FY2008 week 51
Quote of the week: I stopped believing in Santa Claus when I was six. Mother took me to see him in a department store and he asked for my autograph. – Shirley Temple
Here are eight stocking stuffers to unwrap.
1) The conversation between Libertarians and the rest of us (who aren't on some nutty fringe) would go a lot smoother if we would all agree that laws and regulations do not prevent bad behavior.
Rather, they are merely guideposts to measure the quality of deviance in a way that allows the US's local, state and federal judiciary to hand out retribution.
If you need further proof of this, I offer you two words – Bernard Madoff.
In an under-regulated world, Ponzi schemes might not be illegal. In fact, you can assume that is a near certainty, judging by the number of famous institutions and wealthy people that poured billions into Madoff's fund, even as they suspected he was cooking the books.
The allure of that steady 9% return was just too strong... flies to the dung heap.
You have to wonder how many of Madoff's investors will not only lose millions on the madman's fund, then double those loses when the IRS goes all militia on their wacky offshore tax schemes. The latter is one of 2008's most under-reported financial stories... as it will likely be in 2009.
2) Poor and middle-class people dream of the big investment score – the lottery... wealthy people, as the Madoff affair demonstrates, get all dewy eyed over 9%.
The reason is simple. Nine percent of $10 million is $900,000. That's enough to survive on, even if it's your only income. On the other hand, try living on 9% of $200,000 or 9% of $100,000...
Actually, if you don't have health insurance and you live in a tent, you can probably stretch $18,000 out through a year, as long as you don't pay the capital gains tax on it.
3) Now that the conservatives on the Supreme Court have opened the door for a new round of huge lawsuits against the Altria Group, you have to wonder what would prevent the President-elect, who can choke down some Marlboros, from joining a class-action suit.
4) Here's a play for all those union-hating people who believed, without verifying, all the recent bunk about how the United Auto Workers union is killing US automakers.
There is LUV in the air for you. Southwest Airlines trades around $7.50 today. Many of its employees, 7,200 ground-crew workers, haven't had a raise since 2005. Ten-month long negotiations with these workers broke down in October.
LUV is profitable, its debt is manageable, and its earnings and revenues are slated to increase by about 10%.
