to sexual violence and sexual assault. As result, there has been an overall decline in the incidence of women battered or killed by their partners. But as the July-August issue of Mother Jones painfully demonstrates, domestic violence remains a hideous problem. It is both a public health and a human rights issue. Homicide is the 10th leading cause of death for women under 65. According to the Family Violence Prevention Fund, about 30 percent of American women report being physically abused by husbands or boyfriends. Every year, more than 300,000 U.S. women are raped and more than 4 million assaulted. Funding for family violence prevention was cut by $48 million this year. I guess it would be pretty funny, on some level, to put a vet in charge of this issue, too. But let’s not. This is about people’s lives. I’ve already seen too many people staring numbly at walls, still in shock. Let’s start by getting Congress to at least reauthorize the act. The arsenal of democracy starts with the telephone, the fax machine, the e-mail, paper and pen. Just sign it, “Your constituent.” To find out more about Molly Ivins and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com. COPYRIGHT 2005 CREATORS SYNDICATE INC. Originally Published on Thursday September 22, 2005
The Work Penalty September 27, 2005March 2, 2017 TEN, EIGHT, THREE AND FORTY The National Debt will approach TEN trillion by the time the next President is sworn in. Nearly EIGHT trillion of that debt, accumulated since 1776, will have been racked up by just THREE Republican Administrations: Reagan, Bush, and Bush. Even at today’s low interest rates, nearly FORTY percent of the $893 billion Americans paid in personal income tax this year went to pay the interest on the debt. (I know I said all this yesterday – my short-term memory isn’t that bad – but I’m trying to find ways to make it sing. Or at least stark.) THE WORK PENALTY What the Republican leadership has managed so effectively to do is shift the tax burden from wealth to work. It used to be that an heiress who inherited $600 million would pay the same effective 39.6% top rate on her $20 million a year in dividends that a surgeon would pay on his $300,000 in ‘earned income.’ But in recent years the Republican leadership has cut her top tax rate from 39.6% to 15%, while cutting the surgeon’s top bracket from 39.6% to 35%. Much of the heiress’s income came in the form of long-term capital gains. The Republican leadership has cut her tax on that income significantly as well, from 20% to 15%. Her tax on municipal bond interest remains 0%. No cut was possible there. And now the Republican leadership is hell bent on lowering the top estate tax rate on great wealth from ‘about half’ to ‘exactly zero.’ The Republican leadership doesn’t like taxes – who does? – but if we have to have them, they would at least like to see the burden shifted from wealth to work. Laid out plainly that way, some will nod their heads in vigorous agreement with the underlying philosophy. Others will despair at what they see as the shortsightedness and immorality. That’s what makes horse races.
The Debt We Owe Republican Leadership September 26, 2005March 2, 2017 THE REPUBLICAN DEBT Jeff Covey: ‘Seeing it has a bigger impact than anything you can say about it.’ ☞ And this is just now. By the time we have a chance to right things, beginning in 2009, the National Debt will approach $10 trillion – nearly $8 trillion of it racked up under just three Presidents: Reagan, Bush and Bush. THE INTEREST WE PAY ON THAT DEBT Scott Obeck: ‘So, if my math is correct, does about 15 cents of each dollar we send to the federal government go to pay interest on the debt?’ ☞ Not exactly. The interest on our National Debt – currently around $350 billion a year and headed higher – amounts to nearly 40% of the $893 billion we paid in personal income tax this year. (Total federal revenue for the fiscal year just ending is estimated at just over $2 trillion. In addition to the personal income tax there will have been $773 billion in Social Security tax taken out of our pay – but that’s all supposed to go to pay benefits and store up a surplus for the future. Bringing up the rear: the corporate income tax, at $226 billion, and smaller items like excise taxes and the estate tax.) THE ILLUSORY TAX CUTS Well, we may have borrowed $8 trillion, but at least we’re all rolling in tax cuts. Institutional Investor’s Alpha magazine (as quoted in the June 5 New York Times Sunday Magazine) reported that the average pay for the top 25 hedge fund managers in 2004 was $251 million. They can be nothing if not happy about the tax cuts. Your own cut may not have been quite as large . . . you may have earned only $10 million in 2004 or even less . . . but who can fail to favor tax cuts? Yet tax cuts, this author argues – as much as those hedge fund managers may have needed them – are illusory. (And not just because you’re increasingly likely to get hit up for the alternative minimum tax, if you’re a working stiff.) In tiny part: Just remember, to spend is to tax. Not for nothing did the very, very conservative economist Milton Friedman once pen a column for the Wall Street Journal entitled ‘The Taxes Called Deficits.’ (April 26, 1984) . . .
Press 1 for a Job, Press 2 for Pork, Press . . . September 23, 2005January 17, 2017 HOW TO REACH A HUMAN Here, thanks to Dan Pritts, is a list of commonly called institutions – e.g., banks and airlines – that want you to ‘please listen carefully as our menu options have changed’ – with tips for reaching a human instead. LOWERING WAGES TO ATTRACT WORKERS BACK TO NEW ORLEANS Alan: ‘Joe Devney missed the point of suspending the Davis-Bacon Act. The purpose was not to require the contractors to pass the savings on to the government but to induce those contractors to hire more people. If the marginal cost of employing resources, labor in this case, is lower (so goes the economic theory), it will be profitable to employ more units of that resource. So more people who are now out of work will be earning a paycheck, spending that money, and stimulating the local economy in the affected areas. I’m not saying this will be the result; I’m just saying that there is a solid economic principle behind the idea.’ ☞ Then I’m confused. We are talking about spending $200 billion in this region, plus whatever the insurers pay out and add to the pot, plus whatever private individuals choose to spend and invest – and the fear is that there won’t be enough work? Entice former residents to return by offering them lower wages? A MODEST PROPOSAL John Leonarz: ‘One of the lessons I think we can draw from the Katrina/New Orleans disaster is that we do a poor job allocating our public works appropriations to deal with the most needful infrastructure requirements. Serious repairs and strengthening of the New Orleans levees would have been a stitch in time that might have saved $100 billion or so. I think a better way than the Congressional free-for-all for designating the projects that get funded would be to adopt the procedure used for the Base Realignment and Closure (BRAC) program. ‘It would work like this: The Congress would, early in the session, decide how much money the Government will spend during the session for public works, say $200 billion. Each member would get to designate ten or fifteen million for his or her district; Subcommittee Chairs would get twenty million; and Chairs of Appropriations would get fifty. They could give parts off to other members to jointly fund larger projects. Meanwhile, a Civil Public Works Commission would be chosen, with staff, by some means calculated to provide professional expertise, geographically distributed, and as nonpartisan as possible. They and their staff would consider the various projects proposed, or could propose their own. Indeed, anyone, Governors, Mayors, etc., could propose a project. ‘The Commission would set standards as to the completeness of a proposal and would have the right to call upon other Federal Agencies for advice on issues which might be pertinent to various projects, e.g., environmental or security concerns. The Commission could work on future years’ projects as well as the current year, and would allocate funds proportionally for multi-year projects. Each line-item would carry the Commission’s comparative justification for the amount and degree of national priority. The Commission’s report to the Congress would have additions of the respective members’ allocations and then would be voted up or down, without amendments. This procedure would permit the most serious public works issues to be addressed without direct political influences, while simultaneously limiting the total to be spent on public works (one supplemental appropriation for whatever the Congress chooses, would be permitted in an amount not to exceed 10% of the original allowance). What do you think?’ ☞ Nevva happen. Makes too much sense. Have a great weekend. Don’t sell your puts.
Of Debt and Penguins And, for the Person Who Has Everything . . . September 22, 2005March 2, 2017 MAGNIFIQUE! Yaakov-Oz: “MODIQUES absolutely is a word! Just not in English. But feel free to give yourself 230 points in French. (It means ‘moderate.’)” LET THEM EAT BACON Joe Devney: “President Bush has suspended the Davis-Bacon Act, freeing companies contracting with the federal government to rebuild New Orleans to pay their workers less than they would be required to otherwise. I assume that the companies will be contractually obligated to pass the cost savings on to the government – otherwise there is no reason to reduce the wages in the first place. The end result is that money will be taken out of the workers’ pockets and put into the federal treasury. Mr. Bush has insisted that he will not approve any tax increases to pay for the costs of hurricane Katrina. Yet he has, by this executive order, decreased the after-tax pay of some American workers whose incomes are in the $20,000-a-year range – in effect taxing them – in order to keep from having to pinch people who make millions of dollars a year.” THE DEBT Dan Flikkema: “Imagine we could somehow stop adding to the current National Debt and instead could begin to pay it back. Let’s say we pay back $1,000 every second of every day. Did you know it would only take us a little over 251 years to pay it all back?” ☞ Dan goes on to acknowledge that we don’t literally need to pay it all back – it’s okay for a country as rich as ours to have, in effect, a mortgage. It’s just that ours is getting out of hand. (But here’s some good news: One of you double-checked James Musters’ math from yesterday and it seems those 8 trillion dollar bills we’ve borrowed, mainly under Reagan, Bush and Bush, would only stretch to the moon and back sixteen hundred times, not sixteen thousand.) Hollis Polk: “I see the enormous Federal deficit, with no plans to change course while we can still maybe avoid a catastrophe. I think what the Feds will do is print money to inflate their way out of the problem. What do you think of the likelihood of that?” ☞ It is definitely possible, but the Feds may have learned it doesn’t get you out of the problem without some very nasty side effects. With inflation come higher interest rates, higher cost of carrying the debt, higher entitlement pay-outs, the likelihood of stagflation and lower stock prices (at least in the short run) so fewer capital gains tax receipts . . . inflation can balloon the deficit. The Republican economic stewardship, or lack thereof, over the last five years has weakened us in ways for which there is no easy fix. The sooner the tax cuts are rolled back on income above $200,000 or $300,000 a year, the sooner we’ll take the one obvious and relatively painless step in the right direction. FOR THE MAN OR WOMAN WHO HAS EVERYTHING Instead of a Rolex, this holiday season, consider a water treatment plant in Ouagadougou. What’s novel about this site is that you get to choose the specific local project you would like to help fund. Some are small enough to be funded with just a couple dozen shares of the Anadarko Petroleum you bought at $56.50 in June last year (closed $97.97 last night), or by your daughter’s high school cake sale. (All this, presumably, after working out an arrangement to share your kitchen and bathroom with the family you’ve taken in from Louisiana. It’s shaping up to be a banner year for charitable opportunities.) And where with many charitable gifts 25 cents of each dollar may go just to raising that dollar, with another 10 or 20 cents going to overhead, here close to 90% of what you give gets straight to the project. If nothing else, touring this site is yet one more way to see how fortunate most of us are, by comparison. Although if that’s the feeling you’re after, you could just rush out to see “March of the Penguins,” which – while the penguins seem to endure it somehow – has got to be the bleakest existence on the planet. A love story? Give me a break, Morgan. It’s a story about nearly nonstop suffering. However distasteful you find my political views; however much money you may have lost buying Google puts – please don’t make me come back as an Emperor Penguin.
Economy: Meet Astronomy (Bang! Bang!) September 21, 2005March 2, 2017 I just want to say that if MODIQUES were a word, I would have gotten 230 point on a single turn. It was a thing of beauty. I am trying to let go of my disappointment, but it may take some time. THE OTHER REASON MIKE VOTES REPUBLICAN Mike Wallin: ‘You neglected Monday to touch on my second reason for being Republican: If decent people are allowed to carry arms and we have a police force and judiciary that allow citizens to defend themselves, the world is a better place. Perhaps you didn’t notice that New York is a much more pleasant place after (our next President, G-d Willing) Rudy came in and cleaned it up.’ ☞ But he didn’t do it by encouraging citizens to carry concealed weapons in bars and on the subway. In fact, here is Rudy on the gun issue in 1997: Yesterday, President Clinton outlined his proposals for more stringent, federal gun licensing requirements. His proposals include: prohibiting non-citizens from buying guns; requiring proof of residency, including photo id. and something like a utility bill in the buyers name… similar to what is required for a drivers license; making cop killer, or Teflon coated, armor piercing bullets illegal; and requiring child safety locks on the weapons of all Federal Officials to prevent these guns from ever winding up in the hands of children. I applaud the President’s proposals, and I will support them any way I can. I only hope that he is right, and that Congress is finally ready to recognize that the vast majority of Americans want more gun control. It makes sense. It is time. And we can no longer let special interests dominate this vitally important issue. Democrats want gun safety. Close the gun-show loophole. Discourage the sale of assault weapons and cop killer bullets. License gun owners. That kind of thing. Republicans defeat these measures. And Republicans like Mike think we could all rest easier if we knew more people walking or driving past us, or sitting beside us at the ballgame, were armed. THE NATIONAL DEBT James Musters: “While on hold for tech support, I was playing with my Lotus Spreadsheet, trying to put the National Debt in proportion. Not an easy task. From the government, I found out that a dollar bill is 0.155956 meters long. The National Debt clock says today’s debt is 7,925,781,782,400 dollars. So if you taped dollar bills together end to end to form a long chain, the national debt would be 1,236,073,223 kilometers long. How far is that? Well, the moon is 384,400 kilometers away, so the national debt, strung end to end, gets to the moon and back more than 16,000 times. The sun is a lot further away, about 149,600,000 kilometers, so the debt could make four round trips. The chain of debt is longer than the circumference of the earth’s yearly orbit around the sun. Considering that the earth, traveling through space at about 67,000 miles per hour, takes a year go circle the sun, that’s one enormous chain of American debt. Astronomical, really.” ☞ As noted yesterday, the debt will be a lot bigger by the time the Republican leadership has finished inflating it. And nearly four-fifths of it will have been racked up under just three of our 43 Presidents: Reagan, Bush, and Bush. But at least assault weapons are back for sale and you can buy them at gun shows without a background check. Modiques, modiques, modiques.
Debtors, Psychos, and Puts September 20, 2005March 2, 2017 YOU DEBTOR! Juan: ‘How does the interest on the National Debt compare to the $200 billion cost of reconstruction in the Gulf?’ ☞ At $8 trillion now, our National Debt – accumulated since 1776 – will have reached $10 trillion or so by the time President Bush leaves office. Of this, roughly $8 trillion will have been racked up under just three presidents: Ronald Reagan, George Bush, and George Bush. In the fiscal year just ending this month, taxpayers will have paid roughly $350 billion in interest on the debt. That will rise as the debt rises even if interest rates stay low. If they rise, the burden only grows heavier. It’s not hard to imagine an annual interest expense north of half a trillion dollars by the time the current Republican Administration, with the help of the Republican Congress, are finished weakening our finances and increasing our indebtedness to foreign powers. Note that these are the same Republicans who – until they took total control of the government – were demanding a ‘balanced budget’ amendment. With that long forgotten, they now propose to strengthen America by banning flag burning and gay marriage. They are nothing if not adaptable. YOU PSYCHO! Not quite sure why so many of you sent me this link – ‘Psychopaths Could Be Best Financial Traders.’ (Premise: psychopaths don’t have normal emotions that could interfere with their making a killing.) I prefer this classic paean to level-headedness, which you very likely know, by Rudyard Kipling. I once saw it in Kipling’s own hand, framed on the wall of a deeply thoughtful investment strategist: If you can keep your head when all about you Are losing theirs and blaming it on you, If you can trust yourself when all men doubt you But make allowance for their doubting too, If you can wait and not be tired by waiting, Or being lied about, don’t deal in lies, Or being hated, don’t give way to hating, And yet don’t look too good, nor talk too wise: If you can dream–and not make dreams your master, If you can think–and not make thoughts your aim; If you can meet with Triumph and Disaster And treat those two impostors just the same; If you can bear to hear the truth you’ve spoken Twisted by knaves to make a trap for fools, Or watch the things you gave your life to, broken, And stoop and build ’em up with worn-out tools: If you can make one heap of all your winnings And risk it all on one turn of pitch-and-toss, And lose, and start again at your beginnings And never breath a word about your loss; If you can force your heart and nerve and sinew To serve your turn long after they are gone, And so hold on when there is nothing in you Except the Will which says to them: “Hold on!” If you can talk with crowds and keep your virtue, Or walk with kings–nor lose the common touch, If neither foes nor loving friends can hurt you; If all men count with you, but none too much, If you can fill the unforgiving minute With sixty seconds’ worth of distance run, Yours is the Earth and everything that’s in it, And–which is more–you’ll be a Man, my son! NTMD For the week of September 9, UBS reports 365 prescriptions, down slightly from 383 the week before. Prescriptions for hydralazine and isordil, meanwhile – the two generic components of BiDil – are averaging about 4200 a day versus 57 a day for Bidil. The bulls on the stock expect folks who are currently taking the generics to switch to the more convenient combo pill instead. The bears don’t see much evidence that patients, doctors, HMOs or insurers will rush to pay $2,500 a year for BiDil instead of $300 or $400 for the generics. UBS – which makes a market in NTMD stock – rates it ‘Buy 2.’ The difference between ‘Buy 1’ (its top ranking) and ‘Buy 2’ (its other buy rank) is ‘predictability.’ It views NTMD’s future as less predictable than ‘Buy 1.’ Yet UBS remains firm – to the penny – in its sales and profit estimates. It expects the price per pill, currently $1.80, to rise to $2.02 by 2009, at which point it expects the company to earn $3.07 a share on revenues of $341 million from 228,000 patients. In the short term, it still expects the company to report sales through September 30 of $10.1 million. (Cumulative sales from the July 1 launch through September 17 it estimates at $653,184.) Don’t sell your puts. There is a chance that the estimate of $653,184 in sales is misleadingly low and the company will blow past expectations when it releases the quarter’s numbers, causing the stock to soar. There is a chance that the doctors I’ve talked with are wrong, and that insurers will not fuss over paying for BiDil. And – even if neither of these things happens and the stock is $3 in a year or two – there is a chance it will rise to $25 or $30 in the meantime, giving us a total loss on our puts. That’s why you must only buy puts with money you can truly afford to lose. But as bets go, this would appear to remain a pretty good one. The stock closed last night at $18.03, giving Nitromed a market cap of $547 million.
Oink, Oink September 19, 2005January 17, 2017 Why read me when you can read Newsweek‘s Fareed Zakaria? In very small part: The highway bill of 1982 had 10 “earmarked” projects-the code word for pork. The 2005 one has 6,371. Today’s Republicans believe in pork, but they don’t believe in government. So we have the largest government in history but one that is weak and dysfunctional. Hurricane Katrina is a wake-up call. It is time to get serious. We need to secure the homeland, fight terrorism and have an effective foreign policy to advance our interests and our ideals. We also need a world-class education system, a great infrastructure and advancement in science and technology. For all its virtues, the private sector cannot accomplish all this. Wal-Mart and Federal Express cannot devise a national energy policy for the United States. For that and for much else, we need government. We already pay for it. Can somebody help us get our money’s worth? ☞ It helps to have a Party that believes in government and takes its responsibilities seriously. WHY MIKE VOTES REPUBLICAN Mike Wallin: ‘You say gays pay a lot of taxes. True, they do. However under GOP tax policies they (and everyone else) pay a lot less. That’s a big reason I am a Republican.’ ☞ GOP tax policies greatly favor the rich over everyone else and have added literally trillions of dollars to our National Debt. The interest on that debt is now hundreds of billions of dollars a year – and will become even more onerous if interest rates rise, as at some point they almost surely will. In your and your children’s names, we are borrowing the savings of poorer countries, like China. To finance tax cuts for the wealthy, the Republican Party is mortgaging our future and weakening our country. Michelle Daniel: ‘You wrote: GLBT citizens pay a lot of taxes just like everybody else. Actually, we pay more. Recently, the company I work for here in Missouri extended its health insurance policy to include domestic partners (after I wrote a kick-a*s memo, citing statistics from the Human Rights Campaign’s very helpful Web site). This made an enormous change in the quality of health care my self-employed partner and I are able to afford. My partner can now get an annual wellness exam, see a dentist for preventive dental care, and have an annual eye exam – all procedures that she would forgo in the past because of the unreasonably high deductibles she was stuck with as an individual paying for her own health insurance. I am very thankful to work for such an inclusive, progressive company that values all of its employees equally. ‘However, shortly after signing up for the new policy, I was dismayed to learn that domestic partner benefits, unlike benefits provided to married heterosexual couples, are considered taxable income by the Internal Revenue Service. My employer must report and withhold taxes on the ‘fair market value’ of the domestic partner coverage. This means that I have to pay taxes on the portion my employer contributes to the health plan to cover my partner – over $3,000 a year – something my married coworkers do not have to do for coverage of their partners. This has had a real impact on my paycheck. In addition, because my employer must pay payroll taxes on my taxable income, the company is taxed at a higher rate as well. They are effectively being punished for doing what is only fair – providing equal benefits to all of their employees. ‘I wrote my congressman and senators, asking them to support tax equity for domestic partner benefits, but since my senators are Republicans, James Talent and Kit Bond, I don’t hold out much hope.’ GAY MARRIAGE – ARE YOU CRAZY? Ken Ahonen: ‘The American Psychiatric Association has joined the American Psychoanalytic Association, the American Psychological Association, and the National Association of Social Workers in endorsing marriage equality. They understand the benefits of forming the cohesive family units that civil marriage provides.’ Kathi Derevan: ‘I almost never distribute anything to my whole e-mail list, but I did pass out the number to call Arnold about gay marriage. It resulted in lots of calls to the Gov, including one from my grumpy Republican friend Steve, who said, ‘The gays might as well be as miserable as the rest of us.”