txlaw

Would love to see the details of the data behind the mental illness chart at 6:46. Cultural differences seem more relevant (for data quality purposes) than correlation to income inequality. Let's interview some Japanese, Spaniards and Italians on their stance towards mental illness and compare with the rest... Also, the Scandinavian countries are conspicously missing, whilst they are present on every other chart. I find it extremely hard to believe that there is no comparable data from our countries on that. A quick google gave me some numbers on Sweden from our government statistics bureau. Self-reported numbers of 23% of women ages 16-84 feeling mentally unwell and 13% of men. I don't know if those numbers are comparable to the statistic that is reported in the chart, but if they are they would emphatically break the correlation to income equality in the chart and to me seem to suggest there is some cherry-picking of data going on, despite what professor Wilkinson says at the end. I'm not sure I would rely on a quick Google search to determine whether is cherry-picking of data going on. I'm sure there are peer reviews that discuss the methodology of the guy's research and that find that his data has or has not been cherry-picked. I could be convinced that there's something wrong about his presentation if you could cite those critiques.

Good point. Could also be due to distortion from the stock market bubble caused in the 90s. Hard to say, though. Regardless, income inequality in the US has been increasing since the 80s. Don't think you can blame it on particular presidents -- that would be too cute by half. More likely, it has resulted from secular changes in the US economy combined with policies favoring the wealthy and the general trend of shifting risk from firms back onto households.

Interesting TED talk on various correlations associated with income inequality.

Fascinating two part story by CNET about Microsoft's Courier tablet project. The inside story of how Microsoft killed its Courier tablet http://news.cnet.com/8301-10805_3-20128013-75/the-inside-story-of-how-microsoft-killed-its-courier-tablet/ How Windows 8 KO'd the innovative Courier tablet http://news.cnet.com/8301-10805_3-20128045-75/how-windows-8-kod-the-innovative-courier-tablet/

Apropos to our discussion -- Gates on educational inequalities as main obstacle to social mobility: http://seattletimes.nwsource.com/html/technologybrierdudleysblog/2016626758_bill_gates_on_being_the_top_1.html

It's unquestionably true that "the world at large is less inequitable today than at any time in history." (emphasis added) Some other nice quotes: "There's some big fortunes and society can't - it's not good to have a society where you don't have mobility in between different income levels." "So if you really look at where we're letting people down in terms of the American dream, I wouldn't say - you can take this as self-serving - I wouldn't say it's because of a few people are very rich. I'd say it's because we haven't been doing a good job on education to give them an opportunity to move up into the top few percent."

I guess with regards to extending social safety, I favor keeping social security, and I like the idea of mandating healthcare coverage for all, although I recognize that not addressing costs is "kicking the can down the road," so to speak. An unemployment insurance system similar to Germany's seems pretty good too. All of this must be paid for though, and I'm not sure taxpayers are willing to do this. Other than having a basic financial social safety net, I would say that educational opportunities, both for minors and for workers who have been let go, has to be better addressed in the US. It's well and good to say that students should be focusing on science and engineering because they're more likely to get good jobs with those sorts of degrees, but in today's world, you have to be prepared for your job to become obsolete or less secure if the only requisite to having your job is knowledge. Actually, I believe that the whole concept of education must be revamped in the US. I want to see more cutting edge programs like Khan Academy, and I think we need to bust these teacher's unions that focus more on the job prospects of the teachers than on the kids, who appear to get the short end of the stick. Regarding opportunity, I'd say it's a fact of life that there is no such thing as equality of opportunity. The ovarian lottery is real, and your background will effect what opportunities you have in life. In fact, sometimes you can have the best of backgrounds, but you will have problems in life (for example, those who come from advantaged upbringings but who are genetically inclined to suffering depression). My view is that we should create an environment that brings out the potential of as many people as possible.

Hear! Hear! Very well said! :) I second that.

That's a great article. It just shows how skewed most people's perspectives of wealth and income are in the US. The fact of the matter is that the top 1% includes a lot of hard working people who don't have the political clout that large donors have, some of whom are super wealthy households (e.g., investment bankers), but most of whom are artificial entities (think about PACs and the problem of Citizens United). Of course, we should also keep in mind that "We are the 99%" and "Occupy Wall Street" are marketing tools just as "Tea Party" is a marketing tool. So I don't think you can really dismiss those people based on those catchy phrases/terms. Another thing that we should take from this article is that many people in the 1% and, indeed, in the top 15% have a very skewed idea of the "financial worries" that people in the bottom 85% face because of the fact that they have to deal with their own "financial worries." It seems like everyone and their mom in the top 15% thinks they are "middle class." But think about what people who actually are "middle class" -- or who are "poor" -- have to face in terms of risks. They don't have access to good schools. Households can easily be bankrupted by adverse health developments. These households are increasingly pushed out of the most attractive places to live in terms of lifestyle. In urban areas, these employees often have to commute long distances to work at well paying jobs. Savings are minimal and if put into traditional vehicles run by "Wall Street" cannot possibly be relied upon to have a decent retirement. (Can you believe how many people were sold on the idea that they could actually compound their money at 10% over time after fees by putting their money with the professionals?) This is why I'm a big supporter of progressive social insurance programs that are completely paid for because if you can mitigate those financial risks for a large part of productive society, you can truly unleash the power of our capitalist system in the US. Unfortunately, a lot of people believe that social insurance programs are "socialism." Meanwhile, the virtuous cycle of social mobility seems to have stalled in the US. Instead of decreasing disparities between the middle middle class and the upper middle class/lower upper class, it appears that a lot of wealth that has been generated in the past two decades has accrued to the upper class. I also find it amazing that the people who derive large amounts of their income from investment/capital allocation have convinced many people in the lower 14.5% of the top 15% that investment should be taxed at lower rates than income from labor. Apparently, investment prowess and capital allocation is a higher form of work. I've never understood that, and I never will.

Down 11%.

I think valuegeek basically spelled it out for everyone.

That's unfortunate. I thought they might realize some bond gains and buy some cheap equities, particularly ones with relatively high dividend yields.

My bad. I meant Series A warrants. I'll edit.

Yeah, I have to believe he actually bought quite a bit more JEF since the as of date on the report. It just got too cheap, as did most financials. I missed out on picking JEF up at the lows, although I initiated a LUK position, so I benefited from the run up. But to see JEF up like 18% yesterday was painful :)

http://www.sec.gov/Archives/edgar/data/1096344/000119312511285663/d245904dnq.htm Some interesting developments from the allocation fund, as of Aug. 31, which I kind of view as the portfolio that hedge fund Berkowitz might run: Appears to have swapped BAC common for BAC Series A warrants. MBIA at 29% of the portfolio. AIG at 25%. BAC, WFC, and AIG warrants (majority of position is BAC Series A warrants) at 8.8%.

It is true that the government subsidizes English majors and engineering majors equally. But let's not forget that in most colleges in the US, the price differential between obtaining an engineering degree versus obtaining an English degree is relatively small, and at many colleges, you pay the same amount no matter what degree you obtain. So in a sense, English majors and other liberal arts majors are subsidizing the education of engineers and laboratory scientists. After all, how much does it really cost to "educate" a liberal arts student versus an engineering student? The system is a bit screwy in that respect.

ShahKhezri, I have thought the exact same thing and have said as much in private. Almost considered applying to the VIC with ORI, but I couldn't bear to actually write the damn thing up. Not sure I'm too interested in applying for the VIC anyway.

Yes, Richard Koo talks about how much real estate fell in Japan and asks rhetorically, in almost every interview he does, how the US could have handled such a destruction in paper wealth. Koo also worked at the NY Fed when Volcker was Chairman, and he highly praises the actions Volcker took back then. See excerpts from a Koo interview at http://www.zerohedge.com/article/richard-koos-views-macroeconomy-volckers-plan-and-why-extend-and-pretend-will-be-us-long-lon . I'm sure Volcker has read Koo's books. I finally was able to borrow Koo's book, "Balance Sheet Recession." I'm looking forward to reading it after I get done with the Steve Jobs bio.

It does appear initially that you will only be able to read iBooks or iMagazines or whatever they call them on your iOS devices. However, I think it is an open question as to whether Apple will eventually allow users to access their iCatalog on non iOS devices. I know some people don't believe this will happen, but it is possible that Apple will decouple its iContent stores from its devices at some point in the future. If that is the case, then you might at some point be able to access your iBooks on Android tablets. But nobody knows for sure what they're thinking about doing in Cupertino. Hence the need for Amazon to get involved on the device level. It would be a disaster if Amazon allows its physical media business to be destroyed by competitors' digital media businesses. Cannibalization in AMZN's business model was inevitable, and they have been preparing for this a long time now. Bezos is a smart guy.

The way around this is through HTML5 web based apps ... both Kobo and AMZN are developing these and they should be out soon (B&N might be out with this sometime too -- but usually lag a bit). The user wont be able to tell the difference -- but would have to go to the web initially to get a similar app icon set up on the device. It will be all web based and therefore bypass the iTunes store completely. I read an article the other day (not sure how accurate), that tablet users prefer to browse rather than use apps. I guess because of the real estate on tablets -- use of apps is significantly less than on smartphones. So this issue would seem more to impact iPhones -- again it can be dealt with via HTML 5 web-based apps but there is no guarantee the user will set it up. It brings up an interesting thought as to whether we might see Kindle and Kobo phones sometime in the future. The smart phone might not be as important to do the actual reading and such - but in the future it will be a very pivotal point of sale device for many commerce transactions. The Android phone in it's full open form is a good concept; however updates are slow at coming - one thing that Kobo thus far has placed a priority on is updates and open architecture. I agree that web apps are a work around, but if the price to purchase media is consistent among stores, then users may go with the solution with the least friction. Next to the Apple Newsstand could come the Apple Bookstand/Bookshelf. If I'm already logged into my Apple account, and I can use one-click to purchase a book, I might just buy through the Apple store rather than the Amazon store because its easier. I would also note that Apple has filed a patent application for a hybrid LCD/e-Ink screen: http://www.pcworld.com/article/224698/apple_develops_eink_hybrid_display.html

You actually can download your books to your iPad or iPhone using a particular e-reader app. For example, I have the Kindle app on my iPhone 4. And I have the Steve Jobs bio downloaded to my iPhone, which I can read whenever I want to. However, you will see that Amazon is not allowed to have in-app purchases (you would have to use an Amazon web app or the mobile version of the AMZN website to do that), and it is not allowed to refer people to its website. Note that this is actually a compromise position on Apple's part. If it wouldn't have a caused a huge stink among users, Apple probably would have disapproved the Kindle app.

What about the fact that e-reader apps on the iPad or iPhone cannot in any fashion direct users to their own stores for media purchases? Apple's App Store policy forbids Amazon, Barnes & Noble, and Kobo from allowing in-app purchases and from directing people to their own stores. That's because Apple wants a cut of any media purchased while using an iPad; making the Apple storefront the easiest to use on the iPad is a way of shifting sales from those guys to it. If it could, Apple would probably try to take a 30% cut of any sales made by AMZN and the like on the iPad. The Kindle Fire is all about point of sale. If people start shifting more of their time from PCs to tablets, then Amazon has to be worried that Google and Apple will make it far easier to purchase media from their stores rather than Amazon. Bezos understand this and is willing to break even on hardware in order to keep his store a big player in the sale of digital media. Jacob Wolinsky just posted an excellent interview with Tom Russo where he discusses how WEB's capacity to suffer is a huge strength. Geico had to book $250 of operating losses for $1500 of NPV per new customer. Wall Street, of course, couldn't handle this. So WEB was able to buy up Geico for a fair price. Think about that, and then think about what AMZN has done in the past to build its business. Bezos is a great businessman. Having said all of the above, I don't own AMZN, and I haven't done a financial analysis of the company.

Moynihan was talking to his employees. Clearly, he is trying to address the negative energy that a lot of them are getting from the press, politicians, and other interest groups. It's a pep talk -- he's doing the right thing. Regarding the $5 fee, it's probably a good thing for BAC shareholders to drive off unprofitable accounts. The PR was bad at first, but you might as well take additional heat at a profit since you're the whipping boy of American finance in any case. The beauty of the BAC franchise is that the account closings that will result from the move don't mean much in the scheme of things. (That is if you believe that BAC's deposit franchise, along with WFC's, is truly the best in the country.)

Nothing particularly knew, I guess. I just like Paul Volcker. He's so straightforward.

Some pretty good ones in the last couple of weeks. I highly recommend the Paul Volcker interview.