Hashemian Blog Web Tools, Financial Markets, Technology Tuesday, September 22, 2009 Iran Kidney Trade  I already knew that Iran is the only country in the world where the sale of the kidney is not only legal, but government sanctioned and subsidized. When I sat behind my desk to watch the documentary, Iranian Kidney Bargain Sale, I already knew what to expect - sort of. There were 2 things that affected me quite deeply: 1- The human faces and stories behind the kidney trades. 2- The tough ethical and moral questions that creep up on the viewer. Here you have two desperate and nearly hopeless people, each clinging to the hope that the other party can resolve their devastating problem. One gripped with such destitute that has decided to sell a vital organ, the other in urgent need of a kidney to regain a semblance of a normal life. As I watched the movie, I kept wavering between siding with the donor and the recipient. I would condemn the Iranian government for allowing the kidney trade, only to condone it a few moments later. This is not a simple black and white matter. It's one big gray area. Is it fair for people to sell their kidneys for as little as $3,000? Is it fair that potential recipients continue to haggle over price, as if buying a car? And yet, is it fair that some of the lives saved could have been lost without this trade? Or perhaps barring the legal trade, unscrupulous black market operators abuse and intimidate potential donors at their most vulnerable times, the way it's done in India or Pakistan? To be fair, the government does seem to have strict policies in regards to who can donate and who can receive a kidney. Among the rules, they must both be Iranian citizens (eliminating potential abuse by wealthy foreigners) and they must pass rigorous medical exams to qualify for the procedure. I would imagine that the little money the donors receive could hardly resolve their problems. In most cases they would be back at their original financial position, minus a healthy kidney. The recipients seem to benefit the most from the trade, that is if the transplants are successful. In the end I still couldn't make up my mind on whether allowing this practice was ethical. Given all the parameters, I think the kidney trade in Iran is somewhat beneficial to the society, because it does assist in saving lives. Not just the lives of the recipients, but also the lives of the donors who would otherwise be at the mercy of the black market operators. Then again my opinion couldn't possibly carry that much weight, since I haven't walked in the shoes of the people on either side of the kidney trade. kidney transplant,iran,laws Labels: financial, social <Iran Kidney Trade> // posted by rh 0 comments Monday, August 10, 2009 Stock Market – Back to Greed?  For those of us who held on to our 401(k) investments and stuck to our contributions even as the market was plummeting, the rewards are nearly at hand. Looking at my 401(k) balance I was pleased to see a bit of life back in it. The stock market is still off its highs (for NASDAQ you’d have to go back a decade to the tech bubble era), but it has made sizeable gains in a rather short time and that is cause for a bit of concern. Many, including bank and insurance stocks, have quadrupled or quintupled in a short few months. Look are Citibank, Bank of America, or AIG. Ford is going for $8 per share now; it was barely over $1 in March. That is just not normal. Now one could argue that the market is just correcting an extreme oversold condition that occurred a few months ago as a result of extreme fear. Maybe so, but a pendulum swings both ways and we may now be looking at extreme greed and we know where that leads to. stock market Labels: financial <Stock Market – Back to Greed?> // posted by rh 0 comments Monday, June 15, 2009 Cell Phone Tax  Saw this article the other day that makes one wonder how desperate the government must be. Seems like if you have a company-issued cell phone and you use it for anything personal, the value of that use should be reported as income to be taxed. So guess if I'm in the office and scribble a personal note on a piece of paper, check email, get water from the cooler or coffee from the pot, or have lunch at my desk while surfing the Web, I should pay taxes on the value of all these. I wonder if Google employees pay taxes on all the extra benefits they receive from the company, like free food and gym. Anyways, I don't need to worry about the cell phone tax. I don't have a cell phone nor do I want one. irs,income tax,cell phones Labels: financial, tax <Cell Phone Tax> // posted by rh 0 comments Sunday, May 03, 2009 The Innocent Investor  A while back I was reading about Bernie Madoff's adventures (fascinating story) and the smooth way he operated his giant Ponzi machine. The interesting part of the story was about how some of the damages will be recovered from other investors who were ostensibly lucky enough to withdraw their investments before the house of cards came crashing down. I suppose if I had lost substantial assets with Madoff, I would want as much money recovered as possible, even if that meant forcing the early investors to forfeit their gains. While it may be true that those investors profited from ill-gotten gains, this presents one with an ethical and moral dilemma. Suppose you were just an innocent investor in a seemingly legitimate plan and you had decided to take your profits and walk away. Why would you be responsible for future losses if the investment suddenly collapses? You had committed no crime here. You had followed the rules and had bought and sold the investments in good faith. You had taken the same risk as the others, but had the fortune of better timing. This scenario plays out in the market all the time. Take the recent drop in the stock market. Many investors lost substantial amounts when their shares suddenly plummeted in value and they were forced to sell at ridiculously low prices. Then others stepped in and picked up those shares on the cheap and by now some of them have tripled or quadrupled their initial investments in a very short run. If they decide to sell their shares today and walk away with handsome profits, would they need to worry that the early sellers may come back and try to take away their profits? And if so, how much would they need to forfeit? The early sellers may argue that abnormal conditions had caused the shares to plunge to artificially low levels and the current owners had profited from the panic and despair that had gripped the market. You may argue that in this case no fraud had taken place, but those "toxic assets" that led to the violent volatility weren't exactly proper either. I have no problem with going after the swindlers and their cohorts, but for those who took the same risks as others and profited fair and square, there shouldn't be any negative consequences. Why go after the early investors instead of the regulators who were asleep while the fraud was being perpetrated? If every legitimate gain in the market is at the risk of being taken away, what incentive is there for people to invest in anything? madoff,stock market,ponzi schemes Labels: financial <The Innocent Investor> // posted by rh 0 comments Monday, April 20, 2009 Oracle Buys Sun  When today I heard the news of Oracle buying Sun Microsystems, my first thought was that I wished I had picked up some JAVA shares after the IBM deal had fallen through. It was just a matter of time before a suitor would snap it up. My second thought was about its impact on the tech sector and the end users. For one, this puts Oracle in the hardware business with new competitors like IBM, HP, and Dell. It's possible though that Oracle would sell off or just kill that part of the business. The more interesting situation is the future of Java, MySQL, and OpenOffice. My predictions are: Java will continue in its current form, free for users with a fee-based maintenance arm. MySQL will be absorbed into the big Oracle DB mother ship and will continue to be free of charge under a moniker like Oracle-Light or something similar. Again, there will be a fee-based maintenance plan for that. As for OpenOffice, Oracle will have its challenges with Microsoft and Google. It's probably steady-as-she-goes with regards to OpenOffice, at least for some time. Oracle seems to have the right combination of fortune and skills to successfully absorb acquired companies into its collective. If the past is any indication, the Sun Micro acquisition will be yet another smooth sailing (pun intended). Of course the downside of this will the layoffs that follow such an event. It’s a bit sad to bid farewell to Sun as an independent firm. This company has had such a huge impact on the tech sector in terms of innovation and the proliferation of the Internet. But considering the alternative (possible bankruptcy or a state of irrelevance), Oracle may be just the right company to keep Sun's legacy of innovation alive and even push it further. oracle,sun microsystems,microsoft,google,java,mysql,openoffice Labels: financial, internet <Oracle Buys Sun> // posted by rh 0 comments Tuesday, March 17, 2009 Credit Ratings Knocks  Years ago when I was a rookie employee at GE, fresh out of college, I was introduced to GE Interest Plus, offering a checking account with a competitive interest rate. I began saving my money there without realizing that this really wasn't a regular bank account. It wasn't their fault, the fact that they weren't a standard bank and therefore not FDIC-insured was clearly stated, it just took some time for me to realize that. By putting money in that account, I was really investing in GE's short-term debt and accepting a slight risk of loss. There risk was not being FDIC-insured, but GE had top credit ratings from Moody's and S&P and that gave some assurance that the invested money wouldn't just vanish. GE Interest Plus's Web site proudly displayed their perfect credit rating. Fast-forward a few years and it turns out that the credit-rating agencies really weren't adding much value. Many companies or investments that were deemed safe by these agencies either went bankrupt or had severe losses. The agencies may have sustained credibility damage but they still persist. What else is there? Last Friday GE and Berkshire Hathaway had their credit ratings downgraded by a notch. They are still considered safe but not first-rate. GE Interest Plus updated their credit ratings statement to reflect the change and below is snapshots of their before and after ratings statements. Could be a while before GE's credit rating is back on top again. ge,moody,s&p,credit ratings,fdic Labels: financial <Credit Ratings Knocks> // posted by rh 0 comments Sunday, March 08, 2009 Circuit City Goodbye  Last week, walking by a Circuit City store at lunch time, I noticed a few people out on the street holding liquidation signs. Tempted, I went inside the store and took a look around the near-empty and dark store with few remaining items collected in the front of store. There were slim pickings and but I left with a new Batman, The Dark Knight DVD and Saliva's Every Six Seconds CD for about $6. I suppose getting these items at such a bargain price should have given me a good feeling but the truth is that the experience was a depressing one. Circuit City wasn't exactly the kind of store I would shop at but I remember the times when the stores were vibrant and thriving. There were lots of merchandise on the shelves with shoppers zigzagging the isles and talking to the many associates. Today Circuit City shuttered its doors for the last time, joining the other bygone stores like CompUSA and Nobody Beats The Wiz. I couldn't help but feel a bit of guilt over the demise of this business, the throngs of people who have lost their jobs as a result, and the neighborhoods blighted by yet another failed store. In a way the failure of Circuit City is emblematic of the ailing economy as a whole. Whatever satisfaction I might have felt for getting a bargain, quickly turned into an empty and hopeless feeling that the fabric of our economy is fast unraveling under the weight of the economic crisis. I realize that we can't wish the bad times away, but I don't want any more liquidation sales and bankruptcy-driven bargains. I want to walk into a store and see it buzzing with shoppers. Christmas and independence-day sales are just fine with me. circuit city,bankruptcy,economy Labels: business, financial <Circuit City Goodbye> // posted by rh 0 comments Monday, March 02, 2009 GE Below Cisco  Add this to the list of things you thought would never happen. GE's market capitalization of around $80B today is almost the same as those of Apple or Oracle. It’s less than those of Cisco or Google or IBM. General Electric, the conglomerate blue-chip company that once was known as the most admired with the highest market cap in the world is now worth less than the specialized tech companies, much maligned after the tech bubble implosion of 2000. Lest you think that such reversal of fortunes pleases me, consider that as an ex-GE employee with many shares of this company in my 401k, my retirement savings have dwindled to dismal levels. GE was a company that set the criteria by which all others were measured against. Who would have guessed that the rules of long-term investing would turn upside-down in such a short time. One wonders if the time has come to discard everything we have learned for generations and draw up new rules. There are those who believe that the fear-motivated market freefall is terribly overdone. That soon the market will come to its rational senses and will correct itself in a hurry. I also believe that at these levels we must be somewhere near the bottom searching for a footing to climb back out. But as I witness the daily spillage of red ink, the voice inside my head keeps repeating: something has gone horribly wrong with capitalism. ge,general electric,market capitalization,stock market,capitalism Labels: financial <GE Below Cisco> // posted by rh 0 comments Saturday, February 28, 2009 Housing Market  The stock market is going through tough times. Look at your battered 401k statement, if you dare, and you'll know how bad things are. Yesterday the DJIA barely hovered above the 7,000 mark. That's a 12-year low and some are still calling for more, a lot more, pain ahead. Short positions are now firmly in command. The housing market is having its own reversal of fortunes to grapple with. Some markets in California, Nevada, and Florida are just dumping properties as fast as they can find reluctant buyers. Others, such as the northeast, are less severly stricken for now, but trending downward nevertheless. There are a few obvious reasons behind this condition: Banks are afraid. They are unable or unwilling to loan money to anyone but the cream of the crop of creditworthiness. That leaves many out of luck in securing a mortgage. People are afraid. Many with investment properties just want to cut their losses and sell, therefore flooding the market. High unemployment rates have caused many people to fall behind or stop making their mortgage payments causing many properties to be at or near foreclosure. Buyers are waiting for better bargains. As far as the home prices have fallen, many believe there's still plenty more froth to be erased. Money is scarce. People's investments have been decimated in the downturn, leaving little money or confidence to buy properties. So what we have is a double-whammy of inflated supplies and shrinking demand and that's the basic pricing determinant for anything bought or sold. Inherently, the housing market's response to economic conditions is slow. Unlike stocks, futures, or precious metals, it takes time to close the paperwork-heavy deals. But is it possible that the lagging housing market will also experience its own 12-year lows in the near future? If the stock and credit markets continue their deterioration, there's little else the housing market can do but to follow suit. And the bargain hunters keep waiting. Illogical and irrational as things may be, no segment of the market is completely insulated from the rest. stock market,housing market,dow jones,recession Labels: financial <Housing Market> // posted by rh 0 comments Thursday, February 19, 2009 Berkshire Hathaway, Cheap Again?  Back on Nov. 20, 2008 when the stock market was touching multi-year low points, Berkshire Hathaway (headed by the famed Warren Buffett) was touching its own low of $75,000/share. A number of notable sites/publications jumped to the defense of the stock, marveling at the opportunity of owning a share of this company at a bargain price. This one from US News and its follow-up article couldn't hold back the excitement, even claiming that the BRK.A stock (based on some arbitrary metric) should really be valued at $136,000. Were they right or wrong? Well, both. The share price did indeed shoot back up to about $108,000 within 3 weeks. That would have been a good spot to sell. From there it started to fizzle a bit every week and today it once again tested the Nov 2008 lows, some 3 months later. At this point it's anyone's guess where it's headed. The fact is that BRK is invested in some of the same companies that are facing severe financial issues these days. If those companies are ailing, what justification is there for BRK to be healthy? BRK is not insulated from the global economic events that has gripped all industries. Nor is it attractively positioned to profit handsomely from economic hardships. As I have mentioned before, BRK also faces one other big risk and that is the age of its CEO, Warren Buffett. Admittedly that risk is most likely priced in, but one must still wonder, where would this company be without its star leader? So considering everything, is BRK once again at a bargain price or is it over-priced? Only time will tell. berkshire hathaway,brk,warren buffett,stock market Labels: financial <Berkshire Hathaway, Cheap Again?> // posted by rh 0 comments Monday, January 26, 2009 The APY Game  It has been only a few days since I posted about the 4% savings account at Dollar Savings Direct. I characterized the rate as "unheard-of". Apparently the folks over at the bank agreed and over the weekend they lopped off 0.5% from the APY bringing the interest rate down to 3.5%. You really can't blame them for lowering the rate. 4% was just way too high in the current low interest rate market. But that's how the game is played. You set a high rate on the account and advertise the devil out of it to attract enough money. Then you lower the rate to a reasonable level to keep existing customers from jumping ship while new money continues to arrive, albeit at a slower rate. And you keep adjusting the rate to keep the money flow steady. Well, 3.5% APY is still a decent rate, but who knows where it'll stand next week, or the week after. savings account,money market,interest rates,yield,apy Labels: financial <The APY Game> // posted by rh 0 comments Sunday, January 18, 2009 High Interest Savings Account  While the historic low interest rates are good news to consumers who need to borrow money (that is if they qualify in the tight credit market), they are bad news for those needing to hoard cash. You are lucky to find a CD, money market, or a savings account paying 2% interest these days. But there are a few banks around that still offer decent rates on savings accounts. One such bank I recently ran into is DollarSavingsDirect, a division of Emigrant Bank. It has been offering an unheard of 4% APY on savings accounts. In comparison, its sister unit, EmigrantDirect currently offers 2.5% savings accounts with no minimums. DollarSavingsDirect requires a minimum $1,000 deposit, there is apparently no maximum amount, and the accounts are FDIC insured. Based on what I have found so far, this is not a teaser rate and people have actually been earning that interest rate on their deposits for a few months. Of course the rate is always subject to change and it probably will fall if interest rates remain this low or go even lower. That's the basic problem of chasing higher rates. By the time or shortly after your money lands in the account, the rate could slide below your previous bank and you are faced with the decision of moving your cash again. And since your money doesn't earn any interest while in transition (which could sometimes take a week) your effective rate could end up being lower than what you had expected. With electronic deposits (Automated Clearing House or ACH) the best day to request a transfer is on a Monday of a holiday-free week. That way you run a lower risk of having your money held up over the weekend or a holiday and losing extra days of interest earnings, while awaiting the completion of the transfer. Note: I receive no compensation from the banks mentioned in this post. interest rates,savings accounts,yield,money market,ach,fdic Labels: financial <High Interest Savings Account> // posted by rh 0 comments Wednesday, January 14, 2009 Lessons from Apple's Jobs  The off again, on again, off again news about Steve Jobs has been sending the Apple stock on a roller-coaster ride for the past few months. Investors are nervous and that is clearly reflected in the volatility of the company shares. With tonight's news on Jobs' leave of absence, Apple has taken a dive in after-hours trading, down over 7%. No doubt more volatility will follow when it opens tomorrow. This brings into question the degree by which the value of a company should be tied to one person. When Jobs retook the helm at Apple in 1997 he achieved the incredible feat of turning a moribund company into a behemoth. Few expected that kind of success, but the price has been that Apple's fortunes were forever tied to one person. Apple without Steve is like Seinfeld without Jerry, or the Honeymooners without Jackie, or Van Halen without Diamond Dave. Ok, the last one was a bad example, but you get the picture. The point is that companies are supposed to thrive for a long time, but people's lifespan are just too short - we're all mortals. For a company to survive its founder or star leader, it must have a solid succession plan and skilled people who can navigate the ship long after the lone captain has left the deck. GE did it without Edison, AT&T did it without Bell, and Exxon did it without Rockefeller. As for the bad examples, look at GE today. It has floundered since Jack Welch signed off, even with all the grooming for its current leader. Martha Stewart Living Omnimedia never recovered after Martha Stewart got into legal trouble and served jail time. But Microsoft and Oracle have done a decent job of decoupling themselves from their leaders. These companies will probably be fine even after Gates and Ellison are gone. Yahoo has learned that lesson with Yang abdicating yesterday in favor of a new leader. Google has also done it right by not keeping its founders in the limelight all the time and allowing an outsider to lead the company. I suppose the ultimate example of a company inexorably tied to its leader is Berkshire Hathaway. Warren Buffett is no doubt a genius who has transformed an unknown textile company into a $150 billion giant. But he is also 78 years old and investors must wonder about how much longer he can perform his magic. There is little question that at the first sign of his deterioration, the stock will sustain a heavy blow. Of course I hope that's a long way off. The market is a soulless beast, but I admire him for his thrift and his charitable trait. apple,steve jobs,berkshire hathaway,warren buffett,stocks Labels: financial <Lessons from Apple's Jobs> // posted by rh 0 comments Sunday, December 21, 2008 Oil at $200 a Barrel  Seems like an insane prediction when oil is hovering around $34 a barrel, but it was only in July when crude reached $147 and we were paying $4.20 per gallon to fill up our cars. Back then plenty of pundits and analysts were predicting $200/barrel oil and $6/gallon gas and everyone seemed to accept that prediction as a foregone conclusion. Here's one such prediction published in New York Times in May 2008 titled: An Oracle of Oil Predicts $200-a-Barrel Crude. An oracle of oil? This was a mere 7 months ago, not decades to give the "oracle" a little margin of error. I'm really not picking on this particular analyst who made this bold prediction in May 2008. When crude was trading just over $100 per barrel and rising sharply, it wasn't perhaps so radical to make such a statement. But even those pundits who strongly disagreed with this prediction didn't get it right, as evident by this statement in the same article: "Some say prices will fall as low as $70 a barrel by year-end, according to Thomson Financial." As low as $70? Did they possibly dare fathom as low as $30? Every time I hear a prediction from one of these guys, I know they are winging it. Sure, they have access to lots of data, charts, reports, and specialized programs to crunch numbers, but in the end all they can give you is a best guess. It's like predicting the color the ball will land on while it's spinning in a roulette wheel. Sometimes they get the color right and they come back gloating looking for validation. Other times they take bigger risks and predict the number the ball will land on. It's a gamble, and if it comes to pass, they can reap fame and fortune, at least for a while. In the end their predictions are probably just as good as a moderately informed investor. Oil didn't hit $200 per barrel. Instead it took a nose-dive amidst the worsening financial crisis and a severe slowdown of consumer spending. Who knows, in a year or two or three it may reverse course again and really reach $200 per barrel. Would that be a vindication for the oracle? Not at all. If he had correctly predicted the intervening price swings, I might have become a believer. But then again if he could do that, he wouldn't need a job forecasting oil prices. He'd be an instant billionaire tanning on a beach. oil,oil prices,analysts,crude oil,gasoline Labels: financial <Oil at $200 a Barrel> // posted by rh 1 comments Monday, December 15, 2008 Ponzi Schemes  The bad news on Wall Street today was Madoff's Ponzi scheme. This old trick works by paying off previous investors with money from new investors, thereby garnering a false reputation of handsome profits as long as new money keeps arriving, as in the adage: robbing Peter to pay Paul. Of course the problem is that the scheme eventually runs out of steam and as it unravels it leaves the investors at the tail-end of the cycle holding the bag. This particular one had an apparent run over decades with losses to the tune of $50 billion. Many investors were large institutions such as banks and municipalities with fiduciary responsibilities to average folks. Most likely this will become another bailout liability for the taxpayers. Of course Ponzi schemes are not just the domain of the greedy individuals. The subprime mortgage was another example of a Ponzi scheme perpetrated with the approval, and even encouragement, of the government wishing to expand homeownership at any cost. But it even goes further than that. The Social Security and Medicare programs are also Ponzi schemes of sorts. These entitlement programs are funded with the potential earnings of future generations. The U.S. government's irresponsible borrow-and-spend cycles are also garden variety Ponzi schemes with the investors generally consisting of foreign governments. One could argue that the borrowing cycles are not so nefarious as the investor countries are well aware of the risks and they are even in some form complicit in the scheme, since they are also beneficiaries of this vicious cycle. But what will happen when the interest payment liability on the IOU's finally outstrips the government's revenues and China stops buying up more debt to protect itself? Hint: financial calamity on a global scale that makes the current crisis but a pleasant memory. ponzi schemes,madoff,social security,china,treasuries,financial crisis Labels: financial <Ponzi Schemes> // posted by rh 0 comments Tuesday, December 02, 2008 GE, FDIC, and TLGP  For years the standard FDIC (Federal Deposit Insurance Corporation) protection for single accounts had been $100,000. This mostly covered bank accounts such as savings, checking, or CD (Certificate of Deposit) with FDIC member banks. With the recent global financial meltdown, the government sought to stanch the erosion of confidence in the banking system and raised that limit to $250,000 on Oct 2008 to continue through 2009. The FDIC coverage however does not extend to other types of accounts such as money market or corporate debts. To alleviate the frozen credit market and jumpstart the flow of money in the economy, the government recently introduced the Temporary Liquidity Guarantee Program (TLGP) rule which provides unlimited coverage to certain types of unsecured notes. It possibly guarantees certain types of corporate deposit accounts which act much like savings accounts but have not generally benefited from FDIC coverage. The problem is that the rules are apparently so complex and so fluid that even seasoned people running these firms aren't sure whether the deposits are covered or not, as evident below. The screen capture was taken today from the GE Interest Plus site which offers interest-bearing accounts to the public. These accounts are really investments in GE Capital notes, and for now the company's position is that the deposits may not be insured by FDIC. So, for the time being, the depositors' only assurance is the top ratings issued by the rating companies, S&P and Moody's and GE's own reputation. Given the poor track record of the rating companies who were at least tangentially complicit in the recent meltdown, and GE's own financial woes with its stock price hovering near 16-year lows, that's hardly any assurance. Disclosure: I am a previous GE employee and hold GE shares in my 401(k) account. fdic,ge,general electric,tlgp,federal reserve,banks Labels: financial <GE, FDIC, and TLGP> // posted by rh 0 comments Sunday, November 23, 2008 News Robot Incompetence  I am a fan of Google Finance. There's a lot to like. Real-time stock quotes, nice charts and graphs and a clean design. But when it comes to breaking financial news, Google just doesn't cut it. Many sites use bots to collect and disseminate news, but in the rapidly changing financial world a news bot is all but useless. Take a look at the snapshot below taken last Thursday from Google Finance's homepage. The image has been tightened up to show the interesting elements. The headline and subordinate stories shouted losses in the stock market, while the real-time numbers and chart showed considerable market gains. This contradiction was brought to you courtesy of Google's news bots. By the time the headlines came online, the stories were no longer relevant. Of course, the stock market (specially in volatile times) is a rapidly moving target, making it difficult for an even experienced editor to keep up, let alone a soulless bot who can't care less about market timeliness, or which stories may matter more to the readers. So for now, Google Finance is fine for stock quotes and charts, but for timely news its bots have a long way to go to catch up with the biological machines known as the editorial staff. google,news,google finance,market data,stock market Labels: financial, web <News Robot Incompetence> // posted by rh 0 comments Monday, July 07, 2008 The ANWR Oil Debate  Lately I've seen a number of Web sites and emails exhorting Americans to press their government to explore for oil in a parcel of land in ANWR, the Arctic National Wildlife Refuge in the northeast corner of Alaska. The ANWR debate is nothing new and it was a hot topic back in the 1970's oil crisis. Proponents argue that this location may hold vast deposits of oil which could bring relief to the current shortages of oil and thus tame the high prices in the US and the rest of the world. Opponents include the natives and environmentalists who fear that such exploration and subsequent drilling could endanger this natural setting robbing it and its inhabitants (humans and animals) of its ecological diversity and wealth. I am not sure which side of the debate holds the better argument. Personally I don't like to see natural settings overrun by industrial concerns, i.e. the oil companies. What I do know is that Exxon-Mobil's earnings topped $40 billion in 2007 and surely they will easily exceed that figure this year. As people learn of these outlandish profits by the big oil while their savings are being squeezed, there is bound to be some backlash. That has manifested itself in the form of calls for special taxes on oil companies. Couple that with the inevitable emergence of fuel economics and alternative energy and it's not hard to guess that oil companies are worried about their prospects. To me, these pro- oil exploration campaigns are not about alleviating oil shortages, but more about distracting the public from the abuses of the oil companies. Many go even further to shift the spotlight away from the big oil and cast it on the liberals, democrats, or Arabs in a shameless effort to create public sympathy and support for the oil companies. One wonders who the real authors are. Oil companies already have millions of acres of land they can start exploring, but that's not enough. ANWR may hold large reserves of oil, but this campaign smells more like a land-grab and less like a sincere effort to help calm the oil crunch. Blaring their propaganda machine in times of panic and despair is always a good way to assure power and profits. Review history and see how dictators and tyrants have come to power. Their reigns have almost always preceded by periods of unrest and panic when people are at their most vulnerable and can be easily deceived by empty promises and blustering rants. Once they tap into the herd mentality, they are assured of their golden positions. I want a way out of this oil mess too, but not enough to sell out this country to oil thugs. They're beyond rich enough already. oil,anwr,alaska,oil companies,exxon Labels: environment, financial, politics <The ANWR Oil Debate> // posted by rh 2 comments Monday, June 02, 2008 The Inverted CD Yields  I was checking ING DIRECT's CD (Certificates of Deposit) rates today and wondered how long will they continue to be inverted. A 6-month CD currently has an APY of 3.3%, while that of a 4-year CD stands at 2.5%. What I would really like to see is a normal curve, where the longer the CD term, the higher its yield. Bank yields generally follow the economy and when you see this type of anomaly, one interpretation is that there's more uncertainty with the short-term economic outlook than that of the long-term. Another way to put it, there is more perceived risk in the short-term and hence the investment rewards are higher. So what is the person with a long-term goal to do? My approach is not lock in my money for such a long time when shorter rates pay nearly a full percentage more. That can amount to quite a bit of interest. Sure, there's always the risk of buyer's remorse if the rates headed lower, but to me eschewing the long-term, low-yield CD is a calculated risk. I would opt for a short-term, higher-yielding CD and keep rolling it over until the longer-term CD rates become more favorable. In fact, it may make sense to completely bypass CD's for a savings account with a decent rate. ING DIRECT's savings account currently has a 3% APY, and the funds remain completely liquid with no early withdrawal penalties. If and when CD rates become more enticing, one can quickly kick some money from the savings account into a CD. savings accounts,banks,cd,apy,apr,yields,interest rates Labels: financial, money <The Inverted CD Yields> // posted by rh 1 comments Tuesday, April 22, 2008 Yahoo Beats, Microsoft Next  As I had expected, Yahoo reported good earnings, but nothing spectacular. The stock has received a slight dent in after-hours, most likely the effect of selling into the good news. Chances are, barring any big news, it'll stay relatively flat tomorrow. The question still is whether Yahoo can maintain the earnings going forward. I believe most people don't have much faith in that. One quarter is hardly an indication of a trend. The bigger question, however, is the status of Microsoft's offer. A better indication might arrive on Thursday when Microsoft reports its own quarterly earnings. Even with Vista's slow uptake, my feeling is that it will show healthy earnings. Microsoft has a long history of under-promising and over-delivering on earnings. The weak dollar will probably help its bottom-line considerably as well. Many U.S. companies have gotten a boost from the weak dollar, offsetting their weaker domestic intake with higher overseas revenues. While many believe that Microsoft's acquisition of Yahoo is inevitable, there is still plenty of twists and turns left in this saga, including piercing the defenses of some heavy-weights such as Google, News Corp., and Time Warner, who would want to see this takeover derailed. microsoft,yahoo,google,earnings,weak dollar,vista Labels: financial, google, Microsoft, yahoo <Yahoo Beats, Microsoft Next> // posted by rh 0 comments Sunday, March 02, 2008 TaxAct Bests TurboTax and TaxCut  Evil or not, paying the IRS (U.S. Internal Revenue Service) is just a part of life. With the April 15th deadline rapidly approaching I decided to file a little earlier and get the drudgery out of the way, especially since there was a refund to be claimed. Why leave that on the table too long? The package I used this year was TaxAct, and I'm confident I'll be using it again next year. Years ago when I was single, had no assets, made a paltry salary, and my home state (Connecticut) was income tax-free, paper forms served the IRS filing just fine. I think the whole process took less than an hour for me. Made a photocopy, licked a stamp and off it went. A couple of weeks after came the meager refund and the process was over. As life and finances became inevitably more complicated, and tax preparation software packages gained traction, I switched to TurboTax (from Intuit) and was a satisfied customer for a number of years. Then came 2003 and Intuit's spyware fiasco when under the guise of DRM (Digital Rights Management) they bundled an elusive spyware with TurboTax. Thankfully, the spyware was widely reported before I purchased the product, and TurboTax lost my trust forever. That year, TaxCut (from H&R Block) probably saw a surge in their market share and I also ended up as one of their happy customer. TaxCut had the same quality as TurboTax. What I also liked about TaxCut was the ability to prepare my entire tax return before I was asked for payment before printing or e-filing. There was also a full rebate to e-file the tax return which made the product even more enticing. But then TaxCut decided to commit the cardinal sin of charging upfront for the product. This year when I received my TaxCut CD and popped it into the drive, I was accosted by the payment demand before I could run the program. While considering forking over the money, I saw an online ad for TaxAct touting their free tax product and free IRS e-file to boot. I had seen their ads in the past and had wondered about their quality and their honesty, but having nothing to lose I decided to give TaxAct a try this year. I refuse to do my taxes online, so I opted for the download version and went to work. TaxAct surpassed all my expectations for a free product. I dare say it was nearly on par with TurboTax and TaxCut. There was the burden of entering all the personal information (there is no import facility, at least with the free version) and there were a good number of up-selling and cross-selling attempts which could get irritating at times. The help screens were somewhat drab, possibly lifted right out of the IRS publications, and in one instance I had to refer to my last year's TaxCut worksheet to understand a question, but the rest of the process was as smooth as that of the competitive products. The interview questions were relevant and easy to comprehend, there were real-time calculations, error-checking was a breeze and the IRS e-file went without a hitch. The only true limitation was the disabled print-to-PDF option (available with the paid versions). But even that wasn't much of a limitation since I already had a PDF printer driver, so I generated PDF copies of my tax return by printing to that device. As for filing the state tax return, TaxAct offers a paid upgrade version of their product to handle that. But these days most states have web-filing available, and the process is much simpler than the federal return. For most people their state tax is a figure based on their AGI (Adjusted Gross Income) save a couple of deductions. One hardly needs a tax software product for that. If you believe that software should be free, but have had misgivings about free tax preparations products, give TaxAct a try. They made a believer out of me, free and high-quality. And if they had a donation option, I would have definitely kicked a few bucks their way. taxact,turbotax,taxcut,irs,income tax,taxes,tax refund,tax software,agi,tax return Labels: financial, tax <TaxAct Bests TurboTax and TaxCut> // posted by rh 2 comments Wednesday, July 18, 2007 Answers Buys Dictionary  I guess you can call this another case of over-inflated pricing for domain names. Answers.com has agreed to acquire Lexico, the parent of dictionary.com, thesaurus.com, and reference.com for $100 million. Answers.com's market cap is currently below $100 million, and I doubt there's much cash in the bank for this acquisition, so I assume there's third party financing involved. Well, I just read that they'll be raising the cash by offering a variety of securities like floating more shares, bonds and warrants. At first strike, it may seem like an expensive domain play. Those are indeed nice names to have in one's portfolio, but there is more to these domains than just their names. They do attract plenty of eyeballs. I myself use dictionary.com often. My choice of online dictionary used to be m-w.com (Merriam-Webster), but I switched when dictionary.com revamped their site and made it a lot more usable and comprehensive. The price seems a bit steep, but it's a calculated gamble. It has success potential, but it'll probably a long-term one. My only gripe with dictionary.com is the incessant advert pop-unders and their trickery to circumvent the browser pop-up blockers. It would send a great signal if answers.com started the new relationship by getting rid of the annoying pop-ups and go with a more civilized format. How effective can pop-ups possibly be these days, anyways? answers.com,dictionary.com,lexico,acquisition Labels: financial <Answers Buys Dictionary> // posted by rh 0 comments

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