Murray Sussman: ‘We have a wonderful liberal on the radio right here in Florida whose 3 to 7 PM broadcast is on the web and is receiving calls from all over the country. Please Google Randi Rhodes. Then listen to her on WJNO.com. I know that you will be impressed. She follows Rush Limbaugh and gets a higher rating in this area. RANDI IS FOR REAL.’
David Lloyd-Jones: ‘The cod are the biggest and best example around of simple economics at work: The people munch 400,000 tons of cod every year, the seals munch 600,000 tons of cod every year, everybody’s happy. But the people stop wearing seal-fur coats because the seals are all so cute . . . suddenly you got a seal population explosion, the people keep eating 400,000 tons, the seals start eating two million, and in no time at all you got a collapse of the cod population. The seals are still there, and their consumption hasn’t slackened off a great deal. Only now they’re eating the cod small, so the population doesn’t get to bounce back. The people are eating zero, but that makes no difference to the seals: they’ll just breed up to the max. Ya wanna eat cod ten years from now? Buy a seal skin coat today. Preferably floor length.’
☞ Point taken (at least unless/until another knowledgeable reader weighs in with a different view) . . . but is it necessary to club the baby seals to death? Isn’t that part of the objection? And how did the cod ever survive before there were humans in significant numbers to club the seals for fur coats?
Michael Garvey: ‘Why do you prefer 30-year TIPS to 10-year TIPS? The yield is only about 1/2 percent difference and I would think the 10 year would lose less if bonds go down. Also, since the recent 10 year is selling below par, if you hold it to maturity you can’t lose any principal. Thanks for your advice. Like you I sold my tips and I’m thinking of buying some back.
☞ Ordinarily, longer-term bonds do drop more sharply when interest rates rise. (Think of a seesaw with bond prices at one end and interest rates at the other. And think of its fulcrum as ‘today.’ The bonds furthest out from the fulcrum go up and down the furthest as interest rates rise and fall.) But that’s different with TIPS, which remove most of the interest rate risk by their guarantee to ride out inflation.
The 10-year TIPS at 95-and-change may be safer than the 30-year TIPS for a short-term investment; but because they are both inflation-adjusted, to me the yield should be about the same . . . I see no great need to demand a higher yield from the longer-term bonds, as I normally would of a bond. And I think insurance companies and others may like the idea of locking in a certain above-inflation yield for 30 years, so that if the Treasury ever stops issuing TIPS, the 30-year TIPS would be in even greater demand.
That said, you could certainly go either way. Both are good conservative investments, especially within a tax-deferred retirement account.
When my great friend Peter Burns lay dying a dozen years ago, a bishop – a bishop! – came to his bedside to ask where he wanted the funeral. ‘Where do you want the funeral, Peter?’ he asked loudly. But Peter was too far gone to respond. The bishop, having been at many such bedsides – and thus being less inhibited than I – leaned closer and shouted, ‘Peter! Where do you want the funeral?‘ But even though Peter still couldn’t answer, it was unanimously agreed he would have wanted it at the main Episcopal Church downtown. He was one law partner who took his churchgoing seriously. (Less, I think, for the divinity of it than the ceremony and tradition, and the sense of identity it gave him. He liked the ‘smells and bells,’ he used to say.) At the service, there were three bishops, one local (who was straight) and two who had flown some considerable distances to attend, who were gay. Three bishops! Peter would have liked that, and the fine things they were so obviously sincere in saying about him that day. I was very proud of him. The two gay bishops were discreet, of course. But my guess is they, and perhaps the straight one as well, voted yesterday to elevate Gene Robinson to their ranks. And my guess is that if there is a heaven (which – well, don’t get me started), Peter is in it and smiling broadly at yesterday’s news.
Quote of the Day
Governments are necessarily continuing concerns. They have to keep going in good times and bad. They therefore need a wide margin of safety. If taxes and debt are made all the people can bear when times are good, there will be certain disaster when times are bad.~Calvin Coolidge
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The Inauguration . . . PRKR, BOREF, CNF
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The Other Pillow Guy*
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How Great Was That?
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You Respond To Umair Haque
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The Three Big Lies
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Of Insurrection, Inequality, And Your Stocks
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Ronald Reagan Speaks
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What Do Adelson and Netanyahu Think?
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