Friday, February 08, 2002

Capitalism Is Risky
One thing in the Enron collapse that is not emphasized nearly enough is the fact that investments are risky. There is no guarantee of success. If you want certainty, put the money in the bank. You won’t earn the same return as risky stock investments, but you will not lose your money.

Another tendency is to treat the investors like idiots. OK- some of them probably are, but by the time Congress gets done with this the legal mumbo-jumbo you’ll be presented with before you buy a stock will be mind numbing. Perhaps what we really need is something simple:

Buying stocks is risky. You could lose all your money. Do not give your money to the first bozo that asks for it.

Instead we will get:

Before purchasing a financial instrument, you are cautioned to conduct a thorough due diligence investigation of the security in question. Furthermore a substantial reducing in overall asset value may occur due to unforeseen market conditions.

And so on for another page and a half. Welcome to Yawnsville, population: You.

Do they really think that this will prevent people from massing 100% of their portfolio in whatever hot stock they heard about in some Spam that showed up in their in box?

A side note- I’m writing this in Word and pasting it into Blogger so that I can spell check. I’m a lousy speller. Word says Spam is capitalized. Big Spam!
Daley Weather? What The Heck Is That?
This site is called Daley Weather because of a long family attachment to the subject of weather, at least on my mom’s side of the family. My Grandfather, the same one that liked to yell at the TV during the McLaughlin Group, kept track of the weather. He would record the temperature and barometric pressure each day on his calendar. He had a book of early California history and would compare weather patterns. Weather related items made good gifts. Rain gauge for example. I used to joke that we’d have to buy him a weather satellite next. Sadly he died before the Internet took off or he would have had access to that satellite. I love watching the local weather radar on a stormy day on Weather.com.

Never really got into the Weather Channel on TV though. Seems like every time I watch there is something horrible like freezing rain pelting somewhere back east. Makes me feel sorry for those folks. Kind of a downer. Guess sunny weather makes poor news.

UPDATE: Murphy says see thought of the name because I'm always telling her what the weather is going to be like. I seem to remember thinking of something mightly similar before she said it, but my memory is a bit hazy on that point.
Tax Day
Have you noticed that tax day is about as far away from Election Day as the calendar allows? Coincidence?
Do You Have A Receipt?
If, God forbid, the IRS ever audits me they will want to see proof of everything. I want to know why this isn’t a two way street? I want a receipt from the government telling me what my taxes paid for. For example:

  • $1,000- Comfy chairs in the Office of Homeland Security
  • $900- July welfare payment to John Smith, 123 Main Street, Everytown USA
  • $875- Grant to study mating habits of ground squirrels
  • $600- Nut on stealth bomber

That way I can feel good about paying my taxes. And I’d like to stop in and see what John Smith is up to.
Soak The Renters, Part 2
Problem number two with the tax code- anyone who is unable to afford a house has to subsidize everyone who can afford one. That includes me at the moment, so you can take my ravings on the subject with a grain of salt.

Certainly the mortgage interest deduction helps the “rich” more than the poor. If you are poor and can’t afford a house you are in the double bind of paying rent that is non-deductible and paying rent that is typically higher than a mortgage payment for someone in a starter home or condo that is getting a deduction. Now I hate the class warfare stuff, but I do think laws should be fair and equal. We have a tax code that allows some to be more equal than others.

The tax code reminds me of a computer program that has been around too long. Lots of programmers have worked on it. No one at the company understands how all the bits hook up. When code gets like that, it is time to think about writing new code from scratch because it becomes more efficient than maintaining the old, outdated stuff.

Real reform to me would include removal of deductions and social engineering tax credits. Call me cynical but I don’t expect to see that happen soon, if ever.
Soak The Renters, Part 1
Just got done doing my income taxes. I’m getting a refund so I have a financial incentive to file early. Of course doing taxes also poses all sorts of interesting questions. Lets start with the problem posed by uneven tax rates. Right now if you make more money you are taxed at a higher rate. I’m guessing this is politically acceptable to a majority of people. But it has some huge implications beyond the soak the rich rhetoric. Personally I always thought soak the rich would be a good slogan for a water balloon company.

The problem I see is that the cost of living in the United States is not constant. I happen to live in Silicon Valley. In rent alone it costs a ton more to live here than in somewhere like Reno NV. I did a quick search on Apartments.com for one-bedroom apartments. In the town I live in the cheapest listing was from $850 to $1450. That is for a small apartment- around 500 square feet. The cheapest apartment in Reno was $595-$625 and it was 150 square feet bigger. Even comparing the low price to the high there is still a difference of $2,700 per year. If you look high to high it is $9,900 per year.

Naturally employers and smart job seekers know it is expensive to live the Bay Area (or New York, Chicago, other big city). Salaries are adjusted accordingly. Most corporate run apartments insist that your pre-tax income be three times the rent. If you want that $1450 apartment you need to be bringing home $52,200 a year.

Starting to see the problem? That Reno apartment is accessible at $22,500 a year. I’m not H&R Block but I think there is tax bracket with higher rates between those two salaries. You are being taxed at a higher rate because of the housing demand where you live. I’ve never heard anyone explain why where you live should force you to pay more Federal income tax. Perhaps that is forthcoming along with that national ID card Mr. Ellison wants.

One way to control for this would be to allow renters to deduct part of their rental expenses from their income like home owners. California allows this, but only for those with incomes under around $28,000 per year. I have no doubt lots of people in the Bay Area are getting the renters credit, but it leaves a ton of people high and dry.
Enron Testimony
On the theory that someone like Enron CEO Ken Lay has nothing to lose at this point, I suggest that he prepare himself for the upcoming hearings by doing a little research. When he answers questions by taking the 5th, he should refer to the Senators not by name, but by dollar amounts. Hence:

Senator X: "How could you destroy the life savings of poor working people, you evil dolt?"

Lay: "Well Senator $10,500 (or other amount Enron contributed to Senator X), I'm afraid I must refuse to answer on the grounds of self incrimination."

No one likes someone who is bribed and refuses to stay bought.
War Predicting With No Data Points
I made mention about doing a good job of predicting the Gulf War. My causality guess was high, but not as high as the "experts". I said around 1,000 Coalition causalities and a 30-day war. I had been reading a book about the impact of Allied firepower during WWII called Brute Force by John Ellis It convinced me that air power was going to smash the Iraqi army.

In the pundit business you are only as good as your last remark, so an 11-year-old prediction doesn't count for much in this game. But I'm having trouble figuring out the War on Terror. The Gulf War was an open war. It was fairly easy to learn what the Iraqi forces had and what the Coalition had. This new war is being fought under covers. Special Ops folks don't talk much. We can't point to a battle line on a map. The critical bits of data are on the table at the White House and not floating around in the press. Much more frustrating and harder to predict what will happen next with no valid data points.

Now that I'm opening my big mouth on the net, I'll have to gather what data I do have access to and try to make a prediction of what we will see next. Watch for it in a couple of days.
Big Tobacco Plus One
Another person you can blame for me starting this blog stuff is my friend Jay. He is into reading blogs, claiming they cost him up to two hours a day. He encouraged me to get started.

Of course perhaps not all his ideas are good ones. We were discussing the Bigs. You know, Big Tobacco, Big Oil, that sort of thing. He said, "If we started a tobacco company, why would we have to pay money into the tobacco settlement? We never said cigarettes weren’t dangerous and addictive."

This prompted a back and forth to come up with a good name for our product. The more lethal sounding the better. After all, what jury would be convinced that the company selling a product called Death Weed was deceiving people about its terminal properties? I suppose there is probably a law against starting a new tobacco company.

The problem Jay is worried about is that by restricting entry into the tobacco business the government has created a monopoly. If you allowed new tobacco companies operating under the Death Weed system the settlement system breaks down as users switch to the cheaper but garanteed to kill you product. With the monopoly in place, the government has zero incentive to improve the situation.
All Quiet On The Terror Front
Perhaps I'm not watching enough TV news, but I have not heard a lot of talk of late about troops movements and deployments. When the Afghan situation was brewing I saw lots of discussion about naval movements, even to the extent of mentioning that a carrier left Japan with most of its air wing landed in order to carry Special Ops helos. Either nothing is imminent or press has lost interest. If it is the second option I hope they stay uninterested. Rather that we keep the bad guys guessing.
I'm Shocked, Shocked To Discover Gambling In This Establishment!
Since it is after midnight and therefore Friday I'll start with the Olympics. OK, granted this is not virgin blog territory, but I happened to hear some talk radio this evening on the subject. I am not much of a talk radio person. Traditionally I listen to news radio in the AM to get up to speed. About the only other AM radio I'll stomach is Chick Hearn doing a Lakers game (get well Chicky!). For music I'll stick to my CD's and LP's and avoid commercials. Felt that way since my favorite station died a few years back. But more on music down the road.

I'm currently hearing talk radio in my car. I did my bit for the economy and bought a new car back in September of 2001. It came with a radio and cassette deck. I have a wonderful high-end car stereo I took out of my old car, but I am watching my budget these days and haven't gotten up the nerve to spend the dough to have it installed in my new ride. So I have found myself listening to talk radio and NPR when I'm in the car.

The gentleman on the radio was setting up his show for the evening. He wanted to talk about two things, one of which was the use of the WTC flag in the Olympic Opening Ceremonies. He thought it was completely wrong. To him it was an attempt to wave the flag in a nationalistic way and had no place in an event designed to "bring people together". He challenged his listeners to respond to that sentiment and to convince him that the flag was the proper symbol to be included in the opening.

Frankly, I thought this guy was out to lunch.

I can advance some of the obvious arguments. Americans are hosting, paying for, and buying a lot of the tickets for the Olympics. All Opening Ceremonies have nationalistic elements. People of 80 different nationalities died at the WTC and the flag symbolizes them as well. The Olympics are best when nationalism runs rampant (at least according to the Wall Street Journal.

After those ran through my head they sounded a bit like justifications rather than arguments. So what is the policy reasons to push for this? A couple spring to mind:

  • A symbol that we are not defeated. If the world is watching the games, then the world needs to see that 9/11 did not destroy American confidence. Seems like a powerful message to send to those who think they achieved something on 9/11.

  • A chance to honor those who died. Most sporting events of grand scale seem to feel a compulsion to pay tribute to those who have died. Would it seem otherworldly to have a mass gathering only a few months after that event and not mention it at all? In the country where it happened? Surrounded by representatives of the entire world? If I was planning the thing, I would have asked for a representative from each country who had someone killed at the WTC to march out there with the flag.


I do think that NBC will drench its coverage in flag waving. I'll watch very little of it. I've never liked the way they cover the Olympics. Or a lot of other sports for that matter.

If the IOC wants the Olympics to be about something other than nationalism I’m afraid they have a lot of work to do. As long as national Olympic teams sponsor the athletes and the games are put on by host cities backed by countries the Olympics are going to remain nationalistic. Unless the nation state system is on the way out, I don’t see that changing. The IOC had better get used to it.
Hello And Of Course Welcome
Welcome to Daley Weather. I'm Chris, your host. You can blame this all on Mr. Reynolds of Instapundit fame. It has become part of my daily routine along with The Wall Street Journal's Opinion Journal Best of the Web section. My memory is a bit hazy on this, but I'm pretty sure Best of the Web sent me along to Instapundit.

After reading these and other blogs I figured it was time to stop sitting on the sideline. Heck, if someone who grew up watching the McLaughlin Group with his Grandfather (who liked to yell "You tell 'em, Piggy" when Jack Germond was talking), did years of high school and college debate, and likes to brag about predicting the Gulf War better than 95% of the talking heads can't blog, who can?

I'll try my best not to revisit the same ground as everyone else. Why bother? Not like the web needs more Yes Men!