Yep, that's a real billboard of GWB.
But here is why America chose a democrat -- of course there were many other reasons, but this is major:
Tuesday, February 9, 2010
Miss Me Yet?
Yep, that's a real billboard of GWB.
But here is why America chose a democrat -- of course there were many other reasons, but this is major:
Nassim Taleb says Warren Buffett's success due to luck
"I don’t want to spend too much time on Buffett. George Soros has 2 million times more statistical evidence that his results are not chance than Buffett does. Soros is vastly more robust. I am not saying Buffett doesn’t have skill—I’m just saying we don’t have enough evidence to say Buffett isn’t doing it by chance."
Taleb is a certified bear lunatic.
Two points to extinguish the Taleb:
1) Buffett invested for nearly 50 years, and have gone through several recessions.
2) Many baby boomers had the same opportunity in terms of timeframe, but no one came close to Buffett's returns.
Btw, Buffett only made about 350,000% return in the last 45 years.
Taleb, on the other hand, is just a black swan!
Taxpayers will get every penny back on bank bailouts
source:
Henry Paulson and Warren Buffett say US will get bank money back, possibly more.
Henry Paulson, the former Treasury chief, and billionaire Warren Buffett said taxpayers will recover every cent paid out to banks during the economic meltdown and may even turn a profit.
The staunch Democrat investor and the Treasury secretary under President George W. Bush spoke onstage Tuesday before 2,400 at the Greater Omaha Chamber of Commerce's annual meeting.
Paulson in his recently released book defended the government which scrambled to prevent failing U.S. banks from dragging down the global economy with them.
"As bad as this is, when we look back it's not as bad as it could have been," Paulson said.
And he said the United States is better off today than most countries.
"Every other major economy has many more significant challenges than we do," Paulson said. But he said several significant challenges remain.
Paulson said he thinks compensation is normally out of whack on Wall Street, but now in the wake of all the government bailouts, many executive pay packages are excessive.
"I think today restraint is very much in order for the top people," Paulson said.
Paulson's 500-page book, "On the Brink: Inside the Race to Stop the Collapse of the Global Financial System," offers a chronological account of the rush to prevent an economic disaster as Lehman Brothers and American International Group spun toward collapse in September 2008. Paulson served as treasury secretary from June 2006 to January 2009.
Buffett led the talk by asking Paulson about the book but didn't make many comments himself.
Buffett said Paulson's book gave him an appreciation of how well former President George W. Bush understood the economy and events during the crisis.
"Through the book, I gained more appreciation for what he did in this situation," Buffett said.
But Buffett, the longtime Democrat, also pointed out Paulson's positive statements about President Barack Obama.
Buffett praised the actions of Paulson, Federal Reserve Chairman Ben Bernanke and Paulson's successor, Treasury Secretary Timothy Geithner.
Paulson also thanked Buffett, an icon to thousands of investors, who advised the former Treasury chief during the worst days of the economic downturn.
"He was a real source of strength during the financial crisis," Paulson said.
Highly recommend going long this market
It's the high probability trade.
Because the bottom is in.
The bears' made up Greece scare is done, finished.
We got two hours left and the market is holding strong.
Go long and go strong.
And then on Friday, BRK.B gets added to the S&P, a historic event.
Think the bulls will celebrate? I dunno but I'm guessing they will.
Because the bottom is in.
The bears' made up Greece scare is done, finished.
We got two hours left and the market is holding strong.
Go long and go strong.
And then on Friday, BRK.B gets added to the S&P, a historic event.
Think the bulls will celebrate? I dunno but I'm guessing they will.
Rip Roaring
We are getting high volume reversal. Check the SPY.
This is what we want to see, off of a low.
The bottom is in.
Trichet to the rescue
With the futures up this much, there will be aggressive buying today.
Financial markets in Europe have steadied in anticipation of a European Union summit later this week. To add a small bit of dramatic flair, the European Central Bank let it be known that its President, Jean-Claude Trichet, would be jetting back early from Australia to be in attendance.
As investors have grappled with Greece’s fiscal problems, policy makers have tried several Kabuki moves to calm markets — Mr. Trichet’s dash back is but the latest. And for now this bit of posturing is working. The cost of sovereign debt default insurance has fallen a bit, the euro has strengthened and stock markets are a smidge higher.
The anticipation is that the European Union confab — planned well before the recent market turmoil struck — will lead to some sort of Greek rescue. The form of such a rescue remains mysterious, but few investors want to bet hard against Greece, or other periphery EU countries, until the results of the EU meeting are in.
Gapping up
Btw, we should gap higher on Tuesday, and it looks like we will from what I'm seeing in the futures market.
The methodology to determine this (gap up or down) is in the manuscript, in case you missed it with your reading.
Someone in the comments on Monday mentioned he bought some SPY calls before the close. That is the correct call, and he will likely make out like a bandit at the open.
And by the way, we're gapping our manuscript price the other way -- down. The cost of the manuscript is being reduced, through the link HERE, to $197 for the rest of the holidays. The offer expires on February 15,2010.
Monday, February 8, 2010
Why did Warren Buffett buy a railroad?
source:
Warren Buffett: outfoxing the wise men of Wall Street? Or preparing for the Obama economy?
"Watch what we do, not what we say."
That helpful hint — once let slip years ago by a high government official — was meant to convey the message that we do smart things but that doesn't mean it's always smart for us to brag about them. The always cynical media interpreted it to mean that we're actually ashamed of things we do, and it's not smart for us to advertise them.
The message in quotes was uttered early-on by President Nixon's attorney general, John Mitchell. (When Watergate became a scandal a couple of years later, it appeared the media had — perhaps inadvertently — stumbled into the truth, but that's another story.)
Back to the first explanation
When Warren Buffett — America's most famous investor — bought up all the stock in Burlington Northern Santa Fe railroad (BNSF), the "wise men [and women]" of Wall Street began a figurative head-scratching exercise that continues to this day.
The latest manifestation of that puzzlement came this past week when Standard and Poor's cut its credit rating of Buffett's parent firm Berkshire-Hathaway from the honored and coveted AAA to the next wrung down the financial ratings ladder to AA+.
That may or may not be a big deal for Berkshire — at least in the short run — but it is Wall Street's way of saying the Oracle of Omaha perhaps is losing his Midas Touch.
If that does in fact reflect Wall Street's conventional wisdom, it may be ill-placed (not that this would be the first time the keepers of the "Big Board" were caught napping).
Blame BNSF?
If Wall Street is merely saying Berkshire is not perfect anymore, that's a "so what?" What entity is? Many of us earthlings thought Buffett was misguided when he backed Barack Obama for President. But, hey, it's a free country. (S&P is only the latest of the credit agencies to downgrade Berkshire. Moody's and Fitch did so early last year — months before anyone knew of Buffett's "all in" headlong dive into the railroad business).
But S&P's rating reduction reportedly is in fact a reaction to Buffett's purchase of BNSF. If that's the case, the decision-makers at S&P may be exhibiting their own imperfections.
The deal
The "street" was dumfounded at the news last November that Buffett — in his "biggest deal ever" — purchased the remaining 77.4 percent of the BNSF that he did not already own. At the time, he was quoted as saying, "It's a bet on the country, basically" and as soon as the U.S. is out the recession there will be a higher demand to move goods — which is what the freight-hauling BNSF is in business to provide.
Of course, any high-profile investor would be cutting his own throat if he were to say he made an investment because he had some deep concerns about the future. No matter how you couch those reservations in diplomatic language — if Warren Buffet actually were to utter them, many other investors would "head for the hills," and the market would likely tumble, if not crash. And since the market had not been on anything resembling a "roll" since September 2008, it is understandable that the wisest course of action is seen as putting a positive spin on the move.
Not that there are no positive reasons
The hope that the freight business will ultimately pick up big-time is not totally wishful thinking. But if that were the main or only reason for Berkshire-Hathaway's move on BNSF, Buffett could well have held onto his large minority holdings in that railroad, plus the stock he also owned — and has now sold — in Norfolk-Southern (NS) and Union Pacific (UP) — both of which are also solid, healthy railroads.
So what was he thinking?
We make no claims to special insight as to the Omaha Oracle's thought processes. If it were that easy, we could all be billionaires (in which case, the very commonality of the experience would devalue it).
So why BNSF? Well, one could cite the railroad's expenditure in double-tracking its Chicago-Southern California mainline. Wall Street — ever focused on the needs of the next quarter's earnings — didn't like that expenditure at all. But it is proving every day to have been a wise move in delivering BNSF shipments to customers in a more timely manner, thus attracting more business.
That may be one reason for Buffet's bullishness on BNSF. But the only reason? No, there has to be something else. Somehow, there's this gut feeling that a piece of the puzzle is missing. Why would a long-term investor sink all those dollars into one of America's very oldest industries?
Is this the story?
A rail-savvy friend of this column has an interesting take on that — a perspective which we found is shared by others. This school of thought says that Mr. Buffett traded tens of billions of depreciating dollars for a "hard asset" that will be worth something as dollars continue to lose value. When one owns tens of billions of them, depreciating dollars represent massive losses, and trading them now for a railroad is a wise move. Whether or not he could trade that cash for an equivalent supply of gold is doubtful. Where could one find that much gold for sale?
But then —
If Buffett is not thinking along these lines, then perhaps (1) He thinks the Obama economy will in fact turn around (as of this writing, he has not withdrawn support for the president); (2) He thinks that — as has happened in so many past crises — Washington will appoint another commission and attempt to solve the politics of the problem without actually solving the problem itself (however, the country senses that this time "Washington" has run out of wiggle room); or (3) A declining economy can take railroads with it. Then again, perhaps Berkshire-Hathaway reasons that even in the worst of times, a railroad — as "hard asset" — is still the safest bet.
On the rail's passenger side...
That enables us to segue into a discussion of the other half of railroading — passenger trains. One "green" blogger expressed the hope that Warren Buffet's interest in freight railroads would lead him into the rail passenger business, as well. Not likely. Buffet is a railfan (he reportedly has an extensive toy railroad collection in his home), but that is separate and apart from his business life. Private investment in freight rail is a good buy these days. But the passenger rail business? That is another story, and has been for years.
A conservative case can be made for support of passenger trains:
Citing such free marketers as Adam Smith and Alexander Hamilton, the late Paul M. Weyrich collaborated with his longtime associate, William S. Lind, at Free Congress Foundation (which Weyrich founded) to author the book Moving Minds. Their case is that infrastructure and defense of the nation are two legitimate functions of the central government.
The authors believe that a critical part of the nation's infrastructure — its railroads — was neglected in the Post World War II era. That is when the Interstate Highway, they contend, exacerbated a situation whereby unsubsidized railroads had to compete with subsidized highways.
By 1980, the nation's railroads — unsurprisingly — were flat on their backs. That was remedied with passage of the Staggers Act, which deregulated the railroads. That revived freight railroading, and today those Class 1 carriers make up the only mainline transportation system in the world that pays for both its operations (in this case, above the rail — the trains and their crews) and its infrastructure (in this case the "hard asset" rail tracks themselves, plus signaling and other support mechanisms that enable the trains to operate.)
The conservative case for passenger rail
That works well for freight. Rail passenger traffic is another issue. No mainline passenger train operation anywhere in the world makes a profit. The Weyrich/Lind book makes the argument that public backing for passenger trains can be justified on several fronts: (1) Infrastructure as a factor in the nation's commerce; (2) National security (reducing our oil dependence on foreign nations that hate us); and (3) Economic development: A rail passenger operation — through its tracks and stations — usually will spur commercial development that is not as easily attained by a highway or a bus line that can more easily be yanked at will. The infrastructure of tracks and stations represents a long-term commitment.
Moreover, Weyrich and Lind say the suburban sprawl that gave birth to our present-day automobile-centric culture was actually of left-wing origins, as government mandates on local building codes separated where we live from where we work and shop.
Moving Minds offers a remedy: A National Defense Public Transportation Act, which would use a system of nationally-coordinated trains and connecting buses. The aim would be to enable anyone to travel from anywhere to anywhere else in the continental United States without having to drive or fly.
As per the conservative preference for local control, the authors write that under their plan, every county in the nation could decide whether or not to participate in the program. They are that confident that it would work simply through its popularity at the ballot box or local government backing.
Bumps in the (rail)road ahead?
Infrastructure will be a big issue ahead, as it merges with the issue of joblessness in the current economy. It is not just the railroads that have infrastructure problems. Our highways are beginning to show their age, as well.
So what to do?
In mid-January, three members of President Obama's Economic Recovery Advisory Board wrote in the Wall Street Journal that our aging infrastructure (including all forms of surface transportation) would ultimately constrain our economic development. And they added, "It's time that we accept that government alone can no longer finance all the nation's infrastructure requirements."
All the more reason for this administration to admit (to itself, if not to the public) that Americans are soured on its scheme to put government between you and your doctor, as well as its cap and tax "climate change" program.
For starters, Washington instead would do well to focus on tax cuts for all job creators — not just some of them. Tax credits for the freight railroads would help them beef up their infrastructure. The Weyrich/Lind plan for better mobility through availability of passenger rail would enable construction firms to put lots of jobless people to work — lots of them.
And if the economy benefits thereby, Warren Buffett's investment in BNSF will have been justified — not just as a hedge against bad times, but for the best of times, as well.
Warren Buffett: outfoxing the wise men of Wall Street? Or preparing for the Obama economy?
"Watch what we do, not what we say."
That helpful hint — once let slip years ago by a high government official — was meant to convey the message that we do smart things but that doesn't mean it's always smart for us to brag about them. The always cynical media interpreted it to mean that we're actually ashamed of things we do, and it's not smart for us to advertise them.
The message in quotes was uttered early-on by President Nixon's attorney general, John Mitchell. (When Watergate became a scandal a couple of years later, it appeared the media had — perhaps inadvertently — stumbled into the truth, but that's another story.)Back to the first explanation
When Warren Buffett — America's most famous investor — bought up all the stock in Burlington Northern Santa Fe railroad (BNSF), the "wise men [and women]" of Wall Street began a figurative head-scratching exercise that continues to this day.
The latest manifestation of that puzzlement came this past week when Standard and Poor's cut its credit rating of Buffett's parent firm Berkshire-Hathaway from the honored and coveted AAA to the next wrung down the financial ratings ladder to AA+.
That may or may not be a big deal for Berkshire — at least in the short run — but it is Wall Street's way of saying the Oracle of Omaha perhaps is losing his Midas Touch.
If that does in fact reflect Wall Street's conventional wisdom, it may be ill-placed (not that this would be the first time the keepers of the "Big Board" were caught napping).
Blame BNSF?
If Wall Street is merely saying Berkshire is not perfect anymore, that's a "so what?" What entity is? Many of us earthlings thought Buffett was misguided when he backed Barack Obama for President. But, hey, it's a free country. (S&P is only the latest of the credit agencies to downgrade Berkshire. Moody's and Fitch did so early last year — months before anyone knew of Buffett's "all in" headlong dive into the railroad business).
But S&P's rating reduction reportedly is in fact a reaction to Buffett's purchase of BNSF. If that's the case, the decision-makers at S&P may be exhibiting their own imperfections.
The deal
The "street" was dumfounded at the news last November that Buffett — in his "biggest deal ever" — purchased the remaining 77.4 percent of the BNSF that he did not already own. At the time, he was quoted as saying, "It's a bet on the country, basically" and as soon as the U.S. is out the recession there will be a higher demand to move goods — which is what the freight-hauling BNSF is in business to provide.
Of course, any high-profile investor would be cutting his own throat if he were to say he made an investment because he had some deep concerns about the future. No matter how you couch those reservations in diplomatic language — if Warren Buffet actually were to utter them, many other investors would "head for the hills," and the market would likely tumble, if not crash. And since the market had not been on anything resembling a "roll" since September 2008, it is understandable that the wisest course of action is seen as putting a positive spin on the move.Not that there are no positive reasons
The hope that the freight business will ultimately pick up big-time is not totally wishful thinking. But if that were the main or only reason for Berkshire-Hathaway's move on BNSF, Buffett could well have held onto his large minority holdings in that railroad, plus the stock he also owned — and has now sold — in Norfolk-Southern (NS) and Union Pacific (UP) — both of which are also solid, healthy railroads.
So what was he thinking?
We make no claims to special insight as to the Omaha Oracle's thought processes. If it were that easy, we could all be billionaires (in which case, the very commonality of the experience would devalue it).
So why BNSF? Well, one could cite the railroad's expenditure in double-tracking its Chicago-Southern California mainline. Wall Street — ever focused on the needs of the next quarter's earnings — didn't like that expenditure at all. But it is proving every day to have been a wise move in delivering BNSF shipments to customers in a more timely manner, thus attracting more business.
That may be one reason for Buffet's bullishness on BNSF. But the only reason? No, there has to be something else. Somehow, there's this gut feeling that a piece of the puzzle is missing. Why would a long-term investor sink all those dollars into one of America's very oldest industries?
Is this the story?
A rail-savvy friend of this column has an interesting take on that — a perspective which we found is shared by others. This school of thought says that Mr. Buffett traded tens of billions of depreciating dollars for a "hard asset" that will be worth something as dollars continue to lose value. When one owns tens of billions of them, depreciating dollars represent massive losses, and trading them now for a railroad is a wise move. Whether or not he could trade that cash for an equivalent supply of gold is doubtful. Where could one find that much gold for sale?But then —
If Buffett is not thinking along these lines, then perhaps (1) He thinks the Obama economy will in fact turn around (as of this writing, he has not withdrawn support for the president); (2) He thinks that — as has happened in so many past crises — Washington will appoint another commission and attempt to solve the politics of the problem without actually solving the problem itself (however, the country senses that this time "Washington" has run out of wiggle room); or (3) A declining economy can take railroads with it. Then again, perhaps Berkshire-Hathaway reasons that even in the worst of times, a railroad — as "hard asset" — is still the safest bet.
On the rail's passenger side...
That enables us to segue into a discussion of the other half of railroading — passenger trains. One "green" blogger expressed the hope that Warren Buffet's interest in freight railroads would lead him into the rail passenger business, as well. Not likely. Buffet is a railfan (he reportedly has an extensive toy railroad collection in his home), but that is separate and apart from his business life. Private investment in freight rail is a good buy these days. But the passenger rail business? That is another story, and has been for years.
A conservative case can be made for support of passenger trains:
Citing such free marketers as Adam Smith and Alexander Hamilton, the late Paul M. Weyrich collaborated with his longtime associate, William S. Lind, at Free Congress Foundation (which Weyrich founded) to author the book Moving Minds. Their case is that infrastructure and defense of the nation are two legitimate functions of the central government.
The authors believe that a critical part of the nation's infrastructure — its railroads — was neglected in the Post World War II era. That is when the Interstate Highway, they contend, exacerbated a situation whereby unsubsidized railroads had to compete with subsidized highways.By 1980, the nation's railroads — unsurprisingly — were flat on their backs. That was remedied with passage of the Staggers Act, which deregulated the railroads. That revived freight railroading, and today those Class 1 carriers make up the only mainline transportation system in the world that pays for both its operations (in this case, above the rail — the trains and their crews) and its infrastructure (in this case the "hard asset" rail tracks themselves, plus signaling and other support mechanisms that enable the trains to operate.)
The conservative case for passenger rail
That works well for freight. Rail passenger traffic is another issue. No mainline passenger train operation anywhere in the world makes a profit. The Weyrich/Lind book makes the argument that public backing for passenger trains can be justified on several fronts: (1) Infrastructure as a factor in the nation's commerce; (2) National security (reducing our oil dependence on foreign nations that hate us); and (3) Economic development: A rail passenger operation — through its tracks and stations — usually will spur commercial development that is not as easily attained by a highway or a bus line that can more easily be yanked at will. The infrastructure of tracks and stations represents a long-term commitment.
Moreover, Weyrich and Lind say the suburban sprawl that gave birth to our present-day automobile-centric culture was actually of left-wing origins, as government mandates on local building codes separated where we live from where we work and shop.
Moving Minds offers a remedy: A National Defense Public Transportation Act, which would use a system of nationally-coordinated trains and connecting buses. The aim would be to enable anyone to travel from anywhere to anywhere else in the continental United States without having to drive or fly.
As per the conservative preference for local control, the authors write that under their plan, every county in the nation could decide whether or not to participate in the program. They are that confident that it would work simply through its popularity at the ballot box or local government backing.
Bumps in the (rail)road ahead?
Infrastructure will be a big issue ahead, as it merges with the issue of joblessness in the current economy. It is not just the railroads that have infrastructure problems. Our highways are beginning to show their age, as well.
So what to do?In mid-January, three members of President Obama's Economic Recovery Advisory Board wrote in the Wall Street Journal that our aging infrastructure (including all forms of surface transportation) would ultimately constrain our economic development. And they added, "It's time that we accept that government alone can no longer finance all the nation's infrastructure requirements."
All the more reason for this administration to admit (to itself, if not to the public) that Americans are soured on its scheme to put government between you and your doctor, as well as its cap and tax "climate change" program.
For starters, Washington instead would do well to focus on tax cuts for all job creators — not just some of them. Tax credits for the freight railroads would help them beef up their infrastructure. The Weyrich/Lind plan for better mobility through availability of passenger rail would enable construction firms to put lots of jobless people to work — lots of them.
And if the economy benefits thereby, Warren Buffett's investment in BNSF will have been justified — not just as a hedge against bad times, but for the best of times, as well.
Iran wants to stun us this Thursday
Maybe they do have something. Certainly picked a great day, because Thursdays are usually selloff days.
TEHRAN — Supreme leader Ayatollah Ali Khamenei said on Monday that Iran is set to deliver a "punch" that will stun world powers during this week's 31st anniversary of the Islamic revolution.
"The Iranian nation, with its unity and God's grace, will punch the arrogance (Western powers) on the 22nd of Bahman (February 11) in a way that will leave them stunned," Khamenei, who is also Iran's commander-in-chief, told a gathering of air force personnel.
The country's top cleric was marking the occasion when Iran's air force gave its support to revolutionary leader Ayatollah Ruhollah Khomeini, a key event which led to the toppling of the US-backed shah on February 11, 1979.
His comments came as Iran said it would begin to produce higher enriched uranium from Tuesday, in defiance of Western powers trying to ensure the country's nuclear drive is peaceful.
This year's anniversary is expected to become a flashpoint between security forces and supporters of opposition leaders Mir Hossein Mousavi and Mehdi Karroubi, who charge that the June re-election of President Mahmoud Ahmadinejad was rigged.
Opposition supporters are expected to stage anti-government protests on Thursday when the traditional regime-sponsored marches to mark the revolution take place across the country.
Mousavi renewed his call for demonstrations on the February 11 anniversary.
Just over a week ago, he and Karroubi had implicitly called for a gathering of their supporters.
"The 22nd of Bahman is upon us, truly it should be called the day of gathering," Mousavi said on his Kaleme.org website Monday.
"I feel we have to participate while maintaining the collective spirit as well as our identity and leave an impression," Mousavi said.
"Anger and bitterness should not take our control away.
"The clerics should know that since imprisonment, beatings, and other confrontational methods are done in the name of Islam and the Islamic regime, it is hurting Islam and we all should try to stop," he added.
Anti-government protests were first triggered after the June 12 presidential election won by Ahmadinejad.
Over the past eight months, several thousand people were arrested. Some were released and others were given hefty prison terms, among them politicians, journalists and human rights activists.
Two protesters were tried, convicted and hanged in the aftermath of the election.
Khamenei told the air force personnel the "most important aim of the sedition after the election was to create a rift within the Iranian nation, but it was unable to do so and our nation's unity remained a thorn in its eyes."
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Worst Case Scenario
Notice the SPX 950 area support/resistance area? You find that in play in year 2001, 2002, 2003, 2008, and 2009.
Recently, the SPX 950 area is also the neckline of the inverted head n' shoulders formed by the last quarter of 2008 and the first two quarters of 2009.
Here is a better view of that inverted head n' shoulders, with the inverted head at 666:
So there is HUGE fortress of support at 950. I think that level is virtually unbreakable in the foreseeable future.
Related:
The Golden Cross And Where We Go From Here
A Heart Can Break, And So Can Your .....
Dorothy Lee and her husband of 40 years were driving home from a Bible study group one wintry night when their car suddenly hit the curb. Mrs. Lee looked at her husband, who was driving, and saw his head bob a couple of times and fall on his chest.
In the ensuing minutes, Mrs. Lee recalls, she managed to avoid a crash while stopping the car, called 911 on her cellphone and tried to revive her husband before an ambulance arrived. But at the hospital, soon after learning her husband had died of a heart attack, Mrs. Lee's heart appeared to give out as well. She experienced sudden sharp pains in her chest, felt faint and went unconscious.
When doctors performed an X-ray angiogram expecting to find and treat a blood clot that had caused Mrs. Lee's symptoms, they were surprised: There wasn't any evidence of a heart attack. Her coronary arteries were completely clear.
Doctors eventually determined that Mrs. Lee had suffered from broken-heart syndrome, a name given by doctors who observed that it seemed to especially affect patients who had recently lost a spouse or other family member. The mysterious malady mimics heart attacks, but appears to have little connection with coronary artery disease. Instead, it is typically triggered by acute emotion or physical trauma that releases a surge of adrenaline that overwhelms the heart. The effect is to freeze much of the left ventricle, the heart's main pumping chamber, disrupting its ability to contract and effectively pump blood.
The phenomenon is a "concussion" of the heart, says Scott Sharkey, a cardiologist at Minneapolis Heart Institute. "It's really a heart attack which is triggered by stress rather than by a blocked artery," he says.
----------------------------------
Broken Penis Syndrome:
Given that there are no bones in the penis, can it really break? It turns out there is an unfortunate injury termed "penile fracture" that can indeed occur during sexual intercourse. We asked Hunter Wessells, chair of the urology department at the University of Washington School of Medicine in Seattle (also home to the show's Grace Hospital), to describe the condition and how it can happen.
What exactly is broken penis syndrome?
It's what we call penile fracture. It is a severe form of bending injury to the erect penis that occurs when a membrane called the tunica albuginea tears. The tunica albuginea surrounds the corpora cavernosa, specialized spongy tissue in the core of the penis that fills up with blood during an erection. When the tunica albuginea tears, the blood that is normally confined to this space leaks out into other tissues. You get bruising and swelling.
What are the signs of penile fracture?
Usually there will be a popping sound. If someone has severe pain (in the penis), especially associated with bruising, swelling and loss of erection, he should seek emergency care.
How exactly does penile fracture happen?
Any situation during intercourse when there is thrusting and when the penis, instead of penetrating its normal location, is hitting some solid structure (such as the perineum). Usually this occurs during regular vaginal sex with the woman on top, but it can happen in the missionary position or during sexual acrobatics. We had this patient who suffered penile fracture after running across the room and trying to penetrate his wife with a flying leap.
Sarah Palin a palm reader
If Palin is the best candidate the Republicans can get for 2012, Obama is sure to win a second term.
She's cute and everything, but many see the Presidential job way too big for her.
The bulls
They, that's us, will probably own first half of this week. But there's still alot of work to do, to reverse the technical damage.
So we can't get too giddy up just yet.
On a different note, FSLR is down again, this time due to Deutsche Bank lowering its price target.
On a third note, we caught AAPL at $192 late last week for a nice move.
Branson warns of oil crunch within 5 years
Sir Richard Branson and fellow leading businessmen will warn ministers this week that the world is running out of oil and faces an oil crunch within five years.
The founder of the Virgin group, whose rail, airline and travel companies are sensitive to energy prices, will say that the coming crisis could be even more serious than the credit crunch.
"The next five years will see us face another crunch – the oil crunch. This time, we do have the chance to prepare. The challenge is to use that time well," Branson will say...
Sunday, February 7, 2010
Down With the People
Blame the childish, ignorant American public—not politicians—for our political and economic crisis.
By Jacob Weisberg
In trying to explain why our political paralysis seems to have gotten so much worse over the past year, analysts have rounded up a plausible collection of reasons including: President Obama's tactical missteps, the obstinacy of congressional Republicans, rising partisanship in Washington, the blustering idiocracy of the cable-news stations, and the Senate filibuster, which has devolved into a super-majority threshold for any important legislation. These are all large factors, to be sure, but that list neglects what may be the biggest culprit in our current predicament: the childishness, ignorance, and growing incoherence of the public at large.
Anybody who says you can't have it both ways clearly hasn't been spending much time reading opinion polls lately. One year ago, 59 percent of the American public liked the stimulus plan, according to Gallup. A few months later, with the economy still deeply mired in recession, a majority of the same size said Obama was spending too much money on it. There's nothing wrong with changing your mind, of course, but opinion polls over the last year reflect something altogether more troubling: a country that simultaneously demands and rejects action on unemployment, deficits, health care, climate change, and a whole host of other major problems. Sixty percent of Americans want stricter regulations of financial institutions. But nearly the same proportion says we're suffering from too much regulation on business. That kind of illogic—or, if you prefer, susceptibility to rhetorical manipulation—is what locks the status quo in place.
At the root of this kind of self-contradiction is our historical, nationally characterological ambivalence about government. We want Washington and the states to fix all of our problems now. At the same time, we want government to shrink, spend less, and reduce our taxes. We dislike government in the abstract: According to CNN, 67 percent of people favor balancing the budget even when the country is in a recession or a war, which is madness. But we love government in the particular: Even larger majorities oppose the kind of spending cuts that would reduce projected deficits, let alone eliminate them. Nearly half the public wants to cancel the Obama stimulus, and a strong majority doesn't want another round of it. But 80-plus percent of people want to extend unemployment benefits and to spend more money on roads and bridges. There's another term for that stuff: more stimulus spending.
The usual way to describe such inconsistent demands from voters is to say that the public is an angry, populist, tea-partying mood. But a lot more people are watching American Idol than are watching Glenn Beck, and our collective illogic is mostly negligent rather than militant. The more compelling explanation is that the American public lives in Candyland, where government can tackle the big problems and get out of the way at the same time. In this respect, the whole country is becoming more and more like California, where ignorance is bliss and the state's bonds have dropped to an A- rating (the same level as Libya's), thanks to a referendum system that allows the people to be even more irresponsible than their elected representatives. Middle-class Americans really don't want to hear about sacrifices or trade-offs—except as flattering descriptions about how ready we, as a people, are, or used to be, to accept them. We like the idea of hard choices in theory. When was the last time we made one in reality?
The politicians thriving at the moment are the ones who embody this live-for-the-today mentality, those best able to call for the impossible with a straight face. Take Scott Brown, the newly elected Senator from Massachusetts. Brown wants government to take in less revenue: He has signed a no-new-taxes pledge and called for an across-the-board tax cut on families and businesses. But Brown doesn't want government to spend any less money: He opposes reductions in Medicare payments and all other spending cuts of any significance. He says we can lower deficits above 10 percent of GDP—the largest deficits since World War II, deficits so large that they threaten our future as the world's leading military and economic power—simply by cutting government waste. No sensible person who has spent five minutes looking at the budget thinks that's remotely possible. The charitable interpretation is that Brown embodies naive optimism, an approach to politics that Ronald Reagan left as one of his more dubious legacies to Republican Party. A better explanation is that Brown is consciously pandering to the public's ignorance and illusions the same way the rest of his Republican colleagues are.
I don't mean to suggest that honesty is what separates the two parties. Increasingly, the crucial distinction is between the minority of serious politicians in either party who are prepared to speak directly about our choices, on the one hand, and the majority who indulge the public's delusions, on the other. I would put President Obama and his economic team in the first group, along with California Gov. Arnold Schwarzenegger. Republicans are more indulgent of the public's unrealism in general, but Democrats have spent years fostering their own forms of denial. Where Republicans encourage popular myths about taxes, spending, and climate change, Democrats tend to stoke our fantasies about the sustainability of entitlement spending as well as about the cost of new programs.
Our inability to address long-term challenges makes a strong case that the United States now faces an era of historical decline. Our reluctance to recognize economic choices also portends negative effects for the rest of the world. To change this story line, we need to stop blaming the rascals we elect to office and start looking to ourselves.
Economic Black Hole: 20 Reasons Why The U.S. Economy Is Dying And Is Simply Not Going To Recover
The article below pretty much sums up the bears' case for why the economy (and stock market) will not recover. Of course, the bears said the same thing back in 1985 when the national debt increased nearly 4-fold from the 1960's (look at the graph on #15 below). And what happened? We had a great 20-year economic and stock market boom time.
source:
Even though the U.S. financial system nearly experienced a total meltdown in late 2008, the truth is that most Americans simply have no idea what is happening to the U.S. economy. Most people seem to think that the nasty little recession that we have just been through is almost over and that we will be experiencing another time of economic growth and prosperity very shortly. But this time around that is not the case. The reality is that we are being sucked into an economic black hole from which the U.S. economy will never fully recover.
The problem is debt. Collectively, the U.S. government, the state governments, corporate America and American consumers have accumulated the biggest mountain of debt in the history of the world. Our massive debt binge has financed our tremendous growth and prosperity over the last couple of decades, but now the day of reckoning is here.
And it is going to be painful.
The following are 20 reasons why the U.S. economy is dying and is simply not going to recover....
#1) Do you remember that massive wave of subprime mortgages that defaulted in 2007 and 2008 and caused the biggest financial crisis since the Great Depression? Well, the "second wave" of mortgage defaults in on the way and there is simply no way that we are going to be able to avoid it. A huge mountain of mortgages is going to reset starting in 2010, and once those mortgage payments go up there are once again going to be millons of people who simply cannot pay their mortgages. The chart below reveals just how bad the second wave of adjustable rate mortgages is likely to be over the next several years....
#2) The Federal Housing Administration has announced plans to increase the amount of up-front cash paid by new borrowers and to require higher down payments from those with the poorest credit. The Federal Housing Administration currently backs about 30 percent of all new home loans and about 20 percent of all new home refinancing loans. Tighter standards are going to mean that less people will qualify for loans. Less qualifiers means that there will be less buyers for homes. Less buyers means that home prices are going to drop even more.
#3) It is getting really hard to find a job in the United States. A total of 6,130,000 U.S. workers had been unemployed for 27 weeks or more in December 2009. That was the most ever since the U.S. government started keeping track of this statistic in 1948. In fact, it is more than double the 2,612,000 U.S. workers who were unemployed for a similar length of time in December 2008. The reality is that once Americans lose their jobs they are increasingly finding it difficult to find new ones. Just check out the chart below....
#4) In December, there were also 929,000 "discouraged" workers who are not counted as part of the labor force because they have "given up" looking for work. That is the most since the U.S. government first started keeping track of discouraged workers in 1949. Many Americans have simply given up and are now chronically unemployed.
#5) Some areas of the U.S. are already virtually in a state of depression. The mayor of Detroit estimates that the real unemployment rate in his city is now somewhere around 50 percent.
#6) For decades, our leaders in Washington pushed us towards "a global economy" and told us it would be so good for us. But there is a flip side. Now workers in the U.S. must compete with workers all over the world, and our greedy corporations are free to pursue the cheapest labor available anywhere on the globe. Millions of jobs have already been shipped out of the United States, and Princeton University economist Alan S. Blinder estimates that 22% to 29% of all current U.S. jobs will be offshorable within two decades. The days when blue collar workers could live the American Dream are gone and they are not going to come back.
#7) During the 2001 recession, the U.S. economy lost 2% of its jobs and it took four years to get them back. This time around the U.S. economy has lost more than 5% of its jobs and there is no sign that the bleeding of jobs is going to stop any time soon.
#8) All of this unemployment is putting severe stress on state unemployment funds. At this point, 25 state unemployment insurance funds have gone broke and the Department of Labor estimates that 15 more state unemployment funds will likely go broke within two years and will need massive loans from the federal government just to keep going.
#9) 37 million Americans now receive food stamps, and the program is expanding at a pace of about 20,000 people a day. The United States of America is very quickly becoming a socialist welfare state.
#10) The number of Americans who are going broke is staggering. 1.41 million Americans filed for personal bankruptcy in 2009 - a 32 percent increase over 2008.
#11) For decades, the fact that the U.S. dollar was the reserve currency of the world gave the U.S. financial system an unusual degree of stability. But all of that is changing. Foreign countries are increasingly turning away from the dollar to other currencies. For example, Russia’s central bank announced on Wednesday that it had started buying Canadian dollars in a bid to diversify its foreign exchange reserves.
#12) The recent economic downturn has left some localities totally bankrupt. For instance, Jefferson County, Alabama is on the brink of what would be the largest government bankruptcy in the history of the United States - surpassing the 1994 filing by Southern California's Orange County.
#13) The U.S. is facing a pension crisis of unprecedented magnitude. Virtually all pension funds in the United States, both private and public, are massively underfunded. With millions of Baby Boomers getting ready to retire, there is simply no way on earth that all of these obligations can be met. Robert Novy-Marx of the University of Chicago and Joshua D. Rauh of Northwestern's Kellogg School of Management recently calculated the collective unfunded pension liability for all 50 U.S. states for Forbes magazine. So what was the total? 3.2 trillion dollars.
#14) Social Security and Medicare expenses are wildly out of control. Once again, with millions of Baby Boomers now at retirement age there is simply going to be no way to pay all of these retirees what they are owed.
#15) So will the U.S. government come to the rescue? The U.S. has allowed the total federal debt to balloon by 50% since 2006 to $12.3 trillion. The chart below is a bit outdated, but it does show the reckless expansion of U.S. government debt over the past several decades. To get an idea of where we are now, just add at least 3 trillion dollars on to the top of the chart....
#16) So has the U.S. government learned anything from these mistakes? No. In fact, Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $2 trillion to pay its bills, a record increase that would allow the U.S. national debt to reach approximately $14.3 trillion.
#17) It is going to become even harder for the U.S. government to pay the bills now that tax receipts are falling through the floor. U.S. corporate income tax receipts were down 55% in the year that ended on September 30th, 2009.
#18) So where will the U.S. government get the money? From the Federal Reserve of course. The Federal Reserve bought approximately 80 percent of all U.S. Treasury securities issued in 2009. In other words, the U.S. government is now being financed by a massive Ponzi scheme.
#19) The reckless expansion of the money supply by the U.S. government and the Federal Reserve is going to end up destroying the U.S. dollar and the value of the remaining collective net worth of all Americans. The more dollars there are, the less each individual dollar is worth. In essence, inflation is like a hidden tax on each dollar that you own. When they flood the economy with money, the value of the money you have in your bank accounts goes down. The chart below shows the growth of the U.S. money supply. Pay particular attention to the very end of the chart which shows what has been happening lately. What do you think this is going to do to the value of the U.S. dollar?....
#20) When a nation practices evil, there is no way that it is going to be blessed in the long run. The truth is that we have become a nation that is dripping with corruption and wickedness from the top to the bottom. Unless this fundamentally changes, not even the most perfect economic policies in the world are going to do us any good. In the end, you always reap what you sow. The day of reckoning for the U.S. economy is here and it is not going to be pleasant.
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Economy is recovering, Geithner, Paulson, Greenspan agree
CHICAGO (MarketWatch) -- The U.S. economy was front and center on the talk shows Sunday, with administration officials past and present expressing guarded confidence that it's in a recovery mode.
Treasury Secretary Timothy Geithner, appearing on ABC News' "This Week," said he thinks the economy is back in growth mode and, "We're seeing some encouraging signs of healing" following better-than-expected unemployment data released Friday.
Still, Geithner added, "This is going to take a while, and it's going to be uneven, but there are encouraging signs in this report."
Geithner also expressed confidence that the risk of a "double-dip" recession is receding.
"I think we have much, much lower risk of that today than at any time over the last 12 months or so," he said. "We are in an economy that was growing at the rate of almost 6% of GDP in the fourth quarter of last year," the fastest in almost six years.
On NBC's "Meet the Press," Henry Paulson, Treasury secretary under President George W. Bush when the financial crisis began, said that, "The economy is clearly recovering. There is more certainty. Part of it is confidence and psychology ... but ultimately the private sector will do what needs to be done" to create jobs.
Joining Paulson on the program was former Federal Reserve Chairman Alan Greenspan, who said that the jobs report "doesn't signal a turnaround, but a turnaround that has already occurred that is not moving aggressively. It is going to be a slow, trudging thing."
Paulson said the ballooning government deficit said that it is "by far the most serious long-term challenge" the nation faces and it will be a long time bringing it under control.
One of the things he learned in Washington, Paulson said, was that "it is difficult to get Congress to act on anything that is big and controversial unless there is an immediate crisis."
Greenspan said that if the U.S. continues to let the deficit grow, at some point, "We are going to find that our ability to borrow [will be] constrained. And history tells us that that great powers, when they have gotten into significant fiscal problems, cease to be great powers."
Speaking to the same point earlier on ABC, Geithner pointed out that President Barack Obama's budget is aimed at bringing the deficit down to below 4% of GDP over the next four years or so.
"And we want to work with Congress to set up a bipartisan commission to try to make sure that we're going beyond that to address our long-term problems," Geithner added.
He also insisted that the U.S. will not lose its triple-A government bond rating.
"That will never happen to this country," he said. "If you step back and look at what has happened throughout this crisis, when people were most worried about the stability of the world, they still found safety in Treasuries and the dollar."
It's Time to Stop Talking About Clean Energy and Start Acting
video
Leonardi DiCaprio:
It's time people stop talking about clean energy and climate change and start acting.
With that in mind, the NRDC Action Fund and I have launched a campaign to demand action on climate legislation. Our goal: Spread the word and demand that our leaders in Washington take action to pass the critical climate change legislation currently before the Senate. Joining us in this campaign are some of my Hollywood colleagues like Jason Bateman, Forest Whitaker, Chace Crawford, Felicity Huffman, Justin Long, Edward Norton and Emmy Rossum, as well as Professor Cornel West of Princeton University.
We are hoping you will get your friends to help spread that message. Here is what you can do:
* Tell your Senators This is Our Moment by clicking this link.
* Spread the word about this video by posting the link on your own Facebook wall.
* Update your Facebook status to "Thisisourmoment.org" so friends will see our video.
* Tweet #ThisIsOurMoment and tell your followers to take action today.
* Upload your own video calling for clean energy solutions.
* Post ThisIsOurMoment.org on your personal blogs.
We need to take a stand and tell our Senators that we will not accept anything less than a strong, comprehensive clean energy bill that will cut carbon pollution and create clean energy jobs.
If we make ourselves heard, if we stand up and speak the truth, they cannot ignore us. They will have no choice but to pass this monumental legislation. Please visit www.thisisourmoment.org and tell your Senators that you want a strong clean energy and climate bill passed today.
This is our moment and we can't afford to miss it.
Saturday, February 6, 2010
This week's "channel checking"
Would you believe it was as crowded as it's ever been? The Apple store was also a madhouse.
Now, we can't just go merely by anecdotal evidence to draw conclusions. But with the improving economic numbers (5.7% GDP!) and with the strong numbers the corporations themselves have reported, anecdotal evidences do hold water.
I'm sure many of you will find similar madhouses in your area.
So then, what are the bears huffing and puffing about?
Oh, they want to bring the market down to its knees.
Maybe the bears should get out more, or take a date to Mildred's Temple Kitchen restaurant for Valentine's.
Visitors to Mildred's Temple Kitchen, a restaurant in Toronto, Canada, are invited to spice up their love life this Valentine's Day with a trip to the bathroom.
"Have you given any thought to moving beyond the bedroom?" patrons were asked in a not-too-subtle promotional e-mail.
The individual bathrooms will be open for sexual escapades from the 12-15th February. According to the manager, Rory Gallagher, a french maid will be working the toilets, making sure everything is "going smoothly and kept clean."
"We've always had little trysts in our bathrooms," co-owner Donna Dooher told The Toronto Star. "We're taking it to the next level on Valentine's weekend." She added that customers are expected to bring their own condoms.
Perhaps surprisingly, Toronto's Public Health food safety program manager said the restaurant wasn't breaking any laws as long as there's no intercourse in the kitchen and the bathrooms are kept clean.
"As far as bodily fluids, it's pretty much similar to the other human functions going on in there," said Chan, slightly undercutting the erotic value of the venture.
Strong Dollar, Strong Stock Market?
Why is a stronger dollar preferable to a weak dollar?
"A strong dollar enables us to have more flexibility in terms of fiscal policy and stimulus than most any other country in the world," says David Gordon, until recently the director of policy planning at the U.S. State Department. "It also reflects the continuing view in Asia, and especially China, that the financial stability of the United States and the financial recovery of the United States is crucial to their own economic and financial futures."
What we are seeing lately is that the US Dollar is rallying strongly, and the stock market has been correcting.
Here is a daily view of the US Dollar:
Here is a weekly view of the US Dollar:
Last year, we saw the dollar rallied and the stock market tanked. So, naturally, people think that whenever the dollar rallies the market goes down. But historically, the dollar and the stock market have had a positive correlation. That is, when the dollar rises, the market also rises.
In Vincent Farrell's piece, entitled "A Strong Dollar Is Supposed To Lift Stocks", he says:
...there have been seven strong-dollar periods since the mid 1970s. For all the time frames (like February 1975 to May 1976, or December 2004 to November 2005) the S&P 500 has averaged a gain of 26%. The range, excluding the recent decline of 26% for the S&P from March 2008 to February 2009 -- which was the strong dollar time period mentioned above -- was up 3% (December 2004 to November 2005) to 101% (July 1995 to January 2002.)
History tells us that a strong dollar means a strong stock market. It makes sense. Your currency probably wouldn't do well if the economy wasn't doing well. If the economy does well, earnings will grow, and that is what the market pays for.
I think eventually, the dollar and market will get back to a positive correlation. Strong dollar, strong market.
Credit Ratings Agencies Are Still Spreading Nonsense
(By Roosevelt Institute Braintruster Marshall Auerback, a market analyst and commentator.)
America’s Triple AAA credit rating could be at risk should its nascent economic revival not develop into a full-blown recovery, Moody’s Investor Service warned yesterday. The credit ratings agency cautioned that if the US were to grow at slower pace than expected, the largest economy in the world’s already-extended finances could be over-stretched, in turn damaging its AAA credit rating.
Dis-credited ratings agencies
Sound familiar? The so-called “Big Three” ratings agencies have been making claims like this for years: in Japan, the UK and, now, the United States. It is worth recalling that these are the same organizations which, as recently as 2007, were conferring Triple AAA ratings on subprime mortgage paper. Did that work out well for you?
The real news here is that anybody takes anything these discredited rating agencies say seriously. As my colleague, Randy Wray, has already suggested, the top three ratings agencies — Moody’s, Fitch, and S&P — should all be ignored. In fact, Wray is right to suggest that we should prohibit regulated and protected institutions from using any ratings by this group. Their history of failure makes my beloved Toronto Maple Leafs seem like a veritable hockey dynasty in comparison.
Moody’s war on governments freely deploying fiscal policy is nothing new: In November 1998, the day after the Japanese government announced a large-scale fiscal stimulus to its ailing economy, Moody’s Investors Service began the first of a series of downgradings of the Japanese government’s yen-denominated bonds by taking the Aaa (triple A) rating away. The next major Moody’s downgrade occurred on September 8, 2000.
Then, in December 2001, Moody’s further downgraded the Japan Governments yen-denominated bond rating to Aa3 from Aa2. On May 31, 2002, Moody’s Investors Service cut Japan’s long-term credit rating by a further two grades to A2, or below that given to Botswana, Chile and Hungary.
Why Japan doesn’t bounce checks
What was the long term impact of these downgrades? Well, since that time, Japan’s debt/GDP has gone over 200%, and all with a zero or near-zero interest rate policy for over a decade, and 10-year Japanese Government Bonds (JGBs) were continually issued in any size the Japanese government wanted, at the lowest rates in the world.
This, despite the country’s dire economic circumstances: Last year, not only did Japan’s economy fall in percentage terms by three times that of the U.S.; it fell in percentage terms in a year by more than the U.S. economy fell from cyclical peak to cyclical trough in all of its recessions and depressions over the last two hundred years with the exception of 1837-1841, 1929-1933, and perhaps the panic of 1907. Japan’s business expansion in this past decade was driven almost entirely by the growth in exports and an increase in business fixed investment which was itself driven for the most part by the growth in exports. If one looks at the peak to trough decline in Japanese GDP over the last year or so, almost three quarters of it was due to the collapse in exports.
And yet despite these dire economic circumstances, the Japanese government has yet to bounce a check. The country’s central bank has the ABILITY to clear any Ministry of Finance check for ANY size, simply by adding a credit balance to the member bank account in question. Yes, the BOJ could be UNWILLING to clear ANY check, but that is an entirely different matter than being UNABLE to credit an account. Operationally, concepts of the BOJ not having “sufficient funds” to credit member accounts are functionally inapplicable.
Sadly, not even all Japanese policy makers appear to understand this. BOJ board member Seiji Nakamura sounded much like the ratings agencies themselves when he spoke of the need for the US, the UK, and Japan to get their debts down to a “sustainable level” (a level which, curiously, is never defined, because there is no modern economics textbook which offers clear explanations of what constitutes a “sustainable” public debt position). Unfortunately, Nakamura continued in this vein, insisting that Japan’s reliance on fiscal stimulus to spur an expansion without having a strategy to cut public debt would only exacerbate the government’s fiscal situation, and place the country in the same position as Greece, Spain and Portugal.
He’s wrong. The position of Japan, like the US, is very different, because both can operationally issue unlimited quantities of debt in their own national currencies. By contrast, as we have argued before, the relationship of member countries in the Euro zone to the European Central Bank (ECB) is more similar to that of the national treasuries of member states of the United States to the Fed than it is of the US Treasury to the Fed. In the US, states have no power to create currency; nor does Greece, Spain, or any euro zone nation. In this kind of circumstance, taxes really do ‘finance’ state spending and states really do have to borrow (sell bonds to the markets) in order to spend in excess of tax receipts because they are users of a currency, not its creator. Eventually, one hopes that even the Germans will begin to appreciate this point, as they persistently frustrate any rational response to mitigate the possibility of a major national insolvency within the EMU.
But they are not there yet. Purchasers today of Greek, Spanish or Portuguese bonds do worry about the creditworthiness of these nations much as we might also fret about California’s ultimate solvency. That solvency fear is now spreading across the Euro zone and creating contagion effects in all of the world’s capital markets right now.
What about the United States? Well, according to Steven Hess, Moody’s lead analyst for the United States ,”The Aaa rating of the U.S. is not guarantee…So if they don’t get the deficit down in the next 3-4 years to a sustainable level, then the rating will be in jeopardy.” This assessment is made without any mention of what the net spending would be achieving or what the non-government sector might be doing by way of debt-retrenchment and saving. It also assumes that the surpluses in the coming years are attainable, which seems unlikely if the US is bullied into cutting back expenditures, as Moody’s advocates.
We also have no idea how Moody’s defines “sustainable” levels of debt. Even if the US sought to identify a debt threshold in the way in which the European Monetary Union has done, this threshold would tell us nothing at all about fiscal discipline. Imagine an economy faced with a sequence of aggregate demand failures due to private sector pessimism. Without any change in fiscal parameters, the government would see its deficit increasing and because it voluntarily ties net spending to debt-issuance, the former will also rise. You can easily construct circumstances where the debt/GDP ratio could skyrocket without any discretionary change in fiscal policy at all, as Bill Mitchell and Joan Muysken describe in their book, Growth and Cohesion in the European Union.
The running-out-of-money myth
Unlike Moody’s, we think it is absurd to say that the government is going to ‘run out of money’ as our President has repeated. It is not dependent on China or anyone else. There is no operational limit to how much government can spend, when it wants to spend. This includes making interest payments and Social Security and Medicare and Medicaid payments. It includes all government payments made in dollars to anyone.
And if Moody’s (or any other ratings agency) genuinely thinks that government debt is intrinsically evil and that surpluses should be the stated goal of US government policy (in order to safeguard America’s Triple AAA rating) then it must spell out the full consequences of this policy choice. The ratings agencies appear incapable or (at the very least) unwilling to explain the essential sectoral relationships that link the government, private and external sectors. They seem to think that you can have everything - a budget surplus and high private saving and debt reduction. You cannot as a matter of plain accounting logic unless you suddenly start net exporting in great volumes, (which has not happened to the US in its post W.W. II history), or if the domestic private sector is either choosing to deleverage or use leverage less than in the past, that means it will take large and increasing fiscal deficits, or small and decreasing trade deficits, or some combination of the two, in order to achieve trend real GDP growth paths. Otherwise, the result is stagnation or in the extreme, debt deflation. That will not do much to enhance America’s credit rating.
So if the political preference is for the government to deficit spend less, (as Moody’s implicitly advocates), what other sector is ready and willing to reduce its net saving position? The reduction in fiscal deficits cannot occur without an offsetting reduction in domestic private or foreign net saving (the latter being the inverse of the trade deficit). If the answer is that no other sector is willing or able to reduce its net saving, then income growth in the economy will have to adjust downward. Which means higher unemployment, lower growth and more social misery.
That is where the perverse logic of the ratings agencies take us, which people ought to remember the next time yet another one of these silly debt downgrade scare stories makes the front pages of the financial press.
America’s Triple AAA credit rating could be at risk should its nascent economic revival not develop into a full-blown recovery, Moody’s Investor Service warned yesterday. The credit ratings agency cautioned that if the US were to grow at slower pace than expected, the largest economy in the world’s already-extended finances could be over-stretched, in turn damaging its AAA credit rating.
Dis-credited ratings agencies
Sound familiar? The so-called “Big Three” ratings agencies have been making claims like this for years: in Japan, the UK and, now, the United States. It is worth recalling that these are the same organizations which, as recently as 2007, were conferring Triple AAA ratings on subprime mortgage paper. Did that work out well for you?
The real news here is that anybody takes anything these discredited rating agencies say seriously. As my colleague, Randy Wray, has already suggested, the top three ratings agencies — Moody’s, Fitch, and S&P — should all be ignored. In fact, Wray is right to suggest that we should prohibit regulated and protected institutions from using any ratings by this group. Their history of failure makes my beloved Toronto Maple Leafs seem like a veritable hockey dynasty in comparison.
Moody’s war on governments freely deploying fiscal policy is nothing new: In November 1998, the day after the Japanese government announced a large-scale fiscal stimulus to its ailing economy, Moody’s Investors Service began the first of a series of downgradings of the Japanese government’s yen-denominated bonds by taking the Aaa (triple A) rating away. The next major Moody’s downgrade occurred on September 8, 2000.
Then, in December 2001, Moody’s further downgraded the Japan Governments yen-denominated bond rating to Aa3 from Aa2. On May 31, 2002, Moody’s Investors Service cut Japan’s long-term credit rating by a further two grades to A2, or below that given to Botswana, Chile and Hungary.
Why Japan doesn’t bounce checks
What was the long term impact of these downgrades? Well, since that time, Japan’s debt/GDP has gone over 200%, and all with a zero or near-zero interest rate policy for over a decade, and 10-year Japanese Government Bonds (JGBs) were continually issued in any size the Japanese government wanted, at the lowest rates in the world.
This, despite the country’s dire economic circumstances: Last year, not only did Japan’s economy fall in percentage terms by three times that of the U.S.; it fell in percentage terms in a year by more than the U.S. economy fell from cyclical peak to cyclical trough in all of its recessions and depressions over the last two hundred years with the exception of 1837-1841, 1929-1933, and perhaps the panic of 1907. Japan’s business expansion in this past decade was driven almost entirely by the growth in exports and an increase in business fixed investment which was itself driven for the most part by the growth in exports. If one looks at the peak to trough decline in Japanese GDP over the last year or so, almost three quarters of it was due to the collapse in exports.
And yet despite these dire economic circumstances, the Japanese government has yet to bounce a check. The country’s central bank has the ABILITY to clear any Ministry of Finance check for ANY size, simply by adding a credit balance to the member bank account in question. Yes, the BOJ could be UNWILLING to clear ANY check, but that is an entirely different matter than being UNABLE to credit an account. Operationally, concepts of the BOJ not having “sufficient funds” to credit member accounts are functionally inapplicable.
Sadly, not even all Japanese policy makers appear to understand this. BOJ board member Seiji Nakamura sounded much like the ratings agencies themselves when he spoke of the need for the US, the UK, and Japan to get their debts down to a “sustainable level” (a level which, curiously, is never defined, because there is no modern economics textbook which offers clear explanations of what constitutes a “sustainable” public debt position). Unfortunately, Nakamura continued in this vein, insisting that Japan’s reliance on fiscal stimulus to spur an expansion without having a strategy to cut public debt would only exacerbate the government’s fiscal situation, and place the country in the same position as Greece, Spain and Portugal.
He’s wrong. The position of Japan, like the US, is very different, because both can operationally issue unlimited quantities of debt in their own national currencies. By contrast, as we have argued before, the relationship of member countries in the Euro zone to the European Central Bank (ECB) is more similar to that of the national treasuries of member states of the United States to the Fed than it is of the US Treasury to the Fed. In the US, states have no power to create currency; nor does Greece, Spain, or any euro zone nation. In this kind of circumstance, taxes really do ‘finance’ state spending and states really do have to borrow (sell bonds to the markets) in order to spend in excess of tax receipts because they are users of a currency, not its creator. Eventually, one hopes that even the Germans will begin to appreciate this point, as they persistently frustrate any rational response to mitigate the possibility of a major national insolvency within the EMU.
But they are not there yet. Purchasers today of Greek, Spanish or Portuguese bonds do worry about the creditworthiness of these nations much as we might also fret about California’s ultimate solvency. That solvency fear is now spreading across the Euro zone and creating contagion effects in all of the world’s capital markets right now.
What about the United States? Well, according to Steven Hess, Moody’s lead analyst for the United States ,”The Aaa rating of the U.S. is not guarantee…So if they don’t get the deficit down in the next 3-4 years to a sustainable level, then the rating will be in jeopardy.” This assessment is made without any mention of what the net spending would be achieving or what the non-government sector might be doing by way of debt-retrenchment and saving. It also assumes that the surpluses in the coming years are attainable, which seems unlikely if the US is bullied into cutting back expenditures, as Moody’s advocates.
We also have no idea how Moody’s defines “sustainable” levels of debt. Even if the US sought to identify a debt threshold in the way in which the European Monetary Union has done, this threshold would tell us nothing at all about fiscal discipline. Imagine an economy faced with a sequence of aggregate demand failures due to private sector pessimism. Without any change in fiscal parameters, the government would see its deficit increasing and because it voluntarily ties net spending to debt-issuance, the former will also rise. You can easily construct circumstances where the debt/GDP ratio could skyrocket without any discretionary change in fiscal policy at all, as Bill Mitchell and Joan Muysken describe in their book, Growth and Cohesion in the European Union.
The running-out-of-money myth
Unlike Moody’s, we think it is absurd to say that the government is going to ‘run out of money’ as our President has repeated. It is not dependent on China or anyone else. There is no operational limit to how much government can spend, when it wants to spend. This includes making interest payments and Social Security and Medicare and Medicaid payments. It includes all government payments made in dollars to anyone.
And if Moody’s (or any other ratings agency) genuinely thinks that government debt is intrinsically evil and that surpluses should be the stated goal of US government policy (in order to safeguard America’s Triple AAA rating) then it must spell out the full consequences of this policy choice. The ratings agencies appear incapable or (at the very least) unwilling to explain the essential sectoral relationships that link the government, private and external sectors. They seem to think that you can have everything - a budget surplus and high private saving and debt reduction. You cannot as a matter of plain accounting logic unless you suddenly start net exporting in great volumes, (which has not happened to the US in its post W.W. II history), or if the domestic private sector is either choosing to deleverage or use leverage less than in the past, that means it will take large and increasing fiscal deficits, or small and decreasing trade deficits, or some combination of the two, in order to achieve trend real GDP growth paths. Otherwise, the result is stagnation or in the extreme, debt deflation. That will not do much to enhance America’s credit rating.
So if the political preference is for the government to deficit spend less, (as Moody’s implicitly advocates), what other sector is ready and willing to reduce its net saving position? The reduction in fiscal deficits cannot occur without an offsetting reduction in domestic private or foreign net saving (the latter being the inverse of the trade deficit). If the answer is that no other sector is willing or able to reduce its net saving, then income growth in the economy will have to adjust downward. Which means higher unemployment, lower growth and more social misery.
That is where the perverse logic of the ratings agencies take us, which people ought to remember the next time yet another one of these silly debt downgrade scare stories makes the front pages of the financial press.
iPad will take the world by storm
Here is my take on the coming iPad: click here
And here is a San Jose Mercury News journalist's take on the iPad.
It won't be just for the young and tech savy anymore, like the iPod and iPhone. The iPad will be for everybody.
I've never been excited about tech gadgets to want to go out immediately to buy one, but I feel really excited about the iPad.
Apple will do extremely well, and sales of their iMacs and iBooks will also skyrocket as more and more people visit the Apple stores.
And the stock is headed to $300.
Hitler was on 82 different drugs
Maybe that's why he was such a "sick" bastid?
Adolf Hitler also took a primitive form of Viagra when he tried to have sex with Eva Braun, a new book on the Fuhrer’s fragile health has claimed.
Based on long-dormant medical archives and formerly classified military documents, it claimed the dictator was so afraid of pills that most of his medication was injected.
The authors of the book, titled Was Hitler Ill?, claimed he took 82 different sorts of medication during his rule of Nazi Germany including the primitive “Viagra”, which was a testosterone extract.
The book is largely based on papers from Dr. Theodor Morrell, regarded as a quack among many in the upper echelons of Nazism, who Hitler came to rely on with increasing urgency during the war.
The less-than-flattering nickname “Reich syringe master” was given to him by Luftwaffe chief Hermann Goering, himself a morphine addict by war's end.
According to the book, in 1944, Morrell began giving Hitler injections of the testosterone and a cocktail made from the semen and prostate glands of young bulls into his bloodstream.
Hitler, then 55, believed this would give him the necessary energy for his encounters with his young lover, then 32, who would die with him a year later in the Berlin bunker as his new bride.
Hitler, 56, later shot himself and Eva Braun, 33, took cyanide in April 1945 in the bunker only a day after they married.
The doctor’s records showed the Fuhrer, who could order the deaths of entire ethnic minorities, had a fear of pills and so Morrell injected most of his potions.
The book found that Morrell gave Hitler small doses of Pervitin, a form of Speed, glucose, intravenous injections of methamphetamine, barbiturates, opiates and assorted other potions.
At one stage of the war he was on 28 different medications a day out of a plethora of drugs that eventually totalled 82.
Other findings show that he had a mortal fear of cancer, suffered high blood pressure, cramps, headaches and had polyps removed from his vocal chords several times.
It also found that Hitler suffered terribly from wind and took large amounts of anti-flatulence drugs that contained small amounts of the nerve agent strychnine, an ingredient of rat poison.
Historian Henrik Eberle and Hans-Joachim Neumann, a professor emeritus of medicine at Berlin's Charité University Hospital, say they attempted to discover whether Hitler's frail physique was in some way responsible for the monstrosity of his decisions that led to the deaths of millions.
The authors conclude that Hitler, in the end, was suffering from Parkinson's disease, adding: “at no time did Hitler suffer from pathological delusions. He was always aware of his actions. He was fully responsible.”
They also question whether his personal doctor was really trying to kill him over a long period of time, a claim they later dismiss.
According to the book, when he caught a cold once from his personal barber, Hitler angrily said: “The man has had the sniffles for five days, and he doesn't even tell me!”
The authors believe Morrell was not a poisoner after analysing the composition of the anti-wind drug.
They ruled out the possibility of the 'Reich syringe master' trying to kill him.
He did, however, succumb to every command from the Fuhrer to give him whatever he wanted.
The academics believe their research has debunked several myths.
They found no evidence to support the popular British wartime song that the Fuehrer only had one testicle, that his penis was deformed after he was bitten by a goat as a youth or that his warped personality was affected much either way by his consumption of exotic substances throughout his career.
They also found no evidence that Hitler had syphilis, which he railed against for 14 pages in his autobiography Mein Kampf as being a “Jewish Disease”.
Friday, February 5, 2010
Economy still improving
The bears said the commercial properties market was in trouble and will crash.
But that's not what I see with my "channel checking" for weeks and months. In fact, I'm seeing less and less vacancies. I have to look harder to find one.
And what did Simon Property (SPG) say today?
Shares of Simon Property Group Inc. (SPG: 73.3, 2.32, 3.27%) rose more than 5% in Friday’s session, after the company reported earnings that topped expectations and gave a better-than-expected full-year view.
The shopping mall owner expects adjusted 2010 funds from operations in a range of $5.72 to $5.87 a share, and forecast earnings between $2.58 and $2.73 a share.
The outlook was well ahead of expectations; analysts had forecast funds from operations of $5.59 a share, according to a poll by Thomson Reuters.
For the fourth quarter, the company saw profit of $115.9 million, or 32 cents a share, compared to earnings of $196.4 million, or 64 cents a share, one year ago.
Adjusted funds from operations came in at $1.66 a share, on revenue of $1.03 billion. Analysts had expected funds from operations of $1.52 a share on revenue of $963 million.
"I am very pleased with our fourth quarter and full year financial and operational performance," said David Simon, chairman and chief executive, in a statement. "We reported funds from operations as adjusted per share of $1.66 for the quarter and $6.01 for the year. In addition, our regional mall and Premium Outlet Center portfolios generated positive comparable property net operating income growth in 2009. These are significant accomplishments given the state of the U.S. economy and the challenges faced by consumers in 2009."
Shares of Simon Property Group rose $3.91, or 5.6%, in Friday’s session to close at $73.36 a share. The stock was inactive in after-hours trading.
That's the nature of the bears -- they know how to make good stuff look scary.
And here's Nancy Pelosi comparing job losses of the Bush Administration versus the Obama Administration. It's a beautiful chart and it shows it was never Obama's fault; he inherited the mess!
Dow 14,000 in 2010 still on track
Internet sensation Marie Digby gets a photo shoot for Arden B.
Last year, she did this song seemingly fit the bears:
And late last year, she had this song also seemingly fit the bears:
Last year, she did this song seemingly fit the bears:
And late last year, she had this song also seemingly fit the bears:
BRK.B gets added to S&P on Feb 11
I think we get a rally in those shares next week, as funds are forced to scoop 'em up.
Maybe Berkshire leads the markets next week?
We need a strong rally into the close
Since everyone is expecting SPX 1040, it either won't get there or it goes surprisingly much lower than SPX 1040.
We are now very oversold, especially with price and time.
So watch for a potential rally into the close. That's what I'd like to see.
Yingli Green Energy Makes History with 2010 World Cup Sponsorship
Image via Wikipedia
When have you officially arrived as a green energy company? When you’ve installed your first gigawatt? That’s so old economy. It’s when you fork over ridiculous money to sponsor a sporting event.
Yingli Green Energy, a photovoltaic solar panel manufacturer, officially crossed the threshold this morning when it trumpeted its sponsorship of the World Cup in South Africa this June. The release from FIFA, the international soccer body, is here.Yingli is the first green energy company, and the first Chinese concern, to sponsor the FIFA World Cup.
No word about the amount of cash that changed hands in the deal, though “tier one” sponsorships, or Partners, start above the $100 million mark. Sponsors include McDonalds, Budweiser and the Indian-owned Satyam IT services company, among others
The parties also made a claim to greater significance in the deal.
Yingli’s statement claims,
Yingli Green Energy is answering FIFA’s call to make the world’s most popular sport not only a celebration of the game but also a sign of respect for the planet that we inhabit.
FIFA is hoping that Yingli is the first of many Chinese companies to plow money and resources into the event and hopes to grow the game in the world’s most populous country.
FIFA’s marketing director Thierry Weil told Reuters, “China is a given, China is one of the powerhouses of the world,”
Yingli gets global marketing rights, including ticket and board advertising, and the right to showcase its solar products in the fan zones. The company can also showcase its logo next to the World Cup Official Emblem.
Yingli had earlier committed to providing solar panels for the official 2010 campaign “20 Centres for 2010,” a building program that will provide community centres and pitches in areas throughout South Africa.
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China Milk Scandal
China has one of the worst human rights abuses in the world. They don't seem to care much about the people -- why bother to even have a court system?
Several suspects of the melanine-tainted milk case were sentenced to death by firing squad.
A former government employee opened a website for people whose children have been affected by the tainted milk. He too was arrested and could face up to 5 years in labor camp for 'inciting and assembling people.'
SHIJIAZHUANG, China (CNN) -- The former chairwoman of China's Sanlu dairy was sentenced to life in prison and three others received death sentences Thursday in a tainted milk scandal that killed at least six infants and sickened nearly 300,000 others.
Police surround a court building in northern China in late December during the trial.
Police surround a court building in northern China in late December during the trial.
Tian Wenhua and three other Sanlu Group executives were put on trial for producing and selling fake or substandard products after their arrests in late September.
Tian, who pleaded guilty in December, received a life sentence Thursday. Former deputy general managers Wang Yuliang and Hang Zhiqi received sentences of 15 and eight years, while Wu Jusheng, a former executive heading Sanlu's milk division, was sentenced to five years in prison.
In addition, Sanlu, Tian and Wang were ordered to pay multi-million dollar fines.
The court also sentenced three people to death, including a suspended sentence pending a review, and two others to life in prison. Six more received prison terms of five to 15 years each.
A list of sentences handed down by a Chinese court Thursday in China's tainted milk scandal.
Sanlu Group
-- Tian Wenhua, former chairwoman: life, $3.6M fine
-- Wang Yuliang, former executive: 15 years, $3.5M
-- Hang Zhiqi, former executive: 8 years, $133,000
-- Wu Jisheng, former executive, 5 years, $88,000
-- Company: $7 million fine
Producers
-- Geng Jinping, milk producer: death, assets confiscated
-- Geng Jinzhu, milk producer, 8 years, $73,000
Middlemen
-- Zhang Yujun: death
-- Gao Junjie: death; sentence suspended 2 years pending review -- Zhang Yanzhang: life
-- Xue Jianzhong: life
-- Zhang Yanjun: 15 years
-- Xiao Yu: 5 years
Many of the defendants -- including one who received a death sentence -- were middlemen who sold melamine to milking stations that added the chemical to the milk.
Security was tight ahead of the verdicts, as police set up roadblocks a kilometer (0.63 miles) in each direction from the courthouse.
Parents outside the courthouse were outraged by the sentence that spared Tian's life. A mother who's baby died from contaminated milk said she wanted Tian shot to pay for the life of her child.
Twenty-one suspects went on trial late last month. Nine have yet to be sentenced.
Sanlu was one of the main distributors of the tainted milk, which caused kidney stones and urinary tract problems in hundreds of thousands of children.
From early August to mid-September, Sanlu produced 904 metric tons of melamine-tainted baby formula powder and sold 813 metric tons of tainted products made with contaminated milk, the state-run Xinhua news agency reported.
Chinese investigators found melamine in nearly 70 milk products from more than 20 companies, according to quality control official Li Changjiang, who was eventually forced to resign.
The Ministry of Health has said the contamination likely caused the deaths of at least six babies. Another 296,000 infants suffered from urinary problems, such as kidney stones.
The tainted formula came to light in September after babies who were fed milk powder produced by the Sanlu Group, which recently filed for bankruptcy, had developed kidney stones.
Melamine is commonly used in coatings and laminates, wood adhesives, fabric coatings, ceiling tiles and flame retardants. Some Chinese dairy plants added the chemical to milk products so they would appear to have a higher protein level.
Victims of tainted baby formula are expected to be compensated by the 22 Chinese dairy producers that made the milk...
Thursday, February 4, 2010
Top Hollywood Earners
According to Vanity Fair...
The top Hollywood earners in 2009:
1. Michael Bay, producer-director ($125 million)
2. Steven Spielberg, producer-director ($85 million)
3. Roland Emmerich, producer-director ($70 million)
4. James Cameron, producer-director ($50 million)
5. Todd Phillips, director ($44 million)
6. Daniel Radcliffe, actor ($42 million)
7. Ben Stiller, actor ($40 million)
8. Tom Hanks, actor ($36 million)
9. J. J. Abrams, producer-director ($36 million)
10. Jerry Bruckheimer, producer ($35.5 million)
Hollywood's top female earners in 2009:
1. Emma Watson, actress ($30million)
2. Cameron Diaz, actress ($27million)
3. Sarah Jessica Parker, actress ($24million)
4. Katherine Heigl, actress ($24million)
5. Reese Witherspoon, actress ($21million)
6. Angelina Jolie, actress ($21million)
7. Jennifer Aniston, actress ($20million)
8. Sandra Bullock, actress ($20million)
9. Kristen Stewart , actress ($16million)Thoughts for Friday
We're gonna gap higher.
The market is now EXTREMELY oversold in the short term.
Not saying this is the bottom, but it's a good a time to buy some stuff for a trade.
10% correction
That puts us at the 1030-1040 area.
Not unreasonable with the rally we got from March. We may not even get there.
And if we do, we'll still be in a bull market.
Bears don't get where we're headed
They think they know but the joke's on them.
They don't get it... maybe because they're processing this like women!
But they'll eventually get their doomsday scenario, though it will be likely years and years down the line.
(source: Telegraph)
Men may snigger at women who don't 'get' their jokes, but research has found that she who laughs last really does laugh longest.
Women use their brain more when processing jokes and take more enjoyment from a good punchline, according to a new study.
They may take longer to understand the joke than men and have lower expectation that a joke will be funny, but women were shown to take more pleasure from the resulting pay-off.
The study by scientists at Stanford University in California, part of wider research on how our brains process humour, found that women use more parts of the brain to understand comedy than men.
In one experiment, 10 men and 10 women were shown black-and-white cartoons on a screen while their brain activity was monitored by an fMRI scanner.
The subjects pressed buttons to rate how funny each clip was while the scanner measured their brain activity in response to both funny and unfunny cartoons, as well as measuring the time it took them to react to jokes.
Women were found to use their prefrontal cortex – the part of the brain used for language interpretation and complex analysis - more than men did.
They took longer to react to jokes they found funny than men did, though researchers added that the difference was slight.
Women were shown to prefer sophisticated comedy, such as word play and narrative humour, to simpler joke formats such as slapstick.
Professor Allan Reiss, director of the Center for Interdisciplinary Brain Sciences Research at Stanford, who led the study, told the Sunday Times: "Our findings fit the stereotype of how men and women react to humour.
"The scans indicate that women have a lower expectation that they will find jokes funny – but when they do, they experience a greater degree of reward.
"Men have the opposite response ... they expect to get the joke, but when they don't they get more depressed."
Mr Reiss is now performing similar tests on children to attempt to learn whether the differences in sense of humour between the sexes are the result of nature or nurture.
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