Kids on Taxing the rich... Fed & Bernanke counterfeiting

GMA clip 9/29/11.

IF you don't like paying higher taxes "you're greedy."

Kid solution on bringing America back: put money in printer and make more money.  

Future Fed head alert, look out Bernanke.

Kids Don't think Obama Re-elected

A clip from GMA 9/29/11. Kids don't think Obama to be re-elected, offer advice of more job availability.

The Case For Barnes & Noble: Amazon

The performance of Barnes & Noble (BKS) shares compared to Amazon (AMZN) can be seen from this Google chart:

For many reasons Amazon is doing well and Barnes & Noble is under pressure and without a change may go the way of Borders, bankrupt.

Most people have heard the story or been the subject themselves of browsing in a Barnes & Noble brick and mortar to find and review a product and then, having compared costs, ordered the product using Amazon.
Or have you witnessed the "customers" that enjoy casually sitting and reading in the B&N store rather than purchasing the product and reading it elsewhere.

As stated, there are many reasons for the bifurcation in these companies performances.

There are many reasons to think B&N will have trouble surviving without a change. However, one reason to consider investing in BKS is ironically the company that is pressuring its sales, Amazon.

Amazon is under pressure from cash strapped states to implement a sales tax.

One could reasonably suspect that this sales tax drive will eventually take place. At that point, I think Amazon would seriously weigh the pros and cons of establishing a physical presence, brick & mortars. Barnes and Noble would be an attractive way of establishing this physical presence; Amazon may buy B&N.

Amazon has established customers across a broad range of products and is becoming more entwined with its customers daily lives. What better way to promote itself, provide superior customer interaction, and be a resource to the community as a social gathering spot than by a physical store presence?

In addition, Stifel Nicolaus & Co. analyst David Schick says a Barnes and Noble purchase would bring Amazon B&N's "competitive advantage... in its relationship with publishers and heavy readers, ... relationships...strengthened with Borders going out of business."

Amazon's focus on online media could gain tremendous boost utilizing B&N's existing college presence.

AMZN may buy BKS and figuring out when and at what price may be worth thinking about.

HFCS High Fructose Corn Syrup

Just watched a commercial that fails the logic test.



The commercial says studies found that HFCS has an affect similar to sugar in humans.
It implies that there is nothing to worry about in consuming HFCS.

This implies that there was a current concern about consuming HFCS.

'A' is possibly bad.
It is found that 'A' is similar to 'B'.
Therefore....?
Well, according to the commercial 'A' is now okay!

What about the possibility that 'B' may also be bad?

I'm not going to say that sugar is bad. What I will say is that excess sugar is probably not good for anyone.

The average amount of sugar consumed in a year by Americans has increased 100lbs in the last century. 

We know how sugar affects insulin levels and we know how powerful insulin is.
We know that cancer cells feed off of sugar.

Why do we continue to ignore the science that has won multiple Noble prizes for its researchers?

$$$$$$$$$$$

HFCS is cheap compared to sugar. Sugar is sweet. People like the taste of it and the insulin response to sugar.  It is a potentially deadly cycle, an addiction that is being exploited for profit.


Just found this commercial that has the actress hastily mumble "its fine in moderation."  I guess the lawyers got in on that one.

Einstein Wrong. Physicists fail to think. Grand Unified Theory Possible.

Analysis of this article gives credence to many of the thoughts I have had the last few weeks.
Physicists who measured particles traveling faster than speed of light don’t dare dream
The thoughts:

1.Einstein was wrong.
2. Time is not real.
3. The speed of light is not a barrier.
4. Time travel and dilation are a farce
5. Simple thought experiments can invalidate explanations of Einstein's theories.
6. A Grand Unified Theory (GUT) has been hampered by an unwillingness to consider Einstein wrong.
These thoughts were prompted from a TV show discussing the possibility of time travel.

Time is not real, it is a derived measurement. Time can be many things- the displacement of sand by gravity, the period of a pendulum, the frequency of microwaves from cesium. You can not add to it or take away from it. It has no absolute beginning or end. It is a relative measurement that has no meaning beyond what we give it.

A "subatomic particle, the neutrino, was found to have outrun light and confounded the theories of Albert Einstein.
To our great surprise we found an anomaly,”

No! You measured a result. It is only an anomaly to the special theory of relativity.
“Everybody knows that the speed limit is c, the speed of light. And if you find some matter particle such as the neutrino going faster than light, this is something which immediately shocks everybody, including us,”
No! The speed of light is the speed of light. Don't blame everybody for the scientific community's assumption of correctness to Einstein's theory.
Example:
"Alvaro De Rujula, a theoretical physicist at CERN...blamed the readings on a so-far undetected human error... (people) could, in principle, travel to the past and kill their mother before they were born."

Speed of light must be speed barrier and we can manipulate time and events, Einstein said so. WHY would you accept this?

Stop assuming Einstein was right and lets get  a GUT. I can't always do the math but I can do the same thought experiments that Einstein proposed and see their fallacies.

Random Thought

The wisdom of various attempts to stimulate the economy is best described by paraphrasing Edison's aphorism: I haven't failed to stimulate the economy, I've found dozen of ways that don't work

Questions not being asked: Boeing vs NLRB

Poor management is the real reason why Boeing is building in South Carolina. Management is establishing a track record of poor forecasting, inefficient and wasteful production, poor product quality oversight, creating an uninspiring working environment, and waste in general.


Boeing executive Jim Albaugh telling a reporter why they decided to move the 787 Dreamliner assembly line to South Carolina:

The overriding factor was not the business climate. And it was not the wages we are paying today. It was that we can't afford to have a work stoppage every three years.

Each element of his answer should be examined.

Why are there frequent work stoppages?

Why are wages an issue?

Why might there be a poor business climate?

I have visited Boeing facilities in Washington, Kansas, and its HQ in Chicago.

Wasteful bureaucracy at each one.

There are two ways for management to increase profits, increase revenue or decrease expenses thus improving margins.

Instead of cutting all the bloat resulting from poor management, Boeing continually feuds with its workforce.

So maybe the workers will not strike and create stoppages in South Carolina. Will this make the company any more productive. I doubt it.

The 787 program has been a disaster. Every investor and customer was excited about the 787's prospects and the ambitious time line. Delay, delay, delay, lack of this, failure of that; is there any excuse that we didn't hear?

Stop blaming others and take some responsibility Boeing management.

-------------------------------------------------------------------------------------------
Boeing has been around for nearly 100 years and has a market cap over $40 billion. Its main competitor is EADS.

Boeing is essentially a GSE- government sponsored entity. Nearly half of their revenue came from Boeing's Defense, Space & Security divisions. The majority of paperwork at the export-import bank has Boeing's title on it. Subsidies and sweetheart deals at the local level are undeniable.

Some days you just can't get rid of a bomb

The current state of the European economy:




Eventually the bomb will go off. When will the European leaders stop ignoring the problem?  Who is Batman and will they do the right thing?

Boom! Here comes the Boom! Ready or not, How you like me now?

The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
-- The Second Coming; Yeats

The next few days will be tough for the markets.  Investors have been circling the pundits and leaders, slowly widening the gyre, until the falconer is actually ignoring the falcon, as in Europe, or is yelling at it to go away, as in the United States. 

Der Spiegel has the latest on Germany's response to the Greeks ouzo sipping ways. Meanwhile, Bloomberg LP reports Italy is looking for a China bailout. This will initially give some relief and a bounce, but I remember learning that the last money in before an economic bust is often of foreign origin. Prince Walid

I wrote about Greece default, by choice or by riot, and the resulting threat to the Euro structure in June elsewhere (Real Time Economics and others were also early to the game). The spotlight is finally being shown on the situation, but the Europeans are delaying and refusing to deal with their mess. Euro-zone chiefs fiddle while countries burn

In the US, President Obama presented his jobs bill.  Whatever you made of his proposals, many analyses are available, the tax proposals suggested to pay/off-set the proposed spending are coming into full view. 

The bill will restrict some tax exemptions of interest from municipal bonds. The municipal bond market will get killed; "It would be dramatic for municipal bond demand,” said Matt Fabian
It makes no sense to funnel money to the States and local government, as part of the proposed job bill, and at the same time raise their borrowing costs.
Other proposals to offset spending that will discourage risk investment are being found.

Regulations and a yield curve that helicopter-Ben is helping destroy is reshaping the banking industry (BAC layoffs) and most likely moving the financial centers to Asia.

The devaluation of the dollar and essentially negative real returns offered to government debt investors and money market/cd participants is pick-pocketing Americans.  The intentions are well thought out, encourage riskier investments like stocks or real estate, but the reality is that the moral hazard created by the bailouts, the lack of transparency by financial companies, and the lack of certainty in fiscal, monetary, and regulatory policy have created a warning to the investment community; don't trust the guys and gals with the rose colored glasses.


Competitive devaluation further distorts markets and money flow. Lets all buy some Krone!

I think we are at a bifurcation point, hope and wants versus reality.
The reality is Europe's leaders don't want to confront its failed systems. The United States' leaders don't understand simple economics. The falcons, the investors and citizen stakeholders, are no longer willing to dance to their promises and calls.

Things fall apart; the centre cannot hold.

Be careful these next few days.

Fed's Richard Fisher Confuses His Age For Wisdom

This morning on Bloomberg, Federal Reserve Bank of Dallas,@DallasFed, President Richard Fisher made snarky comments in response to Betty Liu, @BettyInTheLoop , and diminished the value of his interviewer, Sara Eisen, @saraeisenFX.
About 4 minutes in, Fisher says that the media is hyping the dissent from the most recent Fed meeting. Liu challenges him saying that the markets may have increased volatility due to the dissent. 

The lack of clarity in policy, monetary and fiscal, has been a key reason why investors have been cautious and unwilling to accept risk.

Fisher goes on to buffer his initial response by stating the obvious, he is much older than either of his two hosts. 

Richard Fisher's credentials are very impressive. However, he should be above diminishing others opinions due to his greater experience.

Who is to say his many years make him any more right than a five year old. For many economic questions, you would do just as well flipping a coin as you would listening to the experts. Actually, listening to the experts may be a good strategy, as long as you take the contrarion view.

"Wisdom doesn't automatically come with old age. Nothing does - except wrinkles. It's true, some wines improve with age. But only if the grapes were good in the first place"   Abigal Van Buren

"The surprising thing about young fools is how many survive to become old fools."  Doug Larson

Sorry BAC, you can keep your "Book Value"

Bank of America Corp has an ugly chart.  Buffett and Berkshire cut their deal with BAC and Moynihan is crying out all clear. 

Bove says book value is this or that and that the stock should move from 7s to 10s. 

I have a feeling that BAC's own analyst, Guy Moszkowski, may agree with Bove.  I remember when Moszkowski maintained a "buy" rating on Bear Sterns @ 140 in June 2007. The price to book value was "1.3", significantly lower than peers like Lehman and Merrill that were at 2.2 and 2 respectively.  Bear, he wrote, is even a "manageable takeover candidate."

I also remember Bove riding down both BAC and Citigroup. 
Why don't the journalist preface any of his appearances with his track record? They used to display how the analysts picks have performed since the last time they spoke.  His track record has been horrible, sorry to say.

Bottom Line:

Why trust the analysts or the banks when it comes to book value?
The banks don't even trust each other?

People are having trouble finding jobs; either they can't find one or they found one but can't sell their house to move to the opportunity.

The unemployment rate and stagnant real-estate market continues to depress home prices and increase delinquency rates.

Bank of America is highly linked to the real estate market going forward and is highly linked to the real estate market of the last few year (lawsuits galore).

What is the "real" book value of BAC?  I doubt even the company itself really knows.  But even more, I bet noone in the company would want you to even begin to calculate it because it is certainly much lower than the on-book current evaluation.

Bloomberg detailed writeup
Moynihan Tries to Keep Bank of America Intact as Mortgage Loans Fall Apart

Yahoo Inside Trade On Bartz Firing?

At 4:58 PM EST on September 6th, eighteen-million shares of Yahoo! were moved at a net price of $ 12.90 per share- that is just over $232 million dollars.

According to a source, the e-mail sent by Bartz to Yahoo! employees was sent at 6PM EST.

Chart via Google:

Who leaked?

It’s Friday, Friday. Presidents gotta get down on Friday

According to sources on wikipedia, Presidents should be quick to duck on Fridays.


Kennedy was shot on a Friday.
Lincoln was shot on a Friday

McKinley was also assassinated on a Friday.

Garfield was shot on Saturday.

Andrew Jackson was shot at on a Friday.

A plot to kill Nixon by crashing a plane into the White House (sound familiar?) was foiled on a Friday.

Ford avoided an assasination attempt on a Friday and then two weeks later on a Monday.

Hinckley tried to kill Reagan on a Monday.

September 12th 1994 a man crashed a plane into the White House lawn (sound familiar), Clinton was not present that Monday.

The article is fascinating as I don't think most people would believe the amount of attempts to kill the Presidents of the United States.

Especially interesting to me was that a grenade was thrown at GW Bush and it did not detonate and kill him because of a handkerchief that was wrapped around it. Sounds like it was a close one but I don't remember hearing about it at the time.

+Update :
21-year-old Idaho man is charged with attempting to try to assassinate President Obama...allegedly shooting at the White House on Friday, Nov. 11, 2011

Internet used to prove teacher wrong on Kennedy-Lincoln Connection

An old worksheet I found from junior high social studies discusses the "Eerie Kennedy-Lincoln Connection." Some examples:

• Lincoln was elected in 1860, Kennedy in 1960.

• Lincoln's secretary, whose name was Kennedy, advised him not to go to the theatre.

• Kennedy had a secretary named Lincoln (who was born 100 years after Lincoln, and whose husband's nickname was Abe) who warned him not to go to Dallas.

• Both presidents were shot from behind in the head.

• Both presidents were shot in presence of their wives.

• Both presidents were shot on a Friday.

• Both presidents were accompanied by another couple.

• Both presidents' last names have 7 letters.

• Both presidents have five syllables in their full name (which counts Kennedy's middle initial).

• John Wilkes Booth and Lee Harvey Oswald each have 15 letters and 3 words.

• There are 6 letters in each Johnson's first name.

• Booth ran from a theatre to a warehouse, Oswald ran from a warehouse to a theatre.
  

This list continues, and as entertaining as it is, some of the statements are not fully true. A good discussion of the Kennedy-Lincoln list can be found at this webpage.

Sadly, this gimmicky list is more memorable than the usual worksheets used to teach and test in that class.

Here is an example of the typical worksheet with my answers:

• What was the name of the play presented the night that President Lincoln was assassinated? Our American Cousin

• Who was the star of the play? Laura Keene

• Who was the conductor of the stage orchestra? William Withers Jr.

• What song was to be played for President Lincoln that evening? "Honor to Our Soldiers"
  

Why was the gimmicky list memorable and the typical worksheet not?

The list made connections and implied patterns. The typical worksheet tests memorization and recall.

A formalized classification of this difference in learning is presented by Benjamin Bloom's Taxonomy.

Bloom says that there are different levels of learning, with knowledge being the lowest and the higher levels being comprehension,application, analysis, synthesis, and evaluation.

The characteristic that distinguishes a human brain from a computer is the ability to make connections and recognize patterns and learning at the higher levels of Bloom.



Unfortunately, teachers typically ask their students to define, label or name, questions at the lowest level. Those asked in my social studies class were at the lowest level.

The more appropriate type of question would evaluate if the students can make a connection and recognize patterns or lack thereof- compare, design, argue, distinguish, interpret, evaluate.

The answers to knowledge questions can now be found by an internet search, they are merely a statement of the written record.


With a few clicks to verify sources, students can now check their teachers by using the internet and they can also find related information to help learn at a higher level if their teachers are not providing that information.