Who knew Google was so in tune with economic theory?
As a side note: I used Hal Varian's book in grad school!
Thursday, May 28, 2009
Tuesday, May 5, 2009
Tornadoes, Swine Flu, and the Facebook Revolution
Over the past seven days, I have been completely occupied between my job, dodging tornadoes, avoiding the Swine Flu, and trying to figure out why my entire family has suddenly decided to join Facebook. Turns out it's pretty difficult to find time to blog amidst that buzz of activity!
All in all, I can't really complain just because life starts getting interesting. I think that the biggest thing is that my whole family now has access to my digital adult life, which may be different than the life they pictured me living in their heads! I am sure there will be plenty of phone calls, Facebook messages, and wall posts to document the interest that gets generated by my photo albums! Ohh wait, I think I set my privacy settings so that only Will and Lindsey can see those pics....hmmm, curious!
I know this is a pretty boring post, but it is all that I really have to say right now. Things in Raleigh are going well for Lindsey and I. We are going skydiving next weekend so I will write up a detailed post to share that experience with you all. Lindsey was afraid that something would happen to us while we were skydiving but I assured her that the drive down there was much more dangerous than jumping out of an airplane with a giant tarp strapped to your back. The scary part is that it's totally true!
All in all, I can't really complain just because life starts getting interesting. I think that the biggest thing is that my whole family now has access to my digital adult life, which may be different than the life they pictured me living in their heads! I am sure there will be plenty of phone calls, Facebook messages, and wall posts to document the interest that gets generated by my photo albums! Ohh wait, I think I set my privacy settings so that only Will and Lindsey can see those pics....hmmm, curious!
I know this is a pretty boring post, but it is all that I really have to say right now. Things in Raleigh are going well for Lindsey and I. We are going skydiving next weekend so I will write up a detailed post to share that experience with you all. Lindsey was afraid that something would happen to us while we were skydiving but I assured her that the drive down there was much more dangerous than jumping out of an airplane with a giant tarp strapped to your back. The scary part is that it's totally true!
Sunday, April 26, 2009
Graduation Season is Upon Us
The trees have all turned green and the air outside is heating up just in time for the ritual of dressing up in black robes, black hats, long sleeve shirts, pants, and any other non-summer friendly clothing for the sake of graduation! Oh, and did I mention that these events are usually forced to take place outside, in the heat, because that is the only place you can fit fifty thousand proud family members, each armed with air horns and fresh vocal chords? But that is all a negligible price to pay in order to witness those who have made the accomplishment of graduating from college.
I hear people say things like “these days everyone goes to college” and “so what, everyone graduates from college” and it makes me sick to my stomach. To make light of the fact that in America, the land of the free, the home of the worlds best post-secondary education system, 30% of our population is able to graduate from college. To put it in perspective, only 10% of the US population was able to graduate from college in 1970, which means we have tripled that number in only 40 years! So 30% of our population is able to earn a bachelor's degree or higher in what is probably the toughest, and certainly the most respected university system in the world and we look at it as if it were just another day when graduation rolls around? Shame on us! We should be jumping for joy and celebrating at the top of our spirits because for every college student that receives a diploma, it brings us all one step closer to maintaining our edge as the dominant country in the global economy.
So the next time you get an invitation to a graduation or you meet a person who has recently graduated, don't just say “congratulations”, say “thank you and God bless you for working your ass off to better yourself and the world that we live in”. Getting through college is tough and requires an immense amount of energy and commitment that only 30% of our country is willing to expend. While that number is higher than in any other country, it still warrants a ginormous pat on the back to those who walk that distinctive path.
I hear people say things like “these days everyone goes to college” and “so what, everyone graduates from college” and it makes me sick to my stomach. To make light of the fact that in America, the land of the free, the home of the worlds best post-secondary education system, 30% of our population is able to graduate from college. To put it in perspective, only 10% of the US population was able to graduate from college in 1970, which means we have tripled that number in only 40 years! So 30% of our population is able to earn a bachelor's degree or higher in what is probably the toughest, and certainly the most respected university system in the world and we look at it as if it were just another day when graduation rolls around? Shame on us! We should be jumping for joy and celebrating at the top of our spirits because for every college student that receives a diploma, it brings us all one step closer to maintaining our edge as the dominant country in the global economy.
So the next time you get an invitation to a graduation or you meet a person who has recently graduated, don't just say “congratulations”, say “thank you and God bless you for working your ass off to better yourself and the world that we live in”. Getting through college is tough and requires an immense amount of energy and commitment that only 30% of our country is willing to expend. While that number is higher than in any other country, it still warrants a ginormous pat on the back to those who walk that distinctive path.
Friday, April 17, 2009
Ponzi Schemes Explained - For you Elise!
I have to admit, I have been totally slacking on my blog posting lately. I have had many good ideas to blog about but I just keep putting it off like a bad blogger. I am trying some new motivational techniques to keep me on point, but the whole reason I am blogging to begin with is for motivation so what I am left with is a huge motivational “hairball” that ends up becoming anti-motivational! What a mess!
Anyway, Elise wanted me to write about Ponzi schemes and how all the stuff that Bernie Madoff did can be considered Ponzi in nature. After some contemplation, I decided that a complete explanation would be way too long for the blog, so bear with me for the abridged explanation.
Wikipedia defines Ponzi scheme (named so after Charles Ponzi, who popularized the idea) as “a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned”. In my opinion, the biggest Ponzi scheme ever is Social Security. The way Social Security works (at least in America) is that today's working generation pays, as a portion of their income tax, a contribution to the Social Security Trust Fund which is in turn used to fund the Social Security checks that are issued today. This is a classic Ponzi scheme and is not too much different from what Madoff was doing with his clientèle.
Madoff, being a powerful Wall street individual, was requisitioned by many of his friends and counterparts to manage their investments for them in exchange for healthy commissions. This is not all too much different from how Financial Consultants (the guys at Morgan Stanley and Smith Barney) make a living. What Madoff eventually realized was that as long as his clients’ portfolios were doing well (10%+ annual returns), they was more likely to leave their money untouched and not withdrawal contributions. It is only when portfolio values begin to fall that people consider cashing them in (thoughts we have all shared lately). This predictable facet of human behavior is what Madoff was eventually able to prey on. Once his managed account got large enough (probably around $500 million) he began sending his clients fictitious annual statements that reported amazing returns even though the money was not even being invested in any securities at all. Instead, he was depositing the funds in his bank account and getting rich! Only when an investor decided to "cash out" did he have to make any real payments and this seldom happened on the count of the fact that his investors thought they were getting phenomenal returns!
Classic Ponzi schemes do not generate any real wealth or return on investment which makes them appear to be much better in nature than they actually are. Investors can be fooled into thinking that they are receiving real returns, as many Americans who benefit from Social Security income so believe, but in reality these schemes only tie up money that could otherwise be invested in legitimate instruments that generate real returns. Just think, if instead of paying 7% of your income (lets say average take home is $20,000) to the Social Security Ponzi scheme, you put that money in an interest bearing savings account at 5% (the average for most money markets) you would have $689,657.36 after thirty years. That is enough to pay out $34,482 a year for 20 years! Way better than Social Security and you are not screwing your grandchildren out of 7% of their income!
Anyway, Elise wanted me to write about Ponzi schemes and how all the stuff that Bernie Madoff did can be considered Ponzi in nature. After some contemplation, I decided that a complete explanation would be way too long for the blog, so bear with me for the abridged explanation.
Wikipedia defines Ponzi scheme (named so after Charles Ponzi, who popularized the idea) as “a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned”. In my opinion, the biggest Ponzi scheme ever is Social Security. The way Social Security works (at least in America) is that today's working generation pays, as a portion of their income tax, a contribution to the Social Security Trust Fund which is in turn used to fund the Social Security checks that are issued today. This is a classic Ponzi scheme and is not too much different from what Madoff was doing with his clientèle.
Madoff, being a powerful Wall street individual, was requisitioned by many of his friends and counterparts to manage their investments for them in exchange for healthy commissions. This is not all too much different from how Financial Consultants (the guys at Morgan Stanley and Smith Barney) make a living. What Madoff eventually realized was that as long as his clients’ portfolios were doing well (10%+ annual returns), they was more likely to leave their money untouched and not withdrawal contributions. It is only when portfolio values begin to fall that people consider cashing them in (thoughts we have all shared lately). This predictable facet of human behavior is what Madoff was eventually able to prey on. Once his managed account got large enough (probably around $500 million) he began sending his clients fictitious annual statements that reported amazing returns even though the money was not even being invested in any securities at all. Instead, he was depositing the funds in his bank account and getting rich! Only when an investor decided to "cash out" did he have to make any real payments and this seldom happened on the count of the fact that his investors thought they were getting phenomenal returns!
Classic Ponzi schemes do not generate any real wealth or return on investment which makes them appear to be much better in nature than they actually are. Investors can be fooled into thinking that they are receiving real returns, as many Americans who benefit from Social Security income so believe, but in reality these schemes only tie up money that could otherwise be invested in legitimate instruments that generate real returns. Just think, if instead of paying 7% of your income (lets say average take home is $20,000) to the Social Security Ponzi scheme, you put that money in an interest bearing savings account at 5% (the average for most money markets) you would have $689,657.36 after thirty years. That is enough to pay out $34,482 a year for 20 years! Way better than Social Security and you are not screwing your grandchildren out of 7% of their income!
Monday, March 16, 2009
The Price Is Right
As I promised, the picture of the weekend is:
I understand that it is nearly impossible to see what it is that I am doing, which is playing The Price is Right on my friend's wii. This might seem like a pretty lame "party pic" but let me tell you, interactively playing The Price is Right with a bunch of drunk people is the funnest thing I have done in a while! I highly recommend this game for your next social gathering around the wii!
By the way, I wanted to mention that I won the double showcase by guessing within $250 of the actual price of my showcase. Maybe I should quit tax consulting and head to LA as a professional Price is Right contestant? I am sure I'm not the first to have that idea!
I understand that it is nearly impossible to see what it is that I am doing, which is playing The Price is Right on my friend's wii. This might seem like a pretty lame "party pic" but let me tell you, interactively playing The Price is Right with a bunch of drunk people is the funnest thing I have done in a while! I highly recommend this game for your next social gathering around the wii!
By the way, I wanted to mention that I won the double showcase by guessing within $250 of the actual price of my showcase. Maybe I should quit tax consulting and head to LA as a professional Price is Right contestant? I am sure I'm not the first to have that idea!
Saturday, March 14, 2009
March Updates and Fixtures - Part 1
I have to begin by apologizing for the broken YouTube link to the Jim Cramer/John Stewart interview. It is available at www.thedailyshow.com and is definitely worth watching!
As for the overall updates, things are going very well here in Raleigh. As of Friday, March 13, Lindsey has been at RedHat for exactly one month and is loving it so far! As you can probably guess, Friday the 13th brings good luck to this household! My career is also going well and on track for world domination at a time TBD (world power in the hands of a tax consultant? Yeah right!).
We are driving to Charlotte tonight for a friend's birthday party so I am planning to pick the "best" picture of the night and post it on the blog accompanied by an explanation Sunday evening.
I am hoping to post on my blog at least once a week but hopefully more often than that. Elise has already asked me to explain what a Panzi scheme is and so I am drafting up an article that uses Social Security (the largest Panzi scheme ever!) as the example. If you have any ideas then please shoot them over to me at blake.shiver@gmail.com.
Have a great weekend!
As for the overall updates, things are going very well here in Raleigh. As of Friday, March 13, Lindsey has been at RedHat for exactly one month and is loving it so far! As you can probably guess, Friday the 13th brings good luck to this household! My career is also going well and on track for world domination at a time TBD (world power in the hands of a tax consultant? Yeah right!).
We are driving to Charlotte tonight for a friend's birthday party so I am planning to pick the "best" picture of the night and post it on the blog accompanied by an explanation Sunday evening.
I am hoping to post on my blog at least once a week but hopefully more often than that. Elise has already asked me to explain what a Panzi scheme is and so I am drafting up an article that uses Social Security (the largest Panzi scheme ever!) as the example. If you have any ideas then please shoot them over to me at blake.shiver@gmail.com.
Have a great weekend!
Friday, March 13, 2009
Jim Cramer Finally Gets Called Out
I have never really liked Jim Cramer or anything that he says because a.) I don't trust him and b.) he acts like a maniac and expects vulnerable people to follow him. The sad truth is that in this time of economic trials and tribulations, many of us feel vulnerable and so Cramer has become increasingly popular for all of the wrong reasons. At least our good friends at the Daily Show finally took the chance to call his ass out:
The logic that most people default to in times of high volatility and unstable expectations about the future is to listen to anyone who convincingly pretends as if he has the answer. Instead, we should approach such individuals dubiously as they are probably out to profit from our vulnerability. I would argue that anyone who is publicly sharing a scheme to "get rich" is actually planning on making themselves rich at the expense of the public's collective naivety. Case and point, Jim Cramer and his show Mad Money. On the other hand, there is a class of "get rich" advocates who offer up a much more solid and practical methodology at the cost of time and patience(things we don't have much of!). People like Dave Ramsey , who tell us to get out of debt, save for rainy days, and invest wisely for our future are the ones we should be listening to. Anyone who is obviously not making a play on the compulsive nature of humans and the weakness of economic vulnerability should probably be trusted far and above the Jim Cramers of the world.
The logic that most people default to in times of high volatility and unstable expectations about the future is to listen to anyone who convincingly pretends as if he has the answer. Instead, we should approach such individuals dubiously as they are probably out to profit from our vulnerability. I would argue that anyone who is publicly sharing a scheme to "get rich" is actually planning on making themselves rich at the expense of the public's collective naivety. Case and point, Jim Cramer and his show Mad Money. On the other hand, there is a class of "get rich" advocates who offer up a much more solid and practical methodology at the cost of time and patience(things we don't have much of!). People like Dave Ramsey , who tell us to get out of debt, save for rainy days, and invest wisely for our future are the ones we should be listening to. Anyone who is obviously not making a play on the compulsive nature of humans and the weakness of economic vulnerability should probably be trusted far and above the Jim Cramers of the world.
Kudos to John Stewart and to all of you down at the Daily Show who finally stood up and called this man out publicly. I would almost argue that he should stand trial with Mad-dog Madoff for the way he has manipulated people with his "snake oil" sales pitches.
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