Obama did inherit the inbox from hell - but this was not in the in-box. This mess was more or less created by the current administration. They were looking for some fast action and immediate results, so they failed to do some research and took a bit too much risk. If this was a private company - well - the investors knew what they were doing right? I hold the government to a higher, more conservative standard.
Look - judging a president on a single action is silly. But we have to put this one in the loss column.
I can find a lot of real life examples of this. However, you have to find places of weak corporate governance and / or government officials you can bribe. I am thinking modem day Russia or America's Gilded Age of stock operators (1870 to 1920).
Today, most bankruptcy sales are either public auction or a court appointed official - the official being selected by the debit holders. The only modern day case in which the politicians interfered with a bankruptcy was G.M. (The banks don't count - that was a bail out.)
Paul won’t run as a 3rd candidate. Obama, on the left, is going to be a tough candidate to beat. While he is a Libertarian (so technically not right or left in this context) He knows that most of his support comes from the right, which means he and Romney will split the right. While not happy with Romney, I think Paul would pick him over Obama.
And now some details. The U.S. does not have a “Party” system exactly. Individuals run, as individuals, for a particular elected office. There are no party lists. There is no safe seat which your party can tuck you away in. Money is kind of changing this however.
“Parties” are quasi private associations where likeminded people get together to promote likeminded candidates. Since they are quasi private they have a lot of flexibility on how the nomination processes works.
Ron Paul has dropped out of the “public” race where he could pick up delegates in statewide primary elections, but he is still running n the “private” race where “super delegates” (i.e. prominent party members) can vote as they wish.
To put this in a historical context, 4 years ago there were rumors that Hillary Clinton was going to persuaded enough supper delegates to give her the nomination even though she had fewer delegates then Obama. Or, to go even further back, this system was put together before mass media where the party would try to stitch together regional blocks of interest to back a national leader. Even as late as the 1950’s most party had real conventions which decided who would be the candidate.
But would it be 50/50? Foxconn just bought a 50% stake in Sharp’s LCD display manufacturing plant. So is it 50/50 with Sharp or with the LCD Plant - in which case it would be more like 75% / 25%.
Question: How hard is it to get into college in Germany in middle age?
In the USA education is rationed / allocated in part by cost (if we ignore the Ivy colleges).
I have been told that in Europe college education is allocated more by the admission office and tends to skew to the young and well prepared. I think in Germany it partly depends on what type of high school (academic or vocational).
I ask because I am thinking about my wife. She came from a lower middle class background where education was not encouraged. She is not academically inclined. (Intelligence comes in many forms, but acing biochemistry exams is not her skill.) However in her 30's she was able to get into Vet school.
I have been told that experiences like hers are rare in Europe. Does anybody know?
Maybe. Depends on what type of tax treaty we have signed. We have a tax treaty with Italy today, so that holds. But not with Brazil, so if the branch was located there, the company could be doubled tax. I could go on. Many different tax treaties. But it does lead to some interesting distortions.
So, prior to a company being hit with over a 100% tax rate, companies lobbied for loopholes, expections, bilateral tax treaties, etc. so the resulting system is a patchwork of loopholes. The only good thing about I can see from it is that I get a job out of it.
One of the expectations is that profits generated overseas would not be taxed if it were reinvested in the overseas operations. Which is lovely. Discourages US companies from bring back profits to reinvest in the US. Sigh.
And tax holidays are not a fix. The last one they tried returned a lot of money but little reinvestment.
Yes. Apple earned 33.8b and paid 8.3b in taxes. Not neccessarly to the US goverment however.
And I wish people would stop talking about “offshore” holdings without talking about territorial tax rates.
In most countries corporate taxes are charged on income earned in that country. Income earned from offshore subsidiaries are not – because their offshore subsidiaries were charged the local corporate tax rate.
The US is one of the few places where US companies have to pay income earned overseas when it brought back onshore. Which means the same income is taxed twice. Back in the 70s,when the US tax rate was over 50%, if the foreign countries’ tax rate was over 50%, could mean a tax rate of over 100%.
So, in order to keep our odd tax system, Congress carved out a whole host of expectations. It’s just a big mess.
The above numbers are Apple “Effective” (I would use actually) tax rates. Apple had 33.8b operating income and paid 8.3b in taxes, or 24%. So we know that.
I think you are trying to say is that we don’t know Apple’s marginal tax rate. Which is true, but I am not sure what you are trying to drive at. Tiered taxes means the more you make the higher your marginal tax should be. (I am making a generalization here. Apple works in a lot of different tax jurisdictions and I don’t know all of them). IIRC, the top US corporate tax tier starts at 18m, which means that about 99.95% of their income is in the top tier.
Since that is basically a rounding error, I am not sure what your point is.
No, but you can say it is really low. What Worstall is saying is that the NY times was using 2010 tax payments (calculated on 14b of profits) on 2011 profits (of 26b).
While the odd U.S. tax rules on territorial income (We should really join how the rest of the world does it) plus special circumstances (None that I know of, but..) will make it hard to make direct comparisons.
However, NY is assuming that a 85% increase in profits would not result in a higher tax bill. I would make the assumption (which is safer) that Apple’s taxes would be higher the next year.
Of course I am getting this info from Apple’s financial statements. And, as I know too well, financial statements to the SEC and the IRS are prepared with very different assumptions.
Maybe yes, maybe no. Most “Golden Parachutes” have a cause that you get nothing if you are fired for cause or moral failure. Lying on your resume has been used before to revoke the payout clause.
Independent board members have a pretty short list of duties.
Hiring (and compensating) the CEO is one. Like picking a partner for marriage, it is an infrequent decision that has big impacts. And it’s not like it was a subjective decision that can only be evaluated in hindsight. It was a simple, objective part of the hiring process which she failed at. If you have a single marjor duty to do, make sure you do it well.
Audit committee is the other.
Short does not mean unimportant. If shareholder democracy is going to work, they have to nail these 2.
It's not that their firing a scapegoat, it is that it takes longer to fire the CEO.
And I don’t care if he has a Accounting or CS degree. What matters is his leadership abilities, which means setting the tone for values and ethics, which it looks like he is failing at.
It also depends if you were Protestant or Catholic.
Well-ordered trails with confessions extracted under torture were very Catholic.
Protestants witch trials were closer to Monty Python. Some were mob lynching. Other towns hired witch hunters – who were paid for each witch they found (and guess how may they found?).
I would not think so. There are so many devices out there. Keeping something like that up to date would be a nightmare. Every year new things are being invented and medical devices are become more customized to individual situations. It would have to centralize with a low ranking bureaucrat reviewing each application – soon to have a massive backlog.
This story is a bit off topic, but it’s funny and it does illustrate a point. Some years back a friend of mine goes into a liquor store to buy wine coolers(1 4 pack.). He gets carded, and the manager declares the driver license to be fake – after all it looked like it had been created by a laser printer and a laminator. And it looks like nothing in his reference book (See - there is a manual in this story).
Which was true. South Dakota had just switched to a new driver’s license (my friend was one of the first to get them) – made with a laser printer and a laminator. (It was kind of nice to walk into the DMV and walk out with a new license in under 30 minutes. There was a hologram, so it did not look totally bogus, but). So the manager calls the local Sheriff, and he drives in. A State Patrol hears the conversations on the C.B., has heard of these new licenses, wants to see one, so drives in as well.
At this point his girlfriend, who was waiting in the car, got to be worried.
Point being, there is going to be no way to standardize this things, and I don’t trust the judgment of a frontline TSA to evaluate complex technical issues. Live with risk.
If the market grows, and you grow as fast as the market, you can have continual growth.
And in the past, the market has grown continual and compound at around 5%. I know some sharp people who say that the future growth in industrial countries is going to continue at 2 to 3%. Oddly enough, in the long run, the value of stocks tends to grow about at the same rate as the overall GNP - which makes sense if you think about.
Now, why does GNP grow? Because of changes, and sometimes big changes.
I think what you want to say is that exponential growth - where growth is accelerating at an increasing rate (1st and 2nd derivative is positive) can only be held for a short period of time - 10 to 20 years - in a single industry - is true.
I mean, if the exponential growth held on for much longer for a single company then that then it would dominate the economy - which does not grow exponentially.
Apparently, satellite stands are covered by ITAR. Basically, we are talking about an aluminum table to hold up the satellite when people are working on it..
Helps exports, thus helps creating jobs in the export business. More true in manufacturing.
Hurts imports, thus helps create inflation. (People like to complain about Walmart importing cheap Chinese stuff, but, IIRC, without cheap imports the average middle to lower income American would be paying about 20% for the basic goods of life - based on the effect of reduced inflation for the past 20 years.)
Should hurt US Treasury Bond yields. Foreign buyers should be demanding higher yields because of the weakling dollar - but the dollar is the word's reserve currency. I sometimes feel like we are Wile E. Coyote in regards to ultra low bond prices.
As for Obama, the first effect has the most immediate effect, and so if the US dollar falls it should help him.
But that is expensive. A company could go out and buy the exact same benefits for their employees via a life insurance company – but at much higher cost.
Life Insurance companies (effectively) have to discount their liabilities at government bond rates – which are guaranteed. I mean, if you are going to guaranty a rate, and returns are linked to risk, that implies a low risk, and thus a low return.
I think you are a bit off on Social Security. Currently benefits are tied to Average Wage Index, not inflation. (And yes, Congress will sometimes step in a goose the figures up a bit when inflation goes up faster then the Average Wage Index, but that is the exception, not the rule.)
But back to pensions – and those are expensive. A company could go out and buy the exact same benefits for their employees via a life insurance company – but at much higher cost.
Life Insurance companies (effectively) have to discount their liabilities at government bond rates – which are guaranteed. I mean, if you are going to guaranty a rate, and returns are linked to risk, that implies a low risk, and thus a low return.
Private companies can use a much higher rate, usually a blend of stock market rates and corporate bonds – and thus are much freer to take risk.
It’s not that I am against pensions – it’s just that I am against the bad actuarial assumptions that most company plans make.
I will point you to a contra example. When AIG blew up, and the government had to bail out corporate, you might have noticed that they did not have to bail out the fixed annuity arm. That’s because 1. the life insurance was segregated out with their own accounts, 2. the pension obligations were conservatively modeled – by state regulators who are not interested in bailing out life insurance companies.
I stand corrected. My memory is playing tricks on me. I remembered that IBM had aggressively encouraged employees to switch from a define pension over to the cash balance account and that things had gone poorly, and thus IBM had a surplus of define pension plans (which are affected by interest rates).
By the way, from my perspective you took a sharp turn with the 2 organizations which I did not follow. I had to look those up.
OK, 2nd post to the same question, but I have been thinking about it.
Let's say...
FB wants to rasis 5B (which is at the low end of guesses)
They price at $50 a share.
That's 100m shares.
Shares are normally sold in lots of 100 - we will call that 1 unit.
So, 1m units will be sold
And since large institutions will buy big blocks of the stock, we can say that less then 1 million people will buy it. (And we are not counting indirect buys by mutal funds and pension plans)
And we could drive a truck though the holes of this argument, but it's a place to start.
Slashdot Mirror
Obama did inherit the inbox from hell - but this was not in the in-box. This mess was more or less created by the current administration. They were looking for some fast action and immediate results, so they failed to do some research and took a bit too much risk. If this was a private company - well - the investors knew what they were doing right? I hold the government to a higher, more conservative standard.
Look - judging a president on a single action is silly. But we have to put this one in the loss column.
I can find a lot of real life examples of this. However, you have to find places of weak corporate governance and / or government officials you can bribe. I am thinking modem day Russia or America's Gilded Age of stock operators (1870 to 1920).
Today, most bankruptcy sales are either public auction or a court appointed official - the official being selected by the debit holders. The only modern day case in which the politicians interfered with a bankruptcy was G.M. (The banks don't count - that was a bail out.)
Paul won’t run as a 3rd candidate. Obama, on the left, is going to be a tough candidate to beat. While he is a Libertarian (so technically not right or left in this context) He knows that most of his support comes from the right, which means he and Romney will split the right. While not happy with Romney, I think Paul would pick him over Obama.
And now some details. The U.S. does not have a “Party” system exactly. Individuals run, as individuals, for a particular elected office. There are no party lists. There is no safe seat which your party can tuck you away in. Money is kind of changing this however.
“Parties” are quasi private associations where likeminded people get together to promote likeminded candidates. Since they are quasi private they have a lot of flexibility on how the nomination processes works.
Ron Paul has dropped out of the “public” race where he could pick up delegates in statewide primary elections, but he is still running n the “private” race where “super delegates” (i.e. prominent party members) can vote as they wish.
To put this in a historical context, 4 years ago there were rumors that Hillary Clinton was going to persuaded enough supper delegates to give her the nomination even though she had fewer delegates then Obama. Or, to go even further back, this system was put together before mass media where the party would try to stitch together regional blocks of interest to back a national leader. Even as late as the 1950’s most party had real conventions which decided who would be the candidate.
But would it be 50/50? Foxconn just bought a 50% stake in Sharp’s LCD display manufacturing plant. So is it 50/50 with Sharp or with the LCD Plant - in which case it would be more like 75% / 25%.
Question: How hard is it to get into college in Germany in middle age?
In the USA education is rationed / allocated in part by cost (if we ignore the Ivy colleges).
I have been told that in Europe college education is allocated more by the admission office and tends to skew to the young and well prepared. I think in Germany it partly depends on what type of high school (academic or vocational).
I ask because I am thinking about my wife. She came from a lower middle class background where education was not encouraged. She is not academically inclined. (Intelligence comes in many forms, but acing biochemistry exams is not her skill.) However in her 30's she was able to get into Vet school.
I have been told that experiences like hers are rare in Europe. Does anybody know?
Maybe. Depends on what type of tax treaty we have signed. We have a tax treaty with Italy today, so that holds. But not with Brazil, so if the branch was located there, the company could be doubled tax. I could go on. Many different tax treaties. But it does lead to some interesting distortions.
Sigh, no Congress - not Nerds,
So, prior to a company being hit with over a 100% tax rate, companies lobbied for loopholes, expections, bilateral tax treaties, etc. so the resulting system is a patchwork of loopholes. The only good thing about I can see from it is that I get a job out of it.
One of the expectations is that profits generated overseas would not be taxed if it were reinvested in the overseas operations. Which is lovely. Discourages US companies from bring back profits to reinvest in the US. Sigh.
And tax holidays are not a fix. The last one they tried returned a lot of money but little reinvestment.
Yes. Apple earned 33.8b and paid 8.3b in taxes. Not neccessarly to the US goverment however.
And I wish people would stop talking about “offshore” holdings without talking about territorial tax rates.
In most countries corporate taxes are charged on income earned in that country. Income earned from offshore subsidiaries are not – because their offshore subsidiaries were charged the local corporate tax rate.
The US is one of the few places where US companies have to pay income earned overseas when it brought back onshore. Which means the same income is taxed twice. Back in the 70s ,when the US tax rate was over 50%, if the foreign countries’ tax rate was over 50%, could mean a tax rate of over 100%.
So, in order to keep our odd tax system, Congress carved out a whole host of expectations. It’s just a big mess.
I am not sure that I am following you.
The above numbers are Apple “Effective” (I would use actually) tax rates. Apple had 33.8b operating income and paid 8.3b in taxes, or 24%. So we know that.
I think you are trying to say is that we don’t know Apple’s marginal tax rate. Which is true, but I am not sure what you are trying to drive at. Tiered taxes means the more you make the higher your marginal tax should be. (I am making a generalization here. Apple works in a lot of different tax jurisdictions and I don’t know all of them). IIRC, the top US corporate tax tier starts at 18m, which means that about 99.95% of their income is in the top tier.
Since that is basically a rounding error, I am not sure what your point is.
Apple's 2011 fiscal year end is September 2012. And I am sure they file extensions. So, no, we would not have the data yet.
No, but you can say it is really low. What Worstall is saying is that the NY times was using 2010 tax payments (calculated on 14b of profits) on 2011 profits (of 26b).
While the odd U.S. tax rules on territorial income (We should really join how the rest of the world does it) plus special circumstances (None that I know of, but..) will make it hard to make direct comparisons.
However, NY is assuming that a 85% increase in profits would not result in a higher tax bill. I would make the assumption (which is safer) that Apple’s taxes would be higher the next year.
Of course I am getting this info from Apple’s financial statements. And, as I know too well, financial statements to the SEC and the IRS are prepared with very different assumptions.
"Yahoo! Board of Directors Forms Special Committee to Review CEO Academic Credentials"
http://pressroom.yahoo.net/pr/ycorp/233689.aspx?link_page_rss=233689
Can't add much more to the headline - expect this is generally the first step in firing the CEO..
Maybe yes, maybe no. Most “Golden Parachutes” have a cause that you get nothing if you are fired for cause or moral failure. Lying on your resume has been used before to revoke the payout clause.
Independent board members have a pretty short list of duties.
Hiring (and compensating) the CEO is one. Like picking a partner for marriage, it is an infrequent decision that has big impacts. And it’s not like it was a subjective decision that can only be evaluated in hindsight. It was a simple, objective part of the hiring process which she failed at. If you have a single marjor duty to do, make sure you do it well.
Audit committee is the other.
Short does not mean unimportant. If shareholder democracy is going to work, they have to nail these 2.
It's not that their firing a scapegoat, it is that it takes longer to fire the CEO.
And I don’t care if he has a Accounting or CS degree. What matters is his leadership abilities, which means setting the tone for values and ethics, which it looks like he is failing at.
It also depends if you were Protestant or Catholic.
Well-ordered trails with confessions extracted under torture were very Catholic.
Protestants witch trials were closer to Monty Python. Some were mob lynching. Other towns hired witch hunters – who were paid for each witch they found (and guess how may they found?).
I would not think so. There are so many devices out there. Keeping something like that up to date would be a nightmare. Every year new things are being invented and medical devices are become more customized to individual situations. It would have to centralize with a low ranking bureaucrat reviewing each application – soon to have a massive backlog.
This story is a bit off topic, but it’s funny and it does illustrate a point. Some years back a friend of mine goes into a liquor store to buy wine coolers(1 4 pack.). He gets carded, and the manager declares the driver license to be fake – after all it looked like it had been created by a laser printer and a laminator. And it looks like nothing in his reference book (See - there is a manual in this story).
Which was true. South Dakota had just switched to a new driver’s license (my friend was one of the first to get them) – made with a laser printer and a laminator. (It was kind of nice to walk into the DMV and walk out with a new license in under 30 minutes. There was a hologram, so it did not look totally bogus, but). So the manager calls the local Sheriff, and he drives in. A State Patrol hears the conversations on the C.B., has heard of these new licenses, wants to see one, so drives in as well.
At this point his girlfriend, who was waiting in the car, got to be worried.
Point being, there is going to be no way to standardize this things, and I don’t trust the judgment of a frontline TSA to evaluate complex technical issues. Live with risk.
You might want to check your math.
If the market grows, and you grow as fast as the market, you can have continual growth.
And in the past, the market has grown continual and compound at around 5%. I know some sharp people who say that the future growth in industrial countries is going to continue at 2 to 3%. Oddly enough, in the long run, the value of stocks tends to grow about at the same rate as the overall GNP - which makes sense if you think about.
Now, why does GNP grow? Because of changes, and sometimes big changes.
I think what you want to say is that exponential growth - where growth is accelerating at an increasing rate (1st and 2nd derivative is positive) can only be held for a short period of time - 10 to 20 years - in a single industry - is true.
I mean, if the exponential growth held on for much longer for a single company then that then it would dominate the economy - which does not grow exponentially.
Apparently, satellite stands are covered by ITAR. Basically, we are talking about an aluminum table to hold up the satellite when people are working on it..
Here is an old, but good article,
http://www.economist.com/node/11965352
A weaker dollar
Helps exports, thus helps creating jobs in the export business. More true in manufacturing.
Hurts imports, thus helps create inflation. (People like to complain about Walmart importing cheap Chinese stuff, but, IIRC, without cheap imports the average middle to lower income American would be paying about 20% for the basic goods of life - based on the effect of reduced inflation for the past 20 years.)
Should hurt US Treasury Bond yields. Foreign buyers should be demanding higher yields because of the weakling dollar - but the dollar is the word's reserve currency. I sometimes feel like we are Wile E. Coyote in regards to ultra low bond prices.
As for Obama, the first effect has the most immediate effect, and so if the US dollar falls it should help him.
But that is expensive. A company could go out and buy the exact same benefits for their employees via a life insurance company – but at much higher cost.
Life Insurance companies (effectively) have to discount their liabilities at government bond rates – which are guaranteed. I mean, if you are going to guaranty a rate, and returns are linked to risk, that implies a low risk, and thus a low return.
I think you are a bit off on Social Security. Currently benefits are tied to Average Wage Index, not inflation. (And yes, Congress will sometimes step in a goose the figures up a bit when inflation goes up faster then the Average Wage Index, but that is the exception, not the rule.)
But back to pensions – and those are expensive. A company could go out and buy the exact same benefits for their employees via a life insurance company – but at much higher cost.
Life Insurance companies (effectively) have to discount their liabilities at government bond rates – which are guaranteed. I mean, if you are going to guaranty a rate, and returns are linked to risk, that implies a low risk, and thus a low return.
Private companies can use a much higher rate, usually a blend of stock market rates and corporate bonds – and thus are much freer to take risk.
It’s not that I am against pensions – it’s just that I am against the bad actuarial assumptions that most company plans make.
I will point you to a contra example. When AIG blew up, and the government had to bail out corporate, you might have noticed that they did not have to bail out the fixed annuity arm. That’s because 1. the life insurance was segregated out with their own accounts, 2. the pension obligations were conservatively modeled – by state regulators who are not interested in bailing out life insurance companies.
I stand corrected. My memory is playing tricks on me. I remembered that IBM had aggressively encouraged employees to switch from a define pension over to the cash balance account and that things had gone poorly, and thus IBM had a surplus of define pension plans (which are affected by interest rates).
By the way, from my perspective you took a sharp turn with the 2 organizations which I did not follow. I had to look those up.
China is telling their bankers to read the FB red hearing as a model to disclose risks.
Of course, they are still not letting their bankers use FB. That would be just too dangerous.
OK, 2nd post to the same question, but I have been thinking about it.
Let's say...
FB wants to rasis 5B (which is at the low end of guesses)
They price at $50 a share.
That's 100m shares.
Shares are normally sold in lots of 100 - we will call that 1 unit.
So, 1m units will be sold
And since large institutions will buy big blocks of the stock, we can say that less then 1 million people will buy it. (And we are not counting indirect buys by mutal funds and pension plans)
And we could drive a truck though the holes of this argument, but it's a place to start.
You can read the read hearing and get a lot of the info (check for links upstream).
P/E implies we know the Price and Earnings.
We don’t know the price (because it has not been priced), but the private stock has been trading at $45.
Earnings were a even billion in 2011. The red hearings says about .43c per share after the sale.
So I would guess P/E = 105 with a wide range of error.