Diurnal Journal - On Occasion

Salve Gaius To answer your question directly:No I do not. Only the most cynical and untrusting individual would think so because, they would have to believe in conspiracies. No offence is intended to anyone who might visit here and disagree.You can expand all you want on that subject which would be worthwhile, and I'm sure it's interesting to the "initiated", but sometimes we are too deep in suspicions (my answer above). Of course that makes the subject more interesting; it's a form of "passion". I share the passion but as a long time player competing in the economy, and someone who struggled through some years that without doubt were affected by the selection of a Fed Chief, I'm slightly more sanguine. I've been alert to the Fed since my early days. I remember all the fed chiefs. My first when I was in business was Wm McChesney Martin, followed by Arthur Burns. I remember the awful years under G. William Miller (to my point above), and then our hero Paul Volker. I used to follow the Fed chiefs closer than Roman emperors, and I know the Roman emperors better than I know US presidents. My big concern in the late 60's, when I came "awake" to what you like to call "Fiat" money was that I thought too much money was creating inflation. I thought it was a trade off, for having enough money to do what I wanted to do.I'm not sure I even think I know what should be done right now. I've recently thought they are cutting rates too fast. The psychological effect here in my location is that people are standing by for lower rates on mortgages, which aren't directly in tandem with fed rates. So if the first cut was needed then all this needs to be over with as soon as possible. They could get too low, and then what? How does one

In a free market economy the government's job is to punish fraud and violations of property and individual rights. I understand this has to do with how fraud and rights are defined, but I'd say that Gould's actions were certainly fraudulent. However, if the government's role extends deeply into the market, then the potential for corruption runs just as deep.

In a free market economy the government's job is to punish fraud and violations of property and individual rights. I understand this has to do with how fraud and rights are defined, but I'd say that Gould's actions were certainly fraudulent.

 

Do you think that it could happen today? (Of course you know that I am waiting in ambush.)

In a free market economy the government's job is to punish fraud and violations of property and individual rights. I understand this has to do with how fraud and rights are defined, but I'd say that Gould's actions were certainly fraudulent. However, if the government's role extends deeply into the market, then the potential for corruption runs just as deep.

 

That's an interesting comment Moonlapse. Where are you going with that?

Do you think that it could happen today? (Of course you know that I am waiting in ambush.)

I'm sure that sort of thing can happen, but I don't know the current specific limitations on the creation of shares. I'm not quite into that topic yet. You can't prevent people from finding new ways to commit fraud so anything can happen, what matters is the consequences.

 

That's an interesting comment Moonlapse. Where are you going with that?

What I mean is, when you centralize the control of anything, then that centralized control becomes a handle and anyone that can get a hold of that handle, by whatever means, has the control. For instance, the FDA provides a convenient handle for pharmaceutical corporations, its just a matter of finding a way to get a hold of it.

Stock Options. Top management manages to churn them out to themselves as if they were toilet paper. Give themselves a good price, and even back date them when necessary. As they pump the options out, the company (via the efforts of top management) has share 'buy backs'. I've never seen a company statement, where a share buy back occurred during the year, that showed fewer shares outstanding at the end of the year than at the beginning. I don't believe that a loss shows up on the books, (at least I can't find one), when the options are executed, but the original shareholders' equity is diluted. Now if the company wanted to be honest with the shareholders, they would go to the 'free' market; buy the shares (Treasury Shares); and then pass them out at bargain basement prices. But, then the loss would show up on the books. (Maybe!) Or, they could pay out the 'excess' cash as dividends.

 

These alleged 'returns' on shares of 10-50+ percent a year are baloney. You can only get these returns if you sell your stock. Why would I want to sell stock in a winner? I'm in 'business' for an actual return, i.e., dividends.

 

Well, I got that off of my chest. Guess that I am giving good reason to buy gold - with the 'tax refund'.

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I agree that corporations have a great tendency to run their regulators. The revolving door.

As far as I understand, the only stock investments worth having are those that pay cash dividends. Thoughts?

In my opinion, there should be a steady growth in both value and dividends. That's what 'we' pay managers for. Citigroup can't run a bank, so who asked the managers to have 'off balance sheet' items, or an insurance company? Microsoft needs Yahoo vs paying a few paltry pennies in dividends? Motorola now has to sell or spin off its cell phone business.?! G.E. seems to be the only one that succeeds in a melange of businesses, but its value and dividends go no where.

 

We own these businesses for income and not to have to sell them to realize income. Traders make markets; investors are supposed to earn income.

 

Options for management rule. Ever hear of managers having to return their bonuses for failure? Remember Hacksaw Al @ Sunbeam?

 

I don't like 'mega' corps; they seldom succeed.

 

Moon, we are as one on this.

As far as I understand, the only stock investments worth having are those that pay cash dividends. Thoughts?

 

Once upon a time there was a bank named 'State Bank of Albany'. It paid a 2% stock dividend each year, and an increasing cash dividend each year. That was my kind of investment. Alas, it was sold off to Fleet which in turn was taken over by the alleged Bank of America. Need I say more?

As far as I understand, the only stock investments worth having are those that pay cash dividends. Thoughts?

 

Once upon a time there was a bank named 'State Bank of Albany'. It paid a 2% stock dividend each year, and an increasing cash dividend each year. That was my kind of investment. Alas, it was sold off to Fleet which in turn was taken over by the alleged Bank of America. Need I say more?

 

Here's something we can agree on Moonlapse.

In 1971 my "better half" worked at GE and put about $15.00/week in a payroll savings account for about 24 weeks, amounting to $360, leaving to become a self-employed realtor.

We allowed those dividends to be reinvested, and they all were, until the U.S. Governmentt interrupted a part of that re-investment growth with so called "back up witholding" in about 1990. The "BUW" wasn't much but neither was the dividend. At the present time we would have about 800 shares and still growing, if we hadn't sold 200 shares last year when it was at $37.50 knocking the shares down to about 600.

 

When the stock is down (like right now) our dividends buy more shares. When the stock price is up we should sell but haven't. Seven years back the price was about $60 per share. Right now it's at $36. When I sold some in (200 shares) April 15 of 07, the price was at a high ($37.50) and you can probably guess why I sold in April.

 

Funny thing: my definitely "better half" said - "Sell now!" when the stock was at $60 (about Jan 01) I said no, no, we have no basis, and there's going to be a change in capital gains law, . I was too smart by half (we had to wait 2 years for that 'cut', by which time. . .well, you know the rest).

Look at how many times government policy has interfered in our good fortune.

 

Today I would only look at buying a stock that paid dividends. That was one of the main positive parts of the President's (you know: Boosh?) tax cutting (CLICK) plan of 2003.

 

Still, look at that amazing growth of a tiny investment. Three hundred bucks was about two weeks earnings for 'this investor

Stock Options. Top management manages to churn them out to themselves as if they were toilet paper. Give themselves a good price, and even back date them when necessary. As they pump the options out, the company (via the efforts of top management) has share 'buy backs'. I've never seen a company statement, where a share buy back occurred during the year, that showed fewer shares outstanding at the end of the year than at the beginning. I don't believe that a loss shows up on the books, (at least I can't find one), when the options are executed, but the original shareholders' equity is diluted. Now if the company wanted to be honest with the shareholders, they would go to the 'free' market; buy the shares (Treasury Shares); and then pass them out at bargain basement prices. But, then the loss would show up on the books. (Maybe!) Or, they could pay out the 'excess' cash as dividends. These alleged 'returns' on shares of 10-50+ percent a year are baloney. You can only get these returns if you sell your stock. Why would I want to sell stock in a winner? I'm in 'business' for an actual return, i.e., dividends.Well, I got that off of my chest. Guess that I am giving good reason to buy gold - with the 'tax refund'.------------------------------------------I agree that corporations have a great tendency to run their regulators. The revolving door.

Gaius, Do we need to be reminded here the reasons Stock Options were introduced in the first place? Wasn't that because politicians attempted to limit income levels to CEO's by limiting deductibility? Then the problem of CEO income rose to an entirely new level to side step the new limits imposed. It seems to almost be a contest. In this country the top career paths are Politics and Corporate Business. They will continue to out do each other while we stand by getting clobbered.Before the "Options" were introduced there was a lot more "transparency" We could punish those corporations by selling their stock and buying those we more approved of.Quidnunc?Faustus

'Attempted' or 'did'? Do you mean Travel & Entertainment? Giving CEO's castles to live in? Air Planes? $5,000 shower curtains? Club dues? Covering weddings and parties? In any event, what does that have to do with stealing from a company? Back dated options? Hedge fund managers having their salaries taxed at long term capital gain rates?

 

Again, Warren Buffett has offered any CEO $1,000,000, if he can show that his tax rate is more than his secretary's.

'Attempted' or 'did'? Do you mean Travel & Entertainment? Giving CEO's castles to live in? Air Planes? $5,000 shower curtains? Club dues? Covering weddings and parties? In any event, what does that have to do with stealing from a company? Back dated options? Hedge fund managers having their salaries taxed at long term capital gain rates?

Again, Warren Buffett has offered any CEO $1,000,000, if he can show that his tax rate is more than his secretary's.

Exactly right, attempted. The lawmakers should've known that by limiting deductibility of salaries to corporations, the corporations would design ways of circumventing those limits by other methods.

$5,000 shower curtains? Club dues? Covering weddings and parties? In any event, what does that have to do with stealing from a company? Back dated options? Hedge fund managers having their salaries taxed at long term capital gain rates?

What it has to do with those things is, the money was channeled through other routes to obtain not only deductibility but tax free status to the recipient. Does it make me angry? In a way it does. But I feel as much anger for the corruption these politicians engendered as I do against the corporates. (We can do something about the corporates, but we can