Archive for September, 2008
Sarah Out-Hillaries Hillary!
Think back, my loyal readers, to the days of the Democratic primaries. Once upon a time there was a candidate named Hillary Clinton who was so presumptuous as to suggest that Barack Obama would be a fine running mate for her. Needless to say, she put the cart way before the horse and not only did Barack not wind up her running mate, she did not end up being his running mate. I thought that her blatant display of ambition would not soon be eclipsed.
Then came Sarah Palin. Palin has done Hillary one better. She has (against every physical law of the universe) become John McCain’s running mate. Apparently, though, that is not good enough for her. She has decided that the ticket should be flipped. Can you blame her? When Sarah’s not there, McCain has no audience.
I’m sure you’ve seen this video before but it’s worth repeating here. We truly cannot make this stuff up!
Respectfully,
Rutherford
6 comments September 22, 2008
More Smoke than Mirrors
From the Desk of The Rigorist
The New York Stock Exchange is in the news, and here, at least, I can add light instead of heat.
There is a general confusion in discussions regarding “investment” in publicly held corporations as the ones traded on the NYSE due to a semantic sloppiness in common English. I will start small and end large, from the understanding of investment we all have, to circumstances where such small ideas have no meaning.
Let’s start with a guy with an idea. He has no money but he’s got an idea. Maybe he’s Bob Ederer of Ocean Springs, Mississippi, the third-generation of a netting manufacturing family in Chicago who only needs machines to assemble and a place to run them. Perhaps he’s Tom Kossen of Jackson, Mississippi, a diesel mechanic without formal education, but a salesman nonpareil who sees the potential in on-site standby power generation systems. Instead of taking on debt which would bankrupt their businesses in their meager beginnings, they sell equity, partial ownership of their endeavors. If we have the wit and the foresight, we will buy all that they offer, INVESTING money that they will in turn invest in machinery and inventory.
Straightforward and simple so far, eh?
10 years pass and the value of our investment is now 10 fold what we paid. There is another guy with another idea. Steve Yobs or Cobbs or something like that. He has no money but he’s got an idea. We’re changing ponies and our investment is put up for sale. Yippee-ki-yay!
Joe Blow buys our equity at a premium no less, expecting increases in value and distributions of profits beyond the extra he pays. This is where things start getting weird.
So, how much of the money that Joe Blow “invests” does Bob or Tom get to use for machinery or inventory or anything else that would increase the value of the business?
That’s right. They get nothing, nada, zero, zilch, the big ROUND number. They get a brand-new guy at their stockholder meetings who knows nothing of their business, interested only in a quick return.
Joe Blow isn’t investing, he’s speculating. We call it investing, I believe, because this sort of thing is the closest regular folk get to the real thing.
10 years pass, and 10 more, and 10 more. The value of our original equity could be worth almost anything depending on what management wants the accountants to say. Bob and Tom have long since cashed out and retired. Previously authorized but un-issued stock has been sold. New preferred classes of equity have also been issued. There have been stock splits and buybacks. The number of stock owners has gone from a few to a few thousand , and no one owns a majority interest anymore.
It is that last element which qualifies this business to be traded on the New York Stock Exchange.
The price of a single share has been set blissfully free from stodgy calculations of the underlying value it represents. The double taxation of dividends has made “profit” into a dirty word, a vulgarity to be avoided. The stock price rises and falls on the hopes and fears of people more strongly influenced by the morning news and the phase of the moon. That’s not hyperbole, that’s what professional stock traders call “technical stock price analysis.” JFGI.
“Investors” gain and lose fortunes without affect to or effect of the business at issue.
So what are we to make of the rise and fall of the aggregate price of single shares of stock of 40 businesses classified as “industrial” traded on the NYSE? That is the definition of the NYSE Dow Jones index, you know.
Up 450, down 500, the only thing it means is a bunch of people have got their panties in a wad, and the MSM can mesmerize an audience with the drama long enough to sell soap.
Be very careful with the conclusions you draw from stock exchange indices.
6 comments September 19, 2008
Dow Drops 504, NOW Let’s Pick a President!
Finally! A news event that renders moose stew and hockey moms and honorable POW status pretty much irrelevant.
Like John McCain, I’m no expert on economics. There was a time that I was in the market, a (very) amateur trader (or home-gamer as Jim Cramer likes to say). I got out for reasons other than the current melt down. My experience as a stock owner at least taught me that failures like the one at Lehman aren’t just limited to Lehman or bank stocks. There is a ripple effect. Lots of folks lost money today and it is only one signal of an economy in desperate straights. McCain’s answer is that the fundamentals of the economy are strong. The only justification for this kind of response is to keep folks from jumping out of windows a la 1929. Let’s hope that was his only motive in making a statement that flies in the face of reality.
Bottom line, the economy has been simmering under the surface as THE campaign issue for 2008 and today I think it finally broke open. Try as he might, McCain can no longer use superficial distractions in place of concrete policies. He must now address how the Republicans have gotten us to where we are. Today on MSNBC’s “Hardball”, Chris Matthews presented some staggering statistics:
Economic Indicators From "Hardball"
If the United States were a corporation, any management team with this track record would be tossed out on its ass faster than you can say “thanks but no thanks”. It’s time to give a new management team a try.
Respectfully,
Rutherford
4 comments September 15, 2008
Is the GOP Really “The Producers”?
My wife, whom I recently nominated for an independent party Vice Presidential slot, has long had the theory that the Republican party, seeing what a mess they’ve made of things in the past eight years, wants no part of the next four. So, they are doing everything in their power to throw the election. It started back in the primary season where not one single candidate was compelling. Then, the nominee wound up being John McCain, a man the GOP doesn’t even like. Then, just to put the final kibosh on things, they nominate an unknown Governor from a remote and sparsely populated state as the VP.
Ah, but ladies and gentlemen, it is that latest move that may have backfired on them. In the popular Broadway musical, “The Producers”, two con men produce a musical called “Springtime for Hitler”, being absolutely sure the production will bomb big time and that they can then skedaddle off with the investment money they’ve gotten for the show. Unfortunately for them, the musical is a smash hit.
Similarly, the Republican party nominates the lackluster McCain and his “Alaska is next to Russia”-foreign-policy running mate, and despite the best efforts of the evil left wing media, they have a major hit on their hands.
If my wife’s theory is right, then the GOP didn’t realize that the American public couldn’t tell the difference between an election and “American Idol”. (I swear if you listen to the Charles Gibson interview of Sarah Palin with your eyes closed, you’d bet dollars to donuts you’re actually hearing the interview portion of the Miss America Beauty Pageant.)
If my wife’s theory is right, and yet the ‘Pubs still win in November, I can hear Karl Rove and the other GOP big wigs echoing the words of slick producer Max Bialystock:
How could this happen? I was so careful. I picked the wrong play, the wrong director, the wrong cast. Where did I go right?
Respectfully,
Rutherford
1 comment September 15, 2008
Politics in Black and White
The following article is taken in its totality from the Huffington Post. John Ridley brilliantly contrasts how the same circumstance comes across differently depending on whether we view it through the liberal or conservative lens. In most of these cases, the differences skew racially.
John Ridley: Your Pocket Guide to Speaking Palin-guage (Vol. 1)
Up in the Twin Cities area folks are speaking a new language. Or, should I say Palinguage. It sounds sorta familiar because it’s Latin based. But different from the plain English we’re used to speaking, in Palinguage recognizable words take on new meanings. Won’t you take a moment to learn some Plainguage so you can talk like a hypocritical conservative?
REPEAT THE FOLLOWING:
If you’re a minority and you’re selected for a job over more qualified candidates you’re a “token hire.” If you’re a conservative and you’re selected for a job over more qualified candidates you’re a “game changer.”
If you live in an Urban area and you get a girl pregnant you’re a “baby daddy.” If you’re the same in Alaska you’re a “teen father.” (Actually, according to your own MySpace page you’re an F’n redneck that don’t want any kids, but that’s too long a phrase for the evil liberal media to take out of context and flog morning noon and night).
Black teen pregnancies? A “crisis” in black America. White teen pregnancies? A “blessed event.”
If you grow up in Hawaii you’re “exotic.” Grow up in Alaska eating mooseburgers, you’re the quintessential “American story.”
Similarly, if you name you kid Barack you’re “unpatriotic.” Name your kid Track, you’re “colorful.”
If you’re a Democrat and you make a VP pick without fully vetting the individual you’re “reckless.” A Republican who doesn’t fully vet is a “maverick.”
If you say that for the “first time in my adult lifetime I’m really proud of my country” it makes you “unfit” to be First Lady. If you are a registered member of a fringe political group that advocates secession that makes you “First Dude.”
A DUI from twenty years ago is “old news.” A speech given without proper citation from twenty years ago is “relevant information.”
And, finally, if you’re a man and you decide to run for office despite your wife’s recurrence of cancer you’re a “questionable spouse.” If you’re a woman and you decide to run for office despite having five kids including a newborn… Well, we don’t know what that is ’cause THAT’S NOT A FAIR QUESTION TO ASK.
John Ridley: Your Pocket Guide to Speaking Palin-guage (Vol. 1).
Isn’t it time we put an end to the double standard in our public discourse? The hypocrisy on display in this week’s Republican convention boggles the mind. The fight for the White House is on and it will be a bloody one. Tonight’s speeches by Mitt Romney, Rudy Giuliani and Sarah Palin made that abundantly clear. That’s why we need folks like John Ridley to help us cut through the double talk and stay focused on the truth.
Respectfully,
Rutherford
Add comment September 4, 2008
Mission Accomplished and the Boy Who Cried Wolf
Senator Barack Obama’s attempts to tie his opponent Senator John McCain to President George Bush could not have been better realized than by the great McCain himself. Today, McCain all but morphed into George Bush before our eyes. Watch as he gloats over his mission accomplished and disparages Obama in the process.
Of course, as in the case of his doppelganger Bush, the mission was not accomplished. The House today failed to pass the Wall Street bailout bill upon which the near term health of our economy depends. In addition to accusing Obama of “watching from the sidelines”, he later chastised Obama for “phoning it in”. Interestingly, throughout the weekend, McCain “monitored the situation” by phone. Who does he think he is fooling? Clearly, McCain outdid himself today when it came to impersonating George Bush.
While we’re on the subject of the President, I am reminded today of an old fable. Why should we be surprised at the outcome of today’s vote?
“Iraq has WMD’s.”
“We will be greeted as liberators.”
“Iraq is the center of the war on terror (i.e. those guys who attacked us on 9/11)”
“If we don’t pass this bill, there will be dire consequences for our economy.”
The first three paraphrases of Bush assertions turned out to be lies. So is it any wonder that when the boy cries wolf again concerning our economy, even his own party fails to heed the call? Unfortunately, as in the fable, this time the assertion is not a lie and ordinary citizens will have to pay the price if something is not done soon.
All in all, it’s been a banner day for the Republicans. One of their leaders wakes up from his delusions too late to have any credibility and the other leader is so immersed in his own delusions (of grandeur) that he does not even realize that he is not a leader at all.
Respectfully,
Rutherford
WordPress.com Political Blogger Alliance
4 comments September 29, 2008