Saturday, December 16, 2006
Ideas from Noonan, Forbes and more
An alert redwavemusings reader pointed out that one reason we see no comments is that the musings blog didn't seem to allow them. So, I adjusted the settings and tested it and now it works (I think). At the bottom of the post you click on comments. The screen resets, you return to the bottom of the post where you can see any previously posted comments, and click on "post a comment."
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Peggy Noonan is one of my favorite columnists and not only because of my sympathy with her views but also because of her beautiful prose. In her column in today's WSJ, she writes about the Barack Obama phenomenon. One interesting point she makes is that the country has spent the last ten years lurching between fairly extreme political positions that have each left at least half of the country not only disappointed but actually in revulsion. Many of us were appalled (her word) by the Clinton scandals and a majority seem to be equally exorcised over the the current administration's shortfalls, starting from what they believe to have been a 'stolen election" in 2000. Ms. Noonan, by the way, has never been a real Bush (43) fan.
Her point is that the search is on for the "Not Bush" candidate, a trait that Senator Obama certainly brings to the table. She apparently believes he brings little else to the fore, though he has the charismatic connection, that's for sure. I agree, and think Hilary Clinton is a much more substantive and formidable candidate. However, if we must elect a Democrat in 2008, I again must point out that Gov. Bill Richardson of New Mexico has the potential to end this scenario where there has been a loss of respect for the Presidency and an inability for the country to get behind its leader in any kind of unified way. It's interesting to me that Mr. Richardson met this week with North Korean envoys to talk about their nuclear program, and that these talks and his participation were sanctioned by the White House. This was not grandstanding - it was done quietly and without political rancor. This is a person who takes politics and international relations seriously. He has led a diverse and growing state effectively and won re-election convincingly. Someone to watch even while others dominate the headlines.
On the Republican side, the candidate with the most potentaial to do likewise is actually one of the front runners, Senator McCain. But if I were setting the odds, I would have to make the Dems 7-5 favorites in 2008, even before knowing the identity of the candidates.
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I hope that by now, the country has figured out what a silly exercise, and even sillier result the non-partisan commission on Iraq turned out to be. It took these brilliant veteran minds to figure out that we can resolve the situation only if we talk with the Syrians and the Iranians? About what? Well, I guess it never hurts to talk, but this is not a plan. In any talks, the Iranians and Syrians will simply pocket any concessions we make, and in turn, will concede --- nothing. As for helping stabilize Iraq, that's a pipe dream. Those two countries have up-to-now done everything they can to destabilize the situation and have been largely successful. What would compel them to suddenly make a 180 degree shift?
I think Steve Forbes' ideas about Iraq should receive more attention. He is in favor of maintaining Iraq as one country, but adopting a federalized structure with three semi-autonomous regions, one Shiite, one Sunni and the other Kurd. He calls it the Swiss model. To assuage the Sunni's whose region would have little or no oil, he believes that resource should be nationalized with all Iraqi's receiving an equal share of the income. This model has been tried in Alaska and seems to be workable. The idea is that Iraqi's would be less inclined to see terrorists sabatoge the wells if they each had a personal stake in them.
These ideas seem to be more creative and helpful than anything the commission came up with.
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The world is forever changing and people who worry that our treasured ideals and lifestyles may be in peril 100 years from now amuse me since that world will belong to our great great grandchildren, not to us, and I guess they can do with it what they will. Nevertheless, the pull on the other side is that we owe both the preservation and the development of the world's resources to those who come after us.
If this goes for the preservation of a well - spoken and written English culture, I'm afraid all has already been lost. Imagine if a literary spokesperson from some past popular culture, say Jane Austen or F. Scott Fitzgerald, could return for an evening and witness this kind of dialogue:
"Well, when I saw him, I was really like happy and we said hello and like he seemed like happy to see me so I go what have you been like doing and he goes nothing much, like hanging out and then he goes, so like where have you been hanging so I go like here and sometimes like there, and we had really a lot of like cool things to talk about and it was kind of like awesome!"
Makes you kind of want to go and like throw up.
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On 12/4, I sold 100 GIFI out of the IRA for 39.30, originally purchased at 19.30 in Nov. 2004. Then on 12/7, I sold 300 HAUP from the taxable account at 6.94, originally purchased at 1.66 in August of 2001. On 12/13, I bought 200 more ADPI, this time for the taxable account at 18.07. Then yesterday, I sold the last 400 shares of CNRD from the IRA at 6.10, originally purchased at 1.55 in April of 2005. Still have CNRD in the taxable account though. If it seems like a lot of selling, that does not reflect a view on the rally ending, only that the rally has driven my cash allocation lower than the target.
Also, brokers, as my full service broker did, are calling clients to point out that they can save taxes by taking some losses now, assuming they have net gains for the year. This is something full service brokers should be doing. I probably should be taking some losses, given the gains I have logged this year, but it's just not part of my system, which avoids giving taxes undue consideration in the decision tree. (One exception is that I prefer to sell out of the IRA whenever it owns shares in the security to be sold). You just never know where tax rates are going so you don't really know in what year the losses will do the most good. We may never have lower capital gains rates than we do now, and if that's the case, I'll save my losses, grin and bear it, and pay my capital gains taxes for 2006.
My own opinion is that gains should be indexed for inflation, so that you pay taxes on the real gains only. If that ever happens, I'll be sorry I didn't take losses sooner. But additional capital gains relief is not yet on the horizon.
-------------------------------------------------------------------------------------
Peggy Noonan is one of my favorite columnists and not only because of my sympathy with her views but also because of her beautiful prose. In her column in today's WSJ, she writes about the Barack Obama phenomenon. One interesting point she makes is that the country has spent the last ten years lurching between fairly extreme political positions that have each left at least half of the country not only disappointed but actually in revulsion. Many of us were appalled (her word) by the Clinton scandals and a majority seem to be equally exorcised over the the current administration's shortfalls, starting from what they believe to have been a 'stolen election" in 2000. Ms. Noonan, by the way, has never been a real Bush (43) fan.
Her point is that the search is on for the "Not Bush" candidate, a trait that Senator Obama certainly brings to the table. She apparently believes he brings little else to the fore, though he has the charismatic connection, that's for sure. I agree, and think Hilary Clinton is a much more substantive and formidable candidate. However, if we must elect a Democrat in 2008, I again must point out that Gov. Bill Richardson of New Mexico has the potential to end this scenario where there has been a loss of respect for the Presidency and an inability for the country to get behind its leader in any kind of unified way. It's interesting to me that Mr. Richardson met this week with North Korean envoys to talk about their nuclear program, and that these talks and his participation were sanctioned by the White House. This was not grandstanding - it was done quietly and without political rancor. This is a person who takes politics and international relations seriously. He has led a diverse and growing state effectively and won re-election convincingly. Someone to watch even while others dominate the headlines.
On the Republican side, the candidate with the most potentaial to do likewise is actually one of the front runners, Senator McCain. But if I were setting the odds, I would have to make the Dems 7-5 favorites in 2008, even before knowing the identity of the candidates.
-------------------------------------------------------------------------------------
I hope that by now, the country has figured out what a silly exercise, and even sillier result the non-partisan commission on Iraq turned out to be. It took these brilliant veteran minds to figure out that we can resolve the situation only if we talk with the Syrians and the Iranians? About what? Well, I guess it never hurts to talk, but this is not a plan. In any talks, the Iranians and Syrians will simply pocket any concessions we make, and in turn, will concede --- nothing. As for helping stabilize Iraq, that's a pipe dream. Those two countries have up-to-now done everything they can to destabilize the situation and have been largely successful. What would compel them to suddenly make a 180 degree shift?
I think Steve Forbes' ideas about Iraq should receive more attention. He is in favor of maintaining Iraq as one country, but adopting a federalized structure with three semi-autonomous regions, one Shiite, one Sunni and the other Kurd. He calls it the Swiss model. To assuage the Sunni's whose region would have little or no oil, he believes that resource should be nationalized with all Iraqi's receiving an equal share of the income. This model has been tried in Alaska and seems to be workable. The idea is that Iraqi's would be less inclined to see terrorists sabatoge the wells if they each had a personal stake in them.
These ideas seem to be more creative and helpful than anything the commission came up with.
------------------------------------------------------------------------------------
The world is forever changing and people who worry that our treasured ideals and lifestyles may be in peril 100 years from now amuse me since that world will belong to our great great grandchildren, not to us, and I guess they can do with it what they will. Nevertheless, the pull on the other side is that we owe both the preservation and the development of the world's resources to those who come after us.
If this goes for the preservation of a well - spoken and written English culture, I'm afraid all has already been lost. Imagine if a literary spokesperson from some past popular culture, say Jane Austen or F. Scott Fitzgerald, could return for an evening and witness this kind of dialogue:
"Well, when I saw him, I was really like happy and we said hello and like he seemed like happy to see me so I go what have you been like doing and he goes nothing much, like hanging out and then he goes, so like where have you been hanging so I go like here and sometimes like there, and we had really a lot of like cool things to talk about and it was kind of like awesome!"
Makes you kind of want to go and like throw up.
-----------------------------------------------------------------------------------
On 12/4, I sold 100 GIFI out of the IRA for 39.30, originally purchased at 19.30 in Nov. 2004. Then on 12/7, I sold 300 HAUP from the taxable account at 6.94, originally purchased at 1.66 in August of 2001. On 12/13, I bought 200 more ADPI, this time for the taxable account at 18.07. Then yesterday, I sold the last 400 shares of CNRD from the IRA at 6.10, originally purchased at 1.55 in April of 2005. Still have CNRD in the taxable account though. If it seems like a lot of selling, that does not reflect a view on the rally ending, only that the rally has driven my cash allocation lower than the target.
Also, brokers, as my full service broker did, are calling clients to point out that they can save taxes by taking some losses now, assuming they have net gains for the year. This is something full service brokers should be doing. I probably should be taking some losses, given the gains I have logged this year, but it's just not part of my system, which avoids giving taxes undue consideration in the decision tree. (One exception is that I prefer to sell out of the IRA whenever it owns shares in the security to be sold). You just never know where tax rates are going so you don't really know in what year the losses will do the most good. We may never have lower capital gains rates than we do now, and if that's the case, I'll save my losses, grin and bear it, and pay my capital gains taxes for 2006.
My own opinion is that gains should be indexed for inflation, so that you pay taxes on the real gains only. If that ever happens, I'll be sorry I didn't take losses sooner. But additional capital gains relief is not yet on the horizon.
