Thursday, August 13, 2009

The Miracle of the Bush Economy, cont.

Whoopsie! Unemployment claims rose sharply last week and retail sales continue to suck because no one has jobs anymore. The Labor Department says initial claims increased to a seasonally adjusted 558,000, from 554,000 the previous week. Analysts expected new claims to drop to 545,000, according to Thomson Reuters.

There is really no positive spin to put on these numbers. The U.S. consumer remains very weak. The jobs situation, while slowly improving, is still dismal.

– Jennifer Lee, an economist with BMO Capital Markets
Households are in no position to drive a decent economic recovery.

– Paul Dales, U.S. economist at Capital Economics

Warren Buffett, Value Investing Guru

Some thoughts on investing in stocks that are undervalued.

Have you heard of value investing? According to Wikipedia, it involves buying securities whose shares appear underpriced by some form of fundamental analysis. Technically speaking, you’ll find such stocks in this category as trading at discounts to their book value, and may at the same time present with high dividend yields, low PE multiples and low price-to-book ratios.

The “value” designation is something that applies to a stock in a temporal manner. What I mean is that those stocks that are considered as “value” stocks at some point in time, may not be this way forever. On the flipside, those equities that may have been considered momentum or growth stocks may one day turn into value stocks when they begin presenting with characteristics that define true value.

An astute equity investor may recognize value stocks as undervalued compared to the rest of the market and look to invest in to them in some way. When the stock market winds shift, it may take down some stocks: that’s exactly what’s happened with certain investments that have been pounded heavily lately. There may be high flying shares that are now taking on a value flavor after experiencing a convincing price tumble. When such an opportunity strikes, value investors are around to sniff out the deals: their goal is to find stocks that are functioning at a much higher level than their peers, which people aren’t noticing. That’s exactly what Warren Buffett has done to become a billionaire.

Warren Buffett, Value Investing Guru

Every investor has heard of Warren Buffett, considered to be one of the world’s richest men whose made a mint from value investing. He is at the helm of Berkshire Hathaway, a holding company that has grown tremendously and on a consistent basis over the last 4 decades. While this company has done well over the long term, its shares have seen it’s own share of volatility. And while still considered by most to be the authority on value investing, Warren Buffett has come under attack lately for his buy and hold approach to investing.

Buffett has crafted his investing strategy around this premise. He’s a buy and hold investor. Now due to recent circumstances in the financial world, many now believe that buy and hold is dead, and because of such beliefs, Mr. Buffett has come under fire. In the past, when asked how long he could theoretically hold on to a stock, he’s answered, “sometimes forever.” Buffett would never cash out after short gains and would clearly avoid riding short term trends. Peaks and valleys in the market don’t interest him because his growth strategy spans decades.

Here’s some practical investment advice: Warren Buffett says that the best value investors will look for value when everybody is fearful. The best value can be found when others aren’t looking in that direction. Or as CNBC’s David Faber has said so many times, “before you know it, the worst becomes first.” What was performing the worst could later turn out to be a top performer; and if you happen to invest in a company that happens to be at its worst or lowest point, there is that chance that you’ll make some good money when it recovers.

It’s hard to argue with success. Mr. Buffett is a billionaire. When he buys stocks, the entire market moves and when he gives his opinion, the world listens. He’s still criticized for his “outdated” ideas but do you know who stops what they are doing to listen to him? His critics.

In conclusion: if you’re going to develop an investment plan, it’s wise to include value oriented equities in your portfolio — don’t ignore such assets in favor of the sexier, high flying momentum and growth stocks. By diversifying not just across asset classes (stocks, bonds, cash, real estate), but also according to various other factors such as market geography (domestic vs foreign securities) or investment philosophy (growth vs value stocks), you’ll be able to spread the risk around in your holdings.

JetBlue's $599 air pass is a deal if you live aboard planes

JetBlue's latest idea seems on first glance like it might have wings: An unlimited "All-You-Can-Jet" air pass, good from Sept. 8 to Oct. 8, that grants unlimited flying for $599.

The pass is pretty simple, as passes go. If there's an available seat, you can take it as long as you book by phone. Passes are on sale until Aug. 21, and if they're popular, they could sell out.

But considering how cheap seats already are at this time of year, you'd have to spend a huge amount of time in the air to make it pay off. You really would have to "jet-all-you-can" in order to make it work.

Essentially, you'd have to travel at least once a week for the month the pass is valid. And even then, you'd have to fly on some of the carrier's longer flights, and not its shorter ones, which are cheaper.

SmartMoney points out that to make the pass pay for itself, you'd have to fly round-trip from New York City to Boston, Chicago, and Denver -- all within a month. So the deal is much better for business travelers than for casual leisure travelers, and even then, only for business travelers who are always on the go.

Reaction from travel journalists has been tepid at best. USA Today reports one industry analyst as saying, it's just another way of having a sale without calling it one.

As further proof that sales are anemic in this late summer season, JetBlue is also trying to pump up late-summer sales by offering triple miles to its frequent flier members.

Although the idea of an air pass is an exciting one that makes for sexy headlines, in practice the prices have to be much lower for it to be a true steal.

N.Y. Times Editorial Urges Authorities to Keep Digging into U.S. Atty. Firings

By The New York Times
Editorial Page

Documents released by Congress, including testimony from Karl Rove, offer powerful new evidence that the Bush administration fired top prosecutors who refused to use their offices to promote the electoral fortunes of Republicans.

Turning law enforcement into a tool of partisan politics is a serious offense, and a Justice Department investigation is under way. Congress must also continue its investigation and call Mr. Rove and others to testify publicly so the American people can hear for themselves how the justice system was hijacked.

The materials released on Tuesday paint an ugly picture of fair-minded prosecutors under siege by the White House for refusing to politicize their offices. And it puts Mr. Rove, former President George W. Bush’s chief political operative, at the center of it.

Philly Prosecutors Files Papers to Try and Get Big-Time Politician Vincent Fumo More Prison Time

If ever there was a sentence that irked the Philly feds in recent times, this is it. Prosecutors and agents alike were appalled by what they considered a lenient sentence. They want this big-time politician who was well known as a shakedown artist, to serve more time.

Ex-Sen. Vincent Fumo
By Emilie Lounsberry

PHILADELPHIA — Federal prosecutors took a first step yesterday toward appealing the 55-month prison sentence given to former State Sen. Vincent J. Fumo, who is scheduled to report to prison this month.

In a one-sentence court filing, Assistant U.S. Attorneys Robert A. Zauzmer and John J. Pease submitted a “notice of appeal” of the sentence imposed last month by U.S. District Judge Ronald L. Buckwalter.

The prosecutors had sought a prison sentence of more than 15 years.

They already have called the prison term “unduly lenient” and said the sentence, which triggered widespread public criticism, had done “grave damage to the public’s respect for the law and expectation of justice.”

Actor Michael Douglas’ Son Messes Up Again After DEA Bust

Actor Michael Douglas’ son Cameron, who was busted last month by the DEA on charges of drug trafficking, has messed up again.

The New York Post, attributing reports to law enforcement sources, said that Cameron Douglas, 30, who was under house arrest, was taken on Wednesday “from his posh pad that belongs to his mom, Diandra Douglas, and brought to the Metropolitan Correctional Center” in New York after his girlfriend was busted for bringing him an electric toothbrush stuffed with 19 tiny bags of heroin in the battery compartment.

Wire service reports said that the DEA arrrested the girlfriend Kelly Sott and found heroin, crystal meth and marijuana in her room.

A federal magistrate ordered that she be held without bail and get treatment for heroin addiction.

The New York Post reported that Michael Douglas issued a statement saying “the family is devastated and very disappointed.”

Court records show his criminal complaint remains under seal.

Documents Says ex-U.S. Atty Christie Was Bush Loyalist; Could Hurt in His Race for N.J. Gov

These days with the economy still in the dump, with the Justice Department still smarting from the mass U.S. Attorney firings during the Bush era, being a Bush loyalist isn’t something you want on your resume — particularly when your running for governor in a blue state.

Christopher Christie
By Claire Heininger and Josh Margolin
Newark Star-Ledger
TRENTON – As early as 2005, the Bush Administration was ranking federal prosecutors by their allegiance to the president as well as their job skills — and then-U.S. attorney Chris Christie was considered one of most loyal, according to newly released documents.

That determination, Democrats say, further cements the political ties between Christie, now the Republican candidate for governor, and former President George W. Bush, an unpopular figure in New Jersey.

The ranking — disclosed for the first time this week as part of a Congressional investigation into the controversial firings of U.S. attorneys in 2006 — places Christie among prosecutors who “produced, managed well and exhibited loyalty to the President and Attorney General.”

Pitino Apologizes, Once Again Invokes 9/11

Rick Pitino's brother-in-law was a trader at Cantor Fitzgerald, and he died on 9/11 along with 3,000 other people, and now his and their memory is being invoked by a guy who, at best, is a floor-rutting womanizer.

Pitino apologized to his family, his players, his recruits, other families, the university, even sportswriters for "that indiscretion six years ago," which he then, somehow, related to that one really big indiscretion eight years ago:

When 9/11 hit, you needed a community to get you over it. In New York City, it was easy because everybody knew the devastation of that and they got each other over it. In Louisville, the impact wasn't felt like New York City, but I needed this community to help me get over it.

Pitino's gone this route before. In June, he obliquely addressed the Karen Sypher case, saying:

Times aren't easy, but if I can get through 9/11, I can get through anything in my life. And I got through 9/11 and there's nothing ever going to come close to that. We'll get through this in a positive way and move on.

Look, 9/11 was a national tragedy with profound personal dimensions for a lot of people, but the great majority of them have had the good sense not to wear it like a perpetual crown of thorns. Yes, Rick, please move on.

Donte' Stallworth Suspended For One Year

Roger Goodell dropped a very big hammer on Donte' Stallworth, suspending him without pay for the entire 2009 season. Goodell said: "Without regard to the merits of the disposition of the criminal case, I believe that further consequences are necessary."

This is the second time since Goodell instituted his new "Personal Conduct Policy" back in 2007, that the league has suspended a player for an entire season over a non-football issue. (Adam "Pacman" Jones got the first one.) He can be re-instated after the Super Bowl.

Many critics have complained about the leniency of Stallworth's legal punishment for DUI manslaughter in Florida, but now it's much harder for anyone to say that he got off "easy."

Figures. Former Clinton Aide Smuggled Knife & Tatoo Needles Into Prison

Weird. Another Clinton official was busted this week.
This former aide was trying to smuggle a knife and tatoo needles into prison in a Doritos bag.
The Daily News reported:

A former top aide to Bill Clinton when he was Arkansas governor was charged Wednesday with trying to smuggle a knife and 48 tattoo needles stashed in a bag of Doritos onto the state's death row.

Betsy Wright, 66, a vocal death penalty opponent, was detained May 22, prison officials said.

It was unclear why she allegedly carried the items into the prison.

Wright denied the charges, but admitted bringing in the Doritos, which she claimed she found in the bottom of a prison vending machine.

Wright served as Clinton's chief of staff and during his 1992 presidential campaign.
Nine years after they left the White House their lackeys are still getting busted.
The Clintons certainly did put together an impressive record:

* Number close to the Clinton machine who have been convicted of or pleaded guilty to crimes: 44
* Number of convictions during his administration: 33
* Number of indictments/misdemeanor charges: 61
* Number of imprisonments: 14
* Number of presidential impeachments: 1
* Number of independent counsel investigations: 7
* Number of congressional witnesses pleading the 5th Amendment: 72
* Number of witnesses fleeing the country to avoid testifying: 17
* Number of foreign witnesses who have declined interviews by investigative bodies: 19

The Clinton machine now holds the record for the administration with:

* The most number of convictions and guilty pleas
* The most number of cabinet members to come under criminal investigation
* The most number of witnesses to flee the country or refuse to testify
* The most number of key witnesses to die suddenly
* The greatest amount of illegal campaign contributions
* The greatest amount of illegal campaign contributions from abroad.

Outside A Town Hall In Maryland: “Death To Obama…And His Kids”

by Doug Mataconis @ 2:29 pm on August 13, 2009.
Another nut outside another Congressional town hall:

Authorities in Hagerstown say they turned over to the Secret Service a man who was holding a sign reading “Death to Obama” outside a town hall meeting on health care reform.

Washington County Sheriff’s Capt. Peter Lazich says the sign also read, “Death to Michelle and her two stupid kids.”

He says U.S. Secret Service agents took the unidentified 51-year-old man into custody Wednesday afternoon after deputies detained him.

This man isn’t reflective of everyone out there, of course, but I can’t help but wonder if the incendiary rhetoric, the lies about death panels, and the claims about imminent imposition of martial law aren’t encouraging some truly bad people to think about doing some truly bad things.

Here’s video of the town hall itself:

Whole Foods comes out against health care reform, calls it "socialism"

The CEO of Whole Foods, John Mackey, just penned an opinion piece in the Wall Street Journal. It sounds like something written by Dick Armey with the help of Sarah Palin and the teabag brigade. I am absolutely shocked. Joe, an avid Whole Foods shopper, up until this morning, is absolutely devastated.

Read this opinion piece. It's not just someone who disagrees with President Obama about the details of health care reform. It reads like someone who is a conservative Republican activist. I'd highly suggest you share this article with your progressive friends who, like Joe and me, have for far too long been under the mistaken assumption that Whole Foods was a "good" company. Apparently they're one of the worst out there. Not just agnostic on doing good, but affirmatively trying to stop good from happening.

When you go to Whole Foods you are bankrolling the conservative Republican effort to kill health care reform and to label Democratic presidents and Democratic values "socialist." The CEO of Whole Foods thinks you're a socialist. It's time to stop giving him your money.

Whole Foods' co-founder and CEO opens the piece by quoting Margaret Thatcher, in an effort, apparently, to label President Obama's health care plan as "socialism:

"The problem with socialism is that eventually you run out
of other people's money."

—Margaret Thatcher

Then, Mackey implicitly criticizes the stimulus bill (by harping on the deficit), calls health care reform "an entitlement," and suggests that health care reform would be some kind of "government takeover" - all GOP talking points:
With a projected $1.8 trillion deficit for 2009, several trillions more in deficits projected over the next decade, and with both Medicare and Social Security entitlement spending about to ratchet up several notches over the next 15 years as Baby Boomers become eligible for both, we are rapidly running out of other people's money. These deficits are simply not sustainable. They are either going to result in unprecedented new taxes and inflation, or they will bankrupt us.

While we clearly need health-care reform, the last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system. Instead, we should be trying to achieve reforms by moving in the opposite direction—toward less government control and more individual empowerment. Here are eight reforms that would greatly lower the cost of health care for everyone...
Like a good teabagger, he's accusing Canada and the UK, and I guess France and every other "socialized" country of "rationing":

Even in countries like Canada and the U.K., there is no intrinsic right to health care. Rather, citizens in these countries are told by government bureaucrats what health-care treatments they are eligible to receive and when they can receive them. All countries with socialized medicine ration health care by forcing their citizens to wait in lines to receive scarce treatments.

Oh dear God. He's actually arguing that most diseases and health care problems wouldn't happen if we all simply ate our vegetables:

Recent scientific and medical evidence shows that a diet consisting of foods that are plant-based, nutrient dense and low-fat will help prevent and often reverse most degenerative diseases that kill us and are expensive to treat. We should be able to live largely disease-free lives until we are well into our 90s and even past 100 years of age.

John Edwards Fathered Rielle Hunter's Baby, National Enquirer Reports

A DNA test proves that John Edwards fathered the daughter of his former mistress, Rielle Hunter, according to a report by the National Enquirer. Edwards, the former senator and presidential candidate, has denied that he is the baby's father; his wife Elizabeth has said she doesn't know the girl's paternity.

The National Enquirer, which broke the original story about the extramarital affair between Edwards and Hunter, cited "multiple sources" in reporting that Edward took a secret DNA test to establish paternity of 18-month-old Frances.

The Enquirer quotes a close friend of Hunter's: "Rielle had no choice but to demand John take a DNA test. She was worried about getting long-term financial support for her daughter. So she hired an attorney, and John consented to undergo a secret swab test to establish paternity."

"There was no surprise," said the friend, according to the Enquirer. "The results of the DNA test proved John was Frances' daddy."

After receiving the DNA test results, the Enquirer reports that lawyers for Hunter and Edwards are negotiating child support payments for the girl.

Last week, Hunter was seen entering a courthouse in North Carolina and leaving nine hours later. She apparently testified before a federal grand jury, which is investigating whether Edwards broke campaign finance laws by allegedly paying off Hunter and aide Andrew Young, who claimed paternity of the child in 2007. Young reportedly testified last month to the same grand jury.

As I wrote that day, Hunter brought the baby with her to the courthouse. She appeared to me to be deliberately forcing her baby to turn her face toward the waiting TV cameras. At the time, I guessed that she was trying to publicly demonstrate her daughter's physical resemblance to Edwards for the media.

We can only feel sorry for little Frances.

Guitar Icon, Innovator Les Paul Is Dead

Les Paul, the guitarist and inventor who developed the solid-body electric guitar that made rock 'n' roll possible, died on Thursday in New York. He was 94. According to a tribute posted by Gibson Guitar, Paul died of complications from pneumonia at White Plains Hospital. His family and friends were by his side.

Paul's innovations include many of the ingredients of modern sound recording, including overdubbing, tape delay and multitrack recording techniques.

Many will say his crowning achievement was the very electric guitar that bears his name. The Les Paul, by Gibson, remains one of the most beloved and played models on the market, more than 50 years after its debut.

As a recording artist, Paul achieved the bulk of his chart success in the early 1950s alongside his wife, singer and guitarist Mary Ford. The husband-and-wife team scored more than a dozen top-ten hits, including 'Tenessee Waltz' and 'I'm Sitting On Top of the World.'

Execs at Gibson have already weighed in on the company's Web site.

"The world has lost a truly innovative and exceptional human being today. I cannot imagine life without Les Paul ... His musical charm was extraordinary and his techniques unmatched anywhere in the world." -- Henry Juszkiewicz, Chairman and CEO of Gibson Guitar.

"As the 'Father of the Electric Guitar', he was not only one of the world's greatest innovators but a legend who created, inspired and contributed to the success of musicians around the world." -- Dave Berryman, President of Gibson Guitar.

US and British relatives split over release of Lockerbie bomber

Abdelbaset Ali Mohmed al-Megrahi, was sentenced to life for the 1988 Lockerbie bombing. Photograph: PA

A sharp division broke out today between relatives of the victims of the Lockerbie bombing, with American families strongly opposed to the release of Abdelbaset al-Megrahi, the Libyan serving life for the attack.

Many of the British families, deeply suspicious about the official version of events, were sympathetic to Megrahi's return to Libya on compassionate grounds because of his advanced cancer.

Susan Cohen, from New Jersey, whose daughter Theodora was one of 35 Syracuse University students on Pan Am flight 103, which was blown up over Scotland in 1988, said: "Any letting out of Megrahi would be a disgrace. It makes me sick, and if there is a compassionate release then I think that is vile."

She added: "It just shows that the power of oil money counts for more than justice. There have been so many attempts to let him off. It has to do with money and power and giving Gaddafi what he wants. My feelings, as a victim, apparently count for nothing."

Kathleen Flynn, the mother of another American victim, told GMTV she was convinced Megrahi, convicted in 2001, was guilty. "My husband and I went to the trial practically every day for many, many years. We watched all the evidence and there is no question in my mind that this man is guilty."

Some US families argued that Megrahi's release would send a message that terrorism was not taken seriously.

However, Martin Cadman, from Norfolk, whose son Bill was one of the 270 people killed in the disaster, said American relatives convinced of Megrahi's guilt, and sceptical about his illness, should "get real". He added: "I think they should remember that the likely cause of the bombing of Pan Am 103 was the shooting down by an American ship of an Iranian Airbus in 1988."

Pamela Dix, from UK Families Flight 103, whose brother Peter was killed, said she supported an appeal. "Even if [Megrahi] is [responsible] he is only a very small cog in the whole chain. We are still not aware of why the bombing was carried out, who else did it as co-conspirators, and why."

Asked to explain the different responses of the US and UK families, Briton Jim Swire, whose daughter Flora was killed, said the US families had believed everything they heard at the trial n Camp Zeist in the Netherlands and wanted "closure".

Swire believes the trial was flawed, and has pointed to a key piece of evidence of which the trial judges were not aware – a break-in at Pan Am's baggage assembly shed at Heathrow on the morning of the bombing. "It was not investigated. If Heathrow had behaved responsibly, my daughter might still be alive," he said.

He also questions how a bomber could have relied on a timer device which would have had to accompany baggage through three airports: Malta, Frankfurt, and Heathrow. He said he was worried that in return for his freedom Megrahi might be persuaded to sign a document preventing an appeal from going ahead.

While American families say Megrahi's release would be rewarded by lucrative contracts for western companies in oil and gas-rich Libya, British families have explained Gaddafi's agreement to hand over two of his intelligence agents and pay compensation to the families by saying that the Libyan leader wanted to end sanctions and mend fences with the west.

The former Labour MP Tam Dalyell, Swire, and others who question the Camp Zeist verdict, echo what western intelligence agencies, including the British, initially concluded.

For more than a year after the bombing the agencies pointed to the Popular Front for the Liberation of Palestine – General Command, led by Ahmed Jibril. Two months before the Lockerbie disaster German police had arrested members of the PFLP-GC near Frankfurt where, according to the prosecution, the bag containing the bomb was placed on the Pan Am airliner.

The widespread view was that the bombing was funded by Iran in retaliation for the mistaken shooting down of an Iranian airliner by the USS Vincennes, over the Persian Gulf in July 1988. Those who question Libya's involvement note that the US and Britain changed tack after the Gulf war in 1990, when they badly needed the quiescence of Iran and the support of Syria, which was then protecting Jibril.

The trial judges heard that Megrahi placed the bomb in an unaccompanied bag at Malta's Luqa airport, from where it was transferred to the Pan Am plane at Frankfurt. Those who question the verdict point to an earlier Palestinian suspect, Abu Talb, who had also visited Malta. He was later held in Sweden on terrorist charges and initially identified by British officials as a prime suspect.