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Monday, February 28, 2011


The Duke of Flatbush

It was good to read all the nice things people wrote today in reporting on the passing of Duke Snider. As a young Dodger fan, Duke was my favorite player. By the time I saw Jackie Robinson and Pee Wee Reese, they were both on the downsides of their careers, though still good enough to be key players on the great 1955 Championship team. But Duke was in his prime that year, the third of five seasons in a row in which he hit 40 or more home runs, and arguably would have been MVP had he not been strangely left off the ballot by one voter. Instead, Roy Campanella, a great teammate and another HOF player won his third MVP. Somehow, Duke never made an issue of the slight. It wasn't really his way, and players were more modest then.

The Dodgers of '55 got off to an incredibly hot start and never looked back, going wire to wire and clinching the NL pennant early in September. In the World Series against their arch nemesis from the Bronx, the Bums lost the first two in Yankee Stadium, but came back to win four of the next 5, the clincher provided by a Johnny Podres complete game shutout in Yankee Stadium. Along the way, the Duke hit four homers, tieing the record that Reggie Jackson later broke (against the LA Dodgers) for most homers in a series. Finally, "next year" arrived and Brooklyn had its only world championship.

Snider had joined the Dodgers in 1947 and had a love/hate relationship with the vocal Brooklyn fans in the early years, but he was a fan favorite during his prime years in the fifties. The troika of New York center fielders of that era has never been surpassed, but certainly Snider was considered by most to be number 3, perhaps unfair since he was older than the still improving Mantle and Mays. Like those two unsurpassed greats, Snider was a five tool player in his prime, and though center field in Ebbets was not spacious enough to showcase his defensive talents, his abilities were frequently on display on the road. I can remember him climbing the fence in Crosley Field in Cincinnati and taking homers away from the hated and muscle bound Redlegs of that era.

Bad knees and the move to the left hand hitter unfriendly Los Angeles Coliseum caused a swift decline in Snider's production, though he contributed significantly to the 1959 championship team hitting over 300 with 23 homers and 88 RBI's in less than 400 official at bats. But by that time, he was playing right field mainly, and never quite mastered the Wally Moon shot over the short left field screen. He was a part time player at age 33 the next year. In 1963, Duke returned to New York to play a season for the Mets, but there wasn't much left in the tank. He finished as a pinch hitter for the Giants.

One thing not well known is that Snider used the reputation he gained early in his career as a dead fastball hitter to great effect after his long swing slowed down. He rarely saw many fastballs but the truth was that he didn't much like the fast ball in his later prime years but feasted on the slower stuff he was always seeing. He was expert on waiting and pulling that pitch to right center and onto Bedford Avenue.

After his career, Snider became a successful baseball announcer, notably with the Montreal Expos. I don't know that his career stats would today make him an automatic HOF - they didn't as it was - but by the criteria I like for HOF voting as written by Stan Isaacs, he was a deserving honoree. Could you possibly write a comprehensive history of baseball without mentioning Duke? No way. Linked forever with Willie and Mickey, he was a baseball immortal and forever will be.
For a rookie Governor, Wisconsin's Scott Walker did a great job on Meet the Press Sunday, patiently enduring the third degree that Conservatives are typically subjected to by the insufferable David Gregory, and sticking to his guns on the need to curtail collective bargaining rights. Putting aside the merits of collective bargaining by public employee unions, which I have addressed in two previous posts, the Democrats' tactic of boycotting sessions to avoid quorums is not going to reflect well on them in the minds of independent voters. At the very least, they should be forfeiting their pay as they decline to show up for work.

In any event, it shows how misguided the left is that they think these situations will backfire on Republicans. Voters have had it with the "public be damned" attitude of these unions and their political allies. By staying on message and maintaining their position, Republican governors are showing how seriously they are taking the need to get fiscal houses in order.

Once again, New Jersey's Governor Christie really made the point in speaking to a union dominated crowd recently. Paraphrasing, he said "Instead of booing me, you should be booing the prior Governors who promised you benefits that the state can't afford. 15 years from now, you will be thanking me for preserving the benefits you actually will receive."

Unfortunately, we are getting no such leadership from the chief executive in Washington. Apparently, Dems believe the can can be kicked down the road forever. Most voters know better, and that's why they are holding newly elected Congressmen's feet to the fire.

And the leadership vacuum extends to foreign policy as well. To be fair, the President did a nice job managing the Egyptian crisis, though it must be pointed out that it is hardly fully resolved. But on Libya, where are we? Are we really going to allow this nut to strafe his own people without NATO instituting a no fly zone? What about Iran? Wait 'til that protest really erupts. The Mullahs will stop at nothing to retain power, I can assure you. And nothing ever seems to be done about North Korea.

When George W. Bush made his unpopular speech about the axis of evil, he was only telling it like it was and is. The Iraq protesters of 1991 saw casualties in the hundreds of thousands at the hands of Hussein. We didn't need a good excuse to remove that butcher, and the world should be thanking us for the sacrifice we made. Lest we forget, Winston Churchill was not immediately beloved for his Iron Curtain speech either.

Liberals would like to believe that people are not inherently evil, that there is a moral equivalence determination you come to when you look at the story from the other guy's perspective. They can make a case that sounds very attractive for that philosophy, and did so for Stalin, Castro, etc. and do so now for the likes of Chavez, et al. But there are people in the world that are just plain dangerous, and its not helpful to disregard the possibility. If we are the good guys (albeit far from perfect, let's stipulate), then, Mr. President, let's dispense with the apology tours and get on with the hard job of leading the free world.
It was so thoughtful of Melissa Leo to apologize for dropping the "F-Bomb" during her Academy Award acceptance speech, but really, isn't it an indication that there are so many people who can't utter three consecutive sentences sans profanity? We've all heard such people, they are our friends, our neighbor's kids, pro basketball players, politicians on tape, etc. They all sound like they came out of a Henry Miller novel. On the Grammy's, they bleeped so many lyrics, you couldn't capture the melody (OK on rap songs, there's no melody anyway).

I was always taught that profanity, unless used for some artistic effect, or to make a point in a special way, is the sign of a weak vocabulary.

Also, we had the obligatory political statement from Director Charles Ferguson, the winner for Best Documentary, who somehow felt that with a captive audience, this was the appropriate time to complain that no financial executives had been put in jail for causing the financial crisis. I remember thinking, "Get this A_ _ hole off, put his A_ _ back in his F_ _ _in seat, and shut the H_ _ _ up." And for that, I sincerely apologize.


On Tuesday, we sold 100 shares of Stifel Nicolaus (SF) from the IRA at 73.24. We bought the shares in two separate purchases in 2007 at an average price of 29.70 (split adjusted). Once the market cracked, we returned to the buy side, purchasing 100 shares of Graham Corp (GHM) for the IRA on Wednesday for 22.92. On Friday, we were buying for the IRA again, this time the RBS Preferred (RBS.PR.E) which continues its dividend thanks to the largess of the British government. We bought 200 shares at a price of 15.09. Today, we bought 100 shares of Newmont Gold (NEM) at a price of 54.60.

Monday, February 21, 2011


After ObamaCare Repeal - Then What

Our fans continue to cry out for the musings solution on health care, and where to go with ObamaCare (i.e. what should be put in its place after it crashes, either in the Courts or via Congressional repeal). It's well that people are finally considering the possibility, at this point maybe the probability, that PPACA will be put out of its and our misery. What originally may have sounded like a right wing pipe dream has been given considerably more credence by Federal Court decisions and by the dynamics of the 2010 and 2012 elections.

Having said all that, I must stipulate that a good solution to the economics and delivery of health care across our population that will make anybody and everybody happy has not been arrived at. I least I haven't heard one I'm ready to pump for. I have addressed entitlements many times here, including a lengthy series that is well back in the archives, for those who wish to review. At that time, my major message was that we had promised benefits already that we could not afford (this was before PPACA), especially in Medicare and Medicaid and we had better do something in terms of reining in those promised benefits since there was no way in the world we could raise the revenue to support them. So instead of doing that, Congress and the Obama administration larded on to the system an entitlement that threatens to dwarf them all in terms of fiscal irresponsibility, namely PPACA.

So how should we deliver and pay for medical care in this country? Rather than prescribe a system, because I and the other honest people out there haven't figured it out yet, for this post I would rather just lay down some principles that should govern our future efforts.

First, delivering health care is different from delivering health insurance. Frankly, what most of us have today is insurance only in the sense that if you meet up with a catastrophic expense, you won't have to pay it if you are in the right plan. However, very few actual insurance plans exist. Most large companies are "self-insured," which means they have taken over the expense themselves rather than outsource it to an insurance company. What they outsource is the recruitment of doctors and pricing negotiation with those doctors, and the bill paying. So if you think your company is insured by CIGNA or Wellpoint, it probably isn't. They are simply the service provider. This is because companies think their net losses for covering their workers will, in most years, be less than the premiums they would have to pay for real insurance. This is also why they don't have to go to the state insurance department to increase your copays and "premiums." Since there is no actual insurance, the state is not really regulating it, and they only have to comply with ERISA.

Under PPACA, these plans will eventually have to conform to the "insurance" requirements under ObamaCare, which will limit corporations' freedom to design their own plans of self insurance. Many would choose to dump their plans and employees into the state exchanges, pay their "fine" and just get out from under the headache. Obama's promise that you will be able to keep your own plan if you like it will be a non-starter.

The point of all this is to keep in mind that health care does not equal insurance.

In small companies, real insurance plans are purchased, or the employer today has the option to not offer employees insurance. The small employer plans again may collapse under ObamaCare, but small employers will be hurt either way since they will have to provide a stipend or pay a fine.

The degree of security confronting individuals and the self employed has been the most concerning depending on what state you are in. In New York, there is community rating so you can't be turned down or cancelled, but the cost for a typical couple is $2,200 per month. This is because true insurance cannot be profitably underwritten without adjustment (or declines) for pre-existing conditions. No legislation or executive order can change that; it is simple economics. Comprehensive insurance is simply an unaffordable solution for most.

There was quite a bit of experimentation going on in the years preceding PPACA that might have borne fruit but the academic left and the medical school community buried all of that nice work under PPACA. So we don't really know how much stress could be removed from the system by HSA's, high deductible plans, and other private sector initiatives.

I don't think any plan based on insurance can work unless the coverage is focused only on the very costly procedures resulting from illnesses and accidents. This is analogous to the major medical insurance approach of the 60's and 70's. This means that check-ups, routine medicines, and any voluntary treatments (abortion related, sterilizations, sterilization reversals, plastic surgery (except for repairs of damage caused by accident or illness)), and certain diagnostic testing (chosen to prevent malpractice lawsuits) would not be covered. Of course, malpractice awards would have to be all but eliminated. People will have to become smarter and more price conscious medical service shoppers. Hopefully, we would also be encouraging young people to build up HSA accounts so that their later expenses would be pre-funded.

We have 50 laboratories in the various states to test alternative approaches. Surely, we could find a few things that work. We already can see in Massachusetts what doesn't work (and it's alarmingly similar to PPACA), and we see in Canada and Europe the mess that occurs under single payer socialized approaches. Inevitably, you get less medical delivery, worse outcomes, long waiting lists, and sharply reduced incentive for people to go into medicine as a career.


Of course, the hardest nut to crack is Medicaid. Medicaid as currently constituted is a state - federal partnership, and the states and the federal government are both bleeding red ink. The tip off on the bankruptcy of PPACA should have been its description as an expansion of Medicaid. Medicaid is doomed because our aging population is counting on it paying for their long term care expenses. Not enough people are buying long term care insurance, which is admittedly expensive, and the result is that once these elderly have had their assets stripped, they are medicaid eligible. On top of that intractable problem is that medicaid is a highly inefficient provider of services to the poor, who proceed to the emergency room at the first inclination.

When you point out that taxpayers and governments can not afford the level of care they have promised under this system, the Left responds that it is a moral obligation, that we should cut everything else (presumably including defense) to pay for it, whatever it costs. Frankly, that has been Europe's answer. As a society, it would be useful to begin a wide ranging discussion about the level of care that must be provided as a moral obligation. We also need to consider what to do if our economy cannot produce the wealth it will take to pay for that. Part of that consideration is the friction that reduces business productivity when entitlements take over the budget.

It would be bad enough if we only had to deal with middle class entitlements and the Medicaid eligible, but apparently, the Left believes we also have to support the high fallutin' lifestyles and political biases of our public employees and their union leaders. At least that is the inference we can make from the reaction to the demonstrations by teachers (who abandoned their classes) and other Wisconsin public employees. To show their allegiance, Democrats in the state Senate took off for parts unknown, out of state, to avoid fulfilling their sworn responsibilities and frustrating those who were hoping for a quorum to conduct official business. This is because they want to avoid a vote they know they will lose on the Governor's proposal to curtail the collective bargaining "rights" for those unions (but not the uniformed services, it should be pointed out, though the Obama people pretended to be ignorant of that). Of course how and why public unions should have these "rights" when their employers are the taxpayers they are supposed to be serving is another question.

As we have discussed here previously, what this is really about is the need to break the viscious cycle that has these unions negotiating with the very (Democratic, usually) politicians they provide campaign funds for. In effect, those politicians sit on both sides of the table and willingly hand the public's tax money to the unions in the form of generous overtime pay and benefits, only to have it come back to them in the form of campaign contributions to help maintain them in office. The GOP wins in 2010 gave some states the rare opportunity to bust this cycle and the time is now. As for the poor schlubs in NY, California, Connecticut and the other states that did not elect Republicans, you can believe you will stop being fleeced when you see it.

Saw the Birdland Big band again last Friday night, as they performed their rare Philly Funk sets. The capacity house loved it right from the opening number, Cannonball Adderly's (and later the Buckinghams of Chicago) Mercy, Mercy, Mercy. This is one of those rare great opportunities when you can see a "house band" hitting on all cylinders, and there's nothing better. The Big Band plays from 5:15 to 7 and you usually need a reservation to get a table.

On Wednesday, we bought 400 shares of Newpark Resources (NR), one of our Tulane portfolio stocks, for 6.06, a value buy. On Friday, we sold 200 shares of Safeguard Scientific (SFE) at 19.28. We had bought 100 on 10/14/2002 for 5.82 and the other 100 on 1/27/03 for 8.22. It's been quite a comeback for this stock from the company's near-death experience following the 2000 Tech Wreck.

We have had a tremendous run so it should not surprise musings followers to see us do some formula driven selling. Newer readers can search the early archives for a description of our investment formula, which will help our hit meter on its inexorable march to 5000 and beyond. I hope to have a printed version of the archives at some point, so I could direct these searches more efficiently, but, alas, I don't as yet.

Monday, February 14, 2011


Valentine's Day Muser

As the Middle East unrest spreads from North Africa to Iran, the Western world watches with a mixture of wonder, hope and trepidation. All three reactions are justified. The internet's social networks have made possible what tens of millions of dollars in western oriented news and propaganda could not do - bringing together the young and still hopeful in Arab lands to capsize authoritarian and sometimes brutal governments. We would hope that something better would replace enemy regimes in Syria, Libya, and Iran, bring civilization to the Sudan and Yemen, yet worry about what manner of political result will occur where authoritarians have been our allies as in Saudi Arabia. Will we have more democracy, and with a population thoroughly indoctrinated over the last 65 years, can democratic Islamic societies really emerge and make peace with Israel in their midst? Can an Islamist government really foster anything resembling a pluralistic society where individual freedoms can be respected for women, Christians and other non-Islamists?

The answers to these questions are probably unknowable, and our defanged CIA is not providing a clue. The Obama administration deserves some credit for its measured response, but at the same time, we wonder whether it is much more than an interested spectator. Somehow, we did seem to exercise enough influence to engineer the military takeover in Egypt, but really, that was the only alternative to anarchy.

It is useful to keep in mind that a lot of what is going on is less about democracy than it is about food prices and poverty. Once again, we need to be reminded that, progressive doctrine notwithstanding, economic freedom and the rule of law are the consistent bulwarks against poverty. If you think China's emergence as the world's second largest economy is evidence against that, think again. On a per capita basis, China is still one of the world's poorest countries, less than a tenth as wealthy as Japan.

Wouldn't it be interesting though if historians some day decide that what we are witnessing in the Arab lands is in fact a delayed reaction to the busting of the hegemony of autocrats that originated, in fact, with George W. Bush's Iraq incursion. Supporters of that effort claimed that democracy would spread around the Middle East as a result, and were ruthlessly derided for their optimism and strategic choices. Time will tell, but I continue to believe that Mr. Bush, though not one of the great Presidents, will continue to rise in stature as history provides better perspective.

On a lighter note, last night's Grammy show was the usual wildly uneven attempt to provide something for all music genres, ultimately providing a few highlights for everyone and probably satisfying no one. For the younger set, the major cross genre awards provided a repeat of the Norah Jones nightmare, as country's Lady Antebellum's clean sweep of those awards was only prevented by Canadian pyrotechnical rock group Arcade Fire's win in the best album category. Otherwise, to the delight of those of us who prefer country to rap or nuclear holocaust rock, Lady's A's more traditional lyric and pleasing harmonies won the day, capturing Best Song, Best Record, and three other awards. They also provided a short medley that suitably demonstrated their talents.

Among the other performers, it was a decidedly mixed bag. There was a nice tribute to Aretha Franklin that started off the show, though none of the five singers from the various music genres that sang her tunes could even remotely approach the Queen of Soul herself. Justin Bieber may have some talents, but apparently none on the musical side, and his "performance" was just awful. Too bad Simon Cowell wasn't there and miked to provide an instant critique. I thought Cee-lo Green and Gwyneth Paltrow were surprisingly OK. When they rolled out Bob Dylan, he literally croaked through Maggie's Farm, an embarrassing performance where even his harmonica playing was pitiful. For those who think Dylan was really just a poet who could never sing nor perform live in an entertaining way, I suggest you review his performance in The Last Waltz, Scorsese's concert movie of The Band's farewell. The Dylan songs are a highlight among so many great moments in that film.

There was a beautiful rendition by Miranda Lambert of her song The House That Built Me (and she really is, by the way), which fittingly won the Grammy for best female country artist performance. But the highlight of the night was the ageless Mick Jagger, in a tribute to soul man Solomon Burke, bouncing around the stage like a 20 year old, singing strongly and clearly and rousing the audience to a fever pitch. Just incredible.

At the opposite end of the spectrum was Barbara Streisand trying to sing Evergreen, not doing quite as badly as Dylan but close enough for discomfort.

As for Katy Perry, I don't get her at all. Her songs were performed poorly - I didn't think she was close to being in tune - she may be a female Justin Bieber. You would think that singing on key would be a minimum requirement for a live Grammy performance. Of course, pop stars who can sing OK on record but not live are not all that unusual. I always thought that one of my faves, Jimmy Ellis, who sang lead for Disco group the Trammps (Disco Inferno, etc.) sang flat when I heard him live.

It was nice that in the tribute to those who have passed on since the last show, the Grammy's remembered pianist Dr. Billy Taylor, the jazz teacher. I had met him when I was 16 at my cousin's bar mitzvah when I had the good fortune to sit at the same table with him. I knew nothing about him then except that, like a lot of jazz stars, he was my uncle's client. There are many in the jazz world, and many lovers of that music, who owe him debts that can never be repaid.


We got some favorable reaction to our last post, and in response to reader's questions, we'll have more in the next post about what the next steps should be on health care reform. In the meantime, we'll watch the budget posturing in Congress and comment on that next time too.

On Feb 7, we bought 200 shares of Peoples United Bancorp (PBCT) for the IRA at
13.29, a value buy. On 2/8, we sold 100 shares of Roper Industries (ROP) at 81.37. We bought the shares on 9/19/01 for 18.22. On 2/9 we bought 100 shares of Graham Corp. (GHM) for the IRA at 23.48, a "zero" buy. On 2/11 we bought 200 shares of the SPR Gold ETF (GLD) at 133.04, also for the IRA. Today, we sold 100 shares of Belden Corp. (BDC) from the IRA for 40.10. We bought them on 8/20/08 (before the swoon) for 38.63.

Saturday, February 05, 2011


Egypt and other points of interest

It was kind of hard to find, but we did receive a new comment (from a new commenter) who had some interest in the January 17 post, but posted the comment in an earlier post (not his fault - we still are not happy with the comment format on blogspot and have been unable to figure out how to fix it). For those who didn't see it (assume that's everyone), and because it poses interesting questions, here it is:

Hi RedWave:

Regarding your January 17th post, it was interesting to see someone from the right interested in paying for the treatment of our mentally ill. Or did "seeing to it" only mean that we should insist on their getting into treatment? If they fail to get treatment without our paying for it, do we then throw them in jail? I do believe we should spend more to provide care for the mentally ill. Still I cannot help but be amused by your ability to point to that, with no mention of background checks for gun buyers. Worried about your reputation with others on the right? If that is the case then be careful they don't think you are in favor of paying for other people's medical problems. Sincerely, Dr. C.

So Dr. C., that's a lot of good questions and a challenging dilemma for the right concerning medical costs for a meaningful population of ill and often indigent souls. Let's consider them in order.

Walk around any city in this country, as I have related in many posts following my business trips, and especially places like New York, San Francisco (perhaps, the worst) Denver, D.C., etc. and you will encounter an alarming number of folks begging for change, and it's clear that the majority are indeed homeless and many are also suffering from mental illness. Most of these people are not dangerous, or even annoying, but this is a life without quality or discernible purpose. Disregarding those who are able and are in fact professional beggars, it would be both humane and responsible to get the mentally ill off the streets and into treatment. Where the illness constitutes a danger to others, it is also a matter of public safety. In any event, providing treatment and shelter for these folks is a legitimate purpose and use of taxpayer funds, at the state and municipal levels. If such people refuse shelter and treatment, jail is a less attractive option (there are vagrancy laws not being enforced); perhaps there is a legitimate state interest in providing a required mental examination and base subsequent treatments, mandatory or otherwise, on those results. So the short answer is the right is not so doctrinaire as to deny the validity of any public services, and I believe my thinking on this is pretty mainstream for the right.

In fact, it is the folks on the left who seem to have insisted on emptying the institutions and thrusting all of these poor folks out into the street. Granted the institutions often needed upgrade and reform, but I just don't get how the current situation is more "humane."

As for background checks for gun purchases, my understanding is that they are occurring, though the left would prefer longer waiting periods. In any event, I will stipulate that current procedures don't keep guns out of the hands of criminals, sane ones or crazy ones, and strengthening those procedures as has been suggested won't either. Nothing short of disarming the public will do that, and I am not in favor of that because the result will inevitably be that only the bad guys will have the guns. Anyway, I think the second amendment would have to be repealed before we go down that road.

As for whether I worry about being in synch with my fellow travelers on the right, I think my Goldwater/Reagan/Gingrich credentials will pass muster. By the way, I don't think the right is any different from the left in that it is pluralistic (not monolithic) on issues and positions, though there is not the rivalry within the movement that Dems like to believe is there. Unlike progressives, those of us on the right usually respect each other's opinions (and even some of the opinions we hear from the left) recognizing that intelligent people will come to different conclusions on these matters. That's what makes these debates fun and why I love to receive such great comments, like yours. Thanks Dr. C.


The bankruptcy of this administration's foreign policy approach is now being again
demonstrated by our helplessness, and lack of intelligence about what will be next for Egypt. Even though we seem to have no idea, the President has already pulled the rug out from under our long time partner Mr. Mubarak, and called for an immediate move toward a transition government. Thus, again, we give proof to the old adage, "it's dangerous to be our enemy, but downright fatal to be our friend." Watching our cynical and feckless display certainly has to raise concerns for our friends around the world, especially Israel. Just how quickly will any friend be abandoned by the U.S. under stress.

Not knowing much about how this will turn out myself, I do have two observations. First, if we could ever agree on a consistent foreign policy, as we did during the Cold War when with few exceptions, both Democratic and Republican administrations acted predictably and forcefully (we'll ignore the Carter administration for now), maybe we would be more effective. But we can't agree. When Bush 43 advocated for a policy that would spread democracy, even if it meant change from a friendly autocrat like Mubarak, he was roundly criticized for it. The Dems, when they achieved power, seemed to adopt the State Department's preferred policy of benign realpolitik, supporting stability, even if it meant backing small-time bullies like Chavez. So when the populace has finally had it with the autocrat, whether the trigger is economic or political, we wind up on the wrong side and can't back away fast enough.

Second, we are still suffering from the dismantling of the CIA as an effective intelligence gathering apparatus. Since Senator Church's hearings resulted in a toothless CIA (as opposed to the Cold War super agency it once was) we have seen a succession of intelligence failures that have won the agency a reputation rivaling the SEC. And here we are again, basically not having seen the Tunisian nor Egyptian crises coming and not having any idea what happens next.


What next for health care? Virginia has asked that the Supreme Court review the litigation on an expedited basis, which makes some sense. The pressure to do so is rising because Republican governors have finally figured out that the recent decisions give them the excuse, if not the obligation, to curtail the implementation efforts by their insurance commissioners.

No one really knows how the Court will ultimately rule, whether Kagan will recuse herself (as she should, but probably won't), and whether Congress will ultimately repeal the most offensive sections of the law. What I would like to see is what should happen constitutionally - each state should determine its own approach, which would give us 50 laboratories to see what works. We pretty well know Romneycare is not working, for example. Maybe the state that figures out that a major medical type approach is the only true insurance program that could work will win the sweepstakes.


When veteran Long Island bridge expert Harry Stappenback passed away last week at age 71, the game lost its tallest master. At 6'11", the gentle giant was a fixture at the late lamented Vanderbilt Bridge Club, and before that at New York metropolitan area tournaments. The highlight of his career was when his team won a national championship in 1987.

New York Times bridge columnist Phil Alder wrote that Harry's teammates in winning a local tournament were 6'6", 6'8", and 6'9" making them the tallest team in New York, including the Knicks.

In my last post, I noted that we had sold 100 shares of Hubbell at 56.93. We had bought them on 12/22/2000 for 23.56. On the 28th, we sold 500 shares of FSI International (FSII) at 4.43, purchased on 9/8/2009 for 1.01, a nice little gain. On the 31st, we bought 100 shares of ING Preferred (ISP) for the IRA at 20.48. On Groundhog Day, we sold 100 shares of Lindsay Corp. (LNN) from the IRA for 68.95. We paid 20 on 3/5/2001. Patience pays.

Loyal readers will no doubt recall that redwavemusings disregarded the deflation scare and mocked the Federal Reserve's concerns, worrying instead about a debasement of our currency. Since so many currencies are tied to the dollar, and since central banks around the world are pumping up their economies, a worldwide inflationary period has already started. If you factor out the retreat in housing prices from the bubble levels of 2008 and prior, you get some pretty ugly increases in the cost of commodities and living expenses. This is showing up in the prices of food, steel and other necessities around the world.

So the rise in nominal stock prices simply reflects the weakened currencies and the fact that the numbers are getting bigger, not that corporate properties are actually increasing in value. So you can't be short, you have to be long to keep up with inflation, and you have to be in commodities that hedge inflation, like gold. In sum, you have to hedge your cash positions, because the value of cash will inevitably decline.

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