18 Year-Old Rescued after Month Adrift at Sea
By Rosa Prince, New York
9:32PM BST 28 Mar 2012
The 10-foot boat containing Adrian Vasquez had travelled more than 600 miles in 28 days when it was found off Ecuador’s Galapagos Islands by a commercial fishing vessel.
His two friends had died more than a week earlier, and Mr Vasquez survived by eating raw fish. He told his rescuers that a sudden rainstorm towards the end of his ordeal saved his life after he ran out of water.
Dozens of people turned out to welcome the noticeably-thin teenager home when he arrived back in Panama to be reunited with his relieved parents. He wept as he embraced his relatives but did not speak to journalists.
Captain Hugo Espinosa of the Ecuador coastguard, whose patrol boat picked Mr Vasquez up from the commercial fishing ship, said he was suffering from malnutrition and severe dehydration when he was found.
The captain said: “He didn’t know what was happening. He was quiet, looking lost. Little by little he began to react. But the subject of his dead friends made him stay silent and lower his gaze. It cost him a lot to discuss the matter.”
Read the rest here.
Why Wall Street Hates the Lazy Portfolios Strategy
By PAUL B. FARRELL
“America’s investors have been ripped off as massively as a bank being held up by a guy with a gun and a mask,” former Securities and Exchange Commission Chairman Arthur Levitt warned in an article in Fortune magazine a decade ago. That same year in his classic “Take On The Street,” Levitt lambasted the fund industry as “a culture that thrives on hype … withholds important information,” a “cutthroat business” that “misleads investors.” Today, it’s worse.
Lazy Portfolios were born as a defensive move against this relentless war by guys with “masks and guns … ripping off” America’s 95 million Main Street investors. And the strategies of men like Levitt, Vanguard’s Jack Bogle, Nobel Economist Daniel Kahneman, Warren Buffett, Yale’s Robert Shiller and other industry giants were the inspiration.
Lazy Portfolios give investors a far superior alternative than gambling retirement savings in Wall’s Street’s casino. Simple solutions: Just three to 11 no-load low-cost index funds, and zero trading. And in the past decade we’ve discovered eight great Lazy Portfolios that investors are using as guides to building their own portfolios, without brokers or advisers.
Today, Wall Street, the fund industry and brokers hate these eight Lazy Portfolios even more. Not just because they consistently beat the S&P 500 on a long-term basis. Not because they’re based on the exact same Nobel Prize-winning model Wall Street’s top wealth managers use. Not because you don’t need any fancy algorithms to rebalance your portfolio. And not because Bogle calls industry insiders casino “croupiers” because they skim a third of your market returns off the top, leaving you leftover crumbs.
The more you trade at Wall Street’s casino, the richer your broker gets.
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Comments »A Rational Reason for High Oil Prices
via Econbrowser
“There is no rational reason for high oil prices,” writes Ali Naimi, Saudi Arabian Minister of Petroleum and Mineral Resources, in today’s Financial Times. Well, I can think of one– if oil prices were lower, the world would want to consume more than is currently being produced.
The graph below plots total world oil production over the last decade. After growing rapidly in earlier years, production hit a bumpy plateau. In November 2007, just before the U.S. recession began, the world was producing 84.9 million barrels each day, a little less than was produced in the spring of 2005. Although production stagnated, the demand curve continued to shift out, with world GDP growing 5.3% in 2006 and another 5.4% in 2007. Consumption of petroleum by China alone was 800,000 barrels/day higher in 2007 than it had been in 2005, meaning the rest of the world had to decrease consumption over this period.
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Comments »LISTEN: Justice Scalia ‘Benchslaps’ Federal Government
Soros Insider-Trade Appeal Rejected by Human Rights Court
Heather Smith
Billionaire investor George Soros lost a challenge to his 2002 insider-trading conviction, with the European Court of Human Rights’s Grand Chamber refusing to review whether France had violated his rights.
The court declined to hear Soros’s appeal it said in a statement today, without providing any reasoning. Soros, 81, was convicted by Paris courts in 2002 for using inside information about Societe Generale SA (GLE) in his trading. He argued that French market regulations weren’t clear enough to hold him responsible.
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Comments »New Study: The whole of the Earth Heated up in Medieval Times Without Human CO2 Emissions
PUBLISHED: 07:21 EST, 26 March 2012 | UPDATED: 07:55 EST, 26 March 2012
Current theories of the causes and impact of global warming have been thrown into question by a new study which shows that during medieval times the whole of the planet heated up.
It then cooled down naturally and there was even a ‘mini ice age’.
A team of scientists led by geochemist Zunli Lu from Syracuse University in New York state, has found that contrary to the ‘consensus’, the ‘Medieval Warm Period’ approximately 500 to 1,000 years ago wasn’t just confined to Europe.
In fact, it extended all the way down to Antarctica – which means that the Earth has already experience global warming without the aid of human CO2 emissions.
Read the rest here.
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Update On The Predictable “Bull Trap” Of New-Highs False Breakouts
Obama’s 2nd-term agenda? House Dems Propose Raising Taxes by 40%, Including on Middle Class
James Pethokoukis
The “Budget for All” contains just about every sort of tax increase imaginable. It would, of course, allow the top-end Bush tax cuts to expire, as well as create five new tax brackets — 45%, 46%, 47%, 48%, and 49% — for “millionaires and billionaires.” In addition, House liberals would break new ground by slapping a European-style wealth tax of 0.5% on fortunes of $10 million or more. The plan also contains a bank tax and a financial transaction tax.
But it’s not just the wealthy and bankers who would get pinched. These Democrats would also raise income taxes on the broad middle. The CPC plan would “allow the 28% and 25% brackets to sunset once the economy is on solid footing, in 2017 and 2019, respectively.” That means higher taxes on families making over $70,000 a year — a big, fat, middle-class tax hike. And some of those families would also be paying more for energy thanks to the carbon tax that’s also in the CPC plan.
Amazing, these progressive Democrats don’t think all those tax hikes will hurt economic growth. Not one bit. Why? First, it’s now the liberal economic consensus that tax rates below 70-80% don’t hurt growth. Second, even if those tax hikes unexpectedly did trim growth a smidgen, they would be more than offset by a new $2 trillion stimulus plan full of such supposedly pro-growth measures as clean energy tax credits, advanced manufacturing tax credits, and a “Child Care Corps.”
Read the rest here.
Comments »Ritholtz: Is Margin Debt Signalling a Top?
Jim Cramer: Buy A House Now, Calls Housing Bottom
Spain’s ‘High-class Hookers Refuse to Sleep with Bankers Until They Open Up Credit Lines to Cash-strapped Families’
Lee Moran
Spain’s high-class escorts are refusing to have sex with the nation’s bankers – until they open up credit lines to cash-strapped families and firms.
Madrid’s top-end prostitutes say their indefinite strike will continue until bank employees ‘fulfil their responsibility to society’ and start offering bigger loans for struggling Spaniards, it has been claimed.
Sneaky bankers were trying to circumvent the protest by claiming to be architects or engineers, the sex-workers said.
Read the rest here.
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Why You Should Feel Sorry For Kentucky Fans
Dennis K. Berman
This should be a moment of elation for Kentucky fans. Their team plays a ruthlessly beautiful brand of basketball. Their starting lineup is better than the New Jersey Nets.
And yet there is something lurking underneath: A sense that winning is, in its own odd way, making UK’s fans miserable. Their expectations of triumph—be it recruiting battles or tournament games—has hardened into a coarse entitlement. It’s gotten to the point where even a championship will feel like anticlimax.
My best friend, a rare species of Louisville-turned-Kentucky turncoat, admits it. “It’s not fun,” he says. “We expect it.”
Where do we find the most joy as fans? Does it come from our teams’ absolute achievements—championship or bust? Or is it all relative, when they perform beyond what we anticipate? Saturday’s Final Four matchup between Louisville and Kentucky gives us a case study.
I write as a Louisville Cardinals fan, who grew up in the heyday of Louisville hoops, and who spent his early years caught in the very real feud between fans of the two schools.
ESPN would have you believe that the Duke-North Carolina rivalry is the most intense in college basketball. ESPN is wrong. The title belongs to Kentucky-Louisville, a 99-year-old feud that cuts across cultural, racial, and even religious lines.
I won’t presume to know what life is like in, say, Northern Ireland. I can tell you that to this day, like Catholics and Protestants, I could name which of my classmates was a Louisville or Kentucky fan.
The answer meant a lot. If you were a Kentucky fan you were more likely from a family with deeper, rural roots in the state. Maybe a grandparent attended school in Lexington, just a 90-minute ride from Louisville.
Cardinal fans were, and remain, the counternote. They were the ones historically excluded from the blue blood social orbits of Lexington. They were Jews and blacks, and more likely than not Democrats—a citified minority in a sea of rural rectitude.
Back home, they’re already calling Saturday’s contest The Civil War. Red and blue car flags are flying like gang colors. They’ve begun burning couches in Lexington. Even my hoops-agnostic mother is sending me articles about Louisville point guard Peyton Siva.
It bears stating: This is the single biggest sporting event in the state’s history.
This is Kentucky’s game to lose. It already beat Louisville on New Year’s Eve 69-62, and clearly has better, NBA-ready personnel. Anthony Davis alone will make more money playing pro ball than the entire Louisville roster.
And yet when you perform a fan’s accounting, the picture changes. The Wildcats lose their edge.
Read the rest here.
Comments »Oil Futures Spark Debate: $100 Level Shortlived?
Javier Blas
Oil contracts for delivery in three to five years’ time are trading at their biggest ever discount to spot prices, prompting a debate about whether the era of triple-digit oil prices will be a short-term phenomenon.
Spot oil prices have rallied nearly $20 since the start of the year and traded above $125 a barrel yesterday, on the back of supply disruptions and geopolitical fears over Iran.
Over the same period, oil for delivery in December 2018 has risen $1 to about $95. This has opened a record gap of more than $30 between spot and five-year contracts. “The market has the perception that oil supply will increase in the future and that is holding back the price of forward contracts,” said Mark Thomas, head of energy futures at commodities brokerage Marex Spectron, citing expectations of higher output in Iraq, Brazil, the US and Canada.
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Comments »‘Best Spring in Five Years’ for Housing: Toll CEO
Margo D. Beller
There are “encouraging” signs the high-end housing market is recovering in many U.S. markets, Toll Brothers CEO Douglas Yearley told CNBC Tuesday.
It’s been the “best spring in five years,” he said. In 2012 “our orders are up significantly and continue to be up significantly. I’m optimistic right now.”
The average price of a Toll home is $575,000.
Yearley spoke the same day homebuilder Lennar reported first-quarter earnings that beat expectations, a sign to some analysts that the housing market is recovering.
The Toll Brothers CEO said that’s true for some markets but not for others. He said that “25 percent of our communities have seen a price increase since Jan 1. That’s encouraging. There are places where we don’t have pricing power (but) we’re not dropping prices. We haven’t dropped prices in over a year.”
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Comments »The Real Oil Shock: Rising Gas Prices Don’t Actually Affect Americans’ Behavior
Adam Davidson
Like a lot of carless New Yorkers, I am generally confused by bursts of populist outrage over high gas prices. But I have always assumed that the anger is genuine — that hard-working Americans, who already spend a lot on gas, are thrown into turmoil when they have to spend even more. After all, 63 percent of Americans insist that these price increases have caused them some financial hardship.
But amid the recent mania over prices hitting $4 a gallon, I decided to figure out whether this fury is economically rational. So I took a look at data from the Census Bureau, which conducts a quarterly survey of American spending habits. During these last few years of historically high oil prices, Americans spent about $40 a week, or $2,000 a year, on gas. That’s around 5 percent of our overall spending. It’s less than half of what we spend on restaurants and entertainment.
High gas prices must be forcing Americans to cut back in other ways, right? That’s what the economists Lutz Kilian at the University of Michigan and Paul Edelstein of the consulting firm IHS Global Insight wondered. They looked at personal spending habits during periods of high energy prices and discovered that “somewhat surprisingly, there is no significant decline in total expenditures on recreation,” which was one place they expected to find frugality. More specifically, rising gas prices had “no significant effect on the consumption of movies, bowling and billiard[s], casino gambling and only insignificant declines for recreational camps, sightseeing, spectator sports and spectator amusements.” Some people bought fewer lottery tickets, they told me.
In other words, Americans may protest loudly, but their economic behavior indicates a remarkable indifference to the price of oil.
Read the rest here.
Comments »Women Bankers Linked to Rise in Risk-taking
Ralph Atkins
The image of women as safer managers less likely to fritter away a bank’s finances is wrong – and politicians should take note, according to Bundesbank research.
Board changes at banks that result in a higher proportion of female executives “lead to a more risky conduct of business”, conclude the authors of an extensive study of German finance houses released by the country’s central bank.
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Comments »Funny Or Die: Muppets vs. Goldman Sachs
Former NAACP Leader Accuses Sharpton and Jackson of ‘Exploiting’ Trayvon Martin
By Alex Pappas – The Daily Caller
Former NAACP leader C.L. Bryant is accusing Jesse Jackson and Al Sharpton of “exploiting” the Trayvon Martin tragedy to “racially divide this country.”
“His family should be outraged at the fact that they’re using this child as the bait to inflame racial passions,” Rev. C.L. Bryant said in a Monday interview with The Daily Caller.
The conservative black pastor who was once the chapter president of the Garland, Texas NAACP called Jackson and Sharpton “race hustlers” and said they are “acting as though they are buzzards circling the carcass of this young boy.”
Jackson, for example, recently said Martin’s death shows how “blacks are under attack” and “targeting, arresting, convicting blacks and ultimately killing us is big business.”
George Zimmerman, a neighborhood watch captain, killed Martin, a 17-year-old black man who was unarmed at the time of his death, last month. Zimmerman has claimed to have shot Martin in self-defense and has not been charged with a crime.
But Bryant, who explores the topic of black-on-black crime in his new film “Runaway Slave,” said people like Jackson and Sharpton are being misleading to suggest there is an epidemic of “white men killing black young men.”
“The epidemic is truly black on black crime,” Bryant said. “The greatest danger to the lives of young black men are young black men.”
Read the rest here.
Comments »How the ‘Far Out’ Legal Arguments Against ObamaCare Went Mainstream
Josh Gerstein
When President Barack Obama signed the health care bill two years ago, the legal challenges to the law were widely belittled as long shots — at best.
But as the cases head to the Supreme Court this week, what looked to many like far-out legal arguments to undo “Obamacare” don’t seem so zany anymore.
“If you don’t like it, repeal it or amend it. But don’t ask the courts to do the job for you, because they won’t,” Harvard Law professor Charles Fried, who served as solicitor general in the Reagan administration, told Fox News’s Greta Van Susteren in April 2010.
Pressed on whether he might be wrong, Fried replied: “Well, I suppose I could. But I’ll tell you what, I would be happy to come on this program and eat a hat which I bought in Australia last month made of kangaroo skin.”
Fried’s offer was extreme, but his skepticism wasn’t. Many legal scholars, including respected conservatives, pooh-poohed the idea that the courts might actually strike down the law or the individual mandate requiring most Americans to get health insurance or pay a fine.
Yet on Monday, three days of oral arguments about the law begin at the high court — the most time justices have devoted to a single law since 1966.
The challengers’ journey from the near-fringe of legal thought to coming within striking distance of knocking out Obama’s signature legislative achievement has coupled an intense legal assault with a communications drive to convince elites and the public that the law violates the Constitution.
“Once the Supreme Court grants review of the case and sets six hours of arguments over three days, it becomes a blockbuster case where, either way, there’s going to be a landmark ruling,” said Doug Kendall of the Constitutional Accountability Center, a liberal legal group.
“Most people think the government is likely to win more than five votes, but the arguments that seemed off the wall now seem on the wall, seem plausible and, for some people, even persuasive,” said Neil Siegel, a Duke law professor who has written extensively in support of the law.
For most of 2009, as Congress began to draft and debate the health care bill, the individual mandate drew little criticism — let alone a sustained argument that it would be unconstitutional.
“The debate about the individual mandate did not even come up until very late in the process of the bill itself,” said Neera Tanden, a key staffer on the administration’s health care team during the passage of the law. “It was a Republican idea. … I was looking for Republican opposition to the individual mandate, but the first letter they wrote on the bill was just about costs and the public option.”
Tanden, now president of the liberal Center for American Progress, attributes the initial wave of attacks on the law’s constitutionality to the rise of the tea party movement in the summer of 2009 and to libertarian legal scholars looking to rein in Congress’s power.
“There was a strategy of far-right thinkers to fundamentally relitigate the meaning of the Commerce Clause,” said Tanden, referring to the constitutional provision allowing Congress to regulate commerce “among the several states.”
The first big steps in the legal campaign against the law were a pair of op-eds in The Washington Post and The Wall Street Journal in August and September 2009, authored by former Justice Department officials David Rivkin and Lee Casey.
“The federal government does not have the power to regulate Americans simply because they are there,” Rivkin and Casey declared in the Post.
“Such a mandate … would expand the federal government’s authority over individual Americans to an unprecedented degree. It is also profoundly unconstitutional,” the pair wrote in the Journal.
In an interview, Rivkin said the crusade was a lonely one at the outset.
“Lee and I were the only people talking about it. … Nobody else was interested in this. [House Speaker Nancy] Pelosi was asked about it and answered, ‘Are you kidding me?’” Rivkin noted. “There were no hearings in the House or Senate Judiciary Committees on whether this was constitutional. … Nothing like that happened.”
Indeed, around the time that the op-eds appeared, several Republican senators, Olympia Snowe of Maine, Mike Enzi of Wyoming and Chuck Grassley of Iowa, were part of a so-called “gang of six” trying to craft bipartisan health care reform legislation. News stories from the time quote them complaining about the cost of Democratic proposals and the implications of a government-run insurance program, but there is little indication they objected to the basic premise of the individual mandate.
Sen. Orrin Hatch (R-Utah), who supported the individual mandate in the 1990s, did list it among concerns he had when he quit bipartisan talks on the health bill in August 2009.
Then, in December 2009, The Heritage Foundation released an influential legal memo, calling the mandate “unprecedented and unconstitutional” — even though the conservative think tank was a key promoter of the idea in the late 1980s and 1990s.
A co-author of the Heritage legal memo, Randy Barnett of Georgetown University law school, said he was not surprised that the constitutional question was slow to gain traction in Congress.
“I don’t think I’d view Republicans in Congress as the touchstone of the constitutionality of any particular issue. The fact that Republicans in Congress may have missed a constitutional problem doesn’t keep me up at night thinking I must be wrong,” Barnett said.
However, Barnett noted that in December 2009, Sens. Jim DeMint (R-S.C.) and John Ensign (R-Nev.) offered an unsuccessful point of order on the Senate floor objecting to the mandate as unconstitutional.
After the health care bill was signed into law by Obama in March 2010, a flurry of lawsuits were filed. One of the challenges, led by Florida, quickly signed up 25 state attorneys general as plaintiffs.
But the suits got little respect in the legal community.
“In my view, there is a less than 1 percent chance that the courts will invalidate the individual mandate,” law professor and prominent libertarian blogger Orin Kerr of George Washington University told the Los Angeles Times days after Obama signed the legislation.
That sentiment began to change in December 2010, when Richmond-based U.S. District Court Judge Henry Hudson became the first judge to rule the mandate unconstitutional.
“A huge inflection point was Judge Henry Hudson’s ruling in Virginia,” Barnett said. He added that the day of the decision he got an email from a key legal thinker on the left saying, “As of this morning, your theory is officially not frivolous anymore.”
Read the rest here.
