Tuesday, July 29, 2014

A no-brainer

Wash Sales are now Self Trade

Wash sales got a very bad name during the Depression.  Justifiably so, as they were one of the primary reasons for the tanking of the market. 

A wash sale involves the same party at each end of the trade, buyer and seller. In the 1920s two-thirds of the volume of some stocks consisted of wash sales. The basic purpose of a wash sale is to pump a stock’s price so insiders can bail out at the top and transfer the losses of a worthless or inflated security to uninformed investors. This is done by the same party conducting or authorizing simultaneous buying and selling in the stock, typically making sure trades occur at ever rising prices until the operators have unloaded their stock. Without that support, the price crashes.

Wash sales were declared illegal in the 1930s. But now it looks as though they are making a comeback - vide "dark pools" - as our financial regulators have modified the rules, even to the point of calling these trades "self trades".

Monday, July 28, 2014

Competition for the banks

Post offices used to provide banking services at one time. Dean Baker and Senator Warren think they should do so once more. Their focus would be on low and moderate income households. You could perform most of the basic banking services - basic checking and saving accounts, car loans, credit cards, etc. -  at the post office. And Baker thinks the postal banking system could make a profit, while meeting the needs of many Americans. Many European countries have viable postal banking systems.

You have to watch this

A Pediatric Orthopedic Surgeon and a Parent

That's Ron Turker and he has something to say about the current craze for child athletes. Perhaps his most interesting and provocative comment is: "Our kids no longer play sports; they are youth athletes.” 

In the old days kids arranged and organized their own sports. Today, that's no longer the case; there  are leagues upon leagues, coaches upon coaches, etc. Parents are spending a lot of money on coaches, leagues, equipment, road trips, motels, tournament fees, etc.

Turker has also found that he is now seeing more juvenile athletes coming in with repetitive stress injuries (both physical and, in a sense, emotional) that were once rare. Often, all the kids want is some time off from athletics. 

Run a University

As I've noted before the job of university president pays well. In the world of the private university, 42 presidents received more than a million dollars each for their work. Public university presidents did not do as well, only nine made over a million. These millions do not include such perks as free luxury cars and country club memberships and free housing. But presidents need help. The number of their helpers (campus administrators) increased by 60% from 1993 to 2009; the faculty increased by 6%.

Sunday, July 27, 2014

A Heretic

Some would call William Deresiewicz that. He's a graduate of Columbia and taught at Yale for twelve years. Yet, he has written an article entitled "Don't Send Your Kid to the Ivy League".  There is a lot of sound analysis there, much of which I agree with. Here are some excerpts, some of which I've 'bolded'.:

  • Our system of elite education manufactures young people who are smart and talented and driven, yes, but also anxious, timid, and lost, with little intellectual curiosity and a stunted sense of purpose: trapped in a bubble of privilege, heading meekly in the same direction, great at what they’re doing but with no idea why they’re doing it.
  • Very few were passionate about ideas. Very few saw college as part of a larger project of intellectual discovery and development. Everyone dressed as if they were ready to be interviewed at a moment’s notice.
  • So extreme are the admission standards now that kids who manage to get into elite colleges have, by definition, never experienced anything but success. The prospect of not being successful terrifies them, disorients them. The cost of falling short, even temporarily, becomes not merely practical, but existential. The result is a violent aversion to risk. You have no margin for error, so you avoid the possibility that you will ever make an error. Once, a student at Pomona told me that she’d love to have a chance to think about the things she’s studying, only she doesn’t have the time. I asked her if she had ever considered not trying to get an A in every class. She looked at me as if I had made an indecent suggestion.
  • Students are regarded by the institution as “customers,” people to be pandered to instead of challenged. Professors are rewarded for research, so they want to spend as little time on their classes as they can. The profession’s whole incentive structure is biased against teaching, and the more prestigious the school, the stronger the bias is likely to be. The result is higher marks for shoddier work.
  • Let’s not kid ourselves: The college admissions game is not primarily about the lower and middle classes seeking to rise, or even about the upper-middle class attempting to maintain its position. It is about determining the exact hierarchy of status within the upper-middle class itself. 
  • This system is exacerbating inequality, retarding social mobility, perpetuating privilege, and creating an elite that is isolated from the society that it’s supposed to lead. The numbers are undeniable. In 1985, 46 percent of incoming freshmen at the 250 most selective colleges came from the top quarter of the income distribution. By 2000, it was 55 percent. As of 2006, only about 15 percent of students at the most competitive schools came from the bottom half. The more prestigious the school, the more unequal its student body is apt to be. And public institutions are not much better than private ones. As of 2004, 40 percent of first-year students at the most selective state campuses came from families with incomes of more than $100,000, up from 32 percent just five years earlier.
  • And so it is hardly a coincidence that income inequality is higher than it has been since before the Great Depression, or that social mobility is lower in the United States than in almost every other developed country. Elite colleges are not just powerless to reverse the movement toward a more unequal society; their policies actively promote it.
  • Instead of service, how about service work? That’ll really give you insight into other people. How about waiting tables so that you can see how hard it is, physically and mentally? You really aren’t as smart as everyone has been telling you; you’re only smarter in a certain way. There are smart people who do not go to a prestigious college, or to any collegeoften precisely for reasons of class. There are smart people who are not “smart.”
  • The education system has to act to mitigate the class system, not reproduce it. Affirmative action should be based on class instead of race, a change that many have been advocating for years. Preferences for legacies and athletes ought to be discarded. SAT scores should be weighted to account for socioeconomic factors. Colleges should put an end to résumé-stuffing by imposing a limit on the number of extracurriculars that kids can list on their applications. They ought to place more value on the kind of service jobs that lower-income students often take in high school and that high achievers almost never do. They should refuse to be impressed by any opportunity that was enabled by parental wealth. Of course, they have to stop cooperating with U.S. News.
  • I used to think that we needed to create a world where every child had an equal chance to get to the Ivy League. I’ve come to see that what we really need is to create one where you don’t have to go to the Ivy League, or any private college, to get a first-rate education.


Going backwards


The graphic above was created by the Russell Sage Foundation. It's hard to imagine that there could be a 36% decline in the median household over a ten-year period. Even those at the 95% level suffered, as only 4% of them increased their household income. And the stock market continues to hit new highs!

Carlo Bergonzi Died

Saturday, July 26, 2014

Communication Management Units

I'd never heard of Communication Management Units (CMU). Molly Crabapple says that the Bureau of Prisons established two of them  in 2006 and 2008 as secret "Limited Communication for Terrorist Inmates". Their purpose is to cut off prisoners from the outside world. Most of the prisoners are Muslims; they make up roughly 70 percent of the prisoners in CMUs but only 6 percent of the federal prison population. 

As Crabapple describes the units, they are inhuman. The prisoners’ every word is recorded. They are strip-searched before and after each visit from loved ones (in case they write messages on their body). Letters are severely restricted; phone calls are limited to two 15-minute calls a week. CMU prisoners may spend decades without hugging their wives or children. 

What kind of country have we become?

The New York City Farm

The NYC Honeybee Association had 25 members in 2007, now it has 480. The Chicken Meetup Group had 400 members in 2012, two years later it has 765. For some reason more New Yorkers are raising hens for eggs, rabbits for meat and bees for honey. They are using the tiniest of spaces - including on roofs - to raise their animals. Here is one of these farmers.

A Voice of Reason re Immigration

Veronica Escobar is a judge in El Paso, one of the places where immigrants are registered and later dispersed to other cities. While there have been more immigrants coming to El Paso and straining resources, she's close enough to the situation to say that there is no crisis; the crisis exists solely in the words of our politicians. Not only are they stirring up the population, but they want to spend money to 'control the situation'.

The most prominent waste of money is Rick Perry's proposal to send 1,000 National Guardsmen to 'protect' the border. This will cost $12,000,000 a month. The wastefulness appears endemic in Texas as state legislators and the Department of Public Safety are planning to spend an additional $30 million over six months to create a “surge” of state law enforcement resources. Part of Mr. Obama's $3 billion will go to surveillance ( drones at $40 million) and transportation and detention ($1 billion). Add all this to the $259 we spend each day on each detained immigrant. Does this make sense to you?


Friday, July 25, 2014

Implementing Dodd-Frank Has Been Slow

Dodd-Frank was passed four years ago, just 52 percent of the rules mandated by Dodd-Frank have been finalized by federal regulators. Part of the problem is that the bill charged various federal agencies with supplying the details; the agencies have not done a very good job. And the Republicans haven't been overly eager to have the full bill up and running, so they've done whatever they can to stall things.

Interesting Numbers

Greg Kaufmann got these numbers from a recent Census report on poverty:

US poverty (less than $19,090 for a family of three): 46.5 million people, 15 percent
Children in poverty: 16.4 million, 23 percent of all children, including 39.6 percent of African-American children and 33.7 percent of Latino children. Children are the poorest age group in the US
Deep poverty (less than $11,510 for a family of four): 20.4 million people, 1 in 15 Americans, including 7.1 million children

People who would have been in poverty if not for Social Security, 2012: 61.8 million (program kept 15.3 million people out of poverty)
People in the US experiencing poverty by age 65: Roughly half
Twice the poverty level (less than $46,042 for a family of four): 106 million people, more than 1 in 3 Americans
Jobs in the US paying less than $34,000 a year: 50 percent
Impact of public policy, 2010: Without government assistance, poverty would have been twice as high — nearly 30 percent of population
Percentage of entitlement benefits going to elderly, disabled or working households, 2010: Over 90 percent


Interviewing anti-immigration protesters

Thursday, July 24, 2014

Immigrants or Refugees?


You remember these words carved into the Statue of Liberty. Don't you?


Give me your tired, your poor, 
Your huddled masses, yearning to breath free, 
The wretched refuse of your teeming shore, 
Send these, the homeless, tempest tossed to me, 
I lift my lamp beside the golden door. 

Why don't we believe and practice these words anymore? Can't we see that most of these kids trying to enter this country are from three countries - Guatemala, Honduras and El Salvador? Because of the War on Drugs between 2009 and 2012 a civilian was more likely to be killed by violence in these countries than killed in Iraq at the height of the insurgency.

These kids are truly refugees.

What's with airplanes this year?

In March Malaysia Airlines flight 370 went missing. Today Algeria Airlines reports one of its planes has gone off the radar. This happened 55 minutes after takeoff. It was flying across the Sahara from Burkino Faso to Algeria. There are 110 passengers and six crew on board.

Wednesday, July 23, 2014

An extra tooth or two

Ashik Gavai, a teenager from India, had had gum problems and pain for the past year and a half. He was finally correctly diagnosed as having "complex composite odontoma where a single gum forms lots of teeth. It's a sort of benign tumour." The tumor was pretty tough and required the use of a chisel and hammer to open it. Then the deluge started:

Teeth of Indian teenager Ashik Gavai

The deluge was 232 small teeth, the most anyone has heard of. He still has 28 regular teeth.

Just another plagiarist

While it's a front-page article in the NY Times, the charge of plagiarism against a national politician is not new. The names of Rand Paul and Joe Biden come readily to mind. Today's politician who "confronts questions of plagiarism" is Senator John Walsh, recently appointed Democrat from Montana. 

The article contends that the final paper required for Mr. Walsh’s master’s degree from the United States Army War College seems to indicate that the senator appropriated at least a quarter of his thesis on American Middle East policy from other authors’ works, with no attribution. Most of the appropriations are word-for-word. When interviewed by the Times, Mr. Walsh said he did not believe he had done anything wrong. Here is one way of looking at his thesis:


The plagiarism is not Mr. Walsh's sole difficulty with the truth. His claim to have graduated from the University of Albany was refuted. He was denied a promotion from colonel to general in the National Guard because he urged other guardsmen to join a private advocacy group, the National Guard Association of the United States, in which he was seeking a leadership role.

A worthy Senator?

And the count goes on and on

Another week, another GM recall. This time it's only 717,960, none of which is related to the ignition switch. There are several reasons but a turn-signal bulb is the biggest culprit this time with 120,426 instances of a problem.