Snow Day! December 14, 2006March 25, 2012 My cab driver pulled out a guitar as he approached the airport this morning and began to sing . . . Merrill’s CEO is expected to get a $50 million bonus this year . . . Goldman’s earnings are up 93% and the firm’s average pay (including receptionists) is something like $663,000 . . . another evangelical leader stepped down for consorting with men (what’s WITH you straight people?) . . . . . . my point being that I have tons to write about, but one thing led to another, and we’re both going to just have to take the day off. See you tomorrow.
Chile December 13, 2006March 5, 2017 I have never been to Chile, have never eaten a frozen teammate after a plane crash, and cannot assess the fairness of what follows. I am counting on you to point me to significantly differing points of view, if you find them (or hold them), to which I will dutifully link. So there may be another side to this story, which I will present in a few days as Part 2. But for now, I simply share the following, which I found really interesting: Tinker Bell, Pinochet And The Fairy Tale Miracle Of Chile by Greg Palast Palast is the author of the New York Times bestseller, Armed Madhouse. (Signed copies available at www.palastinvestigativefund.org) Sunday, Dec. 10, 2006 Chile’s former military dictator General Augusto Pinochet died today at the age of 91. Cinderella’s Fairy Godmother, Tinker Bell and General Augusto Pinochet had much in common. All three performed magical good deeds. In the case of Pinochet, he was universally credited with the Miracle of Chile, the wildly successful experiment in free markets, privatization, de-regulation and union-free economic expansion whose laissez-faire seeds spread from Valparaiso to Virginia. But Cinderella’s pumpkin did not really turn into a coach. The Miracle of Chile, too, was just another fairy tale. The claim that General Pinochet begat an economic powerhouse was one of those utterances whose truth rested entirely on its repetition. Chile could boast some economic success. But that was the work of Salvador Allende – who saved his nation, miraculously, a decade after his death. In 1973, the year General Pinochet brutally seized the government, Chile’s unemployment rate was 4.3%. In 1983, after ten years of free-market modernization, unemployment reached 22%. Real wages declined by 40% under military rule. In 1970, 20% of Chile’s population lived in poverty. By 1990, the year ‘President’ Pinochet left office, the number of destitute had doubled to 40%. Quite a miracle. Pinochet did not destroy Chile’s economy all alone. It took nine years of hard work by the most brilliant minds in world academia, a gaggle of Milton Friedman’s trainees, the Chicago Boys. Under the spell of their theories, the General abolished the minimum wage, outlawed trade union bargaining rights, privatized the pension system, abolished all taxes on wealth and on business profits, slashed public employment, privatized 212 state industries and 66 banks and ran a fiscal surplus. Freed of the dead hand of bureaucracy, taxes and union rules, the country took a giant leap forward … into bankruptcy and depression. After nine years of economics Chicago style, Chile’s industry keeled over and died. In 1982 and 1983, GDP dropped 19%. The free-market experiment was kaput, the test tubes shattered. Blood and glass littered the laboratory floor. Yet, with remarkable chutzpah, the mad scientists of Chicago declared success. In the US, President Ronald Reagan’s State Department issued a report concluding, “Chile is a casebook study in sound economic management.” Milton Friedman himself coined the phrase, “The Miracle of Chile.” Friedman’s sidekick, economist Art Laffer, preened that Pinochet’s Chile was, “a showcase of what supply-side economics can do.” It certainly was. More exactly, Chile was a showcase of de-regulation gone berserk. The Chicago Boys persuaded the junta that removing restrictions on the nation’s banks would free them to attract foreign capital to fund industrial expansion. Pinochet sold off the state banks – at a 40% discount from book value – and they quickly fell into the hands of two conglomerate empires controlled by speculators Javier Vial and Manuel Cruzat. From their captive banks, Vial and Cruzat siphoned cash to buy up manufacturers – then leveraged these assets with loans from foreign investors panting to get their piece of the state giveaways. The bank’s reserves filled with hollow securities from connected enterprises. Pinochet let the good times roll for the speculators. He was persuaded that Governments should not hinder the logic of the market. By 1982, the pyramid finance game was up. The Vial and Cruzat “Grupos” defaulted. Industry shut down, private pensions were worthless, the currency swooned. Riots and strikes by a population too hungry and desperate to fear bullets forced Pinochet to reverse course. He booted his beloved Chicago experimentalists. Reluctantly, the General restored the minimum wage and unions’ collective bargaining rights. Pinochet, who had previously decimated government ranks, authorized a program to create 500,000 jobs. In other words, Chile was pulled from depression by dull old Keynesian remedies, all Franklin Roosevelt, zero Reagan/Thatcher. New Deal tactics rescued Chile from the Panic of 1983, but the nation’s long-term recovery and growth since then is the result of – cover the children’s ears – a large dose of socialism. To save the nation’s pension system, Pinochet nationalized banks and industry on a scale unimagined by Communist Allende. The General expropriated at will, offering little or no compensation. While most of these businesses were eventually re-privatized, the state retained ownership of one industry: copper. For nearly a century, copper has meant Chile and Chile copper. University of Montana metals expert Dr. Janet Finn notes, “Its absurd to describe a nation as a miracle of free enterprise when the engine of the economy remains in government hands.” Copper has provided 30% to 70% of the nation’s export earnings. This is the hard currency which has built today’s Chile, the proceeds from the mines seized from Anaconda and Kennecott in 1973 – Allende’s posthumous gift to his nation. Agribusiness is the second locomotive of Chile’s economic growth. This also is a legacy of the Allende years. According to Professor Arturo Vasquez of Georgetown University, Washington DC, Allende’s land reform, the break-up of feudal estates (which Pinochet could not fully reverse), created a new class of productive tiller-owners, along with corporate and cooperative operators, who now bring in a stream of export earnings to rival copper. “In order to have an economic miracle,” says Dr. Vasquez, “maybe you need a socialist government first to commit agrarian reform.” So there we have it. Keynes and Marx, not Friedman, saved Chile. But the myth of the free-market Miracle persists because it serves a quasi-religious function. Within the faith of the Reaganauts and Thatcherites, Chile provides the necessary genesis fable, the ersatz Eden from which laissez-faire dogma sprang successful and shining. In 1998, the international finance Gang of Four – the World Bank, the IMF, the Inter-American Development Bank and the International Bank for Settlements – offered a $41.5 billion line of credit to Brazil. But before the agencies handed the drowning nation a life preserver, they demanded Brazil commit to swallow the economic medicine that nearly killed Chile. You know the list: fire-sale privatizations, flexible labor markets (i.e. union demolition) and deficit reduction through savage cuts in government services and social security. In Sao Paulo, the public was assured these cruel measures would ultimately benefit the average Brazilian. What looked like financial colonialism was sold as the cure-all tested in Chile with miraculous results. But that miracle was in fact a hoax, a fraud, a fairy tale in which everyone did not live happily ever after. ****** Greg Palast is the author of the New York Times bestseller, “Armed Madhouse”. Read his reports at www.GregPalast.com. ☞ Opposing viewpoints welcome.
Why This Column May Look Messy December 12, 2006January 9, 2017 MORE ON MEDIAN HOME PRICES (And why they understate the downturn.) Thanks, Michael Monahan, for the link. In part: For the past year, newspapers, including the [Arizona] Republic, have run repeated articles that make two points: the housing inventory (supply) has seen a dramatic rise (from 3,000 units to over 35,000 units in Phoenix) while median housing prices have not fallen or even have continued to rise. The front page of the Republic’s Real Estate Section now has a box that is entitled ‘How much has your home appreciated?’–and it is shown in median home prices by zip code. Yet, with a couple of minor exceptions, there has been scant attempt to explain this apparent contradiction of the law of supply and demand–that is, prices are supposed to fall, not rise, when supply goes up. This shrugging of shoulders is particularly curious because the explanation is not a difficult one. DON’T SELL YOUR ALBAW Our Aldabra warrants (ALBAW) closed at $1.32 last night. I guess the warrant will keep going up (if the underlying stock doesn’t fall) until people think the premium is too rich. The warrant gives you the right to buy the underlying stock at $5 any time until February 2009. With the stock at $5.79 yesterday, the ‘intrinsic’ value of the warrant was 79 cents. The extra 53 cents people were paying ($1.32 minus 79 cents = 53 cents) was the premium. Just what the premium ‘should’ be is hard to say. When we were buying the warrants at 70 cents and at 38 cents earlier this year, the premium was ridiculously low – indeed, nonexistent at one point. (Who ever heard of a 33-month option on a speculative stock selling for no premium?! It was a rare opportunity.) Today, at 53 cents – or a little less than 10% of the value of the underlying stock – the premium, still strikes me as somewhat low. Because . . . well, think about it: Say you owned 1,000 shares of ALBA, the underlying stock, right now. These are shares you purchased, one assumes, because you thought the stock would go up. (It’s a speculative that pays no dividend – why else would you have bought it?) Well, if you think the stock is going to go up, would you rather own the stock or the warrants? If that were me, I would probably sell those 1,000 shares at $5.79, for a total of $5,790, and buy perhaps 1,000 warrants instead – or even 2,000 or 3,000 or 4,000 of them – and still have a little cash left over. It all depends on how much risk you want to take and the probabilities your gut tells you to assign to different scenarios. But let’s say you sold your 1,000 shares of the stock for $5,790 and bought 2,000 warrants for $2,640. That would free up $3,650 in cash for you to do something else with. But leaving aside whatever use that money might be to you, look what happens with your $2,640: If the stock went down $3 or $4 from here over the next couple of years, you’d lose ‘only’ that $2,640, not the $3,000 or $4,000 you would have lost on the stock. And if the stock went up $3 or $4, you’d make $4,940 or $6,940 instead of $3,000 or $4,000. (Where you’d get hurt would be if the stock didn’t move much either way. Say, for example, it had edged down to $5 by February of 2009. If you had just held the stock, you would have lost $790 . . . versus a total wipeout of your $2,640 on the warrants [mitigated by whatever gain you might have made from the $3,650 you freed up when you made the switch from stock to warrants].) The point of all this is that right now, with the warrants bearing a premium of 53 cents over their intrinsic value, people who like the stock may not buy it. They may buy the warrants instead. That does nothing to push up the price of the stock. Only when the warrants seem expensive will speculators who like the stock buy the stock. So there’s a little tail-chasing going on here. People buy the warrants because they hope the stock will go up. But the stock will go up only if people buy the stock. Which they won’t do if the warrants are attractive. Just where the equilibrium point will be . . . where someone like me would really have to stew over whether to buy the stock or the warrants, I don’t know. And not everyone is like me – people have different risk tolerances and time horizons and differing opinions about the prospects for the dredging industry in general and Aldabra in particular. Maybe we’re at a rough equilibrium now, and the premium will not widen further. (Eventually, of course, as expiration draws near, it will narrow and ultimately disappear.) My hunch is we’re not there yet. If I were new to this situation and got excited about Aldabra, I think I’d still buy the warrants and not the stock . . . but I’d at least think twice, where before, when there was little or no premium, it was a no-brainer. But I’d not yet stew. When I’d stew, I’ll know that – for me, at least – equilibrium had been reached and the stock might start going up. One important final note to cut through all the above: Aldabra is risky. If you can afford the risk, I think it’s a good one to take. But stock market risks are real. The rich get richer because they can afford to take good risks. It is nuts to take risks – even good ones – you can’t afford. You could suffer real hardship . . . and even if you don’t, even if the risk ultimately pays off big, you could suffer many sleepless nights along the way, which – as anyone who’s been through this knows – is a high cost all by itself. I’m not selling my warrants, and have high hopes for a good long-term gain. But I am prepared for the possibility that they could wind up worthless, because there is always that risk. WHY THESE COLUMNS LOOK MESSY This is not a request for help, because my hope is that the next version of Microsoft Office will miraculously solve the problem. But just so you know: I use Word 2003 to write these things. I try hard to make them look – well, if not ‘good,’ at least consistent. For example, all ‘my’ text is meant to be 12-point Times New Roman. The Subheads, like ‘WHY THESE COLUMNS LOOK MESSY’ above, are meant to be bold face in blue (except once in a while a different color for effect – on Earthday they might be green). Passages I excerpt are meant to be indented, brown, 10-point Verdana. And so on. Yet . . . when I cut and paste a newly-written column from the gigantic Word file that contains all my columns – including the one I’m typing now – into its own separate little Word file (which I then post on my site), all the Times New Roman gets changed to a thing called Unicode. Why does Microsoft do that? All I did was cut and paste it. I change it back before saving the little file as a web page. At that point, Microsoft adds an unbelievably voluminous, kloodgy set of HTML tags to my text – wildly more complicated than it needs to be – but generally, even so, the column pops up on my browser, looking right. But for those of you who get the column delivered with Quickbrowse (the button at the bottom of the column) – or who view it with different browsers – sometimes the type fonts, colors, and paragraph breaks take on minds of their own. I started doing these 2,666 columns ago, before there were blogging tools. And I don’t see changing my little system anytime soon, because if it works (more or less), I just don’t have time to fix it. But I did want to explain that in my mind’s eye, at least, and on my screen, these things look reasonably neat and tidy. If that’s not the case for you, I have to ask you to read them with your eyes closed and just pretend. Tomorrow: Is It Cold in Here Or Am I Getting . . .
It’s Not the Dogs’ Fault But You Still Want to Kick Them December 11, 2006March 5, 2017 MEDIAN HOME PRICES ARE WORSE THAN THEY APPEAR . . . . . . because the published statistics are based only on homes that have sold – not those languishing on the market. Click here for the story. And don’t rush to buy a second home just yet; prices could have further to fall. Which could make for a tough economy; so don’t be buying stocks on margin or otherwise throwing caution to the wind. But it’s the holiday season, and I don’t want to depress you, so . . . THE WHITE HOUSE HOLIDAY VIDEO James Musters: ‘Um…. I think they have lost grip of reality.’ ☞ Click here if you haven’t seen it. ‘Cute’ may not be the mood we’re looking for from the White House just now – but maybe that’s just Mr. Musters and me. TWINKIES This isn’t cute, it’s treacly. Sap that I am, I liked it even so. (Do you cry when you watch ‘It’s a Wonderful Life’? No? Well, then, skip this and go kick a dog [perhaps one of the ones in the White House holiday video].)
Name This Column Without Using the Word December 8, 2006March 5, 2017 HOTEL KEYS Tom: ‘Your initial column was probably right. Contrary to the Snopes page and others, Consumer Affairs looked into this and some hotel keys are dangerous. Click here.’ TAXES Bill McLeese: ‘Your answer to John in Atlanta missed an important point. John is assuming that we liberals see high taxes as an end in themselves. Wrong! We don’t like to pay taxes any more than anyone else. But we recognize that there are legitimate functions for government which need to be properly and fairly financed. Our focus is on the results: strong defense, law and order, better education, better health care, environmental protection, capable emergency response, low deficits, etc.’ Derek: ‘So higher taxes are a good idea, although you won’t pay them by yourself, but you would if others would. Just the kind of leadership one would expect from the Democratic leadership.’ ☞ Oh, Derek. Stephen Gilbert: ‘John in Atlanta calls you and Buffett and Ben Stein glitter types. I can’t think of a glittier group. When I hear the word, an image of Buffett driving around Omaha in his Buick comes to mind, immediately followed by you with a closet full of cases of ketchup you bought on sale.’ ☞ But average Ben Stein’s flamboyance into the mix and, well, anyone? Anyone? UNUSUAL TALENTS Alan Light: ‘They call Stephen Wiltshire The Living Camera because he can see something once and draw it precisely from memory. Stephen is autistic. In this clip, he sees Rome for the first time via helicopter and then in three days draws the entire city in exact detail, down to the number of windows in the buildings, columns in the Coliseum, and back streets and alleys. Goosebump-inducing.’ ☞ Okay, but I can get a suction thing going and dangle hotel-size mouthwash bottles from my upper lip. MICHAEL KINSLEY’S BRILLIANTLY PROVOCATIVE QUESTIONS They do not come smarter or wiser than Kinsley. Here he asks questions about private equity deals (in which we small shareholders would appear to get the short end of the stick). Well worth the read. And I guess the answers are: This is why Goldman Sachs partners make 30% a year on their money and you and I might make 9% . . . but 9% is still better than 5%, so the game is still worth playing for the prudent little guy, but the rich get richer. It’s troubling, if not entirely surprising. Maybe some of you will come up with more interesting or insightful answers. Maybe you or the S.E.C. will come up with proposals for palliative measures. Have a great weekend.
Leaving Sticky Notes for Your Kidnappers December 7, 2006January 9, 2017 AWWWWK-WARD Mary Cheney, the VP’s daughter, is pregnant. According to the Washington Post, she and her partner of 15 years, Heather Poe, are ecstatic. But what rights should the baby have? Justice Scalia, President Bush, et al., hope to amend the Constitution so Mary and Heather can never get a marriage license. But is it better for the baby to be born out of wedlock? Better to for it have one loving parent than two? Should Mary be forced to find a man to marry? Should all single mothers be forced to find men to marry? What penalty should the government exact if they don’t? Take their babies away and put them up for adoption? Is it okay for the baby to be raised by both Mary and Heather just so long as their family doesn’t enjoy equal rights and the baby is not covered by Heather’s health insurance? Those who oppose marriage equality need to share their answers to those questions. STOLEN WALLETS, ETC. Alan Light: ‘Re yesterday‘s tips: As you yourself pointed out years ago, it is a myth that hotel keys contain personal information such as credit card numbers. They don’t even contain a guest’s name. Click here.’ ☞ Just because I write these columns doesn’t mean I have to read them. (Too much politics for my taste.) Mark Centuori: ‘It’s very, very (very) highly unlikely that your bank will know how you usually sign your checks, or care if you decide to add/drop an initial now and then. So have your name printed however you want.’ ☞ On large checks, banks sometimes actually do verify signatures. Mark continues: ‘Good information about identity theft – and protection – is available here from the FTC and here from Bankrate.com.’ Sandra Wilde: ‘People who’ve had their wallet stolen sometimes make the mistake of waiting until they get home and find the credit card numbers since they think they need them to cancel the cards. Here’s what to do: find, in the phone book or, faster yet, from the back of a friend’s credit card, ANY phone number for Visa or Master Card or whatever card it is. They’ll be able to find your info, ask you some security questions, and cancel your card. This stops them IMMEDIATELY from being used.’ Margaret Koppen: ‘Your warnings about stolen wallets and security precautions reminded me of the lecture I give to friends and family when leaving the United States with credit cards in their pockets. We had an unfortunately incident in Peru several years ago – held in the desert for four hours at gunpoint by banditos who had been driving our bus (nice). The gist is that no one in your party should carry ANY credit or ATM card without knowing the ATM code. In most parts of the world, people give an ATM code when they use a credit card, rather than a signature, and use credit cards to get money out of ATM machines – not just ATM cards. So when you’re robbed, it’s common in other countries also to be taken captive, instead of just stealing your wallet, because they need you along with your credit cards to get the codes – often by threats and force. ‘When I leave the country now, I write the ATM codes on sticky notes on the back of every card in my wallet. Don’t worry if your banditos get cash off your cards using those codes – it’s still fraud, so your bank will reverse all the stolen charges (in our case, they got about four grand – serious money in Peru – and each of us ended up paying $50 total). Like most Americans, I generally have no idea what the ATM codes are for my credit cards, since we don’t use those here, but try explaining that to a guy with a gun who only speaks Spanish. Best to be able to say: ‘Look at the sticky note’ [Mirar la nota pegajosa]. ‘Unfortunately, your kidnappers may keep you anyway, through a 24-hour cycle, to hit the machines twice (depending on the sophistication level of banking in your country of choice). Of course, do exactly what they say, give them what they want (except for rape), and don’t be belligerent – one of our gals was belligerent and they broke several of her ribs to shut her up. Not the most festive warnings for the holidays, but your readers will thank you after catching a bad colectivo in Chiapas over the holidays. Happy holidays and safe travels.’ AH, THE IRANY Click here.
Polonium 210, FMD 53 December 6, 2006March 5, 2017 STILL, IT CAN’T BE GOOD FOR YOU I know, I know – the Polonium 210 in cigarettes is of a dosage very substantially less than was used to murder Alexander Litvinenko. But did you know cigarettes apparently do contain the stuff? Washington, DC, goes smokefree January 1. Maybe you should, too. MAZEL TOV! YOU’RE UNIONIZED! Think civil unions are all gay people should be allowed? Sounds like a reasonable compromise, no? Click here to see what happened to Roz’s wedding bands. Two minutes well spent, if you’re trying to understand what all the fuss is about. DOWN 23 POINTS IN A DAY?! No, FMD split 3 for 2 yesterday, so it was actually up a couple of points. Suggested March 6 at $38 and change, which would be $25.50 on a split-adjusted basis, it is now more than double at $53. My suggestion: don’t sell. And while we’re at it: BOREF remains wildly speculative, etc., but no, so long as it’s money you can truly afford to lose, I wouldn’t sell. And I wouldn’t sell the Aldabra warrants (ALBAW), up from 70 cents and 38 cents where we bought them a few months ago to $1.20 last night, because my hope is that over the next couple of years the stock may move closer to the replacement value of its dredging fleet (Aldabra is closing an acquisition with one of the world’s largest dredging companies), which if I’ve done the math from their press release right comes out to about $15. I don’t expect it to get to $15, and who knows what awful surprises could muck this up (get it? muck this up?) . . . but if the stock hit $7.50, the warrants (giving us the right to buy shares at $5) would double from here. (As to the other stocks suggested here from time to time, like the oil stocks and AXP, CBH and so on, I haven’t sold these either. My life is so boring!) GOOD ADVICE CIRCLING THE INTERNET Some of this may be a little paranoid, but by and large it’s certainly worth reviewing – especially the quick action to take if you lose your wallet. (I’d like to attribute this to its source, in case any of you know whom to credit.) A corporate attorney sent the following out to the employees in his company. 1. The next time you order checks have only your initials (instead of first name) and last name put on them. If someone takes your checkbook, they will not know if you sign your checks with just your initials or your first name, but your bank will know how you sign your checks. 2. Do not sign the back of your credit cards. Instead, put “PHOTO ID REQUIRED.” 3. When you are writing checks to pay on your credit card accounts, DO NOT put the complete account number on the “For” line. Instead, just put the last four numbers. The credit card company knows the rest of the number, and anyone who might be handling your check as it passes through all the check-processing channels will not have access to it. 4. Put your work phone # on your checks instead of your home phone. If you have a PO Box, use that instead of your home address. If you do not have a PO Box, use your work address. Never have your SS# printed on your checks, (DUH!). You can add it if it is necessary. However, if you have it printed, anyone can get it. 5. Place the contents of your wallet on a photocopy machine. Do both sides of each license, credit card, etc. You will know what you had in your wallet and all of the account numbers and phone numbers to call and cancel. Keep the photocopy in a safe place. Also carry a photocopy of your passport when traveling either here or abroad. We have all heard horror stories about fraud that is committed on us in stealing a name, address, Social Security number, credit cards. 6. When you check out of a hotel that uses cards for keys (and they all seem to do that now), do not turn the “keys” in. Take them with you and destroy them. Those little cards have on them all of the information you gave the hotel, including address and credit card numbers and expiration dates. Someone with a card reader, or employee of the hotel, can access all that information with no problem whatsoever. [NOT TRUE – THIS IS AN URBAN LEGEND. — A.T.] Unfortunately, as an attorney, I have firsthand knowledge because my wallet was stolen last month. Within a week, the thieves ordered an expensive monthly cell phone package, applied for a VISA credit card, had a credit line approved to buy a Gateway computer and received a PIN number from DMV to change my driving record information online. Here is some critical information to limit the damage in case this happens to you or someone you know: 1. We have been told we should cancel our credit cards immediately. The key is having the toll free numbers and your card numbers handy so you know whom to call. Keep those where you can find them. 2. File a police report immediately in the jurisdiction where your credit cards, etc., were stolen. This proves to credit providers you were diligent, and this is a first step toward an investigation (if there ever is one). However, here is what is perhaps most important of all (I never even thought to do this.) 3. Call the three national credit reporting organizations immediately to place a fraud alert on your name and Social Security number. I had never heard of doing that until advised by a bank that called to tell me an application for credit was made over the Internet in my name. The alert means any company that checks your credit knows your information was stolen, and they have to contact you by phone to authorize new credit. By the time I was advised to do this, almost two weeks after the theft, all the damage had been done. There are records of all the credit checks initiated by the thieves’ purchases, none of which I knew about before placing the alert. Since then, no additional damage has been done, and the thieves threw my wallet away this weekend (someone turned it in). It seems to have stopped them dead in their tracks. Now, here are the numbers you always need to contact about your wallet and contents being stolen: 1.) Equifax: 1-800-525-6285 2.) Experian (formerly TRW): 1-888-397-3742 3.) TransUnion: 1-800-680-7289 4.) Social Security Administration (fraud line): 1-800-269-0271
Party On! December 5, 2006March 5, 2017 PARTY ON! What are you doing December 16? Why not screen An Inconvenient Truth for your friends and neighbors as suggested here. Hey, it’s the only planet we’ve got. Al Gore will be on ‘Oprah’ today, and on ‘Today’ tomorrow. (I was on ‘Tomorrow’ years ago.) TAXES John in Atlanta: ‘If you and Buffett, Ben Stein, and other glitter types, feel you are not paying enough Federal Income Tax there is a simple solution: just write a check for whatever amount you wish and send it to the IRS to be applied to the National Debt. I will never see this in your column and I have no idea why not.’ ☞ Anyone? Anyone? The answer, of course, is that making it voluntary would not raise enough revenue. Also, most rich people would feel like saps paying extra when their peers did not. But many of those very same folks wouldn’t mind paying the rates they paid under Clinton/Gore – if their peers did, too. DEJA VU Bill Spencer: ‘Speaking of Ctrl + to change font size, it was in your column that I first learned of that trick. You must have forgotten two columns (July 21 and 26, 2005) when you published that information. (Your search button found that for me.)’ ☞ Actually, I stopped writing anything new in 2002. Since then, I have been rerunning the first five years’ columns. It’s like re-running the whole Seinfeld series, only dull. PARTY ON! Speaking of déjà vu – what are you doing December 16? Why not screen An Inconvenient Truth for your friends and neighbors as suggested here. Hey, it’s the only planet we’ve got. Al Gore will be on “Oprah” today, and on “Today” tomorrow. (I was on “Tomorrow” and “Today” and “Oprah” years ago.)
Topless Women And Cheap Auto Insurance from Costco December 4, 2006March 5, 2017 HOW MUCH AUTO INSURANCE IS ENOUGH? Following up on our Thanksgiving discussion (where Jeff asked whether there’s any reason to choose higher liability limits, since his agent told him – erroneously – that drivers are never sued for more than whatever coverage they carry): Matt: ‘As one of those greedy liberal trial lawyers you hear so much about, I thought I’d offer my perspective. If you have $100,000 worth of insurance and my client has, say, $500,000 worth of damages, I’m absolutely going to look to see what you have as far as assets before I settle for the $100,000. I’ll look at the house you own, the job you have, etc. in making that determination. I won’t be able to automatically see your bank statements but if I think you’ve got the assets or you’ve got the potential to have the assets (either now or paid back over a few years), I’m going to keep the lawsuit going until I get something from you personally, above your insurance limits. In fact, I’ve got a duty to my client to maximize their return. To most people, $10,000 or $25,000 is a lot of money they don’t have and I’d agree with the statement that overwhelmingly I don’t seek anything above the insurance limits. But . . . if the money is there, there’s no way I’m going to leave it on the table when my client has unpaid bills or pain and suffering just because you didn’t buy enough insurance.’ Randy: ‘I am an insurance defense attorney in VA. One important aspect of auto insurance was left out of the discussion in your most recent post. Your auto insurance is there not only to cover any liabilities but also to cover your own injuries and those of the passengers in your car, assuming you have comprehensive coverage. Also, if someone hits you and they have no auto insurance or a small policy, your auto insurance will likely cover your injuries and damages, up to your policy limits, under the uninsured / underinsured section of your auto insurance policy. Your readers should contact their insurance carriers for more information about their specific policies.’ Chris: ‘You didn’t point out the moral dimension. By buying low limits, you are wrongly forcing the injured party (and, to a certain extent, the state) to subsidize your driving. It is notable that in Europe many countries have mandatory unlimited coverage. There are problems with this, too – people tend to milk the system – but it is morally superior to buy the higher limits (and a personal umbrella on top of that). Stephen Willey: ‘As a NYC limo/taxi operator, I certainly had more than your typical amount of interactions with insurance companies and most were not pleasant or scrupulous to say the least. I think that you might have overlooked a point that we learned through tough experience regarding liability limits. When you have minimum coverages, it is often more economical for the insurer to essentially cave in and not really pay for a maximum defense of your case, as the legal costs might exceed the limits that they have at stake. As a result, the insured receives no – or trivial – representation in their defense. You stated that most people are ‘judgment proof’ but I’m not sure I agree, especially given the current level of real estate pricing. My taxi owner partner bought his attached brownstone in Boerum Hill, Brooklyn for 90k in 1974. It is now ‘worth’ 1.5 million. His wife was involved in an accident that was clearly not her fault but they only had 10k in coverage so her carrier caved. She had to hire her own attorney to defend the accident because her house was on the line. My experience is that with high limits, the carrier takes your defense much more seriously as their assets are now on the line and not just yours. With maximum coverage, you get the senior defense attorney and not the paralegal and they aren’t nearly as quick to tell you that the case is going to be lost and you have to settle. At 10k maximum exposure, their interests and yours are not nearly as aligned as when they have 500k at stake. Even better, getting an umbrella with the same carrier for 2 million coverage for a couple of hundred dollars extra a year, really gets them on your side when claims against you come up. Now it is their ass on the line and not just yours.’ Jon Baumgardner: ‘Costco has the best auto insurance deal in New Jersey. I can’t believe you wouldn’t know that. I got my auto insurance for about half of the reptile and Progressive. The auto insurance at Costco is available in 45 states.’ TOPLESS WOMEN The best solution to the auto insurance problem would be to have no accidents. What if your car would not start without your passing a breathalyzer test, as is being discussed? What if you had hot topless women holding up speed-limit signs to slow down passing motorists?
Kuo December 1, 2006March 5, 2017 TITLE SEARCH A New Orleans lawyer sought an FHA loan for a client who lost his house in Hurricane Katrina and wanted to rebuild… He was told the loan would be granted if he could prove satisfactory title to the parcel of property being offered as collateral. The title to the property dated back to 1803, which took the Lawyer three months to track down. After sending the information to the FHA, he received the following reply: (Actual letter): “Upon review of your letter adjoining your client’s loan application, we note that the request is supported by an Abstract of Title. While we compliment the able manner in which you have prepared and presented the application, we must point out that you have only cleared title to the proposed collateral property back to 1803. Before final approval can be accorded, it will be necessary to clear the title back to its origin.” Annoyed, the lawyer responded as follows: (Actual Letter): “Your letter regarding title in Case No. 189156 has been received. I note that you wish to have title extended further than the 194 years covered by the present application. I was unaware that any educated person in this country, particularly those working in the property area, would not know that Louisiana was purchased, by the U.S., from France in 1803, the year of origin identified in our application. For the edification of uninformed FHA bureaucrats, the title to the land prior to U.S. ownership was obtained from France, which had acquired it by Right of Conquest from Spain. The land came into the possession of Spain by Right of Discovery made in the year 1492 by a sea captain named Christopher Columbus, who had been granted the privilege of seeking a new route to India by the Spanish monarch, Isabella. The good queen, Isabella, being a pious woman and almost as careful about titles as the FHA, took the precaution of securing the blessing of the Pope before she sold her jewels to finance Columbus ‘ expedition. Now the Pope, as I sure you may know, is the emissary of Jesus Christ, the Son of God, and God, it is commonly accepted, created this world. Therefore, I believe it is safe to presume that God also made that part of the world called Louisiana. God, therefore, would be the owner of origin and His origins date back to before the beginning of time, the world as we know it AND the FHA. I hope you find God’s original claim to be satisfactory. Now, may we have our damn loan?” He got the loan. ☞ This is bogus, but fun. TOEVS ON KUO From Jim Toevs, a friend in Montana: My next door neighbors here in Hot Springs, Montana, are wonderful folks. They are the quintessential good neighbors, in the best “Old West” sense of the word. We have never shared a meal together, but we have exchanged baked goodies on occasion, and we have an unspoken mutual understanding that we can always count on each other in any kind of an emergency. They belong to an independent conservative Christian church here in town, but they have never tried to proselyte me, and I know from something the woman said, that they voted for Al Gore in 2000, and this year, they had a big sign for a Democrat State Legislative candidate on their property. They know that I am gay, but we have never talked politics. However, being a former Christian, myself, I was interested to consider how the Mark Foley and Ted Haggard scandals would affect the Evangelical turnout and their votes in the 2006 General Election. About a month before the election, I started seeing op-ed pieces by a man I had never heard of, named David Kuo, who had just written a book entitled, Tempting Faith. David Kuo was the number two person in the Faith-Based Initiative Office in the Bush White House, who resigned when he saw the way in which the Bush political apparatus was using Evangelicals for purely political purposes. After reading a couple of his articles in the press, I decided to buy the book to try to understand the impact it might have on the religious right. As I read the book, my neighbors kept coming to mind, and yesterday morning, I decided to take a risk, and took the book over to my neighbors. I said that I had found the book interesting, and that I thought they would as well. I only said something very general about it being about the seductive nature of power and politics. Unbeknownst to me, fifteen minutes after I left their home, their pastor showed up. He saw the book sitting on the kitchen table and exclaimed, “That is a VERY important book! I have a copy, and between the two of us, every member of our congregation is going to read it!” My neighbor could not wait to call me on the telephone and thank me for the book. I believe Tempting Faith will break the Conservative Republican hold on many Evangelical Christians. You may not choose to read the book, but at least Google David Kuo and read some of his recent op-ed pieces. If Progressives are going to claim the political center, which I believe we must do if we are to build a viable national political movement, it is important to understand that we can no longer assume that Conservative Christians are captives of the Right Wing Republicans. ☞ Kuo’s latest New York Times op-ed. INCONVENIENT DVD MM: ‘It’s at Netflix, here. And for what it’s worth, all 48 copies were rented all last weekend at the local Blockbuster near Hartford CT.’ FIGS Andy Maltz: ‘Cut the figs in half, grill them until almost black, top with a dab of marscarpone and square of proscuitto. I don’t like figs, but this is incredible!’ ☞ I tried this, but couldn’t find the ‘grill’ setting on my microwave and have no idea what marscarpone is, so I just popped the fig into my mouth. Not bad that way either. MOYERS Ralph: ‘You should really have given a warning about the Moyers speech at West Point. I frequently read your blog with my first cup of coffee at work and then settle down to my daily tasks. By the time I got to Emily Perez I was nearly weeping with anger and shame and profound sadness. I am now useless at work for at least the next hour.’ ☞ From now on: warnings.