Other than my family the two things that I love most are numbers and comedy.
I like fried food, too, but now I’m not allowed to eat them, because my numbers are too high.
Sort of ironic. Those numbers I hate.
With so much debate going on about the concentration of wealth in our nation and the unfairness of the tax code, I’m somewhat perplexed that the beautiful objectivity of numbers could be so bastardized.
Living near Washington, DC, I truly understand the beauty of “spin”, but how do you spin a number itself?
Whereas many accept the Bible as the ultimate truth, believing the same about numbers doesn’t violate the first commandment and isn’t really counter to our western belief in monotheism.
In fact, the concept of monotheism couldn’t exist without numbers.
Well, at least one number.
There’s probably no valid reason for me, however, to have such faith in the sanctity of numbers. I should be cynical based on an old Abbott and Costello routine from a few generations ago.
Costello clearly demonstrated that 13 times 7 equalled 28. He also proved that 28 divided by 7 equalled 13.
And for the perfect trifecta (or Troika, as that’s become a popular word in the world of European Finance) 13+13+13+13+13+13+13 = 28
The Gospel of Comedy may trump all other truths.
These days, the numbers are sliced and diced by all sides to demonstrate points about inequities.
Amazing how one side feels that the disenfranchised are being unduly carrying a tax burden, while the other side believes that the disenfranchised are represented by those people that would be effected by the “Buffett Rule”.
“50% of Americans don’t pay taxes”
“The top 1% of earners carry a greater tax burden than ever before”
Both of those sound patently unfair. And there’s no shortage of other factoids being tossed around. Refute one and you’ll be answered with another factoid. Refute that, and so on.
It was 1982 and I was very fortunate when I first started investing, in that the market was beginning to wake uo from a long slumber. Although after what had been referred to as this generation’s “lost decade” in investing, I guess the best investment would have been a 30 year Treasury at 17% back in the late 70’s, or those great MAC bonds that helped rescue New York CIty after Gerald Ford seemed disinclined to help.
See, that’s the beauty of words.
Ford was portrayed as having told New York to “Go to Hell” in the city’s newspapers. That’s spin.
To borrow and butcher Tom Hanks’ line from a Leagiue of their Own”, “There’s no spinning in numbers.”
By the way, there is one other thing that I love, although it’s more of an addiction.
I love anagrams.
Back in 1982 the concept of trickle down economics was widely introduced by Ronald Reagan. You know him, he’s the guy that both sides embrace with a big, wet hug.
The concept sounded great. After all, the wealthy were the benefactors of society. Of course they would take their increased wealth and shower it down upon the masses.
Well, my love of anagrams always led me to the words “age, rage and anger”, whenever I looked at the word “Reagan”.
Of course that just reflects a person who at the time was still young enough to not fall under an earlier generation’s warning to not trust anyone over 30.
There I was in Public Health School, learning all about maldistribution iand inequities, yet I was also a investment class wannabe with a growing fascination with the stock market.
What amazes me is that no one has decided to look at the supposed inequity in a systematic way, by looking at changes at the margins, let’s say, compared to 1980, which ended by ushering in the Reagan era.
My guess is that it actually has already been done, but that without a sexy sound bite, good luck getting popular traction.
Funny thing, but it has already been done by the Congressional Business Office. The non-partisan CBO.
Back in 1980, the top 1% of the population received 9.8% of all income. By 2005, it was up to 18.1% or an 85% increase.
But when it comes to tax paid, the top 1%, and that included me, rose from 15.4 to 27.6%, or a rise of 79%.
In other words, the same tax code that allows most senior citizens on social security to not pay federal income taxes has also significantly trickled up benefits to that top 1%. They made much more money, yet paid much less taxes.
Of course, then the next debate falls to the source of those earnings, specifically capital gains versus earned income.
I also love charity.
But in my case, it’s donating to charity. In that regard, I really have a hard time understanding why the $100 that I donate only really costs me about $60 after considering tax deductions, while Warren Buffet’s secretary ends up being charged $85 for that same contribution.
But that’s another blog. Maybe in that blog I’ll look at the same comparative numbers since 2000. In which case the differences aren’t quite as pronounced. I guess that’s one way of getting the numbers to do what you want.
In the meantime, the numbers treated me well last week, as it hopefully did for most others.
In addition to the nice paper gains, again I sold a number of call options during the last 48 hours.
In fact, I sold such weekly options on 22% of my portfolio and received an additional 0.68% return in premiums on that portion of the portfolio. Those numbers felt good and Ill be happily paying my captal gains taxes on those.
I’ll be losing some of my Halliburton and Freeport McMoRan shares, but may find myself buying them right back, if the price is right.
In that case, the numbers are truly subject to interpretation. Some of those Freeport shares were assigned, resulting in a capital loss on shares.
So it’s off to Quicken to see whether there’s any value in taking a tax loss on those shares or just buying them back within that 30 day period and forgoing the loss in an effort to create new options income and maybe capital gains.
Wash rule be damned. You don’t own me. Sometimes it’s just worth giving up the advantage of the loss that the tax code gives. The code giveth and the code taketh.
Sigh. Rich people’s problems.
A Europe exercises increasing dysfunction, on this side of the pond we look better and better by comparison, but their dysfunction just compounds our Rich People’s Problems.
At the Finance Minister’s recent meeting in Poland, that weren’t very hospitable to TIm Geithner and weren’t very receptive to the advice that he was willing to share, that was borne out of experience.
If they’re not willing to listen to Geithner, I think that I have a suggestion that should be acceptable to all parties, even Malta and Slovakia
Maybe those European Finance Ministers should all just take a math lesson from Abbott and Costello.