September 2007 Archives

This has been a hard lesson to learn, but as an investor with a long time-horizon I'm beginning to love the bear.

If you're like most investors, you cheer for the bull. This makes sense if you need to cash out your stock investments in the next 3-5 years. Table: Windows of OpportunityBut otherwise, you've got it all wrong—you need to start pulling for the bear.

Why? Because during the investing phase of your life, you're going to be a net buyer of stocks for many years to come. You want your monthly investing dollars to stretch as far as possible, acquiring as many stock and stock fund shares as you possibly can. And that happens when prices are down. ...

You like it when you can get bargains on clothes, electronics, furnishings, cars, vacations, and houses. Nobody cheers when those things cost more. Similarly, you should also like it when you can get bargains on stocks.

So, learn to love the bear! The truly long-term investor realizes we need more of them. There have been only ten in the past 40 years. ...

In fact, that's what we may be experiencing right now, but it's too soon to say for sure. At its lowest point to date, the drop has been only 9.4% from the July high. The selloff may already be over and the bull market about ready to resume (drat), or perhaps the market will yet fall -10% to -19% into that mini-bear territory and present a fine window of opportunity for buyers (yes!).

If it's the latter, don't fret and moan along with your friends (who thus reveal their short-term way of thinking despite protestations to the contrary). Enjoy the fact that bargains will continue to be available in the coming months. Eventually you'll be the richer for it!

I was buying into the latest correction and have made more than 6% gains on those purchases just over the past few weeks.

More interesting than whether or not you need a permit to land on the moon is the question of who would prosecute (or define) crimes committed on the moon? If a non-military member of a lunar expedition decides to steal another's watch, what legal recourse is there?

(HT: GeekPress.)

Robert Reich (Bill Clinton's secretary of labor) has made available an excellent chapter about "the conflicted consumer" from his new book Supercapitalism. As Mr. Reich points out, we're all more than mere consumers, being each also an investor and worker.

The awkward truth is that most of us are two minds: As consumers and investors we want the great deals. As citizens we don't like many of the social consequences that flow from them. The system of democratic capitalism in the Not Quite Golden Age struck a very different balance. Then, as consumers and investors we didn't do nearly as well; as citizens we fared better.

What's the right balance? Are our gains as consumers and investors worth the price we're now paying for them? We have no real way to tell. The old institutions of democratic capitalism, and the negotiations that took place within them, are gone. But no new institutions have emerged to replace them. We have no means of balancing. Our desires as consumers and investors usually win out because our values as citizens have virtually no effective means of expression -- other than in heated rhetoric directed against the wrong targets. This is the real crisis of democracy in the age of supercapitalism. ...

These issues of economic security, social equity, community, our shared environment, and common decency were central to democratic capitalism as we knew it in the Not Quite Golden Age. They were -- and still are -- concerns to us in our capacity as citizens. But as power has shifted to us as consumers and investors, these issues have been eclipsed. We've entered into a Faustian bargain. Today's economy can give us great deals largely because it punishes us in other ways. We can blame big corporations, but we've mostly made this bargain with ourselves.

After all, where do we suppose the great deals come from? In part they come from lower payrolls -- from workers who have to settle for lower wages and benefits, or have to get new jobs that often pay less. They also come from big-box retailers that kill off Main Streets because they undercut prices charged by independent retailers there. They come from companies that shed their loyalties to particular communities and morph into global supply chains paying pennies to twelve-year-olds in Indonesia. They come from CEOs who are paid exorbitantly; from companies all over the world who wreak havoc on the environment; and, in some instances, from companies that pump out violence or porn or nutritionless foods and beverages.

You and I are complicit. As consumers and investors, we make the whole world run. Markets have become extraordinarily responsive to our wishes -- more so all the time. Yet most of us are of two minds, and it is the citizens in us that has become relatively powerless. Supercapitalism is triumphant. Democratic capitalism is not.

I don't really see the situation as a "crisis". The fact of the matter is that we get what we want; even though we loudly proclaim our desires for "economic security, social equity, community, our shared environment, and common decency", our actions speak louder than our words. The irony is that we're either ashamed to revel in our avarice or too greedy to follow through on our altruism, and neither condition is likely to be fixed through public policy.

(HT: Bernardo.)

My former Senator, Barbara Boxer, sent me an email yesterday about reducing Los Angeles' traffic problems. One possible solution is conspicuously absent from her suggestions.

This study of urban mobility also concludes that there is no one magic solution to America’s congestion problems. However, as the Chairman of the Senate Committee on Environment and Public Works, I am working every day to find solutions to our nation’s transportation woes.

One of the ways to help ease Los Angeles’ traffic congestion is to make alternatives to single car travel more feasible. To do so, people need to be able to get to work, school, and home easily and quickly, without ever starting their cars. And progress is being made in Los Angeles.

Every year, more public transit lines are either operating or under construction in Los Angeles, which means that more residents of Los Angeles will have the option of using public transit. The Gold Line East Side Extension will bring service to East Los Angeles. I secured a federal appropriation of $70 million in the Senate funding bill to help this construction effort. The Expo Line construction that is now underway will extend service from USC and the Crenshaw area to Culver City. And in the long term, I am very excited that it may be possible to extend the Red Line from Union Station, along Wilshire Boulevard, all the way to the ocean. Think of the cars that will be taken off the freeways when all of these projects are complete.

Alternatively, think of how many more cars our cities could support if we built more freeways!

Here's a sad story linking money and divorce. I really feel sorry for people who live their lives like this.

FOR years, Michele Kleier, a real estate broker on the Upper East Side, knew why one of her most persistent clients was calling even before picking up the phone.

The client, a former high-ranking fashion executive and perpetual volunteer at her children’s private schools, was checking the price she could get for her nine-room co-op in a prewar building. When the market reached a high, she told Ms. Kleier, she planned to divorce her husband, sell the apartment and live on her share of the profits.

Last year, Ms. Kleier delivered the long-awaited news: Manhattan luxury apartments were at a peak. The client went through with her plan. Now the woman calls from her new condo in California, raving about the weather and the distance from her ex-husband.

“She felt that she couldn’t walk out on him until she had the money to move away and buy something on her own,” Ms. Kleier said. “The real estate market allowed her to buy her freedom.”

I guess many people deal with situations in the way that seems the most immediately easy, and when divorce seems easier than working through marriage issues they split.

One of the great failings of our education system is the protracted adolescence that apparently extends into the college years for so many students. The interesting aspect of the Colorado State "f*** Bush" mini-"controversy" isn't that some unsophisticated undergrad used the F word, but rather that anyone thinks this situation is some sort of revolution in free speech or the discussion thereof.

College Republicans at Colorado State University collected more than 300 signatures calling on CSU's Board of Student Communications to fire Editor in Chief David McSwane. ...

On Friday, The Rocky Mountain Collegian ran a four-word editorial that read: "Taser this . . . F--- Bush." National radio talk shows, CNN and MSNBC have since buzzed with debate about free-speech rights and the bounds of propriety. ...

But senior journalism major Rachael Martin defended the paper. "I agree that he didn't need to use the f-word," said Martin, who described herself as a Republican.

"But look at what it's done. It's had college students all around the nation talking about freedom of speech for the first time. By no means should he be fired."

Real World to College-Fantasyland: Your observations are not profound, your debates have all been had before, and your controversies are generally uninteresting and insubstantial. And our university system should have taught you that by now. If you want to prepare yourself to someday make a substantial contribution to human civilization, then instead of fomenting insipid debates about shallow, meaningless issues you should spend your time learning from the debates and discussions of the past.

Isaac Newton famously wrote, "If I have seen a little further it is by standing on the shoulders of Giants." Our education system needs to teach our students about the giants of the past and help them climb up on their shoulders. Instead, every student is taught to stand alone, deluded into thinking that the world has never seen the likes of their intelligence and rationality and that their every stray thought is a profound revelation of universal truth.

Talk less. Listen more. If you're extremely blessed you may someday have even one single thought that's worth broad dissemination for the betterment of humanity.

The House of Representatives "easily passed" the "Expanding American Homeownership Act of 2007" -- a massive giveaway of public money to people who bought houses they couldn't afford.

The House easily passed this bill that will give the Federal Housing Administration the authority to assist struggling homeowners in making their mortgage payments. This is a significant attempt by Congress to remedy the sub-prime mortgage crisis that has resulted in thousands of delinquent payments and foreclosures. The White House agreed that this bill would provide much needed assistance to homeowners but was concerned over what it considers excessive spending. The bill will move to the Senate for a vote.

Hey, I want some free money too! I guess I'd better stop being financially responsible. Idiocy.

The fact of the matter is that lenders and borrowers who are bailing out should go out of business or lose their homes. They made bad decisions, and not only shouldn't they be rewarded but they should be allowed to fall out of the marketplace. If there was some demonstrable fraud then the injured parties should recover from the perpetrators, but I see no reason whatsoever that our tax dollars should be handed out to anyone involved.

It is my decidedly non-expert opinion that the United Auto Workers union leaders called a strike to pave the way for future concessions to General Motors. The UAW knows that they're going to have to help GM cut costs, but the union leaders don't want to look weak; the strike is just a show for the benefit of union members who wouldn't be willing to compromise if they didn't see it as their only option.

I think Peggy Noonan's "now he tells us!" criticism of Alan Greenspan is right on the nose. The money-graphs:

The book has merits--it is blessedly lucid on how the Fed works and how Fed-heads think--but there is within it a great disconnect. I was thinking about this when I got a note from a former U.S. senator who groused about "the phenomena of high-level public officials 'bravely speaking out' after they have left office." He scored Mr. Greenspan as "perfectly free to have spoken out about the need for the President to veto more spending bills on numerous occasions when he was testifying in public." My correspondent says Mr. Greenspan's "total silence" while in office does not exactly qualify as "bravely speaking out."

The former senator has a point. It can be summed up as: Now you tell us? It doesn't take courage to speak clearly when no one can hurt you. It takes guts to be candid when candor can earn powerful enemies.

U.S. government officials owe the people who pay them, and who have raised them high--that would be the American taxpayer--real-time wisdom. They owe us their best thinking. Sometimes this is uncomfortable. But that's the price you pay for the car and the honors and the security detail and the special U.S. Army jet that flies you home, alone, across the Atlantic, on the day after 9/11.

Mr. Greenspan was reappointed for a three-year term by President Clinton in 2000. He allowed himself to be painted as a supporter of the Bush tax cuts in 2001. He was reappointed by President Bush in 2003. Mr. Bush is now deeply unpopular. Mr. Greenspan, retired and selling a book, has discovered Mr. Bush's deep flaws. The timing is all so convenient.

I'm less qualified to comment on Jim Cramer's accusations of poor interest rate manipulation, but they sound reasonable when you like up the facts like he does.

What was Bernanke saving us from? What caused the mess that forced him to take drastic action, not one of those itty-bitty quarter-point interest-rate jobs? How about a chaotic, frozen, dysfunctional economy fueled by defaulting mortgages based on irresponsible teaser rates that his predecessor pushed hard and often for every prospective home buyer to take, including those who could ill afford them? Where’s that in the book? And then, after hooking millions of unqualified buyers to take low-interest teasers that would reset in two years, Greenspan gaffed the borrowers with fourteen straight interest-rate hikes that put the reset mortgage rates out of reach for all but the wealthiest. Those vicious and, I believe, foreseeable resets—foreseeable if you are going to set the rates, as Greenspan did—are causing a national wave of defaults the likes of which haven’t been seen since the Great Depression. And why did Mr. Prudent champion these reckless teasers almost as heavily as the endless Ditech and Countrywide television pitchmen who buried us in these adjustable-rate nooses did? Because he needed to work his way out of the dot-com crash by stoking the housing market. And what had caused the dot-com bubble? That would be the low margin rates that fueled ridiculous speculation in junk stocks—rates controlled by, you guessed it, our lovable hero, Alan Greenspan. At any given time the author of The Age of Turbulence could have prevented, well, the Age of Turbulence, by simply raising margin rates, by discouraging the use of exotic teaser mortgages, and by encouraging regulations that would have ended the travesty of giving money to speculators to flip houses. But Greenspan, an acolyte of libertarian Ayn Rand, disdains regulations. Instead, he seemed to like the power and mystery of endlessly taking rates up and down, disrupting the whole economy instead of managing discrete stock-market or house-speculation bubbles. Just a little regulation could have avoided both of those bubbles, with no need to overstimulate and then wreck the overall economy with crushing rate increases like the ones with which Greenspan stuck Bernanke.

Hindsight is 20/20 and all that; I think Ms. Noonan's observation that our public servants aren't willing to share their honest opinions in real-time is more important than dissecting specific policy decisions from the past.

I started eating breakfast about a year ago because of all the supposed health benefits I'd read about, but the only effect the extra meal had on me was weight gain. I only had a piece of fruit or some small bit of carbs, but I discovered that once I ate I was hungry all morning until lunch, when I'd overeat.

I was never hungry in the morning before, but I forced myself to eat breakfast because of all the hype... now I'm quitting again. Unless I prime the pump with breakfast I don't really think about food at all until lunch time, when I eat a reasonable portion. I haven't eaten breakfast for several weeks now, and I feel much better for it and I'm losing weight.

I think Bill Clinton is probably right in recommending that our leaders get more sleep.

Clinton also recommended, as Political Radar notes, that the presidential candidates get more sleep.

"I do believe sleep deprivation has a lot to do with some of the edginess of Washington today," he said, "And if we can find a way for them and their challengers to run for elections without making them go out five nights a week for this endless hunt for funds. ... I think America would be better."

I know lack of sleep can make me cranky!

The primary difference between enemies and opponents is that the latter need to be given a fair hearing, reasoned with, and respected, whereas the former simply need to be defeated. Failing to treat Iranian President Ahmadinejad as their enemy demonstrates that Columbia University is either delusional, misguided, or itself an enemy of America rather than just an opponent.

Iranian President Mahmoud Ahmadinejad has accepted an offer to speak next week at Columbia’s World Leaders Forum, the University announced Wednesday.

The appearance of Ahmadinejad—widely criticized for espousing anti-Semitic views and condemned for apparent human rights abuses—will mark the head of state’s first-ever public engagement at a U.S. university and seems certain to fuel heated protest on and beyond Columbia’s campus.

University President Lee Bollinger announced the decision to invite the leader in a statement Wednesday evening.

“It should never be thought that merely to listen to ideas we deplore in any way implies our endorsement of those ideas, or the weakness of our resolve to resist those ideas, or our naiveté about the very real dangers inherent in such ideas,” Bollinger said. “It is a critical premise of freedom of speech that we do not honor the dishonorable when we open the public forum to their voices. To hold otherwise would make vigorous debate impossible.”

There's no doubt that Columbia doesn't "endorse" Ahmadinejad's views, but by giving him a forum they elevate him from enemy to mere opponent, which is either a grave mistake or an inadvertent revelation of Columbia's own relationship with America.

It's a serious thing to label someone or some group an enemy rather than just an opponent. I'm very much against active or passive efforts to stifle free speech by one's opponents, be they political, ideological, religious, or economic, but enemies are a different matter entirely.

Update:

Indian Chris points out that Columbia University welcomes Ahmadinejad to its campus but only begrudgingly allows American military recruiters access because of the "punitive financial coercion" of the Solomon Amendment.

I just ordered a Nintendo DS Lite and I'm looking for some game recommendations. I don't always trust the reviews on the major game sites....

My wife told me about a man who rescued a baby deer and raised it as a family pet has had his deer seized and threatened with death for lack of a permit that was arbitrarily denied.

Had he been a hunter, and had the mottled white doe that tumbled down a hill into his rural Oregon driveway six years ago been an adult, Jim Filipetti could have ponied up $19, applied for a deer tag and gunned the animal down. He could have butchered the deer the state now knows as "Snowball," mounted her head on the wall and moved on with his life. Story continues below ↓advertisement

But Filipetti chose to raise the injured fawn as a pet, spending thousands of dollars on veterinarian bills to treat her deformed hooves, ...

There are permits available to rehabilitate or otherwise care for wildlife, and Filipetti is seeking one, but the state has only agreed to issue 16 such licenses, and they're all spoken for, Hargrave explains. Still, because this was an "exceptional case" (read: exceptional public pressure) it looks as if Filipetti will be reunited, at least with Snowball, since she's incapable of surviving on her own.

Look, it's just stupid to spend all this public money worrying a guy about his pet deer. Maybe this "exceptional public pressure" will serve as a warning to bureaucrats around the country that they should err on the side of leaving the rest of us alone.

My brother sent me a link to a really cool invention that enhances your senses with virtual whiskers.

Ever wanted some cat's whiskers or insect antennae? Probably not, but check out this head-mounted haptic device developed by researchers at the University of Tokyo in Japan. It lets a wearer "feel" their surroundings from a distance, roughly as if they had several long whiskers sticking out of the head. At least, that's what the researchers say.

A series of infrared sensors positioned around the device act as invisible whisker or antenna sensors. When these detect an object, a small motor vibrates on the appropriate side of the wearer's head to alert them.

A brilliantly simple idea that will find a myriad of applications.

I made some minor stylesheet and formatting changes earlier this morning. I added a category link to each post, and made the title of each post a link to the individual archive. The date-stamp has also been moved from the bottom to the top. The category archives (which I doubt anyone ever visits) have had post bodies removed in favor of titles only. Any opinions?

Via Voice of the Martyrs here's a little taste of what the South Korean missionaries who were taken hostage in Afghanistan faced during captivity.

UPDATE: Korean Hostages Told Convert to Islam or Die – British Broadcasting Corporation On September 12, South Korean Christian aid workers held hostage by the Taliban in Afghanistan for six weeks, reported being beaten and ordered at gun point to convert to Islam, according to the British Broadcasting Corporation (BBC). According to the BBC, the former hostages told a press conference they were made to work like slaves while in captivity. Jae Chang-hee told reporters, "We were beaten with a tree branch or kicked around. Some kidnappers threatened us with death at gunpoint to force us to follow them in chanting their Islamic prayer for conversion. I was beaten many times. They pointed a rifle and bayonet at me and tried to force me to convert." Jae Chang-hee added, "We lived like slaves. We had to level the ground for motorbikes, and get water and make a fire." BBC reported that Yu Jung-hwa said she thought she was going to die. "The most difficult moment, when I had a big fear of death, was when the Taliban shot a video. All 23 of us leaned against a wall and armed Taliban aimed their guns at us, and a pit was before me. They said they will save us if we believe in Islam. I almost fainted at the time and I still cannot look at cameras." Recalling how Pastor Bae Hyung-kyu was led away to his death, the BBC said Han Ji-young, in tears, added, "Bae didn't even look at us when he was leaving the room. He only said, 'Overcome with faith.'" Continue praying for God to touch the lives of these believers as they deal with their experience in Afghanistan. Pray God comforts the families of the two that were killed. Pray the testimony of these Christians will draw non-believers into fellowship with Him. Deuteronomy 28, Psalm 91

It's humbling to realize that despite our safety here in America, Christians are still the most persecuted group in the world. Christians face death and imprisonment every day for their faith, and for trying to share it.

I hated it when I picked it, but for whatever reason I took it and now I'm stuck with it. Changing a domain name seems to cause Google to forget all about you. Sigh.