All Things in Moderation

This one originally aired on CBS, the year I was born. They might air such a thing again. But I doubt it.

20 years after I was born, the Berlin Wall came down. Here’s a picture of Ronald Reagan urged Gorbachev to tear down the wall, and the next is a picture of Ronald Reagan, a year later, tearing down a few pieces of the Berlin Wall for himself.

Now, I like Ronald Reagan as much as the next guy. He remains my favorite 20th century president (my favorites being, boringly, George Washington and Thomas Jefferson). However, it’s the valor and the sacrifice of America’s fighting men and women that made sure there was an American president to demand such a thing (not mention a NATO to protect Europe from the ever-encroaching Iron Curtain). As a dedicated chicken-hawk and hypocrite in support of a strong American defense, I salute you prematurely, American veterans!

edit:

Crazy science that will one day coercively affect our lives:

http://www.reuters.com/resources_v2/flash/video_embed.swf?videoId=217093066&edition=BETAUS

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As a joking observation about the ‘Oops’ Heard Around The World, I suggested that Rick Perry’s incoherent fumbling was the result of there just being too many agencies that he wanted to ax.

In an odd piece of trying to make lemonade out of lemons, the Perry campaign is confirming my suspicion with a straw poll of what other agencies Perry should also pledge to ax. It includes the usual suspects, the Department of Labor, the IRS, the NEA, and so forth. A very odd inclusion at the very bottom is the Marine Mammal Commission.

Compared to the other big massive targets in his crosshairs, this seems like pretty small beer. Is Rick Perry really courting the Club The Seals crowd?

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No, seriously. if you make more than $34,000 per year, you’re in the top 1%.

In America, the top 1% earn more than $380,000 per year. In Australia, the top 3% of households earn more than $250,000 per week, according to the ABS. How much do you need to earn to be among the top 1% of the world?

$34,000.

That was the finding World Bank economist Branko Milanovic presented in his 2010 book The Haves and the Have-Nots. Going down the distribution ladder may be just as surprising. To be in the top half of the globe, you need to earn just $1,225 a year. For the top 20%, it’s $5,000 per year. Enter the top 10% with $12,000 a year. To be included in the top 0.1% requires an annual income of $70,000.

Not only am I in the top 1%, I’m just at the cusp of being in the top .1%, if I only look at gross income. I’m clearly wealthy beyond my wildest dreams, yet I still wince every time I fill up my gas tank.

The OWS who had her $5000 laptop stolen—that laptop represented half-a-year’s income to someone right at the nadir of the top 10% of earners in the world.

Not pointing fingers (well, except at our foreign aid, which clearly needs to be reserved for nations where contract law is enforced and it’s possible for citizens to own private property and build up equity), just sayin’ . . . it’s good to keep things in perspective.

How would you view someone making $350,000 per year who was out in the streets protesting those making $35 million per year, because those super rich folks could afford yachts and private jets and had the financial security that came with owning multiple houses in different countries, and the merely wealthy could only afford one vacation home—and could only lease time on a private jet, but could not own their own?

I doubt there’d be a lot of sympathy for the folks topping $350k or $500k a year, protesting those making tens-of-millions.

Yet to most of the world, that’s what the OWS people look like. Or would look like, if they could afford cable, television, internet, newspapers, or literacy.

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http://www.freep.com/assets/freep/pdf/C4181508116.PDF

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Vital Statistics:

Markets are rebounding after a successful Italian bond auction overnight. Italy sold 5 billion euros of government debt at 6.09%, which put a bid in the 10-year, which rallied to below 7%, nearly erasing yesterday’s losses. Essentially the Italian 10-year did a round trip from 86 1/2 to 82 1/4, which is a 5% move. For government bonds, that is nearly a year’s pay. It is a strange world we live in when normally staid government bonds exhibit the sort of volatility usually reserved for stocks and commodities.

The permanent rescue fund has hit a roadblock as French and German finance ministers clash over provisions to force haircuts on bondholders. As I mentioned before, it appears the French banks are holding the old maid and the government is resisting plans that impose losses on creditors because the last thing they want to do is to have to bail out the French banks (again). This could become an issue.

In the US, there has been a battle royale going on between Green Mountain Coffee Roasters (Nasdaq – GMCR) and hedge fund manager David Einhorn. For those who don’t know, Einhorn runs Greenlight Capital and has be very publicly short the coffee company. Einhorn has cited a number of accounting issues as well as concerns over market size and patents. GMCR announced lower than expected earnings last night, and the stock is down about 30%. These sorts of battles between value hedge-fund managers and growth mutual fund managers make for interesting stories. Usually, the mutual fund managers (by sheer size of dollars invested) steamroll the value guys who are shorting the high-flyers. Once in a while the value guys win one too.

In economic data, initial jobless claims came in at 390k, slightly below the street estimate of 400k. The trade deficit shrunk to 43 billion from 45 billion.

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