Monday, January 31, 2011

Solving Problems 101

To solve a problem, one must do two things first.

1. Identify the problem correctly; and
2. Identify the entire problem - both its short term and long term parts.

Congress, of course, fails to do either #1 or #2 correctly almost all the time.

What are the major problems facing America now?

I. Energy.
II. Transportation.
III. Jobs.
IV. Wasteful borrowing.

I and II are connected. III and IV are connected.

I. Energy: Within the lives of the current younger generation in America, the fundamental source of transportation energy in the US will change as oil will dry up ... literally. The energy density of gasoline has made it a wonderful source to portable energy to power vehicles. The Earth has now been nearly fully explored and the huge populations of the former Third World are now consuming huge amounts of oil. Demand has increased and can further increase, yet supply is hitting the brick wall. Recent discoveries of new sources of natural gas will help wean us off oil, as will tar sands. Other costlier sources of hydrocarbons will stretch this major energy problem out as oil prices rise gradually. The brick wall in 40 years can become an 80 year grinding, slow process of change.

II. Transportation. Unfortunately, since WW II the cheap gasoline has produced enormous urban sprawl. That sprawl increases demand for energy and causes huge losses in people's time and energy use in traffic jams and wasteful travel in commerce. Anyone with a couple decades of experience driving in a metropolis has seen this problem grow in intensity and extent. Airports have also gotten more and more crowded and busy; they have grown so much that simply getting in and out of them takes a serious share of the total travel time. The costs have grown and the efficiency has fallen. That old trends must stop & reverse.

III. Jobs: The Panic of 2008 and its ensuing Great Recession has created a HUGE loss of productive capacity in America, viz. those 15% of productive people now either unemployed or underemployed. Those people span all generations from the young to the retired. Many - most of those people can and want to be more productive. They want to earn more and want to work harder. The Federal budget deficit as a percentage of GDP is about 10%. Has it occurred to no one in leadership that the Federal budget deficit is directly related to the unemployment and underemployment of its people? Putting those 15% of the nation's people to productive work would SOLVE the Federal budget deficit problem.

IV. Wasteful Borrowing. DEBT IS NOT EVIL NOR BAD INTRINSICALLY. But borrowing money to waste the money is. Borrowing to dig a hole and fill it up is a total waste. Borrowing money to build a factory can be good IF the factory is useful. Borrowing to build up the nation's productive capacity is good - that money from debt is used for true investment that produces a return ... a profit that can repay the debt (interest and principal). The debt of a nation need NEVER be repaid. Has the debt of AT&T or IBM or General Electric or Exxon - all 100+ year old corporations - ever been entirely repaid? No. They continue to borrow money and invest it wisely. They borrow more and more, yet have no problem paying their debt service. The same applies to the US.

GM borrowed stupidly for decades, to overpay its unionized workforce to buy labor peace and overpaid its executives to keep them happy slurping at the trough; it invested in other businesses outside its core. Over time, that cannot be sustained and GM went bankrupt while competitors in the US south prospered. Borrowing to waste money leads to bankruptcy.

The same analysis applies to the US and to the States. They must cease wasteful borrowing.

Those are the problems. For the rest of this week I will post solutions.

Word of the Day

"Fardel" - noun [$100] Archaic. Used by W. B. Yeats.
Fardel means 1. a bundle; 2. a burden.
Sentence: The great fardel of problems identified above can be solved with ruthless logic and facts.

Friday, January 28, 2011

TGIF and a move

It's Friday, I have a lot of snow shoveling to do this morning and no good ideas for a one day post. I have a series bouncing around my "little grey cells", but it's not ready this morning.

Krypto's model finally gave a stronger buy signal for gold & silver. I will be buying some GLD and SLV in a 2:1 ratio this AM.

The municipal bond buy program is over. Upon a decent sized move up in stocks, I will be selling those higher and buying more municipal bonds provided their yields remain over 5% for the good quality bonds I like.

That's all for now.

Word of the Day

"Camarilla" - noun [$10]
Camarilla means a cabal or clique
Sentence: DC has devolved into competing camarillas, each fighting for time at the hog trough. We need some leaders to engage the American public to develop a national consensus on America's long term problems.

Thursday, January 27, 2011

More Snow

I guess global warming theories are not working too well. We are getting another big storm and it's very cold, too. Of course the global warming Kool-Aid crowd says the snow is a result of global warming ... as is no snow. As is extra cold ... as is warmth. If you listen closely and have a memory, you'll note they end up saying that everything is caused by global warming. Of course, all those scientists really want is the money, so they screech endlessly. Facts don't matter.

The gold buy signal got a bit weaker, so we wait. Krypto's municipal bond buy programs just needs a bit more, and it will be over, until and IF stocks go up a lot more.

An intriguing fact: Krypto seems to do the opposite of whatever the human crowd is doing and / or the financial press is touting. Hmmmm ... is my dog smarter than the average investor? Or does she just think and do more research?

Meteorological winter is almost 2/3 over. We shall endure.

Word of the Day

"Wowser" - noun [$10] Australian slang.
Wowser means 1. a puritanical fanatic; 2. a spoilsport; 3. a teetotaler.
Sentence: The global warming wowsers want all of us to live in mud-walled, thatched roof cottages with outhouses and to burn manure to stay warm. More truly, however, they want there to be fewer humans. Anyone knowing a bit of history knows where that leads.

Wednesday, January 26, 2011

The Arrogance of Wealth and Power. III.

"Davos" is a synonym for that arrogance. Every year that conference of the hegemonic classes and their bureaucratic allies makes me want to puke. The media go there to talk to the billionaires and others in the Ruling Classes and go goo-goo eyes, butt-kissing them endlessly about their wealth and power ... and "ideas". I just heard some Ruling Class puke talk about signing deals. Sheesh, at least he was honest and didn't give us the regurgitated lies that most of them do. Today again I reprise thoughts about "Davos" from prior years post around this time of year.

[from 1/29/2009 post of same title, numbered II.] “Davos" is the epitome of that syndrome. Rich and powerful people meet in a resort to discuss the "world economy", viz., how they can control the common man and bend him to their wishes. Is increasing human freedom a pillar of their goals ? ... No. Is increasing human culture and knowledge a goal ? ... No. They network among each other to exchange thinking on how to maintain and increase their control over ... the rest of us. Every year Davos makes me want to puke.

So is Davos about actually helping people .. or is it about using and creating fear and grabbing power so "they" can become new Dukes & Barons ? I think it's a bit of both, but the well-meaning fools seeking the former are being used as cover by those knaves seeking the latter. Are restrictions on the rich and powerful a subject at Davos ? What about regulation of hedge funds ? If they want to discuss how to control themselves, fine, that's an admirable topic. Otherwise, they should shut up and leave us alone.

[from 1/25/2008 post regarding "Changing Capitalism" and Davos] The system of freedom and private property works superbly, but the tendency for excess accumulations of wealth and power by a few needs to be somehow properly directed - social pressure would be best - and their tendencies to create aristocracies stopped. And their raiding parties need to be squashed.

For example, what philanthropist funds artists or mathematicians or writers or philosophers to increase human knowledge ? Mostly they pay big $ to museums to buy old masters or build new wings. Nothing new is created. Davos is full of them - those wanting a big monument to themselves. A few do good things to increase human knowledge. But just a few.

For example, a program to teach young children foreign languages would be incredibly valuable. The young can learn languages so easily. But is that done ? No.

I again reproduce the quote from Thucydides that sparked my thinking on this matter - I first read it referenced in Erasmus' "Praise of Folly". The quote is from the famous oration of Pericles."We cultivate refinement without extravagance and knowledge without effeminacy; wealth we employ more for use than for show, and place the real disgrace of poverty not in owning to the fact but in declining the struggle against it."

Unfortunately, too much wealth has been used to buy estates in the Hamptons or invested in hedge fund speculations. And not enough has been productively invested or used to increase human knowledge. That is the real problem.

[from 1/24/2007 post re Davos] Davos is a bunch a rich and / or powerful people trying to get richer & more powerful, colluding to push people around and suck more money and resources from them, like a bunch a leeches. Somehow the so-called solutions always have more powerful governments and bureaucracies. There are exceptions, but they are few.

Word of the Day

"Vitriolic" - adjective [$10]
Vitriolic means 1. something felt to resemble vitriol (sulfate of various metals) esp. in caustic quality; 2. esp. virulence of feeling or speech.
Sentence: Every year Davos causes me to post vitriolic writings about that wretched hive of scum and villainy. There! I did it again!

Tuesday, January 25, 2011

Techtonic Change

That has been occurring in Krypto Fund recently; the "mountain" of cash is now a high hill. The buying program in municipal bonds is nearing an end. We've gotten a diversified pool of good quality municipal bonds with yields over 5% (all three yields: current yield, yield to call and yield to maturity). Most recent buys have maturities in the 15-20 year range and seem to have been scooped up from scared sellers. Perhaps I should thank Molotova aka Meredith Whitney, for trumpeting her doom visions and scaring some people into dumping their municipal bonds at silly prices.

Most of the remaining cash is dedicated to re-buying TIPs once their yields get a bit higher (or prices lower ... same thing).

Krypto's model is giving a weak buy signal for gold & silver; we shall wait a bit to get a stronger signal. It's close.

I wonder if anyone else has noticed that emerging market stocks seem a bit stagnant. Perhaps some beefers are secretly selling?

Bunkerman is still riding that bull elephant. Sitting on one's butt can be profitably and stress free.

The Barry the Bloviator speaks tonight. I will NOT be listening. Those State of the Union speaks have devolved to propaganda screeds. I've rather watch South Park IF I stayed up that late.

I suppose Barry will not have read my list of reforms posted yesterday. No one who cares about people would talk about lowering corporate taxes. Of course, who could ever think Barry cares about the common man and woman.

I hear that Davos is this week. I'd better dust off my anti-Davos posts for a reprise.

Word of the Day

"Magniloquent" - adjective [$10] a T. S. Eliot word
Magniloquent means 1. grand or grandiose in speech; 2. boastful.
Sentence: Barry's speech tonight will likely be magniloquent but devoid of serious content.

Monday, January 24, 2011

What is to be Done?

That's the famous question. Last week I proved by simple research of widely and easily available data that since around 1970, the common man and woman has been screwed by the hegemonic class and their bureaucratic allies. The screwing occurred under administrations of both parties insidiously and slowly. For 40 years ALL the productivity gains of technology has been slurped down by those hogs. But ... What is to be Done?

(A) The new system must increase the demand for labor ... employees .... in the US economy, and concurrently permit entrepreneurs to prosper. We need reforms to do this WITHOUT increasing governmental power. Increased government is part of the problem; that permits the bureaucratic classes to slurp MORE from the trough; it gives the hegemonic classes a place to buy protection and gain tools to grab more wealth and power.

Increased demand for labor and freedom for entrepreneurs would increase the pay and share of profits for the common man and woman.

(B) The costs of the social safety net must be borne by those who have benefited from the existence of the nation. Notice I wrote that past tense of the verb, benefited. Not the present tense. The current income tax system takes mostly from those trying to become wealthy, not those who are wealthy.

One single change will not do the job; we must identify an entire panoply of changes, each designed to accomplish either A or B or both.

Here are some changes.

1. Eliminate all accelerated depreciation - that subsidizes machines over people. Go back to the old system of the 1960s - straight line depreciation over the useful life.
2. Eliminate the R&D tax credit - a corporate tax subsidy used to replace people.
3. Eliminate the corporate deduction for interest except to the extent of interest income from loans (not securities income) made by banks. Capital is capital - tax it equally: No more subsidies for debt.
4. Eliminate the deduction for charitable contributions in the estate tax. Make the wealthy spend or give away the money while alive.
5. Make the estate tax iron clad - no loopholes for any trusts, etc. The recent changes for exemptions, rates are fair and fine. Encourage the wealthy to spend or give away the money while alive.
6. Implement the other tax reforms the I wrote about a few weeks ago, viz., the low rates & large exemptions for the income tax, the value added tax, the new rules for foundation spending, etc.
7. Seal the borders, but permit immigration from entrepreneurs and the very talented: we need them and they would prosper here. No more use of visas by US corporations to keep US pay down for engineers, etc.
8. Put luxury taxes on many, many goods the wealthy covet (mansions, extravagant travel, old art, etc.). The rate would be equal to the value added tax (i. e., these pay double).
9. Put an excise tax on corporate pay over the President's salary - let's call it the Hog Tax; this is paid at the corporate level and would equal the income tax rate (as modified by my other reforms): high income pays double; NO deferring compensation unless subject to clawbacks. Two moderately paid people suddenly become more economical than one hog.
10. Apply the Hog Tax to any pay over the President's salary for any service (actors, big mouth media, sports hogs, lawyer hogs, etc.), BUT permit them and all entrepreneurs and sole proprietors to income average over 10 years: they should not pay those extra taxes for one time gains.
11. Gut and scrap ALL tax loopholes the hedge funds and money managers: compensation is pay and gets taxed the same as for the common man and woman. Hedge funds pay the Hog Tax on manager pay (see item 9).
12. Invigorate an inspector general to investigate government contracts for overpayment and any indicia of inside dealings.
13. Put a 10% annual excise tax on the licenses of electromagnetic spectrum - all of it - to pay for the safety net. The big mouth media need to pay. The money goes to support and improve the systems nationally.
14. Require truly independent compensation committees for all corporations to be made up from small shareholders (whether by lottery or by some fair system). The Street, hedge funds, mutual funds, etc. are part of the problem.
15. Reform government pensions at all levels to be no better than available to the common man and woman; no one retires before 65 unless they do it on their own savings.
16. Tax ALL income equally - no special buckets - over a sizable exemption (see prior tax reforms).
17. Put an excise tax on sports franchises and on the top 1/2 of player compensation; the money goes to provide access to the common man. The sports owners & player hogs pay for the stadiums and access; no more blackouts. Permit ALL sports betting: the people want it. More freedom for the people.
18. Eliminate taxes on employers for unemployment benefits, but keep worker's compensation taxes (that promotes safely). Unemployment taxes should be paid out of an add-on special Hog Tax: the bosses lay people off to make more money for themselves, let them pay the costs.
19. Use money from the Hog Taxes to keep rates low for the common man and woman. This will make it easier for them to save and lead a happier life. The Hogs pay and aristocracies are prevented. The unlucky and unendowed have a secure, reasonable safety net.
20. Apply the value added tax to all services engaged overseas: outsourcing pays that tax.

Using the principles of Free Fraternalism, finding innumerable small reforms is rather easy. One can see ways to implement these changes almost everywhere. The crucial factor is to embrace the principles of Free Fraternalism and apply them fairly and uniformly.

Combined with the other reforms I wrote about a few weeks ago (which eliminate all taxes on jobs), you can see this new system is consistent with Free Fraternalism. The economics of common people increase; the economics of Hogs decrease; the economics of machines decrease. That's what we want.

Word of the Day

"Latifundium" - noun [$100]; plural latifundia.
Latifundium means 1. a great estate; 2. a great landed estate, especially of the ancient Romans.
Sentence: It's time to break up the latifundia of the hegemonic classes; too much wealth is held unproductively. Put it back to work.

Friday, January 21, 2011

Who Benefitted ?

Yesterday's post proved that the common man and woman obtained zero - nada - no benefit from the massive productivity gains since 1969. Where did that increased productivity come from ? Technology. New technology from computerization permitted everyone to do more work with less labor. Machines replaced people.

Expensive and time consuming studies could prove that, but our collective memory contains plenty of proof. Remember that great musical, "How to Succeed in Business Without Really Trying?" The secretarial pool and the junior executive pool no longer exist. Remember the job of receptionist at the elevator entrance on every floor? Gone. A person used to answer the telephone and take messages. No more - voice mail. Today many lawyers do their own documents and make changes; in the past a skilled legal secretary did them.

On the factory floor, fewer skilled machinists are needed as CNC machinery does their work after the set-up. Technology permits jobs to be performed in India for low wages that used to require highly paid analysts in NYC. X-rays are read in India, instead of by a US based skilled person. Plug-in modules dumb down the job of being a technician, reducing their skill - and pay levels.

You know all this deep in your mind and memory. BUT where is the profits go? Where did the gains in national income go? Who got it? Readers of yesterday's post know the common man and woman got nothing from 40 years of increasing national income.

The cynics are right. The people on top got it all. They took it all. Data prove this. I downloaded the table, "Table 695. Money Income of Families--Percent Distribution by Income" from the Census bureau. Families making $100,000 and over (in constant dollars) increased their share of the total national income from 8.7% in 1969 to 26% in 2008. Everyone else was mostly flat or got a lot less. Remember, the median Ozzie & Harriet family got nothing - almost no income gains for almost years. The group at the top got plenty.

We even see this process continuing today. WSJ: "Lenders See Little Choice: Layoffs - The banking industry, racked by the financial crisis and facing slower revenue growth, is starting to cut costs—increasingly at the expense of jobs."

The leadership at banks failed and is continuing to fail. Does the executive suite get a pay cut? Nope. They lay off lower paid workers, cut their pay, benefits and pension. The customer gets worse service. The bosses get MORE.

All this simple research and thinking proves the 200+ year old implied social contract was broken unilaterally around 1970. The group at the top left the rest of the people eating their dust and leftovers. For all the vaunted bloviations of the revolutionary baby boomers of the 1960s, the leaders of that generation did their best to screw the common man and woman. You can see that easily in people like the Clintons, Barry and the bespectacled Republicans. They all got plenty in favors and book deals. Joe Auto Mechanic got the shaft.

We need a new social compact, a square deal for the common men and women. We need an ideology to bind together the great majority of people in the US in the middle - the center. Let them rule and get a Square Deal. Cast aside the fringe right and left. The fringe right want to let the Vikings continue to raid and loot; the fringe left wants to turn us all into serfs for the government, union bosses and trust fund brats.

Under Free Fraternalism, the middle 60% or so gets complete freedom and a square deal; the top 20% pays part of their fortunes to support the unlucky and unendowed bottom 20%. Those numbers aren't strict lines; they are just rough guidelines. BUT I've proven in other posts that national happiness would increase under this political economic system. And in the past few days you have seen data to substantiate your own memories of 40 years, that national happiness has NOT improved for the great bulk of the people under the existing classic liberal system with its socialist admixture.

The existing system has failed: Time to recognize this and fix the problem.

More to come in future posts.

Word of the Day

"Pellucid" - adjective [$10]
Pellucid means easy to understand.
Sentence: Today's pellucid post should make the nature of the problem facing America obvious. Government and its implied social compact need to be fundamentally changed Free Fraternalism is the solution - a total makeover, not simple tinkering around the edges.

Thursday, January 20, 2011

Square Deal ... Not!

Yesterday I posed the question of whether the classic liberal political economic theory was working as it existed in the US since the 1960s. Did it produce the implied increases in happiness-utility-wealth for the common man and woman? In colloquial speech, was it a Square Deal for them ? Or not? Did the hegemonic class and their governmental bureaucratic allies live up to their express and / or implied promises?

Easily available data exist to test that question. The US Census Bureau keeps and has kept high quality statistical data about the US for decades; they've even extended those data series back to the beginning of the nation and before. This data is and was published in the Statistical Abstracts (published annually since 1878) and the companion volume Historical Statistics of the United States published in 1975 (I have a copy).

I learned about this data series at a course taken as a freshman at Harvard in 1972 from the late Sen. (then Prof.) Daniel Patrick Moynihan. He used his mind in serving the nation, and was a tough professor. You had to do the work and read the material. I did and it sunk in. [To brag a bit, the course was a mixed undergraduate-graduate level course - I did not take (many) gut courses; I wanted my money's worth.] Now, almost 40 years later, I can draw on that learning to write this blog post.

All that data is now available online. With a few clicks , I downloaded a spreadsheet: "Table 698. Median Income of Families by Type of Family in Current and Constant (2008) Dollars". To do a fair longitudinal evaluation, one must keep the sample type as fixed as possible to limit systematic drift. American demographics has changed over time. Let's study the canonical, "Ozzie and Harriet" family - the same as the "Leave It to Beaver" family: a married couple family with the husband working and the wife not in the labor force. Oh, of course she works hard taking care of the household, likely helping out in a family business, or doing many other tasks for no money compensation. Many baby boomers remember that type of family.

Were they treated to a Square Deal?

The numbers. In 1969, a median married couple family with wife not in the labor force made $46,101 in constant 2008 dollars. In 2008, that family made $48,502. The total increase over that huge 38 year span was a mere $2,401, a 5.21% gross increase over 39 years! Per annum, that is a minuscule 0.130% per year. That is NOT a Square Deal.

The numbers also show that for the two decades prior to 1969 (i., e., from 1949 to 1969), the median income for that family grew from $24,173 to $46,101, a gain of $21,928 which was 90.7% increase over the base year of 1949, or growth of 3.28% per annum. That WAS a Square Deal.

Something changed in the 1960s. The political-economic bargain between the common people and their leaders was changed ... unilaterally and possibly secretly and certainly unintended by the common man and woman. The common man and woman certainly did not bargain for that change.

Was there a secret coup? Or some insidious decaying process? Or something else going on?

Your writer will post more on this later.

Word of the Day

"Gravel" - verb usage [$10] a T. S. Eliot word
Gravel means (transitive verb) 1. to lay or strew with gravel; 2. perplex, puzzle, nonplus (from an obsolete sense of 'run (a ship) aground').
Sentence: Stagnant or declining living standards for decades gravel the common man and woman; the reality is and has been so far from the promises of the political leaders. What's going on?

Wednesday, January 19, 2011

Square Deal ?

Did classic liberalism work? By classic liberalism, I mean the type of political economy proposed and explained by Adam Smith and John Stuart Mill. In their theories, maximum economic freedom was supposed to work by an "invisible hand" to increase the wealth of all people, and increase their happiness. Total "utility" (implied to be happiness) was maximized in a system with this freedom; mathematical proofs of this exist and are the basis of much economic theory. I've seen versions of this proof in graduate school level textbooks and B-school classes.

The question is, though, DID it work? And IS it working? Putting theory into practice and testing under dynamic conditions could expose ERRORS and unrecognized assumptions. Astrophysicists in the 1970s found this out; they assumed that all matter and energy could be seen directly or indirectly in some manner or marker from emitted light or other electromagnetic radiation. But clear contradictions existed even then in the rotation curves of galaxies. Decades later, dark matter and dark energy were discovered. The theories were incomplete in the 1970s.
Now, the Panic of 2008, the Great Recession and actual events since the 1970s seems to have exposed a flaw - a contradiction - in classic liberalism. Has the utility-happiness-wealth of the common man and woman increased since the 1970s? The "purported" deal - compact - of classic liberalism was that the hegemonic (Ruling) classes working with the political bureaucracy would cause GNP to increase on and on. But to the common man and woman, GNP is a meaningless number. They care about their personal happiness - their ability to make a living and raise their families and live comfortably throughout their lives.

From 1800 until at least the 1960s, it's rather obvious the Deal did work over the long term. By the 1950s and early 1960s in America a family could live, buy a home, send children to college or to a good job in the trades or a plant, and have a reasonable retirement. In 1800 or even 1900 that was a distance dream.

BUT now? And since then? Is there DATA that this "Deal" did not work and is not working, or is it still working? The 40-50 years since 1960-70 is long enough a baseline - that's almost two generations.

This is the question of the century. Has or is classic liberalism reached a range where it fails? Theories can work for awhile, but then breakdown.

My "gut" is that the answer is classic liberalism has been failing for decades, that the lives of the common man and woman has NOT been improving since the late 1960s and 1970s. One has to measure such a concept corrected for age and family composition. From my memories, the level that a family could do and how they could live in 1965 was really far better than now. A common American family must work much harder and longer to achieve the same standard of living.

Is my "gut" instinct correct?

I don't know. I am now researching this matter and will report on the results soon. Demographics, family composition and propensity to work for wages (i. e., women in the workforce) complicate the question, but I'm aware of those factors and will try to take them into account. Meanwhile, could you search your memories about this question with an open mind?

Word of the Day

"Heterodox" - adjective [$10]
Heterodox means (of a person, opinion, etc.) not orthodox.
Sentence: View from the Bunker provides heterodox opinions on investing, government and politics.

Tuesday, January 18, 2011

I Have a Dream

Of course that's Martin Luther King's famous speech line. I'm borrowing it today to post my "dream" about where Ms. Market will take us this year. Will she dance on that tables & party, or dump us?

Stocks (S&P 500): high - 1500, low 1200, close 1500.

Bonds: (US 10 year yield): high 4.5%, low 3.3%, close 4.5%

TIPs (the ETF): high 108, low 104, close 104

Gold: high 1500, low 1200, close 1500

Muni bonds: solid A-AA yields rise to 5.5%

From where we are now in these asset classes, the "buy low, sell high" and "sell high, buy low" tactics will pay off well.

Timing: Ms. Market will dance and party a bit, then take a break, then hit the dance floors again.

Hedge funds will have a poor year as the commodity trades will sour, providing little upside and much pain from drops and sideways action. Favorites like AAPL will be sideways. Winnings will be boring stocks like those in the DJIA - big cap blue chips. Big banks will sputter as regulations grind profits away.

Krypto anticipates a fine year and is drooling over those dog biscuits.

Bman will keep riding this bull elephant, but pick fruit off the trees as he passes good trades. The ending waterhole is not yet in sight.

Word of the Day

"Progenerate" - verb [$1000] Obsolete, rare; a T. S. Eliot word
Progenerate means to beget, propagate, procreate.
Sentence: After due exercise of my little grey cells towards the likely path for the various major asset classes for 2011, Bunkerman today progenerated the outcomes that he now believes the near future will bring. Will be a hero or a goat? Time will tell. The future is not determined, but is (mostly) controlled by men riding along the waves of our world in time and space.

Friday, January 14, 2011

Reform VII. End Small Business Regulations.

The heavy hand - a ham hand - of government is stifling the entrepreneurial spirit of Americans. That ham hand is at the local level, the State level and the Federal level. Localities use regulations to prevent people from starting small business that might compete with favored groups, or impinge on some connected clique's environment. States use licensing laws and education requirements for "professions" to restrict competition. The Federal government has a huge panoply of regulation ready to land on any business once it grows to 25 or 50 employees. Yup, they tend to restrict hiring more people.

We need to get rid of all this regulation of the common man. We need a new burst of freedom for all of the common men and women.

The tax reforms I proposed are a start; they would get rid of all taxes on employments. The parallel reform we need is a removal off ALL business regulations and licensing (other than life threatening matters) below a very high threshold.

If someone scrapes together enough money to start a business, let him! If someone can get customers to come to him for some service, let him run that business without phony licensing or education requirements. For example, why does the SEC-FINRA regulate financial advisors? Word of mouth or a good private certification such as the CFA would do the job. Let the SEC-FINRA deal with frauds and ponzi-scams.

Why are real estate brokers burdened with silly "continuing education classes"? If they can't do the job, the customers would know it soon. Ditto for people cutting hair or helping the veterinarian treat dogs. Either the customer or the boss knows when the job is being done. Let the customers go to whom they want for services and goods. Let the business owner run his business.

Remember the "UL" label on electric goods? "UL" meant the device was tested by the Underwriters' Laboratories, a private testing service that made sure the device was safely constructed. It was created by the insurance industry.

Make the customers pay attention to the good or service he's getting. The ham hand of government is causing everyone to think the government is supposed to take care of everything and make everything work. It's time that responsibility is put onto the person running the business and the customer to check and make sure the service or good is suitable. They know better, or should know better, than some bureaucrat.

Get rid of almost all government regulations at all levels of government. Then let a thousand flowers bloom - the flowers that a new burst of small business entrepreneurs will bring.

The only regulations needed are for life threatening matters and for the ruling class of the rich and powerful - aka the hegemonic class - to prevent them from enslaving all of us and becoming aristocrats. That's a small group of people and corporations and institutions. Watch them closely; let everyone else be free.


None. waiting for better rates in the municipal bond market to trickle down to the bonds I'm seeing from Mrs. B's broker.

Word of the Day

"Autotelic" - adjective [$10]; a T. S. Eliot word
Autotelic means having or being a purpose in itself.
Sentence: Government is not autotelic; its purpose is to serve the people and protect them from invaders and oppressors.

Thursday, January 13, 2011

Snow Day redux

Sorry for lack of a post, but power went off overnight. It's back on now, but I'm declaring another snow day. Today is the clean-up.

Wednesday, January 12, 2011

Snow Day

About 15" of snow is expected here today. I'm taking a snow day. Next post will be tomorrow.

Tuesday, January 11, 2011

Reform VI. Energy Policy. A.

Think back ... almost 40 years ago the US was hit by the first energy crisis as the Arab nations cut back oil production in response to the victory of Israel in the 1973 Yom Kippur war. At that time those living and working endured gas lines, a cold winter and a severe recession. Politicians trumpeted they would make America independent on foreign oil; they they would create a long term energy policy to make the US self-sufficient, and they would break our dependence on oil altogether as it was a diminishing resource.

Billions were spent by government and big business on alternative energy research in solar, wind and other new energy sources. Think tanks and policy school invested millions of hours in valuable human capital analyzing the issues, devising mechanisms to promote energy independence and a non-oil dependent culture and civilisation.

We now should recognize that all that was simply bloviation, blather and the intellectual class slurping at the public trough for high pay and little product. And wasted money. We now have nothing to show for this. Worse, we are repeating the same mistakes as made 35 years ago, wasting human and money capital on solar, wind, and other pie-in-the-sky, grass is greener fantasies.

Energy policy led by environmentalists is a one way road to serfdom, to living in a thatched hut cottage with an outhouse, gathering wood and manure to try to stay warm and cook a bit of gruel for food.

We are now 35 years closer to an Armageddon: the end of abundant oil for cheap, flexible, speedy transportation. After finding and obtaining the oil on the continental shelves in the world, where else can oil be found? Oil from those deep water wells is very expensive, too. In another 35 years, oil will be either very scare or very expensive .. or both. Oil from other yet to be discovered places is certain to be very, very expensive. The US - and the World - needs to find a transportation fuel for the future.

A knock-on problem. That solution must not drain capacity from other needed sectors, such as electric power. After all, electricity for the vaunted electric car had to come from the power grid. That's a HUGE source of demand. Where would that electricity come from? Coal, nuclear or ???

I took a graduate level course in public policy in decision theory about 35 years ago; one of the projects was energy policy. The alternatives were analysed and assessed for durability and cost. At that time, coal was thought to provide 300 years of energy, nuclear with breeder reactors could provide thousands of years; fusion power ... millions of year IF it could be made to work.

What is new now?

One item. New, abundant sources of natural gas have been found ... by private industry. Nations such as France & Japan have massive nuclear power programs. The US ... has done nothing. NOTHING for 35 years of money and effort.

Politicians still seem to not understand that price matters. The price of fantasy alternative energy matters. And I mean the total cost, not the marginal cost. Total cost includes the cost of making the equipment, installation, rent for use of land sites, transmission, storage, maintenance, etc. Sure, wind power is free. Sun power is free. But it costs hugely to get it and distribute it. And neither solar nor wind power is suitable for transportation unless the resultant electrical power is stored into batteries or other storage system. So you have to make and pay for the batteries, too.

And solar and wind power do not work all the time, at the flip of a switch. They are on & off, with the clouds, dust and wind. Thus backup power is required. That costs money, too. Huge amounts.

The simple reality based on physics and the world as it exists: solar and wind power are useful simply for non-connected, non-continuous power needs. The Dutch used windmills to pump water; there was no need for the pumps to run all the time, just part of the time. Solar power works well for remote sites with good weather. Space satellites come to mind. Or your survival cabin. Solar and wind power could pump water into up-gradient storage pools for later use in irrigation, etc.

A rational energy policy would recognize this. Any politician blathering about wind and solar is simply lying to you. His agenda, his priorities are something else, mostly likely he's a delusional greenie or a ruling class hog slurping at the public trough for green $ for consultants, etc.

Hydro power works well in places like Norway, Canada, probably Russia. But where hydro power does not exist, the primary, large source for energy in the World are coal, nuclear and natural gas (for awhile).

A workable, practical, economical energy policy would recognize this and ... do something.

Tomorrow I will several outline workable solutions over the necesary 35 year time frame when oil will run out.

Word of the Day

"Tare" noun [$10]
Tare means 1. an allowance made for the weight of the packaging or wrapping around goods; 2. the weight of a motor vehicle without its fuel or food.
Sentence: Subtract the tare from Obama and you get ... zero substance. He's all glitter and packaging and hype with no leadership or ideas.

Monday, January 10, 2011

Monday Morning Ramblings

The Reform series will continue tomorrow. I need to pummel hedge funds today.

Are the Rich stupid? Or gullible? Or foolishly greedy? That's the logical conclusion one could make from the annual returns of their favorite club topic, viz. hedge funds. They love to put money into hedge funds; they've poured billions - trillions - into thousands of hedge funds. The economy of southeast Connecticut must depend on hedge funds, as must many exclusive districts in London or Switzerland. A hedge fund manager gets fat fees, often 2% of assets and 20% of profits. They risk nothing other than some pittance of their own money. They get to gamble with clients money and rake off those fees.

What do clients - investors - get? Oh, they can talk about their hedge fund investments with their pals over cocktails before those black tie galas or at the exclusive clubs, or vacationing at Palm Beach or exclusive resorts. What kind of person would invest for that mere psychological benefit? Any rational person would say no one. They would want superior returns at lower risk.

The numbers for 2010 are now out. The average hedge fund gained 10.4% in 2010 according to Hedge Fund Research, which returns agree with those of Hennessee Group LLC, an advisor to investors. [Source: WSJ over the weekend]. Krypto Fund had a 14.1% return with very low risk as almost 1/2 of its investments are in passive fixed income investments. The equity components of Krypto Fund are invested mostly in low fee index funds. Krypto Fund crushed the performance of all those hedge funds by 3.7%, a huge margin. What fees were paid ? Dog biscuits. Active trading ? Nope, almost no trading - mostly simple asset allocation trades when a sector became out of balance.

All that superior performance with a public, easily copied strategy and no fees. Thus, what else can we conclude but that the rich are either stupid or greedily gullible or foolish or have psychologically weak minds, or any or all of the foregoing?

What else could one expect - there are thousands of hedge funds, just like there are thousands of mutual funds and now thousands of ETFs and thousands of managed account gimmicks at the big Street firms. All that vig created by the Street to rake off all the cream. The money managers and the Street get the beef and the customers get the gristle and fat. Those layers of fees guarantee poor performance on average.

Don't do it. Manage your own money with a simple, low fee, conservative strategy as Krypto Fund does. Sleep easy. Don't worry. Be happy. :)

Word of the Day

"Apocopation" - noun [$10] from "apocopate" - verb [$10]
Apocopate means the omission of a letter or letters at the end of a word as a morphological development [e. g. in the derivation of curio ].
Sentence: The title of the humorous Mozart opera, "Così fan tutte" contains the apocopation 'fan' from 'fanno' meaning 'they do'. In that title, 'tutte' is feminine plural for 'all" hence the literal translation is So do all (women).

Friday, January 7, 2011

Reforms V. Privacy.

The US is far behind Europe in enforcing privacy rights for people. I suppose that's not surprising, as European people have borne much suffering from totalitarian regimes like Soviet Russia, Nazi Germany and Mussolini's Italy. They (or at least their parents) know that totalitarianism needs to know who is thinking and doing what. Thus in Europe a company like Google faces strong, enforced prohibitions on gathering data about you.

Here is the US, we have almost no protection. Congress is in the pockets of the banks and marketing companies and simply requires them to notify us with long, wordy inserts to things like our credit card bill to "opt out". Of course we all get many, many of those and they are always changing, making us "opt out" over & over again.

Why is the rule not, "opt in"? After all, that's how Nielson gets it ratings. They arrange for a certain number of homes to "opt in" and let Nielson monitor their viewing habits. And when those people want out, they simply quit the programs.

I don't want to be in ANY company's database, but get forced in by wanting to use simple services like credit cards, banks, and store cards to get discounts (that used to exist a sales in newspaper inserts). Sooo I pay cash and don't use my store card anymore. That works. When a company wants to give me a "rewards" card, I decline. I concentrate most credit card spending on one card and then keep track of its privacy policy, making sure I'm on the "opt out" list.

But why do I have to do all this to keep my privacy?

Because the US Congress is in the pocket of the Ruling Class: some of the big corporations and their wealthy lobbyists make money off collecting data about us. And the US government wants to have files on all of us, too.

We need real privacy. No data files at all on us ... anywhere. I want the privacy of a common man who was a pioneer in America. Just pure privacy. I don't want to be a number in a corporate database. Leave me alone!!!

The people need to demand privacy laws - strong ones. Laws the prohibit any company or person or government from maintaining data about you for any reason. If a data file about you needs kept - such as medical records - it should be YOUR property. Period. They have to ask YOU for permission to access it, everytime. You can then give it to your doctor, but NOT to some drug marketing company.

Privacy is essential to a free people. Without privacy, innumerable ways exist to extort or tempt you. We should all demand strong privacy laws from Congress. Our lives are OURS. We are free people! Get out of our lives and homes and stop spying on us. Just leave us alone!

Word of the Day

"Verily" - adverb [$10]
Verily means really, truely
Sentence: The Ruling Class verily sees each of us as a serf whom they want to tattoo with an identifying number and watch ... everything about us: what we eat, buy, use, do, say and think. Demand and value your privacy and everyone's privacy; it's a barrier against totaliarianism and a bulwark of freedom.

Thursday, January 6, 2011

Reform IV. End the Credit Score Racket.

Credit scores. You hear ads about them all the time, how YOU are supposed to check yours and fix the errors. And Identity Theft. YOU are supposed to check for this and fix the confusion and harm it can cause you. And the financial industry tries very hard to sell you identity theft insurance. They cause pain by spreading lies and you are supposed to buy insurance from them. That's a protection racket.

Banks, landlords and all sorts of companies use this information to make decisions about YOU. Does the credit score company ask you for permission to collect this data? Nope. From where do they collect the data? Anywhere and from anyone.

You have a dispute about a bill. Maybe you never even got the bill. The vendor calls and says pay up, or they'll report the matter to a credit score company. That will hurt you whenever you apply for credit or try to rent an apartment or for all sorts of things, even buying insurance for your car, house or life.

Isn't this reminiscent of a protection racket? Pay us or we'll cause you pain.

"Identity theft": a bank loses money in a scam. They try to force YOU to work to fix THEIR mistakes or they'll spread lies about YOU.

This whole industry and practice is a racket, one of many in the financial industry to loot and pillage from the public. They're like a mafia, seeking all kinds of ways to extort money and work from YOU, while giving you ... nothing.

Identity theft. Let's analyzes this "theft". Who loses money? The banks, etc. get scammed and lose money. And do they try to collect from the perp? Nope. Instead they post lies about YOU to their partners in crime, the credit score companies. Then YOU are forced to fix the errors, or THEY make it impossible for you to get a loan. Identity theft is the banks' problem. Let them fix the errors and try to apprehend the actual thief.

Credit Score Reforms.

1. Permission. No company should be permitted to keep a data collection about YOU unless YOU give them permission. Improve the existing law that requires them to give you a report IF you ask, to a requirement that they give it to you every year regardless of your asking or not. Why should you be forced to spend your time to get your data?

2. Limit on Power. Require that no bank or insurance company make having a credit score a condition to getting a loan or an insurance policy. Ditto for renting apartments, etc. They can make loans the old fashioned way: doing their own homework.

3. Defamation. Make credit score companies responsible for ANY harm that lies they post about you cause you; strict liability should apply, plus a fine for about $500 payable to YOU for your time used to notify them of their lies. Open them up to defamation lawsuits. Require them to check whatever they post about you and force the giver to bear the risk of giving false data. This makes THEM liable for any costs of "identity theft" and would put the costs further onto the banks, vendors, etc. that post the false information about YOU.

All this would level the field. The common man and woman would no longer be terrorized by credit score agencies and threat by debt collectors. Over time, banks would stop relying on these nameless data systems and learn about their local economies and people. Small banks would have an advantage; big banks would be put at a disadvantage.

That's good. Let's end the credit score protection racket.

Word of the Day

"Deracinate" - verb, transitive [$10] literary
Deracinate means 1. tear up by the roots; 2. obliterate, expurge.
Sentence: Financial "innovation" for the past two decades has been a disaster. It has created piratical beasts - from large carnivores and small parasites; they prey on the common man and woman and create huge risks to the economy, all for their own gains. Let's deracinate all these "reforms" and go back to the old ways of the mid 1980s. The system worked better then and was much fairer.

Wednesday, January 5, 2011

Reforms III. The Safety Net.

Ronald Reagan supported a safety net for people who experience bad luck or other misfortunes, or simply temporary economic dislocation. The US is a wealthy society; we already don't let people die in the streets. The US provides considerable subsidies to children of the poor, even to children of illegal aliens. But what does society provide for a 50 year old person with no children who loses a job or has a serious accident or health problem? Nothing, until that person is destitute. Even then, that person's safety net is rather thin, and disappears upon making almost nothing in income.

The current US safety net is really a trapdoor to destitution for people who might have paid taxes all their lives, supporting programs for others. The removal of benefits upon many minimal income creates a huge barrier to climbing out of poverty. Worst, it is a system of chains keeping people in dead end jobs when entrepreneurial effort might benefit all. Any person in a job that provides health benefits must be very careful about changing to a better job; health conditions that exist might be denied coverage in the new job as a "precondition". That person can't quit to start a new business or venture as the loss of health benefits might be catastrophic. That chain is thick and strong as health problems with one's spouse or children also cause one to stick to the dead end job or avoid entrepreneurial risk.

The Safety Net

The US needs a safety net that is not connected to children. Children can be a part of it, but should not be the crucial qualifying requirement. Today we get more children in the safety net because the poor can do better by having more children, usually by multiple fathers (who don't stick around).

The crucial elements of a safety net are food, shelter and health care. Let's deal with health care - actually it's the easy one.

Health Care

The US should provide a national health benefit to all people. The shared benefit would not be connected to employment - it would apply to all people - to anyone legally entitled to be in the US. [Illegals would be treated, then deported.] The shared benefit would not be a gold plated program; it would provide basic benefits, hospitalization and prescription drugs. I've written elsewhere how such a program would be structured and funded [Oct. 21, 2009 and Nov. 24, 2009]. Coverage would be determined by a Medical Board comprised of the public - not doctors or government employees. The common man and woman decide; after all, they are paying.


The existing food stamp program would be expanded and not geared to children: anyone temporarily poor would qualify. Again, a board comprised of the common man would decide what foods are covered. The poor would get a good diet with nutrition, but would be expected to do some food preparation themselves. Yes, to slice & cook. There are plenty of cheap, nutritious foods out there. I know - I prepare and eat them. That's the trade-off: more people benefit, but choice is restricted. No one starves or suffers malnutrition.


This is tougher - housing is a locally supplied market. The current program of subsidized housing complexes don't work too well. Communities are burdened paying for education for outsiders. Drug use and violence can overwhelm the complex if too many deviants are concentrated there.

My proposal would be to use a combination of voucher programs and homesteading to start to reform and broaden the housing safety net. Vacant homes or condos in communities that are abandoned would be offered to the poor under a new homesteading law. Living there for 3-5 years plus making improvements (paint, clean-up, simple repairs) would lead to ownership on a profit sharing basis. In communities without vacant homes, vouchers would be offered to the poor or newly homeless; that would include those being tossed out in foreclosure, etc.

This shelter program is rather incomplete, but it's a start. Ideas are welcome. By the way, the homes need to be where the jobs are. The poor might have to move to new communities; again, some kind of vouchers can help here, too.

Basic Income

My tax reform proposal cuts the cord that ties Social Security to employment. taxes that currently fund unemployment benefits are badly constructed: they tax jobs. Combine Social Security, disability and unemployment benefits into a single, simple safety income net. The benefits are not connected to how much you made in your prior job; anyone who worked gets it. The amount and time one would receive the benefit would be related to how long as you worked prior thereto. Thus the person who works for decades, then lost a job gets much longer support and more in hardship. At a certain point one would qualify for their entire retirement years.

For the young or those who haven't worked enough, work would be required and jobs offered when benefits run out. This is fair. In the New Deal, people happily took tough, dirty jobs at low pay simply to have some work and income. The US should offer that. Simply working to paint, pick up trash, plant flowers and clean communities would benefit all. Many other jobs are obvious to anyone driving or walking around with one's eye's open.


This safety net is not perfect, but it's a good start. The cost is mostly being paid already under many ineffective, complex programs. Benefits should not drop instantly upon making some income, perhaps only upon making a certain aggregate $ amount based on time and income. Let people recover and climb out; don't pull the lever for the trapdoor so again right away. Lower the walls that now keep people poor forever.

One helping hand: remove rules that resticts entrepreneurialism. That's for tomorrow.

Word of the Day

"Opprobrium" - noun [$10]
Opprobrium means 1. something that brings disgrace; 2. public disgrace or ill fame that follows from conduct considered grossly wrong or vicious.
Sentence: To paraphrase Pericles: There is no opprobrium to poverty itself, but to not striving to climb out.

Tuesday, January 4, 2011

Reforms II. Funding the Government.

US Federal government funding is completely out of balance. Nearly all its revenues come from taxes on incomes of one kind or another: personal income taxes, corporate income taxes, and taxes on employment earnings. Europe does not do this; its funding mechanisms include big value added taxes to spread the cost of government much more broadly. Value added taxes even make consumers of imports pay for the cost of government, while in the US, consumers of imports get a free ride.

Historically, the US government was funded by tariffs and excise taxes on specific good and services. Perhaps coincidentally, the US had enormous economic growth then. All that changed when taxes on incomes were made constitutional.

The funding imbalance causes huge losses to the US economy and people. Taxes on jobs reduces the number of jobs; letting import consumption get a free ride hurts US based production and ... costs more good jobs.

The US needs to re-balance its funding sources. How?

1. Eliminate ALL taxes on jobs: no Social Security taxes, no Medicare taxes, no other taxes on employment earnings.

2. Put on a big, European style value added tax - or excise tax - on everything, including imports: something in the range of 10-15% could work. The rich would pay a lot as they spend their money; even old art would be taxed.

3. Reform the personal income tax to (A) eliminate ALL deductions and ALL adjustments to income, (B) put in a BIG personal exemption, perhaps $20,000 for each adult and $5,000 per child, and (C) lower the rate to something like 15%. Tax ALL personal income equally, including municipal bonds.

4. Corporate tax reforms: (I) eliminate the deduction for interest expense (must be phased in over time) except for (a) banks and finance companies (as interest for them is an ordinary cost of business) and (b) working capital loans; (II) tax US corporations on worldwide income - no more free ride on income in foreign lands; (III) eliminate deductions for ANY compensation above a fixed number such as the salary of the US President; (IV) permit expensing of all machinery and equipment as paid; (V) lower the corporate rate to something like 15%; (VI) include a big small business exemption of something like $1 million; (VII) move all other deductions for business expenses to a cash basis (this will simplify everything).

5. Estate Taxes: (I) eliminate this entirely, but (II) require all capital gains be realized on death and the taxes paid. Eliminate gift taxes.

6. Foundations: require all foundations to expend ALL monies within 21 years of creation - no perpetual tax free institutions. This eliminates the creation of modern day monasteries owning everything, and fairly quickly recycles all the wealth of the Ruling Class.

This system of funding the government is simple, containing only a few rates and variables such as the exemption levels. It has LOW rates and is fair to the common man and woman. It removes tax subsidies for the Ruling Classes and big corporations. It removes taxes on jobs and even has a simple incentive to hire more people below the executive suite.

TOMORROW: The safety net for the common man and woman.

Word of the Day

"Piacular" - adjective [$10] formal.
Piacular means expiatory; 2. needing expiation.
Sentence: Tossing salt over one's left shoulder after spilling salt is a simple, piacular sacrifice: a bit more salt is lost, but the demons are appeased. [Salt was a very valuable commodity in ancient times.]

Monday, January 3, 2011

Reforms for a Square Deal. I.

I'll borrow the policy label that the great President Theodore Roosevelt used to describe his policies for the common man and woman: A Square Deal. They people deserve a Square Deal from the government and the Ruling Classes. The common people are the ultimate source of national sovereignty in the US, and the ultimate reason it survives. Their national cohesion makes the US exist. They fight the wars. Today begins a series advocating simple and not so simple reforms that will help move the US towards ... what ?

What do we want ? What is our End Point ? What is our metaphorical eschaton for the US ?

We want a happier society more consistent with the Preamble of the Constitution of the US and consistent with our inalienable rights to Life, Liberty and Pursuit of Happiness. I've written elsewhere how this can be accomplished in a broad context of philosophy and also political economics. A happier society would provide near complete freedom for a great majority in the middle, a secure safety net for the poor and considerable regulations for the top - those budding aristocrats. The top pays for the safety net. Simple. I've proven that such a society would be happier [See posts of January 29 and April 9 of 2010]. Now what's the optimal path ?

Today and in coming days I will write about specific reforms that will move us there. First, a simple banking reform.

Banking Reform

There's too much vig in the system. The big banking corporations want a bigger and bigger slice of every transaction and everyone's pay checks. For what ? Nothing. The government provides deposit insurance at a non-profit basis. The Treasury prints the paper money and mints the coins. The debit card systems, the pay day lenders, the fees on bank accounts, the refusal to open accounts for the poor, the fees on every transaction: all are unfair vig the bosses want to loot from the people.

A reform: as a condition of having Federal deposit insurance, any bank or credit union must offer a transaction account for free that a person can use to deposit checks (electronically OR paper) and obtain cash or a debit card. For free, regardless of credit history (as no credit is being given). Now a person with any job can store his money safety and use it in the economic system. He can deposit a check for services rendered (whether from an employer or a friend), and get cash when the check clears. This rule would apply to small business accounts, too. And one more thing: the ability to get a bank check for minimal fee to pay for large expenditures that require checks (car purchase, etc.)

I don't have to suggest reforms for debit cards transaction fees since the Fed has already proposed new rules (after much research) to eviscerate the rapacious fees of the banks. Payday lenders could still exist ... to lend. The same for check cashing services. If they provide value or convenience, they could exist. But the poor could access the normal banking system and ... live freely without the parasites and vig paid.

Krypto Fund

My dog Krypto performed superlatively last year in her money management job. Krypto Fun made a 14.1% total return in 2010, better that most hedge funds. The S&P 500 total return was a bit over 15%; that's 100% equity, while Krypto Fund is less than 50% equity. Obviously Krypto Fund's risk reward is far superior. Good doggie ... here's your fee, a fine dog biscuit.

Word of the Day

"Gracile" - adjective [$10]
Gracile means 1. gracefully slender; 2. graceful.
Sentence: Attractiveness in ladies is not unidimensional: Audrey Hepburn was a gracile beauty; Marilyn Monroe was voluptuously gorgeous, but definitely not gracile.