(Evil) Profits

Elvis has Left the Building

The last of the mutual fund rock stars, Bill Miller of Legg Mason Value Trust, has decided to give up active management of that fund in the near future to assume the role of Chief Investment Officer.

Bill Miller became a household name and his fund, a member of many 401k plans, amid a 15-year streak of beating the S&P 500, beginning in the early 1990s. But in recent years reversion to mean has punished Miller run funds and their shareholders mightily.

Some might argue that the era of the mutual fund and superstar stock pickers have gone the way of AOL, one of the stocks Miller built his reputation on. Ultimately, Miller's gunslinging twist on value investing was unable to match his past superior performance due to his love of financial stocks and an expense ratio of over 1.76% at a time when certain ETFs and index funds are charging as little as .07% in fees.

Five Lessons for America from the European Fiscal Crisis

The five lessons she identifies are:

1. Higher taxes lead to higher spending, not lower deficits. Miss Morandotti looks at the evidence from Europe and shows that politicians almost always claim that higher taxes will be used to reduce red ink, but the inevitable result is bigger government. This is a lesson that gullible Republicans need to learn – especially since some of them want to acquiesce to a tax hike as part of the “Supercommitee” negotiations.
2. A value-added tax would be a disaster. This was music to my ears since I have repeatedly warned that the statists won’t be able to impose a European-style welfare state in the United States without first imposing this European-style money machine for big government.
3. A welfare state cripples the human spirit. This was the point eloquently made by Hadley Heath of the Independent Women’s Forum in a recent video.
4. Nations reach a point of no return when the number of people mooching off government exceeds the number of people producing. Indeed, Miss Morandotti drew these two cartoons showing how the welfare state inevitably leads to fiscal collapse.
5. Bailouts don’t work. This also was a powerful lesson. Imagine how much better things would be in Europe if Greece never received an initial bailout. Much less money would have been flushed down the toilet and this tough-love approach would have sent a very positive message to nations such as Portugal, Italy, and Spain about the danger of continued excessive spending.

The only thing I think she left out is that the private sector needs to grow faster than government, which, sadly, hasn't happened for quite a while, and doesn't seem to be in the cards for the near term.  The current cast of characters seem hellbent on increasing the power and influence of government over individuals.

Time Lapse Photography from the International Space Station

Earth | Time Lapse View from Space, Fly Over | NASA, ISS from Michael König on Vimeo.

Time lapse sequences of photographs taken by Ron Garan, Satoshi Furukawa and the crew of expeditions 28 & 29 onboard the International Space Station from August to October, 2011, who shot these pictures at an altitude of around 350 km.

Shooting locations in order of appearance:

1. Aurora Borealis Pass over the United States at Night
2. Aurora Borealis and eastern United States at Night
3. Aurora Australis from Madagascar to southwest of Australia
4. Aurora Australis south of Australia
5. Northwest coast of United States to Central South America at Night
6. Aurora Australis from the Southern to the Northern Pacific Ocean
7. Halfway around the World
8. Night Pass over Central Africa and the Middle East
9. Evening Pass over the Sahara Desert and the Middle East
10. Pass over Canada and Central United States at Night
11. Pass over Southern California to Hudson Bay
12. Islands in the Philippine Sea at Night
13. Pass over Eastern Asia to Philippine Sea and Guam
14. Views of the Mideast at Night
15. Night Pass over Mediterranean Sea
16. Aurora Borealis and the United States at Night
17. Aurora Australis over Indian Ocean
18. Eastern Europe to Southeastern Asia at Night

What Does Unhate Mean?

What does unhate mean?  UN-hate or stop hating altogether?  I'm not really sure, and this ad campaign, besides grossing me out, is not exactly presenting a clear and compelling message.

The Washington Post reports:

The Benetton has dropped the image of the Pope kissing an Imam from the campaign after complaints.

Benetton returns to its controversial marketing roots with a new campaign that features President Obama and other world leaders engaging in a kiss. In two separate ads, Obama is seen kissing Venezuelan president Hugo Chavez, and Chinese President Hu Jintao.

The Unhate Foundation, founded by the Italian clothing company, is an advocacy group for tolerance. The controversial ad campaign is an attempt for Benetton to regain its status from the “United Colors” ads that regularly shocked viewers with subjects that had nothing to do with clothing: A priest kissing a nun, a man dying of AIDS, a just-born baby with umbilical cord still attached, a trio of real human hearts.

In the new campaign, the leaders of North and South Korea lock lips, and the Pope kisses Ahmed Mohamed el-Tayeb, the Imam of al-Azhar mosque in Egypt. The Vatican condemned the image, and the company decided to remove it from all publications after complaints. German Chancellor Angela Merkel smooches Nicholas Sarkozy, president of France (What will Carla Bruni think?). Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu also share a kiss. The campaign was inspired by a kiss between Soviet leader Leonid Brezhnev and East German communist leader Erich Honecker in 1979.

A Random Act of Journalism: How Congress Critters Enrich Themselves

A random act of investigative journalism occurred last night on CBS's 60 minutes. In case you missed it, I've embedded the video below:



(CBS News) -- "Martha Stewart went to jail for it. Hedge fund honcho Raj Rajaratnam was fined $92 million and will go to jail for years for it. But members of Congress can do the same thing -use non-public information to make stock trades -- and there's no law against it. Steve Kroft on "60 Minutes" reports on how America's lawmakers can legally make tidy profits on information only they know, simply because they won't pass a law against themselves.

If senators and representatives are using non-public information to win in the market, it's all legal says Peter Schweizer, who works for the Hoover Institute, a conservative think tank. He has been examining these issues for some time and has written about them in a book, "Throw them All Out." "Insider trading laws apply to corporate executives, to Americans...If you are a member of Congress, those laws are deemed not to apply," he tells Kroft. "It's really the way the rules have been defined... lawmakers have conveniently written them in such a way as they don't apply to themselves," says Schweizer.

Efforts to make such insider trading off limits to Washington's lawmakers have never been able to get traction."

Update:  A 2011 research article in the journal Business and Politics ("Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives") found that the stock portfolios of House of Representative members outperformed the overall stock market by 55 basis points per month, or 6.6% on an annual basis between 1985 and 2001, suggesting that lawmakers have a "substantial informational advantage" over the general public and even over corporate insiders.

Grouch: I thought the 60 Minutes piece was much less scathing than it could have been and should have been. Corruption in Congress and Government in general runs deep in both parties. This was a surface treatment of the issue. treading lightly around the problem. I would have expected a more penetrating report from this reputable news organization. For a deeper look at the problem see Government Gone Wild! -- How Congressmen Enrich Themselves While in Office.

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Michael Moore's Vacation Hovel

Michael Moore: "Capitalism did nothing for me. The system is not set up to help somebody from the working class."

Grouch: When Michael Moore is not stepping out of his multi-million dollar dwelling in NYC to urge the OWS croud to rage on against capitalism and greed, he spends time relaxing over a copy of the Communist Manifesto, Mao's Little Red Book of The Collected Works of V.I. Lenin in this squalid hovel on the shores of Torch Lake, Michigan---one of the most elite communities in the United States. He is indeed a true revolutionary and a man of the people.

A Sister’s Eulogy

Here's how Steve Job's sister eulogized him.  A reminder of what is important in life.