Let Your Profits Run? But Never With Scissors January 28, 2021 PRKR was up another 30% yesterday, briefly hitting $1.05 before closing at 97 cents. This analysis values the shares at “a probability-adjusted $10.64.” The report was paid for by the company. Though the authors do have a degree of independence, one can assume the report is largely based on the company’s own views. If PRKR loses all its lawsuits, the stock would likely be worthless. And if it wins one or more, who’s to say they will win nearly as much as the authors assume? On the other hand, if the company does win its lawsuits, then the 62% probability of success that was used to weight the results goes to 100% and the $10.64 goes to more like $17. And if the company were to be awarded interest and legal fees — and/or the judge in the Qualcomm case decides to award something approaching the treble damages he’s authorized to impose, I would never have to work another day in my life. I can’t say whether $10.64 is a fair probability-adjusted valuation for PRKR shares. But cut it in half. And then cut it in half again. And still the stock could more than double from here. With money you can truly afford to lose, it may still be a good bet. (And unlike BOREF, we may not have six million years to wait. The biggest of the trials is set to begin little more than three months from now.) Fred Campbell: “CTHR has doubled. Is it time to take any profits?” → Suggested last March around 77 cents, it closed last night at $1.67, up 13% on very heavy volume. I like to think someone smart thinks it’s undervalued. I’m in no rush to sell. > “Cut your losses and let your profits run” was the mantra of many a millionaire. So don’t sell! A year or two from now, CTHR could be $3! > “The bulls make money and the bears make money — but the pigs get slaughtered.” Don’t be a pig. Take your double and sell! > He who hesitates is lost! Yet haste makes waste! I’m so confused! So maybe do what King Solomon did? Sell half, to recoup your investment, and hold the rest?
43 – 26 – 74 – Hike! January 27, 2021January 26, 2021 Tom Brady is going to the Super Bowl for the millionth time. How does a 43-year-old stay so sharp? Brain HQ. Have you done your brain exercises today? If you can get your parents to spend 30 minutes a week on this, there’s peer-reviewed reason to believe you’ll meaningfully lessen the odds of having to care for them with dementia years from now. And to believe that they’ll have fewer, less severe auto accidents (because their reaction time will be faster). So I continue to nag.* *And continue to own a sliver of the company. PRKR had a good day yesterday. The judge denied Intel’s request to move the case to Oregon . . . sided with PRKR’s framing of the 26 disputed “terms” to be considered by the jury . . . and then said (in effect), “But hey, folks, there are nine separate patents in dispute here.” After which one might have expected him to say, “Which is way too many for a jury to cope with, so pick your three or four strongest, Parker, and we’ll go with those.” But no. Instead he said (in effect), “So what we’re gonna do is have two trials, with two separate juries, each one considering four or five of the patents.” The first trial to commence February 7, 2022; the second, about two months later. This strikes me as good news all around: > Intel may one day have to pony up. > Four smaller firms PRKR has sued in the same court might see yesterday’s ruling as a reason to settle rather than litigate. > And Qualcomm? The real black hat in this story? Different court, different law firm, much bigger potential damages — scheduled to go to trial May 3. Having bought a ridiculous number of shares at a dime and then a ridiculous lot more at 35 cents, I may lighten up a bit if and as PRKR — 74 cents last night — approaches a dollar. But my dream is to sell most of it a lot higher. And to get rid of the filibuster. (Worth the read.)
Strength January 26, 2021 Behold the Biden Cabinet: competent, honorable, diverse. Competence and integrity come first. But having a Cabinet not primarily limited to straight white men adds to its strength: (1) By widening the available talent pool. (2) By making more people see themselves in their government and thus more likely to root for its success. (As gratifying as it is to see the nation’s first openly gay Cabinet Secretary, it may be even more moving to see a native American Secretary of the Interior. The justness of it fairly screams.) There’s strength in competence, integrity, and diversity. And then there’s that other kind of strength, as detailed in Ruth Ben-Ghiat’s Strongmen: Mussolini to the Present. Corrupt thugs and bullies — like mobbed-up Trump who for years kept a book of Hitler’s speeches by his bedside and who, as President, felt most comfortable with strongmen around the world who murdered journalists and poisoned their political opponents. With that in mind, two just-released documentaries for your consideration: Putin’s Palace: History of the World’s Largest Bribe. Since last week, it’s been seen 80 million times in Russia. It’s free. You’ll see why Trump so admires Putin. The Dissident, about the Washington Post journalist the Saudis dismembered with a bone saw. Wait til you see how the Saudis used Israeli spyware to control Jeff Bezos’s phone. The film costs $25 but when it wins the Oscar, you’ll be able to tell folks you saw it way back in January. Trump’s condemnation of Mohammad Bin Salman, who ordered the murder, never came. BONUS The Order of the Day, a very short book about Germany’s most powerful businessmen and politicians, and how they came to be cowed by Hitler. If he had wanted them to overturn the results of a free and fair election, you can bet they’d have voted to do it.
The Inauguration . . . PRKR, BOREF, CNF January 24, 2021February 11, 2021 How great was it to see Hillary Clinton wearing a Charles Nolan scarf at the Inauguration? (Long-time readers know that I’m a non-genetic Nolan.) I would never have recognized it myself, but one of his surviving brothers, Kenneth, called to tell me. (Kenneth is also a designer; Congresswomen frequently wear his clothes.) But wait — there’s more. Another of Charles’s brothers, David, is a priest. Guess whom he was blessing while she was in make-up before going out to sing the National Anthem? David would never have told me this himself — modesty runs in the Nolan family. Kenneth told me. So I called David for permission to tell you. It seems Mr. and Mrs. Gaga have long been his parishioners. Her dad came by the morning of the Inauguration to ask if they could Facetime his daughter for a blessing. As a result of which (no doubt), she knocked it out of the ballpark. Can you tell how proud I am to be a Nolan? In case you missed the Inaugural Concert, here are Springsteen, Tom Hanks, John Legend, Katy Perry and loads more — with Presidents Clinton, Bush, and Obama in conversation. Pretty cool. In case, on the other hand, you refused to watch because you believe your guy was robbed, John Stuart Mill explained why, way back in 1869. Wayne A.: “I was reading an old post where you suggested FedEx as a core holding. A quick check shows that suggestion would have garnered an 11% annualized return over the 25 years since. Plus dividends.” → The same money invested in BOREF when I first mentioned it (A Stock That’s Surely Going To Zero) would barely have doubled . . . which over those 21 years is a 3% compounded rate of return. The difference between 3% and 12% (I’m adding 1% for the FedEx dividend) is the difference between $1 growing to $4 over 50 years versus $289; so I’d advise you, wherever possible, to find investments that compound at 12%. And to eat well, floss, and walk up and down hills. The question for those of us who’ve bought BOREF — many of us, including me, paying a lot more than that initial $3 a share — is: will the pay-off ever come? Could BOREF hit $100 a few years from now, on (say) the 25th anniversary of my first mention? Probably not, I guess. (I don’t want to get my hopes up.) Though if it did, it would represent a 15% annualized return on our by-then-25-year investment, leaving FedEx in the dust. And yet part of my brain says, yes! They just keep moving forward (last week: WheelTug Joins IATA As A Strategic Partner). And at $100 a share, BOREF would be valued at $500 million — a lot to you or me, but a trifle compared to the economic benefit of cutting a few minutes off the ground time of thousands of commercial flights each day. With WheelTug, airlines and airports could potentially increase their capacity by 10% or 15% without buying a single new plane or hiring a single new worker or building a single new terminal. And passengers? How pleased would we be to shave 10 or 20 minutes from the ground time of each flight we take? So I hold on. Patience is my middle name. PRKR — I bought a little of this one at $1 and a lot more at a dime. It’s been creeping up lately, likely in hopes of a favorable “Markman ruling” in its case against Intel this week. If the ruling proves unexpectedly negative, the stock will tank; and if it proves positive, the stock might tank (“buy on the rumor, sell on the news”) — or it might find a new higher plateau. All that really matters for patient investors (have I ever told you my middle name?) is whether someday a final judgment or settlement is reached in one of PRKR’s lawsuits that floods its coffers with cash. If that ever happened, the stock would presumably trade a lot higher than its 67-cent closing Friday. A triple from here? A tentuple? The broader issue is whether people who invent new things — and spend millions patenting them — can reap rewards from their inventions. The odds have become stacked ever more heavily against them. Which may be one of the reasons former FBI director Louis Freeh decided to join the PRKR legal team. America was built on invention. (Well, slave labor; but invention, too.) So what to do? It’s a conundrum: > At one end of the spectrum you have meritless patent claims filed solely in the knowledge that — being so expensive to defend — the “patent troll” may get bought off. Every reasonable means should be found to discourage such claims. > At the other end, you have clear cases of patent infringement that should (somehow) be expeditiously remedied. > In the middle are a great many legitimate, often-complex disputes where both sides strongly believe in the validity of their position. How to make those quicker and less expensive to resolve? Believing the system has come to be badly skewed in favor of giant corporations, US Inventor was formed to pull the pendulum back toward the center. Its 40,000 members have access to a monthly live webcast. PRKR’s CEO was interviewed last week. If you own the stock (or are simply interested in the conundrum), watch and decide for yourself whether you think he is an abused inventor or a patent troll. (To skip the brief overview, jump right in to where Jeff starts talking.) CNF — The stock has performed miserably but remains one of my largest speculations. I know one of the people involved, who’s both honest and successful; and I think China’s growth may continue.
The Other Pillow Guy* January 22, 2021 The reason you have to read Nick Hanauer’s “pitchforks” letter to his fellow billionaires again, even if you yourself are not a billionaire, is that it informs all the debates we’re likely to have in the next few months — and forever — about who gets what. How high should your taxes be compared to mine? How high should the minimum wage be — if we have one at all? Should CEO’s typically make 30 times what their employees do or 500 times? Forget “fairness,” he says. Appealing to fairness just plays into the stereotype of the bleeding heart liberal. Appeal, rather, to self-interest! We should be leaning against inequality because it will make us ALL richer in the long run. Addressing his fellow billionaires, he writes: . . . [F]orget all that rhetoric about how America is great because of people like you and me and Steve Jobs. You know the truth even if you won’t admit it: If any of us had been born in Somalia or the Congo, all we’d be is some guy standing barefoot next to a dirt road selling fruit. It’s not that Somalia and Congo don’t have good entrepreneurs. It’s just that the best ones are selling their wares off crates by the side of the road because that’s all their customers can afford. . . . The oldest and most important conflict in human societies is the battle over the concentration of wealth and power. The folks like us at the top have always told those at the bottom that our respective positions are righteous and good for all. Historically, we called that divine right. Today we have trickle-down economics. What nonsense this is. Am I really such a superior person? Do I belong at the center of the moral as well as economic universe? Do you? My family, the Hanauers, started in Germany selling feathers and pillows. They got chased out of Germany by Hitler and ended up in Seattle owning another pillow company. Three generations later, I benefited from that. Then I got as lucky as a person could possibly get in the Internet age by having a buddy in Seattle named Bezos. I look at the average Joe on the street, and I say, “There but for the grace of Jeff go I.” Even the best of us, in the worst of circumstances, are barefoot, standing by a dirt road, selling fruit. We should never forget that, or forget that the United States of America and its middle class made us, rather than the other way around. Or we could sit back, do nothing, enjoy our yachts. And wait for the pitchforks. Nick’s full piece is so worth your time. If we could get the pie growing for almost everyone, as it once did, and not just for those at the very top, demagoguery might not find such a willing audience. January 6th’s insurrection might never have happened. *Not this pillow guy, for sure.
How Great Was That? January 21, 2021January 20, 2021 Decency restored. Hope renewed. Have a great day.
You Respond To Umair Haque January 20, 2021January 20, 2021 But first: A new day dawns. Hope reborn for those who side with America’s intelligence professionals over Putin. With journalists over journalist-murderers. With decency over vulgarity, honesty over nonstop lies. There’s so much work to do, but at least now we have a shot. And now: John Frager: “Thanks for posting [Umair Haque yesterday]. After 40+ years in the Republican party, I’m abandoning them. Perhaps the only benefit of Trump’s behavior is that more moderate Republicans will come to their senses.” Joel Margolis: “Haque aserts: <<White Americans as a social group have never voted for a progressive President, ever, not even Joe Biden.>> Could you explain how Teddy Roosevelt, Franklin Roosevelt, Harry Truman, Lyndon Johnson got elected president?” → Great question. I went back to the piece and saw that what you quoted was linked to another of his pieces wherein he makes clear he is referring to “modern history” at least as far back as 1968. He should have made that clear in his “Three Big Lies,” and you are right to point this out. But he might also ask you: would white Americans have elected LBJ in 1964 if they had known how hard he would fight to get black folks the Voting Rights Act of 1965? Would they have reelected Kennedy after he had stood with civil rights leaders? We’ll never know. White voters did elect Truman months after he integrated the military; but in such a squeaker that many papers famously declared Dewey the winner. At a time of tremendous prosperity, wouldn’t reelection ordinarily have been a breeze? Had just a few more white voters rebelled against that executive order, you’d have to go back to FDR to find a progressive backed by a majority of whites. And even FDR didn’t do much noteworthy for equality until after his final reelection. As for his fifth cousin Teddy — a progressive Republican — “his conviction that white men of European descent were innately superior informed his actions on matters from national parks to foreign policy.” So I’m not sure we can dismiss Umair Haque’s assertion, let alone his whole piece. Harris Barer: “Does Haque really hate America this much?” → I’m guessing from what I’ve read of his work that he loves the America of invention (Franklin! Edison! Bell! the Wright Brothers! Steve Jobs!) but hates the America of slavery, Jim Crow, and shooting unarmed black people in the back. That he loves the America that defeated Hitler and stared down communism, but hates the America where neo-Nazis stormed the Capitol as the president watched gleefully on TV. That he loves America’s natural bounty, but hates that America among all the nations of the earth left the Paris Climate Accords. Blind loyalty to everything America does is not what the Founders intended at all. Enjoy the festivities.
The Three Big Lies January 19, 2021January 18, 2021 Now that the election is over, rightwing outlets are admitting their claims the election was rigged were baseless. False. Wrong. Irresponsible. LIes. But once out there, it’s so hard to get toothpaste back into the tube. By Umair Haque (emphasis his): Trump Told Three Big Lies — and They’re Ripping America Apart The Three Big Lies That Hide the Ugly Truths America Still Doesn’t Want to Confront By now, the story of the last few weeks has become dismally clear. There was, it seems, a hard coup at the US Capitol, carried out by extremists, which was planned, organized, and funded, apparently possibly by Bitcoin payments — whose goal was to capture, hold hostage, and assassinate legislators. Three words: white supremacist terror. Designed to overthrow the government. And it came this close — the blink of an eye — to success. Why? All because of a Big Lie. Trump’s told three formative Big Lies over the last five years. And while Trump may be on his way out of office, the Big Lies are going to outlive his Presidency. Millions upon millions of Americans believe them — and they are going to keep on ripping America apart. Unless, that is, I suppose, the Ugly Truths they try to hide are revealed, understood, shared, and discussed. So let’s talk about Trump’s three Big Lies — and the Ugly Truths they are designed to hide. Let me begin with the first Big Lie, and we’ll trace the whole series of them backwards, one by one. Why did Capitol Hill get assaulted by fascists, who shot it up, planning to, let me say it again, assassinate legislators? Because of Trump’s first Big Lie. The most recent one. “The election was stolen from us.” I predicted he’d say that, and I wasn’t kidding. It’s what fascists do — twist reality inside out, in order to gaslight you, and keep their movement alive. It’s hardly just the extremists who assaulted the Capitol though. How many Americans believe this Big Lie? The answer’s chilling. Massive, massive numbers do. About half of Republicans believe the election was stolen from them. That’s 35 to 40 million people. Trump’s Big Lie about the election being stolen wasn’t just obviously going to result in a coup attempt. That is what it was designed to do. To provoke one, embolden one, and then to justify one, after it happened. Imagine for a moment that the terrorists who stormed the Capitol had been successful at the massacre of legislators they’d planned. Where would America be right now? Trump would probably be declaring martial law, and postponing the inauguration. The GOP would probably back him. America would be on its way to full blown authoritarian rule. Why do so many Americans believe this Big Lie — as obviously false as it is? One answer is that social media radicalises them. They live in alternative realities, universes of lies, which no truth ever penetrates. But that’s only a partial answer. A better one, a truer truth, is that millions of American believe the election was stolen from them because it is what they want to believe. Trump is just pandering to their biases. White Americans — sorry, here we go, we’re going to have to talk about race, because this was a white supremacist coup — backed Trump all over again as a majority. They are the ones who believe the election was stolen from them. And that is because white Americans, as a social group — maybe not you, but on average — believe America belongs to them. That is what a supremacist society is, and until 1971 or thereabouts, America was the world’s largest apartheid state. 1971 wasn’t so long ago — and so it’s hardly surprising that a majority of white Americans believe America belongs to them. Ergo, “the election was stolen from us!” It’s just another way of saying: “What we want happens around here! This country doesn’t belong to all those minorities and strangers and foreigners and immigrants! Why, they used to be my grandaddy’s slaves!!” Who’s the us in “the election was stolen from us”? White people. Remember, America was a white supremacist society for centuries — not the genuine democracy America’s only been trying to be for a mere handful of decades. They might not know it or admit it — but what else were they voting for Trump for? Trump pandered to this bias in his raging propaganda over the last few months — but the bias existed long ago, and has never moved an inch, and you can see that in the stark fact that white Americans as a social group have never voted for a progressive President, ever, not even Joe Biden. Why “the election was stolen from us!” was so seductive, seemed to infect white America like a plague of stupidity — it makes a lot more sense when you understand all that, especially the fact that white Americans as a social group do not want to live in a society of equals to this very day. “Us” means white people, the more than half of them who are Trumpists, fascists, fanatics. Big Lie: “the election was stolen from us!” Ugly Truth: that “us” is white Americans, who, as a social group, still think the country should belong to them, and anything else must be theft, to be fought, then, justifiably, by force. And so it was almost inevitable that a hardcore minority of white people who seem to believe that America belongs only to them — and so the election was stolen — would act violently to steal it back. Especially when their President licensed them to do so. It was just a few weeks ago that Trump put the Proud Boys on “stand by.” For what? For the coup. And then…he said go. Why do white Americans think America belongs only to them? How does supremacy translate in the modern context? That brings me to Trump’s second formative Big Lie. This one is hidden in plain sight, where almost no one sees it. “The Swamp has failed you!” Trump’s said the equivalent of all that, over and over again, meaning: all those corrupt and nasty elites in DC and Manhattan could care less about you, the average formerly working class usually white person, who now lives a life of poverty and despair. It’s true that American elites are venal, foolish, and corrupt, like their Soviet counterparts. But they are not the reason that the average white American’s life fell apart. The Swamp was not what destroyed America’s prosperity. What or who destroyed America’s middle and working class? Americans did. I know that sounds extreme, but hear me out. Who was responsible for even white Americans not having decent healthcare, retirements, jobs, incomes, savings? It wasn’t the Swamp. It was just what Americans — especially white ones — themselves voted for, over and over again. So what happened? Instead of having affordable healthcare and education and retirement, even white Americans soon enough had to pay astronomical amounts for such things, the kinds of amounts America’s now famous for, $50,000 for childbirth, $150,000 for an operation, $400,000 to send a kid to college. And that is what produced massive poverty, destroyed the middle and working class, White Americans have never voted for the social contract of a modern society, like Canada or Europe, where everyone enjoys decent levels of basics, offered by public institutions, like healthcare or retirement or jobs. Never. Why not? The answer, again, sadly, is racism. The average white American voted against any kinds of public institutions or goods because they thought to themselves: “Those minorities don’t deserve such things! I won’t pay for their healthcare and retirement!” Racism cost America a functioning social contract. White people as a social group made a choice — better to stay supreme atop a failing society, than be equals in a functioning modern one. That is, better to be poor and have the status and power of whiteness, than to be better off economically, financially, materially, but less socially and culturally powerful. They chose not to have a functioning society even if it included them. Who else in the world votes against their own healthcare and retirement? Only, across the entire world, white Americans. That is how the Swamp in DC didn’t destroy America’s middle and working class. It destroyed itself. DC became a place of corrupt, foolish, Soviet-style officials — because that is what white Americans voted for. It didn’t become a city of, say, an American Healthcare System or American Retirement Fund because, full of public servants working nobly to make everyone better off, because American whites didn’t vote for that. That’s all a little complex and subtle, and nobody much tells this story, so let me summarize. The Big Lie: the Swamp destroyed America’s working and middle class, especially the white part. The Ugly Truth: Americans destroyed their own prosperity, upward mobility, futures, because white ones denied everyone else in America as a whole the chance to have a modern social contract, just because they didn’t want any other group to be equal to them. And that brings me to the Big Lie at the heart of it all. How did Trump rise to power? He told Americans something they had believed for centuries, and only been asked to stop believing in relatively recent times. Trump’s blamed the average American’s woes on minorities, others, immigrants, refugees. He scapegoated powerless groups in society for the struggles the majority now faced. But the majority’s lives had fallen apart, as we’ve discussed, through their own choices. Americans, especially white ones, are why America doesn’t have any functioning institutions — that’s what they voted for. And yet nobody wants to admit their mistakes, do they? So this Big Lie was catastrophically successful. The average American, whose life had fallen apart, simply ate it up, especially the white one. Who was responsible for the fact that 80% of Americans lived pay check to paycheck, couldn’t raise a tiny amount for an emergency, lived and died in unpayable debt? Why, it was those minorities. Why? Because they weren’t like us. They weren’t pure in blood and true in faith. There was something inferior about them. We were the superior ones, the master race. It was our inherent genetic destiny to be… Great Again. That was the first and formative Big Lie. “Make America Great Again!” What did it always mean? “White People are the masters, and everyone else the slaves. Whites are genetically superior. Everyone else is inherently inferior. Restore America’s destiny! Make it a nation of the pure-blooded and true-hearted again!!” MAGA was always a thinly, barely veiled fascist appeal, one so naked that it was obscene. And yet it went unchallenged, more or less, in America, and still does. I want you to think about this carefully. When was America great, if we needed to make it great “again”? It was an apartheid state until 1971. And Trump was harkening back to some nostalgic past, some garish, surreal utopian 50s suburban daydream, lit with burning crosses by night, where not a minority lived in that perfect suburb of gleaming new appliances. “Again” wasn’t the 90s, when those Dems rules. It wasn’t the 80s, when those scummy yuppies did. So when was it? It was just before. Before civil rights. Before equality, before gay rights, before women were equals, before. MAGA was always just a naked atavistic call to arms. Let us return to before. Before when? Pick your grievance? Hate women? Cool, before women could vote. Hate minorities? Cool, before they could drink from the same fountains. Hate the LGBTQ? Good, before they could marry. Hate them all? Excellent — let’s work together to bring it all to life, all the hate, and build some kind of Handmaid’s Tale style dystopia, by way of Mein Kampf. I mean this seriously. When was America “great”? Was it during World War II, when America fought off the Nazis — but was still the apartheid state the Nazis studied, admired, and wanted to build? Was it after slaves were freed — but Jim Crow was soon passed? When? I’m not saying: America was bad, evil, terrible, and so on. I don’t know — you have to judge that for yourself. But I am saying that MAGA was the original Big Lie. Maybe the intentions of the framers were “great.” Certainly, though, the execution left a lot to be desired. America didn’t evolve into a nation where all people were free to pursue life, liberty, and justice equally. It became an apartheid state. And so MAGA stopped dead any real conversation or discussion about how America had got here. Where was here? To a fascist in the White House. Instead, it was accepted that this numinous, vague goal of American “Being Great Again” wasn’t thinly veiled code for: “white people should have all the power, because they’re inherently superior, and that is how they ‘founded’ this country. Never mind the slavery, genocides, and hate!” And because that was never challenged, it was predictable that Trumpism was going to end in white supremacy, which is what it had always been. Big Lie: MAGA! Ugly Truth: Trumpism was always white supremacy, a movement of it, which, when politically applied, is better called fascism. I don’t think America’s even begun to discuss the Ugly Truths that Trump’s Big Lies were designed to hide. The fact that millions of Americans believed these Big Lies not just because Trump told them particularly well, but because they wanted to, and they wanted to because that is what they had been culturally and socially conditioned to do all their lives long. Trump’s Big Lies are going to go on ripping America apart long after Trump is gone. Millions upon millions of Americans believe them. And Trump will be there, repeating them in even more extreme ways, now that the shackles of the Presidency are removed. The millions of American who don’t believe them are going to find themselves amidst a radicalised society, where their friends, colleagues, and neighbours seem to believe things that are at odds with reality — and some, maybe many, back real, lasting, and serious violence to apply politically and socially too, just like the fanatics did on Capitol Hill. The only way that Trump’s Big Lies don’t go on ripping America apart is if Americans are ready to face the Ugly Truths those lies are designed to hide — ugly truths about themselves. Nobody wants to do that. I get it. It’s hard, uncomfortable, stressful work, facing the ugly truth. And yet America is where it is today because it has done far too little of it yet. One day more.
Two Harvard Grads Still For Trump January 18, 2021January 18, 2021 I’ve been watching Fran Lebowitz on NETFLIX, listening to Colin Jost on Audible, and reading The Order of the Day. The first two, big fun. The third, in the words of the BBC: “Extraordinary, disturbingly relevant.” (“. . . Goering had had it up to here with those stupid Austrians. Why couldn’t they just leave him the hell alone, already! But Hitler saw things differently. Miklas had better accept that resignation, he screeched, a telephone receiver in each hand. That’s an order! It’s strange how the most dyed-in-the-wool tyrants still vaguely respect due process, as if they want to make it appear as though they aren’t abusing procedure, even while riding roughshod over every convention.”) The other thing I’ve been doing: trying to figure out how to get Still Trumpers to reconsider. It won’t be easy — witness A QAnon ‘Digital Soldier’ Marches On, Undeterred by Theory’s Unraveling. (This particular soldier, a woman in her 50s with a Harvard degree.) These four minutes make you think: which America are we? We are both. But look: Objectively, either Trump did win by a landslide or he didn’t. (He didn’t.) Objectively, either millions of good people were tricked into believing he did or they weren’t. (They were.) Someone has to be correct here. The truth cannot lie “someplace in the middle.” The earth is flat, as almost everyone once believed, or it is round, as almost everyone believes now. The answer isn’t based on an opinion poll — it’s based on what’s true. The people caught up in Trump’s cult truly believe they’re on the right side of all this. I don’t blame them for getting scammed, I blame Trump for scamming them. And all those, like Rupert Murdoch and Ted Cruz and Fox News — and Zuckerberg — who knowingly enabled him. It’s so hard. A college classmate emails that he’s gotten the following from several of his friends over the past few days, and that it sums up how he feels, too: Win, lose or fraud…President Trump. I just want to say thank you for the last four years. Thank you for making it cool to be an American again. [Many of us thought it was cool when, say, we saved ourselves and the world from a deadly Ebola pandemic. Or when we saved ourselves and the world from the global depression on the edge of which it teetered at the end of 2008. Or when we led the world in adopting the Paris Climate Accord.] Thank you for showing us that we don’t need to be under China’s thumb anymore economically, or any other way. [By scuttling Obama’s TPP, we handed China a huge win. Then imposed tariffs on average Americans buying Chinese goods. And drove American farmers to suicide.] Thank you for one of the strongest economies we’ve ever experienced in my lifetime. [Trump is the only president other than Herbert Hoover to have lost jobs on his watch. Fewer jobs were added in his first three years than in Obama’s last three — and Obama did that while bringing the deficit under control, while Trump exploded it even before Covid.] Thank you for all you have done for the minority communities. [If true, why didn’t they vote to re-elect him?] Thank you for making it feel good to love our country and to be a proud patriot again. [Many of us were prouder before Trump began siding with journalist-murdering dictators and making ours the only country on earth to exit the Paris Climate Accord.] Thirteen more thank you’s follow — those are just the first five — for each of which one could offer a different point of view. But my goal is not to get Trump fans to feel about Trump as I do. For me, it would be enough to have my classmate say . . . << Well, he did a lot of good things — and MAYBE some not so good things — but either way, Biden won. In Georgia, the closest of the contested states, the paper ballots were counted and recounted (and recounted again) by Republicans who themselves had hoped Trump would win. >> So, just as the crowd on the Mall at Trump’s Inauguration was NOT “the largest in history” — an objective fact — so, too, sadly, did not enough Trump supporters turn out to reelect him. We shouldn’t be gleeful watching rioters storm the Capitol for the first time since the War of 1812. We shouldn’t cheer as the Confederate Flag is waved inside the Capitol. That’s not the kind of patriotism that will make us stronger or more prosperous. We shouldn’t try to kill Nancy Pelosi and Mike Pence . . . or tell people Hillary was running a pedophile ring out of the basement of a pizza parlor that had no basement . . . or tell them that FBI directors can’t be trusted but Putin can . . . or that the Wall Street Journal can’t be trusted but that Q can. Let’s start looking instead for common ground, of which there is just so, so much.
Of Insurrection, Inequality, And Your Stocks January 15, 2021January 15, 2021 FOURTH QUARTERLY ESTIMATED TAX DUE TODAY (unless you’ll be filing your return, with any balance due, by February 1) INSURRECTION This piece argues that what Republicans did shortly after the insurrection was worse: . . . The 139 representatives and eight senators who voted to reject the results of a democratic election, were certainly well mannered—speakers wore formal clothes such as ties and suits rather than the outlandish outfits of the mob. The legislators adhered to time limits rather than putting their feet on desks while hamming it up for photos. But this veneer of respectability makes what happened on the floor more dangerous, by making it harder to recognize as a violation of democracy. The legislators were there to count the votes certified by the states—after months of review by election officials, and after endless court challenges were rebuffed—and, instead, they voted to throw them out. They did this after months of lying to the public, saying that the election had been stolen. They crossed every line a democracy should hold dear. To my knowledge, not one of them has yet apologized or recanted for their participation in what even some Republican senators are openly calling the “big lie.” Some, like Senator Ted Cruz, have tried to cover up their attempt to overturn the election by saying that their constituents (and indeed tens of millions of Americans) believe that the election was stolen, and that they were merely honoring their beliefs. However, it was they, along with the president, who convinced those millions of people that the election was stolen in the first place, and that Joe Biden was not the legitimate president-elect. Convincing people of outright lies does not excuse attempts to pander to those lies later; if anything, it makes the whole act more damning for those who carry it out. . . . Worth reading the whole thing, as our democracy hangs in the balance. As is watching Steve Schmidt’s powerful 4 minutes on Morning Joe. “This undemocratic moment must be met head on.” Joe is a conservative former Republican Congressman; Steve worked to beat Obama in 2008. I don’t buy their politics; but I do buy their patriotism. INEQUALITY If the gains of the last four decades had not skewed so heavily toward the wealthy, would any of this be happening? Economic hardship and inequality are fertilizer for fascism and revolt. It’s time once again to highlight Nick Hanauer’s The Pitchforks Are Coming For Us Plutocrats. The fun part is how he made his fortune, but then it gets serious: . . . Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution. And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last. If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when. . . . What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. . . . The most ironic thing about rising inequality is how completely unnecessary and self-defeating it is. If we do something about it, if we adjust our policies in the way that, say, Franklin D. Roosevelt did during the Great Depression—so that we help the 99 percent and preempt the revolutionaries and crazies, the ones with the pitchforks—that will be the best thing possible for us rich folks, too. It’s not just that we’ll escape with our lives; it’s that we’ll most certainly get even richer. The model for us rich guys here should be Henry Ford, who realized that all his autoworkers in Michigan weren’t only cheap labor to be exploited; they were consumers, too. Ford figured that if he raised their wages, to a then-exorbitant $5 a day, they’d be able to afford his Model Ts. What a great idea. . . . the fundamental law of capitalism must be: If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around. On June 19, 2013, Bloomberg published an article I wrote called “The Capitalist’s Case for a $15 Minimum Wage.” Forbes labeled it “Nick Hanauer’s near insane” proposal. And yet, just weeks after it was published, my friend David Rolf, a Service Employees International Union organizer, roused fast-food workers to go on strike around the country for a $15 living wage. Nearly a year later, the city of Seattle passed a $15 minimum wage. And just 350 days after my article was published, Seattle Mayor Ed Murray signed that ordinance into law. How could this happen, you ask? It happened because we reminded the masses that they are the source of growth and prosperity, not us rich guys. We reminded them that when workers have more money, businesses have more customers—and need more employees. We reminded them that if businesses paid workers a living wage rather than poverty wages, taxpayers wouldn’t have to make up the difference. And when we got done, 74 percent of likely Seattle voters in a recent poll agreed that a $15 minimum wage was a swell idea. . . . That was seven years ago. Joe Biden is calling for a national $15 minimum wage. Nick is looking as prescient as he does now for having seen the possibilities, years ago, for a start-up on-line bookseller he funded called Amazon. But the point is . . . ironically, those who stormed the Capitol worship someone — Trump — who’s made the inequality worse, backed by a party that sees tax-cuts-for-the-rich as the solution to almost any problem. Somehow, he’s managed to get them to believe that, despite all evidence, “he alone can fix it.” He paid someone to take his SATs He lied to avoid the military He stiffed creditors with multiple bankruptcies He stiffed contractors and exploited workers He took a full-page ad calling for the death of 5 black teenagers, expressing no regret when it was proven they were innocent He was fined $25 million for the conduct of his “University” He was fined $2 million for the conduct of his “charity” He cheated on his taxes He bragged about “grabbing pussy” He watched gleefully from the White House as the Capitol was being sacked by a mob out to murder senators and representatives and keep him in office But so mesmerizing can a demagogue be — so powerful and enduring can a Big Lie become (his landslide victory was stolen!) — that, well, here we are. Oh! And the Dow is near its all-time high! Which brings me to . . . YOUR STOCKS I’ve recently become a fan of Jim Scurlock’s blog (examples here, subscribe here) and found this one from a couple of days ago sobering: Since it’s been mentioned here—more than once!—that every signal of a market top is upon us, an accounting seems in order: · Stock indexes are all at record highs—not just nominally but also as a multiple of both earnings and quantitative value. · Last year was the busiest year for IPOs since 2000, and this week at least eight new companies are poised to hit the market. BNPL (Buy Now Pay Later) fintech Affirm, the most well-known of the group, lost over $112 million in 2020 and has just been priced at $12 billion. Which, naturally, is above expectations. · There is a pronounced deterioration of quality in new issues, i.e. they’re younger and less profitable than ever. · Financial engineering, aka manipulation, has become too blatant to hide. Many companies have over-leveraged in pursuit of juicing short-term earnings per share while the popular SPAC—aka blank-check company—scheme is a classic symptom of a market gone crazy. Ten SPACs are scheduled to go public this week alone, which kind of suggests that their backers realize time is of the essence. If you know what I mean! · Stock options volume was up 70% last year, and actually accelerated into December. At the same time, there is evidence that stock options trades are far less profitable than they have been historically. · Interest rates are already maxed out at zero, so all the Federal Reserve can do to boost stock prices is inject money directly into the markets. However, there is no longer anything the Fed can do to boost profits. · Name games, not prevalent since before the dot-com collapsed, have resurfaced. Nikola is a prime example, chosen for its association with Tesla. Also there’s a SPAC whose symbol is LMFAO. · Performance funds, i.e. funds that buy growth stocks regardless of price, are in vogue. · A record number of foreign companies, many Chinese domiciled in the Caymans, are going public on U.S. exchanges. · Momentum, i.e. the belief that the higher stocks go the safer they become, is once again the market’s reigning dogma. · A lot of smart money is staying out. See: Warren Buffett, private equity, etc.. · Scarcity trades, most notably in crypto-currencies and real estate, have surged as investors chase yield in the riskiest of places. · Day-trading in new and unproven technologies is rampant. AI, biopharma, EVs and solar/alternative energy are all areas where unsophisticated investors are placing bets. Even if the technology itself is proven—and in many cases it is not—the profitability of all of these technologies remains in question. · Facts are being constructed in order to fit conclusions, none more striking than a fictional relationship between (temporary) interest rates and stock prices. · GM shares hit an all-time high yesterday because its CEO announced a flying Cadillac. Full stop. Have a great weekend!