I had a mental orgasm when I read this article on Obama, who just froze the salaries of high-paid aides, instituted a new ethics code, and changed FOIA policy:
http://news.yahoo.com/s/ap/20090121/ap_on_go_pr_wh/obama_executive_pay
"For a long time now, there's been too much secrecy in this city," Obama said.
Obama gets it. He really gets it. God bless him, and God bless America.
"And if an epitaph be my story, I'd have a short one ready for my own: I had a lover's quarrel with the world." -- Robert Frost
Wednesday, January 21, 2009
Microfinance: Oikocredit et al
If you have at least $1,000 to invest and a desire to make a difference, where should you invest? If dislike stocks, you might be interested in Oikocredit:
http://www2.oikocredit.org/sa/us/doc.phtml?p=Investing1
http://www2.oikocredit.org/sa/us/doc.phtml?p=investing-in-oiko-usa
From what I gather, it's like Kiva, except micro-finance investors receive 2% interest on their loans (instead of Kiva's 0% rate). I am not an Oikocredit investor, so I don't have any personal experience with the organization. I find Oikocredit's website hard to navigate and their procedures convoluted. In addition, they appear to favor donations/investments from organizations (like churches) rather than individuals.
Do your own due diligence. I am not endorsing Oikocredit. However, if you do invest in Oikocredit or are already an investor, please post a comment and let us know your opinion. It would be nice if Kiva had some competition to keep them on their toes.
Update on March 28, 2009: this eBay-affiliated site looks very promising:
https://www.microplace.com/
Update: found another site worth checking out:
http://lendforpeace.org
The information on this site is provided for discussion purposes only and does not constitute investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities or make any kind of an investment. You are responsible for your own due diligence.
http://www2.oikocredit.org/sa/us/doc.phtml?p=Investing1
http://www2.oikocredit.org/sa/us/doc.phtml?p=investing-in-oiko-usa
From what I gather, it's like Kiva, except micro-finance investors receive 2% interest on their loans (instead of Kiva's 0% rate). I am not an Oikocredit investor, so I don't have any personal experience with the organization. I find Oikocredit's website hard to navigate and their procedures convoluted. In addition, they appear to favor donations/investments from organizations (like churches) rather than individuals.
Do your own due diligence. I am not endorsing Oikocredit. However, if you do invest in Oikocredit or are already an investor, please post a comment and let us know your opinion. It would be nice if Kiva had some competition to keep them on their toes.
Update on March 28, 2009: this eBay-affiliated site looks very promising:
https://www.microplace.com/
Update: found another site worth checking out:
http://lendforpeace.org
The information on this site is provided for discussion purposes only and does not constitute investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities or make any kind of an investment. You are responsible for your own due diligence.
Tuesday, January 20, 2009
Tom Brokaw Interviews Warren Buffett
In case you missed it, here is the transcript of NBC's January 18, 2009 interview with Warren Buffett.
Every time I read what Warren says, I relax. America is lucky to have such an articulate, honorable spokesman. Excerpts from the interview are below.
Warren on public pensions:
[T]he pension plans of states and cities...have been decimated in the last year. And the costs from that, the lack of revenue they're going to face as the economy slows, means that you are going to see a parade of mayors and governors to Washington like you've never seen it. And they're gonna say, "If you can help out General Motors, and you can help out Citicorp, you can certainly help out, you know, this state or that state." So I think it's gonna make inauguration day look like nothing in terms of the public officials that come in here and say, "We need help." Their revenues are gonna be down. Their expenses, particularly including pension expenses, are going to be up. And you're going to have unbalanced budgets just all over the country with states and cities.
Warren on economic stimulus:
[E]very time you read about 523,000, or whatever, those people losing their jobs in December, those are 523,000 human tragedies. I mean, I can think of nothing worse than going home and saying, you know, to a family that, "I've lost my job and we've got mortgage payments and food to buy." And so we need to solve that one. And we will have consequences to the kind of deficits we're running up. And some of them will be unpleasant. But I would rather face those consequences than to face the consequences of doing nothing.
Warren on investing:
[Investors] have to look to the business, the asset itself. If you own an apartment house you wouldn't get a [price] quote on it every day. You'd just look at the rent, and what your taxes were and expenses were. And if they all came in line with what you expected when you bought it, you'd feel you'd made a satisfactory investment, and you'd never get a quote on it. So I don't look at quotes. Mostly-- I can't tell you what Berkshire Hathaway [BRK.A, BRK.B] is selling for today.
Warren on bailouts:
Well, that's [bank, auto bailouts] exactly what we did in 1933. I mean, in 1933, when Roosevelt came in, there was something called the Reconstruction Finance Corp, RFC. Actually, It got enacted under Hoover in '32. But Roosevelt appointed Jesse Jones in 1933. And they put preferred stocks into the banks. They concentrated on banks, but they went into other things. Incidentally, when [Jesse Jones] put that money in, he told 'em what the compensation rate was gonna be too. I mean, he was a tough tsar. And it helped take the United States out of a depression. I mean, the RFC was an important component. And I'm sure they got criticized at the start. And they said, "People, you're throwing money into the wrong things and all that." ...But you can't separate Wall Street, Main Street, side streets. We are connected. This is one big community. And you better have credit flowing.
I knew that Congress authorized loans in 1979 to prevent a Chrysler bankruptcy, and J.P. Morgan once bailed out the Treasury, but this is the first time I've heard about the RFC and Jesse Jones. I shouldn't be so surprised--as I wrote here, the more things change, the more they stay the same.
Every time I read what Warren says, I relax. America is lucky to have such an articulate, honorable spokesman. Excerpts from the interview are below.
Warren on public pensions:
[T]he pension plans of states and cities...have been decimated in the last year. And the costs from that, the lack of revenue they're going to face as the economy slows, means that you are going to see a parade of mayors and governors to Washington like you've never seen it. And they're gonna say, "If you can help out General Motors, and you can help out Citicorp, you can certainly help out, you know, this state or that state." So I think it's gonna make inauguration day look like nothing in terms of the public officials that come in here and say, "We need help." Their revenues are gonna be down. Their expenses, particularly including pension expenses, are going to be up. And you're going to have unbalanced budgets just all over the country with states and cities.
Warren on economic stimulus:
[E]very time you read about 523,000, or whatever, those people losing their jobs in December, those are 523,000 human tragedies. I mean, I can think of nothing worse than going home and saying, you know, to a family that, "I've lost my job and we've got mortgage payments and food to buy." And so we need to solve that one. And we will have consequences to the kind of deficits we're running up. And some of them will be unpleasant. But I would rather face those consequences than to face the consequences of doing nothing.
Warren on investing:
[Investors] have to look to the business, the asset itself. If you own an apartment house you wouldn't get a [price] quote on it every day. You'd just look at the rent, and what your taxes were and expenses were. And if they all came in line with what you expected when you bought it, you'd feel you'd made a satisfactory investment, and you'd never get a quote on it. So I don't look at quotes. Mostly-- I can't tell you what Berkshire Hathaway [BRK.A, BRK.B] is selling for today.
Warren on bailouts:
Well, that's [bank, auto bailouts] exactly what we did in 1933. I mean, in 1933, when Roosevelt came in, there was something called the Reconstruction Finance Corp, RFC. Actually, It got enacted under Hoover in '32. But Roosevelt appointed Jesse Jones in 1933. And they put preferred stocks into the banks. They concentrated on banks, but they went into other things. Incidentally, when [Jesse Jones] put that money in, he told 'em what the compensation rate was gonna be too. I mean, he was a tough tsar. And it helped take the United States out of a depression. I mean, the RFC was an important component. And I'm sure they got criticized at the start. And they said, "People, you're throwing money into the wrong things and all that." ...But you can't separate Wall Street, Main Street, side streets. We are connected. This is one big community. And you better have credit flowing.
I knew that Congress authorized loans in 1979 to prevent a Chrysler bankruptcy, and J.P. Morgan once bailed out the Treasury, but this is the first time I've heard about the RFC and Jesse Jones. I shouldn't be so surprised--as I wrote here, the more things change, the more they stay the same.
Obama's Inauguration Address Transcript
For those of you who missed it, here is the transcript of President Obama's inauguration address:
http://www.welt.de/english-news/article3062276/President-Obamas-inauguration-address.html
I didn't hear the address, but reading the transcript, this is my favorite part:
[I]t has been the risk-takers, the doers, the makers of things – some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.
In other news, stocks markets are down. The Dow is down 2.6%, and Nasdaq is down 4.2% in mid-day trading. It's got nothing to do with Obama's address--corporate earnings are still coming out, and people are scared.
http://www.welt.de/english-news/article3062276/President-Obamas-inauguration-address.html
I didn't hear the address, but reading the transcript, this is my favorite part:
[I]t has been the risk-takers, the doers, the makers of things – some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.
In other news, stocks markets are down. The Dow is down 2.6%, and Nasdaq is down 4.2% in mid-day trading. It's got nothing to do with Obama's address--corporate earnings are still coming out, and people are scared.
Monday, January 19, 2009
Madoff Investors and White Shirts
It's becoming fashionable for Madoff investors to share their stories. One investor, Alexandra Penney, shares her tale of woe here.
For the thousandth time, the lesson is “diversify”:
More than a decade ago, when I was in my late 40s, I handed over my life savings to Madoff’s firm...
It's also clear the elite were the ones connected to Madoff:
I was brought up in very comfortable circumstances in a Waspy Connecticut suburb. My mother was a descendant of Greek royalty, an intellectual grande dame who wore elegant shaded glasses. But my father, a Greek immigrant, was a product of the Depression. He was a smart, strict Harvard lawyer who had seen bad times...I asked around and talked to my smartest friends with Harvard and Wharton MBAs. There appeared to be a secret society of Madoff investors. A friend who was older, wealthier, and more established somehow got me in.
It's still difficult to identify with Madoff investors, partly because there's an element of self-exploitation involved. Ms. Penny, for example, uses her article to promote a sex book she wrote years ago. She also unconsciously reveals how insulated she is when she talks about her forty white shirts, ironed by an immigrant named Yolanda:
I wear a classic clean white shirt every day of the week. I have about 40 white shirts. They make me feel fresh and ready to face whatever battles I may be fighting in the studio to get the best out of my work.
The language is shockingly out-of-touch. "Battles" fought "in the studio"? Is she forgetting that Americans, mostly poor and middle class, are fighting real battles right now? Also, who has 40 white shirts? I'm an attorney, so I actually need white collared shirts. Yet, I own only three--one from Gap (GPS), one from Macy's (M), and another from Nordstrom (JWN). I also specifically look for "wrinkle-resistant" shirts to save money on drycleaning.
Other readers picked up on the "white shirt" phenomenon, too--here's a comment from "Hammett":
Hey, you're worried about clean white shirts. So, you're going to have to learn how to iron and stand there until your back hurts, like most people. That's life. Get off your [arse], and get to work. And stop feeling sorry for yourself.
More on Madoff here and here. Public outrage isn't going to go away anytime soon. Scott Burns, one of my favorite finance writers, received 3,000 emails/letters when he asked readers how Madoff should be punished. What do you think, readers? What would be an appropriate punishment for Madoff?
For the thousandth time, the lesson is “diversify”:
More than a decade ago, when I was in my late 40s, I handed over my life savings to Madoff’s firm...
It's also clear the elite were the ones connected to Madoff:
I was brought up in very comfortable circumstances in a Waspy Connecticut suburb. My mother was a descendant of Greek royalty, an intellectual grande dame who wore elegant shaded glasses. But my father, a Greek immigrant, was a product of the Depression. He was a smart, strict Harvard lawyer who had seen bad times...I asked around and talked to my smartest friends with Harvard and Wharton MBAs. There appeared to be a secret society of Madoff investors. A friend who was older, wealthier, and more established somehow got me in.
It's still difficult to identify with Madoff investors, partly because there's an element of self-exploitation involved. Ms. Penny, for example, uses her article to promote a sex book she wrote years ago. She also unconsciously reveals how insulated she is when she talks about her forty white shirts, ironed by an immigrant named Yolanda:
I wear a classic clean white shirt every day of the week. I have about 40 white shirts. They make me feel fresh and ready to face whatever battles I may be fighting in the studio to get the best out of my work.
The language is shockingly out-of-touch. "Battles" fought "in the studio"? Is she forgetting that Americans, mostly poor and middle class, are fighting real battles right now? Also, who has 40 white shirts? I'm an attorney, so I actually need white collared shirts. Yet, I own only three--one from Gap (GPS), one from Macy's (M), and another from Nordstrom (JWN). I also specifically look for "wrinkle-resistant" shirts to save money on drycleaning.
Other readers picked up on the "white shirt" phenomenon, too--here's a comment from "Hammett":
Hey, you're worried about clean white shirts. So, you're going to have to learn how to iron and stand there until your back hurts, like most people. That's life. Get off your [arse], and get to work. And stop feeling sorry for yourself.
More on Madoff here and here. Public outrage isn't going to go away anytime soon. Scott Burns, one of my favorite finance writers, received 3,000 emails/letters when he asked readers how Madoff should be punished. What do you think, readers? What would be an appropriate punishment for Madoff?
Sunday, January 18, 2009
Salary Info and the Middle Class
From The Atlantic's Jan/Feb 2009 issue (p. 77):
[T]he median household income in the United States is $48,000... [but] the median-household-income statistic is too blunt an instrument, because it contains households headed by 20-year-olds (i.e., students), as well as 90-year-olds (i.e., retirees). If you earn $48,000 at 20, you're doing fine and don't need government help; at 90, you're on a fixed income and have different needs (and more options) from government than someone younger. According to an analysis by The Third Way, the median household income for people ages 25 to 60, the prime working years, is about $68,000; if they're married, it's about $78,000. If both spouses earn income at some point during the year, the number rises to $85,000.
Makes you reconsider the definition of middle-class, doesn't it?
[T]he median household income in the United States is $48,000... [but] the median-household-income statistic is too blunt an instrument, because it contains households headed by 20-year-olds (i.e., students), as well as 90-year-olds (i.e., retirees). If you earn $48,000 at 20, you're doing fine and don't need government help; at 90, you're on a fixed income and have different needs (and more options) from government than someone younger. According to an analysis by The Third Way, the median household income for people ages 25 to 60, the prime working years, is about $68,000; if they're married, it's about $78,000. If both spouses earn income at some point during the year, the number rises to $85,000.
Makes you reconsider the definition of middle-class, doesn't it?
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