Friday, September 23, 2011

TGIF and a bit more

Is the Board of HP out of its mind ... bipolar?  They obviously should all resign.  We are seeing the destruction of a formerly fine company with fine products.  How much money have they paid the ex-CEO?  The ex-ex-CEO?  And now the new CEO?  The directors? What a remarkable cluster FUBAR!

We bought a few stocks yesterday afternoon about 3:30 when the DJIA was down well over 500 pts:  JPM, HBC, FCX.  Those had been on the shopping list for awhile, but at the prices offfered then, we decided to start buying.  Those are not trades, but are long term investments.  Buys were made with 25% of the cash raised when the S&P was over 1300 a few months ago.  We are looking for more buys/adds to make in high quality stocks with dividends over 3% and plenty of room to raise them, meaning that payouts should be under 1/3 of earnings.

Word of the Day

"Suppurate" - verb, intransitive [$10]
Suppurate means 1. to form pus; 2. fester.
Sentence:  The self-inflicted wounds of HP continue to suppurate as the Board of Directors does nothing effective to cleanse them.  Resign!

Thursday, September 22, 2011

The Good Fight

This morning's headlines feature the possibility of a government shutdown over spending.

Hooray !!!

That's the correct battle - cut spending.

Disaster relief should be funded as a recurring item.  Disasters occur somewhere every year.  They are not unusual.  Cut some other wasteful program to fund them

Go for it, Tea party!  Get on message, Republican leadership!

Shut the government down - stop all this worthless spending.

The right fight.

Word of the Day

"Supine" - adjective [$10]
Supine means lying on the back or with face upward.
Sentence:  Here's hoping the Republican leadership stops being supine dolts and force real spending cuts on the budget bill.

Wednesday, September 21, 2011

Instructions for Ben et al.

Attention Ben and other Federal Reserve officials.

Here are the instructions for your 'actions' after the end of your two day meeting.

1.  Do nothing.
2.  Claim victory in your QE2 effort - you succeeded in reducing long term interest rates to levels not seen since the 1950s or prior to the 1930s when America was on the gold standard.  The dollar is stable and emerging market currencies that were too low have risen in value.  Inflation is well under control, being in the rough target range.
3.  Issue a statement that correctly blames Congress and the President for the current stagnation:  (A) they utterly failed in doing anything to help the housing markets or the job prospects for Americans or aid small business in getting simple loans; (B) they have utterly failed in real tax reform; (C) they utterly failed in spending reform; (D) they utterly failed in financial reform; and (E) they squandered the 2009 "stimulus" money on worthless pork and bailouts of profligate states.
4.  As a coda, tell the Republican leaders to keep their snouts out of your job until they show a modicum of success in doing their own jobs.
5.  Urge all 'leaders' in the Dark City to read this blog to find truly new ideas and solutions for America's problems.

The pamphlet goes to the printer today; planning a distribution by mid October.

Word of the Day

"Subjoin" - verb, transitive [$10] from Marshal's "Life of Washington".  Also used by Dickens in "David Copperfield".
Subjoin means to add or append (an illustration, anecdote, etc.) at the end.
Sentence: Bunkerman subjoined a small blurb for his booklet to today's blog post.
Subjoin means

Tuesday, September 20, 2011

A Word for a Dull Tuesday

Word of the Day

"Euhemerism" - noun [$100] One comes across this word in studies of classical mythology.
Euhemerism means 1. the theory of Euhemeris that the mythologies of various gods arose out of the deification of dead heroes; 2. the theory that mythology is derived from history.
Sentence:  Euhemerism received strong support in modern times when the remains of ancient Troy were discovered in the 19th century.

Monday, September 19, 2011

More Blather from Barry

Barry (aka Obama) has brought forth a new wave a blather and bloviation to pander to his base, viz. unions, the hard left and government workers.

His vaunted "jobs" plan was touted to a joint session of Congress as something big, but it turned out simply to be a plan to tax the private sector to fund public sector jobs.  And the taxes were permanent, while the "jobs" were temporary.  Short term thinking, thy name is Barry.

He comes out with a new tax on 'Millionaires" - I wonder what his definition for that is?  Don't we already have a minimum tax that forces them to pay?  Would his tax get to big mouth Warren Buffet's billions?  I doubt it, unless he goes after the charitable deduction for them.

He already has some rather large tax increases coming in 2013 from the expiration of the Bush tax cuts and the new taxes for his health care boondoggle.

Does he want to cut spending?  Nope.  Are any government departments or even sub-departments headed for the dust bin?  Nope.  Will government "workers" get a pay cut?  Nope.

Barry is in campaign mode. He's done his polling.  Now he's doing the one thing he knows how to do - talk.  Blather.  Bloviate. Blab.

When one reads the news stories about his "plans", we find no details.  For example, the Buffet "Millionaires Tax".  Here is the gist of it:  (WSJ) "On the Buffett Rule, for example, the president is likely to stop short of saying what the minimum tax rate should be for millionaires or how much money the new policy would raise."  In other words, it's just a talking point now.

Why bother listening to him any more?


None.  The past few weeks have been much ado about nothing.

Word of the Day

"Pronate" - verb [$10]
Pronate means to rotate the hand and forearm so the palm faces backward or downward.
Sentence:  To indicate the judgment on Barry's plan, pronate your right hand and extend its thumb.  Yes, that's a fancy way to say, "give it thumbs down".

Wednesday, September 14, 2011

Job Evaluation: Failure to Meet Objectives

The Census Bureau came out with hard numbers that permit us to evaluate the long term performance of Congress and the leadership class (to be called the Pharisees in the future).

WSJ (9/14/2011 online) "The income of a household considered to be at the statistical middle fell 2.3% to an inflation-adjusted $49,445 in 2010, which is 7.1% below its 1999 peak, the Census Bureau said."

FT (9/14/2011 online): “In 2009, the median full-time male worker aged 25-64 was earning $48,000 – roughly the same as in 1969 in real terms. Meanwhile, in the same 40-year period, the income of the top 2 per cent of working age men has jumped 75 per cent.”

These results are an unmitigated disaster.

The common people in America have lost ground in incomes during a period when the promises of the Pharisees in the Dark City have expanded.  For 40 years, the Pharisees urged the public to accept great changes in governmental policies based on theories. The promise was better living standards.

We can evaluate the success or failure of those policies with hard data:  they all failed.  Failure was bipartisan. The Pharisees in the Dark City and elsewhere got more [75% more!], but the plain people got less.

The 40 year social contract was a fraud to fool the people to accept risks to their lifestyles in exchange.  The Pharisees got a banquet, the plain people get to chew cud.

Here's a simple proposal to start to change to a better society:  cut the pay and benefits of Congress by 20%.  Cut the pay and benefits of Federal employees making over $100,000 by up to 20% [scaled to hit the higher levels with the full cut].  Require similar cuts for all government contractors.

Reason:  complete failure to meet objectives.

That's true shared sacrifice.  The leaders bear the pain, too.

Word of the Day

"Manqué" - adjective [$10] placed after the noun
Manqué means that might have been, but is not, unfulfilled (a comic actor manqué).
Sentence:  "Better lives from productivity increases" was a key part of a social contract manqué - the Pharisees are now in default.  Cut their pay.

Tuesday, September 13, 2011

Obvious Answer

Isn't the obvious answer to the structural problems in Europe the creation of a United States of Europe on the model of the federal system in the USA?

I know the French and Germans and other Europeans hate that idea, as it admits the USA is correct, but at some time one has to admit that reality exists.

By copying the USA constitutional structure and other institutions, Europe could let any "state" default and that would have no impact on the "nation".

Europe:  Just xerox the US Constitution and change the words a bit.  Now, would that not be easy?

Word of the Day

"Zymotic" - adjective [$10] archaic
Zymotic means of or relating to fermentation.
Sentence:  The zymotic roots of civilization are suggested by poems from Sumeria about the wonders of beer.

Monday, September 12, 2011

Monday Morning Ramblings

Let Greece default.  Why should that affect the Euro?  If Alabama defaulted, the dollar would not be affected one iota.

More research with hard data is crushing the global warming propaganda machine. Here's another link with more proof ->

As the authors are Serbian, they cannot be blackmailed by Al Gore's evil minions.

To reiterate:  major global temperature changes over decadal and century time periods are caused by changes in cloud cover, whihc are caused by cosmis ray flux changes, which are casued by soalr wind changes, whaic are caused by solar activity changes. Every link in this chian is backed by hard science and known physical processes, and is further backed by spectacularly significant correlation observations of solar activity measurements with global temperature.  Man is insignificant; carbon dioxide levels in the atmospere is an effect, not a cause.

The global warming scaremonger "scientists" are like patent medicine hawkers, telling a gullible public scare stories to get grant money.

To repeat, check out the Autobiography of Theodore Roosevelt.  I just read the section on his observations on how corruption worked in the New York Assembly in the late 19th century.  The methods seem to be in use now.  One technique is a form of blackmail:  introduce a law that might harm some corporations, then collect lobbying donations to stop it.  Has anything changed?

If you have private businesses, remember to pay your estimated taxes by September 15 (Thursday).

Some big cap stocks are getting intriguingly low priced.  As your writer is outside the prime spending years [24-55], dividends matter a lot.  I am looking for more solid stocks paying over 3% with reasonable prospects of future increases.

Word of the Day

"Fardel" - noun [$100] archaic; used in the Hamlet's soliloquy.
Fardel means a bundle, a burden.
Sentence:    The common man and woman bear fardels working in the fields and factories, while the hogs at the trough in the Dark City slurp the feed.

Friday, September 9, 2011

More Blather from the Bloviator

Barry offered some re-tread policies to carry the nation onward.  All he had to do was to read posts of the past two days for real solutions, and he failed.

Of his entire package, only $50 billion was offered to infrastructure, and that was rather vague.  The rest is borrowing money to invest in ... nothing.  Sigh ...

Meanwhile, Bank of America [aka BofA] plans to cut 40,000 jobs.  BofA already has terrible service.  The one job cut that might help that company won't be announced, viz., the firing of its CEO.

The Pharisees in the Dark City continue to rule and do nothing but posture to collect money from lobbyists.  The plain people deserve a new Square Deal.  Where is the 21st century Theodore Roosevelt?  Sigh ...

Book:  I suggest the Autobiography of Theodore Roosevelt for reading.  I started reading it a week ago.  The book has no ghost writer, being written by the great man himself in a plain, refreshing style.

Word of the Day

"Catharsis" - noun [$10]
Catharsis means 1. an emotional release in drama or art; 2. (Psychology) the process of freeing repressed emotion by association with the cause, and elimination by abreaction; 3. (Medical) purgation.
Sentence:  The quintessential achievement of catharis in drama has to be the scene in Sophocles' Oedipus the King when the truth finally is exposed to all, by the persistent questioning by Oedipus himself.  Moral:  some questions are best not ever asked.

Thursday, September 8, 2011

The Short Term Jobs Solution

America has a multi-generational opportunity now to build out its national infrastructure with ultra cheap money.  And America has a multi-generational need to provide the skeleton on which private industry can grow to offer more jobs for all Americans.  And America has a multi-generational need for growth that will hire more Americans for good jobs.

Not since the 1930s and 1950s has America expanded its national infrastructure.  Both those investments paid off handsomely.  The 1930s saw rural electrification, flood control, and parks construction that brought all America to the modern age and opened up the nation.  The 1950s saw highway construction that connected and bound the nation together.  After and during those periods, the incomes of the common man and woman all across America increased year after year in real growth for an entire generation.

The second decade of the 21st century should become a similar period of building national strength to support growth for the rest of the 21st century.

Here is the program.

I.  Remarkably low interest rates for long term bonds can fund this program.  The bonds will be paid from increased revenues that growth will provide.  The US Treasury should begin selling $1 Trillion in 10 to 50 year bonds with with maturities distributed from 2022 to 2062 so as to make the cash debt service payments approximately equal every year. 

II.  Sell both fixed rate and TIPs.

III.  Create an infrastructure super committee to choose the projects within guidelines. Committee members swear to have no conflicts of interest and must approve each project personally.  Criminal penalties and personal liability will apply to any member who lies about any conflict of interest.  An inspector general will review all contracts and performance. 

IV.  Override ALL environmental laws and prohibit any judicial interference for these projects.  Decisions of the super-committee are final.

V.  Request the public and private sector to submit proposals for projects, to be considered along with projects from the super committee.

VI.  Project sectors:  highway buildout, rail buildout, fiber optics buildout, gas and electric transmission line buildout, airport buildout, air traffic control system buildout, cell phone and wireless Internet buildout, port buildout, parks buildout, flood control buildout, etc. (software included).

VII. Objective:  connect and bind all America with these systems with special attention to the small cities and rural areas, that great expanse of America that will be the regions of future growth.

VIII.  Require all contracts to have fixed prices and fixed completion times.  Provide bonuses for coming in on time or early and on or under budget.  Put penalties on contracts that are late or over budget.

IX.  Require any imported goods or services used therein to bear an excise tax equal to the proportional share of the long term cost of government divided by GDP, currently about 20%.  This would be in lieu of the long term job reforms posted yesterday.

X.  All projects must commence by year end, 2013.  All projects must finish by year end 2021.  The entire $1 trillion will be pre-funded by bond sales commencing as soon as possible.

We want a flexible national infrastructure that will work as the world makes the transition from the gasoline engine to other transportation motive forces (likely within 50 years).  The infrastructure envisioned would support rail, electricity and natural gas as motive means, and would support alternatives to physical transportation by modern communication technologies and better distributrion networks.

JOBS:  that $1 trillion would provide jobs for millions of construction workers and manufacturing and service industries for at least a decade.  That will re-start the American economy.  As this infrastructure is built-out, private industry will use it and find new needs to be met and new demand for new ideas in new industries.

Revenues from these new industries and jobs will pay for the debt service on the bonds beginning in 2022.

Cost:  $1 trillion funded at 3% costs $30 billion per year in interest from 2012 under principal begins to repaid in 2022.  Thereafter, the cost is $43 billion per year to pay interst and principal.  This amount of debt service is easily achieved from tax revenues of new economic growth in the nation.

Hmmm ... this is rather cheap.  Maybe we should consider $2 trillion.  $3 trillion sounds letter.  Sounds good:  costs just $90-120 billion per year.

[Consider the cost of the endless Afghanistan program = about $100 billion per year]

Let's do it - a $3 trillion Build America Program!

Word of the Day

"Euergetism" - noun [$10,000] alt. spelling "Evergetism".  From an ancient Greek word meaning "I do good things."
Euergetism means the practice of notables to distribute part of their wealth to the community of 'hoi polloi', rather than to individuals (clientelism).
Sentence:  Let's encourage euergetism for today's billionaires:  buy the long term Treasury bonds to fund the build-out of America.  Do some good by making permanent investments, rather than putting all your money in Philistine hedge funds that simply trade.

Wednesday, September 7, 2011

The Long Term Job Solution

The problem that America has with lack of jobs needs both a short term and a long term solution.  Below is the long term solution that Barry should propose tomorrow night.  He won't.  He's part of the problem and seems to have no vision for the future of America.

The Job Solution - Long Term

Stop taxing jobs. That means no more taxes paid on employment income for Social Security, Medicare, unemployment benefits or any other direct or indirect tax on jobs. This will lower the cost of hiring people significantly.

Eliminate the connection between health care and jobs. Tying health care to a job is a Faustian bargain: one loses a job and health care and the same time – horribly risky for people. Those silver chains both increases the cost of employment enormously and prevents people from moving to either better jobs or starting their own businesses.

Social Security, Medicare, all other job taxes AND a new National Shared Heath Care Benefit should be funded by a new Value-added or Sales tax on goods (especially imported goods) and many services (especially imported services). Consumers of imported goods and services now get a free ride. Nothing embedded in the value of imported goods & services helps fund the government or provides benefits to American workers. Shifting the funding for all those programs will make consumers of imports pay a fair share to support the New American System. See The Tax Solution for more details. In this New American System, cost of employing Americans in America will be far, far less.

Eliminate all tax subsidies for equipment and machinery (accelerated depreciation, etc.). Eliminate all overseas income tax loopholes. In the New American System, the plain American people are preferred over machines or foreign labor.

Eliminate tax deductions for any compensation above the salary of the President of the United States. Why the President’s salary? We have to draw the line somewhere and that’s a highly recognizable, bright line all can see. That change will lower the costs of employing many people at middle income wages/salaries vs. an executive suite or princely contractors. Eliminate tax loopholes for billionaire money managers.

Require any corporation wishing to bring in immigrants for so-called "hard to fill" jobs first offer the job broadly at a 10% pay increase AND offer job training for any special requirements; provide an arbitration board to protect against unfair or excessively tailored job descriptions.

Eliminate all Federal & State regulations that kick in at some number of jobs, like 50. Those hold down the number of jobs and encourage using high paid employees supported by machines, vs. simple jobs for more people.

Eliminate the R&D tax credit and replace it with a Job Training credit: US companies get the credit for the costs of training workers whom they hire with skills needed for the jobs; if the new hires are laid off within five years, the credit should be recaptured.

The new value-Added Tax will apply to services, too, thus forcing those using foreign labor or foreign contracts services to pay the tax for the retirement and health care benefits for Americans.

All these policies will lower the cost of hiring plain people in America and increase the demand for people vs. machines. And it frees the entrepreneurial energy of millions of people chained to dead end jobs by "benefits". Entrepreneurs will be more free to hire people as hiring becomes simple and direct, with no red tape. The cost of replacing people with machines goes up. By equating the W-2 worker with the 1099 worker, employers will want to hire more people to lock in their services; there will be NO benefit to keeping people on 1099 contracts.

Word of the Day

"Fard" - noun, verb, transitive [$100] Archaic.
Fard means (noun) facial cosmetics; (verb) to apply cosmetics to (the face).
Sentence:  Will Barry offer new ideas?  Nope, he's going to fard the hogs at the trough.

Tuesday, September 6, 2011

Back in the Saddle

Last week was a break from this blog for your writer.  He used it productively in collecting and editing some past posts to create a pamphlet to publish and send to about 1,000 "leaders" in the US.  Why?  To give them truly new ideas.  I can't bash them as they deserve, because I want them to read it.  Writing an effective pamphlet requires one to incorporate principles of good advertizing to capture the readers.  That rules out bashing them ... at least at first.  The pamphlet is in re-write mode now as I proceed through many drafts to hone the language and thoughts.  Publication will be this month ... or my name isn't Bunkerman.

The Panic of the Rich in Europe continues.  European stocks markets cratered yesterday while we had our Labor Day barbecues.  Today the Swiss National Bank set a hard ceiling on the Swiss Franc vs. the Euro saying it will buy unlimited quantities of Euros by issuing unlimited amounts of Swiss Francs.  Will they do it?  Time will tell.  Thye have to stop the distortion caused by the flood of panic money coming from rich Europeans and the Middle East.  Rich Europeans fear taxes and social disorder; rich Arabs fear revolutions and social disorder.  Do you notice a common denominator?

Obama will make another speech Thursday evening.  Judging from his Labor Day speeches, he will offer nothing new and mostly posture to his base for political gain.  Your writer will make a post tomorrow with the correct answer to the correct question:  how to help America and the American people get back onto a path towards more prosperity and happiness for all.

An Interesting Movie

Check out The Inside Job, which contains many quite intriguing and provocative facts about the Panic of 2008.  I was quite surprised to learn the huge sums paid to economists such as Larry Summers and Glenn Hubbard by the financial services industry.  These guys were [are?] getting $100,000 a speech.  Uh ... that's not a speaking fee, it's a payoff.  Big money has utterly corrupted that formerly academic profession.  Remember that when the media puts people like this on TV to blather about what's good for America.

The movie missed a few points (such as the role of hedge funds), but has enough to make it quite worth watching.

Comparisons to 2008

These are all over the business press.  Uh ... guys ... if that has any validity, why are TIPs prices so high?  Why are municipal bonds yields so low?  Sheesh ...


Word of the Day

"Contumely" - noun [$10] Shakespeare, from Hamlet's soliloquy.
Contumely means 1. insolent or reproachful language or treatment; 2. disgrace.
Sentence: The common man and woman need to start dousing the DC crowd with contumely - in old Brooklynese,  give them the raspberry.  Toss the bums out.