Piss On The Taliban

This one is for all the bleeding hearts out there who are outraged (outraged, I tell you!) over the just-released video showing a U.S. Marine sniper team urinating on dead bodies in Afghanistan.

Are you kidding me!?  The only outrage in this whole thing should be directed at the namby-pamby civilian and military personnel who are making the dead people the victims, and the U.S. troops the enemy.

This is not torture.  This is not Abu Ghraib.  This is a group of Marines who are probably damn tired of being away from their families in godforsaken country full of people trying to kill them (possibly including the pissees), and who want to exact a little bit of mental revenge.

Is this really so hard for us to accept?  I can imagine it now, one of these Marines says, "Screw this place.  These people are trying to kill us, and nobody at home gives a damn because they're too busy trying to decide whether to buy the 'grande' or the 'venti' today.  We got them before they got us, and since there won't be any parades, let's celebrate our victory by pissing on them!"  And the other Marines say, "Hell yes!  Great idea!"  And finally one of the dumber Marines says, "Yeah, and let's put it on video so we can show everybody back home some day!"

I get that the U.S. / Obama administration has to officially condemn this conduct.  We don't want to come off looking like barbarians.  The thing of it is, the Taliban and other radical Islamic terrorist group are going to think that about Americans regardless of what we do.  They would kill us in a second if given the chance, no questions asked.

What I don't need to hear are any religious scholars out there suggesting that somehow the U.S. is desecrating Islam.  Does anyone really believe these Marines were urinating on these people as a symbol of their hatred for Muslims?  Of course not, they couldn't care less about their religious beliefs.  The Marines are simply showing their disrespect for some people who probably just tried to kill them.

This is war.  There are no rules in war, at least not in combat.  Did we follow any rules when we captured/killed Bin Laden?  If there were rules, the U.S. would surely lose the so-called war on terror, because the enemy sure as hell isn't following them.

I hope the way this plays out is, soon there will be a groundswell of support for these Marines.  Most Americans are going to see through the pious rhetoric and realize that no one was actually harmed in the shooting of this video - although someone was clearly harmed beforehand.  And piss on them!

It's Tough To Make Predictions

This is the time of the year when the so-called investment ‘experts’ make their predictions for the coming year.  While this information may be interesting, the predictions are actually much more entertaining when reviewed a year later.

Take the late 2010 Barclays Capital Global Macro Survey of more than 2,000 institutional investors.  The consensus pick for the best performing asset class in 2011 was equities, with a predicted 15% annual gain for the S&P 500 stock index.  Less than 10% of those surveyed said fixed income would be the best performing asset class.

And...wait for it...Surprise!  Fixed income was easily the best performing asset class of the year, with the Barclays aggregate bond index gaining almost 8% in 2011.  Conversely, the year-to-date return for the S&P 500 stock index (including dividends) was 2%.  On a risk-adjusted basis, the disparity is even greater.

Remember, these were the forecasts of big institutional investors – major financial institutions with armies of analysts, mountains of data, and sophisticated forecasting tools.  If the ‘experts’ can't get the broad asset class movements right, what chance do they (or anyone) have of correctly and consistently predicting the performance of individual securities?

In short, they have no chance, but year after year, that doesn't stop them from trying.

What are the lessons to take from this information?

1)  Don’t invest based on economic forecasts.  They are simply media-hyped guesswork.  Over time, unforeseen events are sure to invalidate certain assumptions used in those same forecasts.

2)  There is no substitute for low-cost diversification.  While equity markets were rocky this past year, fixed income markets provided excellent returns.  By staying diversified both across and within asset classes, and keeping investment costs to a minimum, smart investors can enjoy gains now and still be positioned to reap returns when riskier assets come back into favor.

3)  The past is NOT prologue.  As an investment strategy, chasing past returns is no better than chasing predicted returns.  Just because fixed income outperformed the equity market in 2011 is no reason to believe it will do the same in 2012.  Investors should determine their risk tolerance, and not change investment direction unless that tolerance changes.

In the end, when it comes to ‘expert’ forecasts on the direction of investment markets, it’s probably best to remember the words of Yogi Berra:  “It’s tough to make predictions, especially about the future.”

2012

The beginning/end of every year gives everyone a chance to make resolutions or predictions for the next 12 months.  Instead of doing either of those things, which will inevitably come back to haunt, I'll just set out a few things I'd like to see in 2012.

I'd like to see:

-Me take more time off.

-The insurance industry get into trouble for the individual products they sell to people as 'investments.'

-A warmer and earlier Spring.

-The Minnesota Twins and Vikings not being among the worst teams in their respective sports.  Talk about low expectations!

-The rejection of social conservatism.

-The rejection of any further extensions to to unemployment benefits.  In other words, that my tax money stops being used to pay people to not work.

-Jersey Shore get canceled when one or more of the cast is arrested and/or goes to rehab.  (OK, that is actually a prediction, not exactly something I want to see happen.)

-The Mayans exposed as just goofing around with their calendar.

A 2012 Caucus Guide

I already summarized the Republican presidential candidates a few weeks ago.  With the Iowa caucuses (and liberation from the endless, mindless TV campaign ads) a mere one week away, let me now quickly summarize the various candidate campaign strategies:

For all those not named Ron Paul or Mitt Romney or John Huntsman:  Watch the news (easier than reading it) and simply say you are against everything that's currently happening.

For Ron Paul:  Just keep saying extreme liberatarian things to win the youth vote.

For Mitt Romney and John Huntsman:  Just say nothing.  That passes for a moderate view in this group, and while it may not serve them well in Iowa, it's makes them look presidential in comparison.

That's it.  I told you it was simple.

When it comes to the Republican party, the Iowa caucuses don't help the party find a nominee, they help the party realize who NOT to nominate - specifically anyone who panders to the social conservative base that the electorate eventually rejects.

The Meaning Of Christmas (Cards)

In the past couple of weeks, we've received our share of Christmas cards from family and friends.  I generally enjoy this annual ritual, and for many years our family has put forth an above average effort to send not only a card, but a themed-letter with highlights of the past year, along with a short personal note.

On the other hand, the Christmas cards we receive fall into two general categories: Those that include a picture with a form letter, and those that are simply a pre-printed family picture.

I acknowledge that lots of people don't think much of the Christmas form letter.  I get that, it can be kind of lame, and include all kinds of unnecessary information.  But as silly as that sounds, at least it's something. Which brings me to today's touchy subject.

I have little regard for those who send only a pre-printed picture as their so-called Christmas card.  Sadly, this has become the norm for the greetings we receive, and that trend has been growing ever since it became easy for people to make the pre-printed picture card several years ago.

If all someone cares to send me for a Christmas greeting is a once-per-year family picture, why bother?  If you're unwilling to give more than the minimum effort, just send it to me another time, when you aren't so lazy, er, I mean busy.  Hell, you can even send it electronically in an email, or tell me about a picture you posted to Facebook; it's all the same to me.

To all those family and friends who send me nothing but a pre-printed picture card as a Christmas greeting, I have a Christmas gift for you, something to make sending your Christmas greetings even easier:  Take me off of your Christmas card list.  If our relationship doesn't mean enough for you to personalize your greeting, then I assure you, it doesn't mean enough for me to care about getting an annual picture of your family/pet/vacation.

Just save the stamp, or better yet, donate the postage to charity.  That's a better way to show someone how much you care.

CDs = Bad Investment

Some time ago I wrote about how insurance is a bad investment and should be used only for protection.  Today I'm going to pile on another bad investment in the current financial environment - good 'ol certificates of deposit.

I’m routinely contacted by people looking for a higher rate of return than can be found on CDs. Such frustrated investors are everywhere these days, as 12-month CD rates have hovered below 1%. Even in this environment, however, many are reluctant to leave the ‘safety’ of CDs.

Here’s what I’ve told those investors, and everyone else for the past year: Safety and capital preservation are not the same thing. CDs are not safe, in terms of preserving your capital. They are in fact locking in a loss; the real CD return is currently negative after inflation plus taxes on the interest. If fact, in terms of annual purchasing power, a CD investor will likely have about 2% less than they did before putting the money in the CD.

To preserve capital in this market/economy, investors will need something more than CDs. One secure alternative is U.S. government bonds. The interest paid may not be much more than on CDs, but those bondholders don’t have to pay any state taxes on the interest. These bonds do carry risk, but in a way, U.S. government bonds are safer than CDs – there’s less chance Uncle Sam will go insolvent than a bank.

Another alternative is municipal bonds. For residents who purchase such bonds issued in their state, none of the interest is taxable at the federal or state level. This means a bond with a 2% coupon would have an effective taxable yield of closer to 3%, assuming the bond is purchased at or near par value.

A third option is to invest in dividend paying stocks of large companies. Many well-known companies are paying up to 5% a year just to invest in their stock. The stock price could go down, but if it goes nowhere the investor will make that dividend yield on the money, and if the stock price goes up, even better! And also, qualified dividends currently receive favorable tax treatment.

These are all good, manageable risks for people to take with some of their savings – and it beats the heck out of an inflation-and-tax adjusted 2% loss!

The Problem With Kids Is Parents

There are no bad kids, there are only bad parents.  I say this all of the time, and usually end up defending it to a parent who seems convinced that some kids are so insufferable, no parenting would have mattered.

When an adult argues that there's something in the gene pool that turns children into delinquents, you can assume two things: 1) that parent had or has rotton kids, and 2) that you've just heard an incredible crock of crap.  Sure, some infants are born with genetic mental or physical defects, but none are born inately bad. 

Bad kids are a direct by-product of bad parenting.  And bad parenting doesn't mean abusive parenting - there are a lot of ways to be a bad parent.  One example is the parent who compensates for never being around their kids, by giving their kids whatever they want.  They're the ones most likely to think they're great parents, when just the opposite is true.  Their kids will not contribute to society.

Another one of the worst kinds of bad parents are the enablers.  You know, the kind whose kids never do anything wrong, and if they do, believe everything their kid says in defending their actions.  Here again, they think they're great parents, but really they suck at it.  Those kids eventually leave home, then get their asses kicked by the real world.  Or they never leave home, to avoid getting their asses kicked.

To be fair, bad parents are often the product of a poor environment, perhaps from an abusive past, or from having kids too young.  However, most of the bad behavior I see in my white-bred suburban lfe comes from comes from children of well-to-do parents.  Go figure.

If we want to reduced juvenile delinquency, let's cut of the snake's head.  Stop focusing on the bad kids, and start calling out the bad parents.