Wednesday, June 30, 2010

Sam Zell on the "Recovery"

Sam Zell, real estate mogul, discusses his view of the economy and the recovery.

To underscore Zell's point on job creation, here's the current picture of the recovery showing the private sector still shrinking as the public sector grows:

Thursday, June 24, 2010

Matt Ridley, The Rational Optimist

Best-selling science writer Matt Ridley's latest book is The Rational Optimist, which explains why the author is upbeat on the prospects of a planet and a civilization that seems to lurch from one pending political, economic, or environmental catastrophe to another.

Doomsayers have it all wrong, writes Ridley, who argues that prosperity and innovation have outraced even the visions of Adam Smith and John Stuart Mill. He argues:

"The phrase diminishing returns is such a cliché that few people give it much thought. Picking out the pecans from a bowl of salted nuts gives diminishing returns: The pieces of pecan in the bowl get rarer and smaller. The fingers keep finding almonds, hazelnuts, cashews, or even—God forbid—Brazil nuts. Gradually the bowl, like a moribund gold mine, ceases to yield decent returns of pecan.

Now imagine a bowl of nuts that has the opposite character. The more pecans you take, the larger and more numerous they grow. That is the human experience for the last 100,000 years. The global nut bowl has yielded ever more pecans."

Reason's own science correspondent Ronald Bailey talked with Ridley recently in Washington, D.C. They discuss Ridley's book, his hopes for the future, and the policies that can improve - or undermine - the prospects for our future.

Sunday, June 6, 2010

The Wizard of Westwood Passes On

Sunday Verse: Yusef Komunyakaa (1947- ) Facing It

Facing It

My black face fades,
hiding inside the black granite.
I said I wouldn't,
dammit: No tears.
I'm stone. I'm flesh.
My clouded reflection eyes me
like a bird of prey, the profile of night
slanted against morning. I turn
this way—the stone lets me go.
I turn that way—I'm inside
the Vietnam Veterans Memorial
again, depending on the light
to make a difference.
I go down the 58,022 names
half-expecting to find
my own in letters like smoke.
I touch the name Andrew Johnson
I see the booby trap's white flash.
Names shimmer on a woman's blouse
but when she walks away
the names stay on the wall.
Brushstrokes flash, a red bird's
wings cutting across my stare.
The sky. A plane in the sky.
A white vet's image floats
closer to me, then his pale eyes
look through mine. I'm a window.
He's lost his right arm
inside the stone. In the black mirror
a woman’s trying to erase names:
No, she's brushing a boy's hair.

Saturday, June 5, 2010

Natural Gas Makes so Much Sense the Politicians Will Never Go For It

I don't agree with Cramer much, but he is right on the money with his thoughts on natural gas. It is the key to American energy independence and reducing the trade deficits in the short and intermediate terms while the technological glitches with renewable sources of energy are being worked out.

America should be running their cars and trucks on natural gas as well as heating homes and producing electricity.  The tepid response of politicians so far is disappointing, but they tend to like complex, expensive solutions that require heavy government subsidies to succeed.  Companies are already beginning to build out a compress natural gas delivery infrastructure for cars and trucks, but this needs to be accelerated.  Honda does make a Civic that runs off of CNG, but it is $5 - $7,000 more costly than its gasoline counterpart.

As oil gets harder and harder to find and extract, and with the disaster in the gulf, its time for American to start taking advantage of one of their great natural resources to cleanly meet their energy needs.  Let's hope that government, for once, will have some foresight and make a major move to champion this strategic American resource.

Fiscal Responsbility: Is It Catching On Around the World?

I'm not as convinced as Irish filmmaker Phelim McAleer. I see a lot of knee jerk reactions from politicians right now based on fear and self-preservation, but I don't see a wave a true fiscal reform sweeping the globe yet. But I'm looking forward to the day when it begins to happen in earnest.

My 2010 Book List


Alice in Wonderland - Lewis Carroll
The Wizard of Oz - L. Frank Baum
American Sphinx: The Character of Thomas Jefferson - Joseph L. Ellis
The Investor's Manifesto - William Bernstein
Common Sense on Mutual Funds - John Bogle
Dien Cai Dau - Yusef Komunyakaa


Flight - Sherman Alexie
The Little Book of Common Sense Investing - John Bogle
Enough - John Bogle
Liberty and Tyranny - Mark Levin
The Four Pillars of Investing - William Bernstein
The Investor's Manifesto - William Bernstein
Facts About the Moon - Dorrianne Laux
Smoke - Dorrianne Laux

Very Good

The Basketball Diaries - Jim Carroll
A Red Convertible: Selected and New Stories, 1978-2008 - Louise Erdich
The Bogelheads' Guide to Investing - Taylor Larimore
The Bogelheads' Guide to Retirement - Taylor Larimore
God's Silence - Franz Wright
The Lies About Money - Ric Edelman
Native Guard - Natasha Trethewey


Taboo - Yusef Komunyakaa
The Little Book of Bull Moves in Bear Markets - Peter Schiff
Fortune - Joseph Millar
The Book of Nods - Jim Carroll
One Foot in Eden - Ron Rash


Warhorses - Yusef Komunyakaa
Void of Course - Jim Carroll


Rich Dad, Poor Dad - Robert T. Kiyosaki

Thursday, June 3, 2010

Fama on Financial Reform

Gene Fama, one of the fathers of Modern Portfolio Theory, expresses his view on financial reform. Personally, I've seen little evidence that regulators are capable of regulating the industries they are supposed to police, and don't place much faith in the financial reform bill in Congress. I think 1,400 pages of law is way to complicated and unenforceable. The new bureaucracies that are created will be just as ineffective as the old bureaucracies. The bill itself should be much simpler and rely on much higher capital standards to enforce discipline. The implicit promise of bailout nation needs to come to an end, and companies should be allowed to fail based on their own foolish decisions and miscalculations. The failure to address Fannie and Freddie in this bill is a major shortcoming, and until those companies are wound down, or sold off and detached from the government and mortgage standards raised we still live in a world exposed to irresponsible underwriting.

Wednesday, June 2, 2010

Authors@Google: Burton Malkiel - Timeless Lessons for Investors

One of the giants in the area of personal finance and investing. Professor Malkiel is the author of the classic investment book, A Random Walk Down Wall Street. He has also authored several other books, including the recently published The Elements of Investing.

Quote of the Day: Thomas Sowell on The Real Public Service

It was Thomas Edison who brought us electricity, not the Sierra Club. It was the Wright brothers who got us off the ground, not the Federal Aviation Administration. It was Henry Ford who ended the isolation of millions of Americans by making the automobile affordable, not Ralph Nader.

Those who have helped the poor the most have not been those who have gone around loudly expressing "compassion" for the poor, but those who found ways to make industry more productive and distribution more efficient, so that the poor of today can afford things that the affluent of yesterday could only dream about.
~ Thomas Sowell

Grouch: The average American today lives better than the Kings and Queens of a hundred years ago could even imagine.  This is primarily due to the risk taker, the entrepreneurs, the inventors who created things like electricity, the telephone, cars and airplanes, washers and dryers, refrigerators and freezers, radio and TV, the computer and the internet, central heating and air conditioning, etc.  Not to mention the jobs these innovations have created... all leading to a higher standard of living.

Tuesday, June 1, 2010

YeZ concept car to inhale CO2 and exhale oxygen into the atmosphere

This concept car developed as a joint venture by SAIC and GM looks like a leaf on wheels, and it is designed to function much like a leaf.  It will get power from the natural sources of energy. The rooftop of the car will be equipped with solar panels and small wind turbines located on the wheels.  YeZ will also feature an advanced system that will inhale the CO2 from the surrounding air and exhale the fresh oxygen back into the atmosphere, in a fashion very similar to plants. The energy generated from all these means will be stored in the batteries that will further conduit it to the vehicle when on the move.  Whether this will actually turn into an affordable production vehicle remains to be seen, but the concept is interesting to say the least.

Bureaucrats vs. Taxpayers

I'm sure this video will anger some of my friends in government, but Dan Mitchel makes a number of good points that Americans should pay attention to. The level of benefits and salary many have become accustom to are not sustainable. To quote Mitchel: "Government workers have now become a cosseted elite, with generous pay, extravagant benefits, lavish pensions, and ironclad job security. In exchange for this privileged status, they reward the politicians with millions of dollars of support and a host of in-kind contributions." Mitchel make the case that: 1) bureaucrats are vastly overcompensated; 2) debunks the myth that bureaucrats are underpaid compared to the private sector; and 3) makes the libertarian point that most federal bureaucrats should not exist in the first place. I'm sympathetic to his point of view and believe that for the long term fiscal health of the country the bureaucracy needs to be trim, and federal needs to be frozen or actually decrease to reduce our deficits back to a more manageable level. Right now, the government seems to be headed in the opposite direction, and trillion dollar a year deficits as far as the eye can see will turn the country into monumental financial disaster that will make the European mess look like chump change.

The Guatemalan Sink Hole

This image is almost otherworldly.  Reminds me of some of the computer generated special effects in Hollywood movies.  Unfortunately, it also sums up my feelings on the current state of the stock market (especially my euro denominated assets), but I'm sticking with my asset allocation strategy rebalancing periodically.