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The inequality blathering must stop

Posted December 9, 2011 at 3:08 am

by David Merkel  

This is not likely to be a popular post.  Just warning you.

I have a bias that modernity is more fragile than commonly believed.  One aspect of that is income/wealth distributions.  Inequality was far more pronounced in the past, and was fairly stable in being so.  So why should the last 150 or so years not be viewed as a possible aberration?

Let me give you five or so reasons why the middle class should shrink:

1) Education — middle classes in the developed world were relatively large when the education systems produced a large portion of the educated people of the world.  That is no longer so, and relative education levels have tipped against the US.  Any surprise that we fall behind?

2) Lazy choices for majors/jobs — “follow your bliss” is stupid advice if no one wants to fund your bliss.  All prosperity comes through serving the needs of others.  Follow their bliss, not yours, and you will do well.

3) Technology — some technological advances aid equality, and some aid inequality — we have been getting more of  [continue]….

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Trading stock on inside information?

Posted November 16, 2011 at 1:11 am

by Vedran Vuk

This 60 Minutes segment [ watch video here ] on Congressional insider trading is simply outstanding. However, I would like to correct it on some points. The video points out that some Congressman made trades after negative briefings with the Fed. That part might not be so bad.

After all, consider who was running these briefings – the same people who said that everything was fine only a few years ago. If one had acted on Bernanke’s past advice, one’s portfolio would be nothing to brag about. At the end of the day, you’re hearing someone’s opinion about the market.

However, purchasing shares of healthcare or insurance companies right before a vote on a major health care overhaul… well, that’s something entirely different.

While this story covers Congress, think about everyone else getting rich from this information – from staffers to relatives to just random residents of D.C. One really doesn’t have to be far on the inside to acquire tradable knowledge.

For example, when I worked in D.C., I had a pretty good idea that the first bailout vote was not going to pass.  Remember the one where the market fell over 700 points in a single day?

I was just a lowly intern at the time, but still I could gather enough information to understand that the panic on the Hill was much worse than what CNN was reporting at the time. If the information leaks that far down, just think about how much money is being made up there.


Vedran Vuk
graduated with a BBA in Economics from Loyola University of New Orleans. Currently, he is pursuing a M.S. in Finance at Johns Hopkins University. He also spent time on a PhD. economics program.

His publications include academic journal articles, book chapter contributions, newspaper columns, and online articles. Prior to Casey Research, he worked in think tanks, government affairs, and corporate governance. Utilizing his experiences with academics, Washington politics, and financial knowledge, Vedran’s analysis often seeks to find the mid-point between these different areas.

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Quit complaining and go create something

Posted November 8, 2011 at 8:59 pm

by Leigh Drogen

I’ve been fired or laid off from every job I’ve ever had. No joke, I’ve been fired from delivering pizza, stringing tennis racquets, being a boating instructor at a summer camp, I was laid off from Geller Capital in early 2009 after David got sick and wound down the firm, fired from the private wealth management firm I worked at for a short time after that, and I was (technically) fired from StockTwits in March of 2011 after Howard told me that I was “an entrepreneur”, and it was “time to go make some real money”.

Every time I was fired, I went back to working for myself, and ended up loving it. I lived on a girlfriend’s couch for a few months and ate ramen noodles one time, but I loved it.

As a kid I used to sell painted rocks, shells, other arts and crafts, and even once put my little 5 year old sister out in front of the wagon with a sign saying that we were donating all money to the ASPCA, we wanted a cat, we raised $250 in an afternoon.

When I got older I leveraged my notoriety as a great tennis player to teach private tennis lessons for $50/hour, it beat delivering pizza for $4/hour, or camp for $12/hour. When I was fired from the private wealth management firm, I formed Surfview Capital to build my own asset management firm which I successfully ran for 2+ years with great returns and growing assets.

And when I got fired from StockTwits, I started Estimize where I’m able to execute on several different ideas I had while at StockTwits which were never going to get built there.

Until recently I didn’t understand the definition of entrepreneur. Building businesses and making money on my own was always just something that I did when I was forced to, I didn’t think of it as a job or a career. Until recently I didn’t understand the idea that being an entrepreneur permanently wasn’t something that should be looked down upon.

The story of why it took me 25 years to figure this out says a lot about my generation, the pain and disappointment many of them are [continue]…

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Elitism gone bad at the IRS?

Posted October 27, 2011 at 1:29 am

by Kelly Phillips Erb

Over the years, I’ve represented a lot of clients. I’ve listened to hours and hours of IRS hold music. And I’ve had a lot of conversations with IRS reps and agents. But last week something happened that truly shocked me: the IRS hung up on me. On purpose.

The details aren’t all that important. Basically, I called the IRS to discuss a client’s tax matter. While it’s my job to zealously protect the rights of my clients, I am very aware that the person on the end of the line is also doing their job, and as such, I am professional when I speak to the IRS. On this day, I did exactly that.

I didn’t raise my voice. I wasn’t nasty. I merely tried to explain that there appeared to have been a cross in communications when the agent cut in abruptly with a brusque “This is how we do it” and then, Click.

I was actually rendered speechless. If you’ve met me, you’ll understand that’s quite the feat.

I called back, only to find that there is no way to [continue]…

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The united fascist states of america

Posted October 17, 2011 at 3:55 am

by Bobby Casey

I want to share with you two separate news items that are both frightening and disgusting. 

The first news item occurred just about two weeks ago and involves a court case where the CA appeals court approved cell phone searches during traffic stops.  The details of the case can be found here.

It all started with a traffic stop and a driver that had some photos of guns on his phone.  The man was pulled over for speeding in Santa Cruz County and the officer suspected him of driving under the influence of drugs.

Upon further inspection the officer found the driver had an expired driver’s license and decided to impound the car.  The officer refused to allow the car to be parked roadside and await a friend of the driver to pick up the car.  At that point, the officer decided to conduct an inventory search of the car.

Upon the inventory search, the officer found a fully legal Glock pistol and the driver’s Blackberry phone.  On the screen of the phone there were pictures of two men holding AR-15 rifles.  At that point, another officer went through the contents of the driver’s phone.  It wasn’t until much later did they get a search warrant for this action.

Based on the info found on the phone, the sheriff’s office sent a SWAT team to execute a search warrant at the driver’s home 10 days later.  The SWAT team confiscated a cache of weapons, marijuana growing paraphernalia, and $15,000 cash.

In summary, the driver’s lawyer argued the search was a violation of the 4th amendment and all evidence should be disallowed.  The judge agreed and ordered the information to be suppressed.  However the appeals court overturned the judge’s ruling on the grounds that the phone was part of the inventory check needed to process the vehicle impound.

Ironically the driver died of an unrelated incident before he went to trial, but the decision was released anyway solely for the purpose of creating a precedent for future cases.

I ask you dear readers, do you feel it is legal and moral for the police to have the right to confiscate and search your mobile phone if you are stopped for speeding or running a red light?  Is it legal and moral for the police to take this information acquired through unconstitutional means and raid your personal residence and confiscate your personal property?

If you can answer yes to either of these questions, you have clearly subscribed to the wrong newsletter.  Or you are a fascist troll lurking in the shadows trying to gain the perspective of freedom lovers in an attempt to shut down the party. 

The second news item involves a bill the House Judiciary Committee passed on October 6th, 2011 that would make it a federal crime for US residents to discuss or plan activities on foreign soil that if carried out in the US would violate the Controlled Substances Act (CSA).

Essentially this is saying that if a US resident makes plans to use a controlled substance outside of the US, he or she would be subject to federal law even if the event took place in a country where the act is legal.

For example, let’s say you are planning a bachelor party for your buddy who is getting married in December.  The bachelor party is to be held in Amsterdam and the group decides that you all want to visit a couple of cafes and smoke some pot.

Keep in mind, you have not bought or consumed marijuana in the US, only made plans to do so in a country where the substance is legal to own and use.  But low and behold, your entire bachelor party group is now subject to prosecution.

What if you have been successfully running your medical marijuana dispensary in California for the past 5 years and have formulated a unique method to increase yields for other growers.  You may decide to provide consulting services to growers in other countries where marijuana is legal to grow and buy.

By providing this service as a US resident, you would now be in violation of this new law.  If interpreted broadly enough, doctors, academics and policymakers could even be charged criminally for contributing their expertise to companies or other agencies outside of the US.

Let me be as delicate as possible here – what kind of arrogant bas***d thinks he can legislate the morality of its citizenry as well as regulate the actions of those citizens abroad?  House Judiciary Committee Chairman Rep. Lamar Smith (R-Texas), that’s who.

Welcome to the United Fascist States of America.

How many of you are continuing to keep your head in the sand thinking the United States is still a free country?  In what bizarre universe does running a police state that directly violates the core foundation of the country constitute freedom?  When does criminalizing the citizenry for actions outside of your home country become the moral obligation of the ruling class?

I sincerely hope you are doing something to protect your assets and ensure your wealth for the future.  Please take the time to assess your own personal and financial situation and make sure you are prepared to prosper in the coming years.  Putting your head in the sand doesn’t make the problems go away.

[ To learn about Bobby Casey and his offerings, click here... ]

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Occupy Wall Street – a pointless ‘blame game’ movement?

Posted September 29, 2011 at 11:53 pm

by Stacy Curtin

For 12 days, the Occupy Wall Street movement has taken to the streets of downtown Manhattan and used Zuccotti Park as a base, a location not far from the former site of the World Trade Center.

But it wasn’t until the protesters’ march from Liberty Street and Broadway to Union Square on Saturday, Sept. 24, that the media and the rest of the country began to really take notice. Nearly 80 people were arrested for blocking traffic and committing other minor offenses, while reports of excessive police force, including a group of girls who were pepper-sprayed, flooded the Internet and TV news broadcasts.

The incident on Saturday not only set to further galvanize the group, it also grabbed the attention of celebrity activists Susan Sarandon and Michael Moore. [WV staff note: click his name to learn how he has already attempted to suck the life out of capitalism by feeding into the victimitis-thinking, non-producers of the world]

Both visited the park this week along with popular political activist Dr. Cornel West. Now, copycat groups are popping up in other big cities across the country, from Boston to Chicago to San Francisco.

Accounts of who these protesters are and what they are actually protesting have been mixed and not always entirely clear. No single and unified message has been delivered, but for many of them, an interest in effecting change to the U.S. system of capitalism ranks high on their wish list.

So The Daily Ticker’s very own Aaron Task took to the park to find out for himself what this movement is all about.

He found a leaderless movement comprised of people from all walks of life. But they did seem to have common threads for what brought them to demonstrate.

Two prominent themes include dissatisfaction with the growing income inequality between the wealthy and the poor in this country and dissatisfaction over big corporate interests, rather than ordinary voters, controlling Washington.

Here are some thoughts from the front line [continue]…

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Mainstream financial media – clueless!

Posted September 29, 2011 at 1:59 am

by Leigh Drogen

In some ways, I’m happy that main stream financial media continues to be completely bereft of any value or understanding of how markets actually work.

The truth is, the more suckers there are out there, the more inefficiency there is in the market for us to take advantage of. All these little lemmings walking off the cliff with the money honeys of CNBC and Fox Business News.

And in other ways it makes me sick that the average guy out there just trying to earn 7% a year so that he can retire is being sold all of these lies and ridiculous crap by people who don’t know a damn thing about the market.

Look I get it, financial media isn’t there as a service to us, it’s there as entertainment, like 99% of news these days. If they took the time to get it right, you wouldn’t watch, because it wouldn’t be any fun.

On top of that, why would anyone who has a real clue how markets work want to be in financial media, writing articles that no one pays for, doing television no one really watches.

The majority of financial media is made up of either journalists who have never run money in their lives, or investment managers who’s only goal is to garner assets.

Either way, you as the consumer are not only getting nothing out of it, you’re getting sold a bucket of info that has [continue]…

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The rise and entrenchment of the American police state

Posted September 28, 2011 at 10:15 am

by Llewellyn H. Rockwell, Jr.

Several years ago, the police entered the office of a young professor at a reputable university and arrested him for an online crime. They took the professor away, booked him, and then offered him a deal: admit guilt and get off easy.

The professor said to the few people to whom he was permitted to speak that this was crazy because he was innocent. His lawyer warned him: fight this and you could get life; admit guilt and you will get a suspended sentence. He took the deal. It was a trick. Now he languishes in jail, his life wrecked as far into the future as he can see.

This doesn’t happen in America, does it? Yes, it does. Not only that, it is increasingly the norm. Those raised on a steady diet of courtroom television shows believe that they are true to the way justice is meted out.

This is completely naive. Trials in federal criminal cases are rare. Nine in ten cases are settled in pleas like the above case. Only 3 percent of the cases go to trial. Among those that go to trial, the defendant wins once in every 212 times.

What this means is that there is no way out for the accused. The prosecutors have all the power.

Not even the judge has discretion because lawmakers have mostly taken that liberality away in the name of [continue]…

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$600 million paid to dead federal workers

Posted September 26, 2011 at 11:11 pm

by Sam Hananel

The federal government has doled out more than $600 million in benefit payments to dead people over the past five years, a watchdog report says.

Such payments are meant for retired or disabled federal workers, but sometimes the checks keep going out even after the former employees pass away and the deaths are not reported, according to the report this week from the Office of Personnel Management’s inspector general, Patrick McFarland.

In one case, the son of
a beneficiary received
payments for 37 years after
his father’s death in 1971,
totaling $515,000. They
were only discovered when
the son died in 2008.

The government has been aware of the problem since a 2005 inspector general’s report revealed defects in the Civil Service Retirement and Disability Fund. Yet the improper payments have continued, despite more than a half dozen attempts to develop a system that can figure out which beneficiaries are still alive and which are dead, the report said.

“It is time to stop, once and for all, this waste of taxpayer money,” it said.

Office of Personnel Management spokesman Edmund Byrnes said he could not immediately comment on the findings. But the report said OPM Director John Berry agrees that stopping the improper payments should be a priority.

There are about 2.5 million federal workers who receive over $60 billion in benefit payments from the program each year.

Federal officials have tried matching the fund’s computer records with the Social Security Administration’s death records, checking tax records and improving the timeliness of death reporting.

OPM has also sampled its records of all recipients over 90 years old to confirm whether they are still alive. In 2009, there were more than 125,000 recipients identified as over 90 and about 3,400 over 100 years old.

Both the Obama administration and Congress have made it a higher priority to crack down on improper government payments.

Last year, government investigators found that more than [continue]…

 

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One in five Americans thinks God controls the stock market

Posted September 25, 2011 at 11:25 pm

by Justin Rohrlich 

According to USA Today, “About one in five Americans combine a view of God as actively engaged in daily workings of the world with an economic conservative view that opposes government regulation and champions the free market as a matter of faith.”

“They say the invisible hand of the free market is really God at work,” sociologist Paul Froese, co-author of the just-released Baylor Religion Survey [PDF], tells the paper. “They think the economy works because God wants it to work. It’s a new religious economic idealism.”

Froese says this group believes the Bible is the “ultimate truth in the world, and new economic information of cost-benefit analysis is not going to change their mind about how the economy should work.”

The study reveals a number of interesting insights.

For one, more Americans believe that wealth — or lack of it — is [continue]…

 

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