aftermath

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Archive for October 2008

Bush League Politics

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Actuary meets pollster: I don’t project the same hopes that McCain campaign handlers are said to dream as lurking in the tightest of the polls to come out in the past day or so from Pennsylvania, a so-called “statistical tie” which puts Obama at 47%, McCain “only” 4 points behind at 43%, with supposedly more than enough slack for catching up among the 9% undecideds. Let’s let the wider margins of other polls suggest that we can lock up Obama’s 47% in this one, then give McCain the benefit of the doubt by granting him his 43% here despite other polls showing him lagging further. Then let’s call the missing 1% rounding and another 1% out of the 9% votes likely to swing over to Barr or Nader. If only 2 out of the remaining 8 remain undecided to the bitter end, declining to vote at all, then McCain need to get 5 to Obama’s 1 out of the leftover 6 just to gain a tie. 5 to 1?!? That’s supposed to look like a sunny prospect?

Some TV commentators hint that voters who remain undecided so long into this election after the deluge of media from the Obama campaign must indicate sufficient residual doubt to push the majority of those undecided votes into McCain’s column. That I find very highly dubious. I’ve seen and heard from way too many Republicans who have gone through much the same process that first turned me into a hesitant McCain supporter, then into one who planned to simply abstain from voting altogether, then finally into deciding to cast a vote against the abject void of leadership and outright dirt being displayed by the GOP this year. So yes, many of those undecideds may have strong doubts about Obama, doubts that McCain and Palin’s smear tactics might even convert into fears strong enough to keep the voter from casting a vote for Obama. But as long as the McCain campaign persists in virtually 100% negative campaigning without offering any concrete plan for dealing with the current economic and social issues, those undecideds are not going to vote for a hole in the air. At best, from McCain’s perspective, they simply won’t vote; but that doesn’t win him Pennsylvania.

I sincerely believe that if the American system of government permitted a “None of the Above” option on the ballot and had a workable process for interim government (i.e., not even another single day of the Bush Administration) until a candidate could actually win a true majority, then this year would be a year when voters would send both major parties back to the drawing board. Whether or not that belief is actually true among all registered voters, certainly it is a prevailing opinion among any remaining undecideds that neither candidate is winning their approval. But if those “None of the Above” undecideds are finding cause to doubt and fear Obama, don’t look for them to just shrug and vote for a “trust-me” blank page that has failed to sufficiently distinguish itself from the failed policies of its predecessor. Or if a few are influenced enough by GOP demagoguery to fear Obama enough to vote against Obama in similar spirit as I’ve voted against my own party in going with Obama, don’t expect it to be in numbers of the order of 5 to 1.

I would rather pay a little higher tax on a higher profit than a lower tax rate on lower profits.

Victor Hammel, CEO of J.C. Ehrlich,
a pest-control company based in Reading, PA

As a general rule of thumb, my own profession tends to be economically conservative and lined up politically pretty much the same. But starting about four years ago, I found more and more actuaries at conferences and other business meetings speaking openly of disaffections with where the GOP was headed. We are not socialists, nor are we liberal. But we do expect leadership and positive action toward realistic goals. And although certainly not to speak for the profession in general, I have been hearing from hundreds who are no longer hearing what they want to hear from their traditional party. So seek instead to form a moderate coalition with someone whom they know not to be boogeyman caricature the McCain campaign has degraded itself into painting Obama as.

I am not alone. I know of many just like me, Republicans who would have given almost anything to have a reason to vote for McCain, but instead only have been muddied up by despicably ignorant attempts to keep us from voting for Obama. And for every one like me whom I personally know, there are thousands more. Not un-American. Not Marxist. Just seeking solutions that are MIA from the McCain campaign. When he loses, it will be because he lost voters like me. Pushed us away.

Bush League: Below good standards, not good or incorrect. Pitiful, poor, terrible, awful, bad, sucky.

Urban Dictionary

Pretty accurate characterization of the campaign that Bush’s would-be successor has run.

bumper sticker [www.internetbumperstickers.com] - jourbeau

Written by macheide

31 October 2008 at 4:16 pm

Posted in jourbeau

Treat Me to a Trick

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Which part of Halloween are you looking more forward to: Trick (1) or Treat (2) ?

strawpoll

Response: 1 You can’t reach an old dog with new treats.

Whereas we’ve seen enough monsters, goblins, ghouls, zombies, and other abominations wallowing in the grave the GOP is digging itself into this year to last us a lifetime of Halloweens.
//www.internetbumperstickers.com] - strawpoll

Written by macheide

29 October 2008 at 4:45 pm

Posted in strawpoll

Low Gas Price!

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I’m told that up the street I could have done a few cents better, but $2.14 per gallon for my gas is still a very nice change over the $3.90 I was shelling out just 4 months ago.

//www.internetbumperstickers.com] - abelian

Written by macheide

29 October 2008 at 3:50 pm

Posted in abelian

only have ice for you

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i have an itch where i can’t scratch without revealing my secret contortionist moves

echoing a meme from susan

bumper sticker [www.internetbumperstickers.com] - not me

Written by macheide

29 October 2008 at 1:01 am

Posted in not meme

On Calling a Bottom

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By Election Day, I think we’ll be happy if 12k would serve as reasonable target to climb back up to.

aftermath (5/20, after the Dow closed at 12828.68)

Well, here we finally are, just around the corner from Election Day. And yes, we would be happy, indeed quite surprised, if we could realistically set a 12k Dow as any reasonable target to climb back up to. At the time, just before Memorial Day, nobody else I was reading in the business press or watching on the business TV channels was breathing a word about the market even dipping into the 11s, much less far enough so to consider 12k a “happy” target to reach for.

I’ll tentatively set my expectation for the market within the next 18 months to steer downward toward 10k.

aftermath (5/27, after the Dow closed at 12548.35)

The biz press & TV were still talking like the Dow’s loitering in the 12s was but a temporary lull, with some prognosticators pointing up to 15k and even beyond. I had already given up on expecting to see 13k again, and felt that we were headed lower, far far lower. I anticipated seeing sub-10k levels by early 2009, but gave my prediction an 18-month horizon just to be on the safe side of the intermediate term of my expectations.

I expect us to be between 10k and 11k by September.

aftermath (7/24, after the Dow closed at 11349.28)

Technicians were scurrying around with their charts, all pointing to perceived bottoms, at that time none of them calling for numbers below 11k. I had already started talking about how long I thought it might take to find the sub-10k floor I still did not see anywhere near. I felt the market would continue drifting slowly down down down, but verbally did sketch out how equities might drop like a rock if and when other selling – such as that from hedge funds or 401(k) plans – might join the on-going pension plan selling in some sort of panic.

Before we reach the end of 2008, I expect the Dow to dip below 10k.

aftermath (9/4, after the Dow closed at 11188.23)

As close to the precipice as we stood at Labor Day, at that point there still were no TV or newspaper analysts daring to point further down. Whereas I couldn’t see anything that would give us any sustained climb, and only pointed vaguely at the next four months just to hedge my bets. I didn’t believe it would take very long to drop below 10k. Just, outside of the panic I’d briefly sketched out mid-summer, I didn’t expect it to fall quite so dramatically.

So then, where do we go from here?

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Written by macheide

28 October 2008 at 6:18 pm

Posted in calls & puts

Not Quite

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When attempting to gauge the pension funding damage done so far by the credit crisis and market turmoil, “not quite” getting it right can lead to analysis very badly wrong.

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Written by macheide

28 October 2008 at 5:17 pm

Posted in άctuary

Pack It In

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Written by macheide

28 October 2008 at 4:16 pm

Posted in pollster

In Play

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Play: Work that you enjoy doing for nothing.

Evan Esar

Herein otherwise known as my spreadsheet.

My spreadsheet is my borderless hook rug. My spreadsheet is my never-ending crossword puzzle. My spreadsheet is my endlessly moving painting, my poem without a final line. My spreadsheet is my mathematical jigsaw puzzle with an infinite supply of new pieces to fit into the emerging picture.

By saying “for nothing,” Esar no doubt refers to monetary compensation. I will work on my spreadsheet with no less the play even if it all comes to nothing. I used to make intricate sand castles that the tide washed away. I used to create snow sculptures that the wind and rain and sun melted down. Now I build a spreadsheet that someday may be lost to yet another computer crash. And I will smile at merely having had the time I’ve had with it.

bumper sticker [www.internetbumperstickers.com] - huckleberry

Written by macheide

28 October 2008 at 3:44 pm

Posted in huckleberry

Houston Autumn

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This is as much autumn as Houston will see. No leaves turning and falling and needing to get raked up. No frost on the grass and windows. No breath in the air. Just a little chill, enough to warrant bringing out my leather jacket for a few days.

Which is as long as this will last. Then we’ll go back to another of Houston’s many summers, until it’s time for a week of winter. Then we skip spring altogether and go back to summer.

bumper sticker [www.internetbumperstickers.com] - mother nature

Written by macheide

27 October 2008 at 3:28 pm

Posted in Mother Nature

Civic Opportunities

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Susan and I voted early today. Within an hour of getting in line, we were trying to figure out how the voting booths worked . . . by which time the line had shrunk down to only about a half hour’s worth. Still, it was worth it, to avoid those intolerably long lines that are likely to be there on November 4.

As I’d decided, I cast mine for Obama. Thanks to McCain’s campaign. Quite convincing, he and his running mate and his organization have been.

The fortune is from the chinese buffet dinner we shared after voting. While watching some of the closing displays in the sky above the airshow we’d decided to skip this year. Just because one looks up to see an opportunity doesn’t mean one necessarily chooses to take it.

bumper sticker [www.internetbumperstickers.com] - adrien

Written by macheide

26 October 2008 at 4:14 pm

Posted in Adrien

Tagged with

Campaign Failure

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Sad to say, this waste of campaign contributions will probably be duplicated outside every polling site throughout the country. None of these signs “work,” neither to keep nor to convert any decided voter, nor to persuade an undecided one. Not a single vote will be influenced by this trash. Not one.

At least there exists strong evidence that robocalls, smear commercials, and other negative campaigning do have an effect – in the opposite direction intended, especially when there exists no strong, consistent positive message standing behind those low-road tactics.

As long as political parties persist in wasting campaign contributions on worthless or negative strategies, they need not come looking to me to donate to the “cause”! Nor can they hope me to be alone, nor even in the minority.

bumper sticker [www.internetbumperstickers.com] - jourbeau

Written by macheide

26 October 2008 at 3:06 pm

Posted in jourbeau

APM – Continuously Updated

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One of the metholodgies used for the Aftermath Pension Metric: Numbers are updated to reflect the most recently disclosed pension assets and projected benefit obligations on the date that each annual financial statement is made available on the SEC website.

So for example, today Monsanto Company, a constituent of the S&P 500, published its annual financial statement for the fiscal year ending 8/31/2008. That will mean that APM calculations for 10/24/2008 and later will incorporate the 8/31/2008 numbers for Monsanto, as then projected from 8/31/2008 to the date for each APM number.

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Written by macheide

24 October 2008 at 8:20 pm

Posted in άctuary

Pricing Economic Risk into Pension Funding

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While Treasury 30-year bond yields (red circles) were lower by September 30 than at the beginning of the year, corporate bond yields as represented by Moody’s Aaa (blue diamonds) were higher. A spread of about 1.00% at the beginning of the year had widened to 1.70% by the end of the year’s third quarter.

I don’t expect that wide spread to persist far into 2009, if even through the close of 2008. But although some of the contraction of the spread will come via easing of corporate bond yields, long-term government bond yields will likely rise somewhat as the economic crisis shakes itself out.

Several pension prognosticators seem to be expecting contraction of the yield spread, based on comments that have been made about estimated pension funded status levels as of September 30. Since measurement of pension obligations under generally accepted accounting principles is based on corporate bond yields rather than on government bond yields, is is quite correctly observed that declines during 2008 in the values of pension asset equity investments have been partially offset by decreases in the value of pension obligation, due to the higher corporate bond rates.

But at that point, those prognosticators and I part company, since they then proceed to imply or to directly compute how very deeply pension funded status would be further eroded if the yield spread were to return to the beginning-of-year levels entirely via a drop in corporate bond yields, without any corresponding change in the value of pension assets.

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Written by macheide

22 October 2008 at 7:23 pm

Posted in άctuary

Pet Me

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Pets?

meme from susan

A

Not enough.

We need a few more cats. And another husband for Gertie to murder. And an aquarium of tropical fish. And some ducks.

And may I have an alpaca, please?

bumper sticker [www.internetbumperstickers.com] - not me

Written by macheide

22 October 2008 at 1:01 am

Posted in not meme

Decided

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McCain’s campaign has finally convinced me.

I voted for Reagan both times around, remain solidly Republican despite all the damage our current president has done to the party, and don’t plan to switch my party affiliation. And have been waiting and hoping and urgently wanting good reason to vote for the Republican ticket in this election.

All I am being offered by the GOP is fear. Or worse. Powell called it what it is: demagoguery. Yet far from disavowing it or distancing himself from it, John McCain embraces it, repeats it, uses it as the basis for his own decisions.

Warren Buffett, one of the most thinking, successful men in the world in economic circles and surely no socialist, endorses Obama and believes in Obama’s leadership and plans; but without being given any solid reason for doing so, and without being given any substantive proactive alternative leadership or plan beyond stay-the-course, I’m supposed to choose otherwise on the basis of simple fear. Colin Powell, one of the most thinking, successful men in the world in foreign policy circles and surely no pal of terrorists, endorses Obama and believes in Obama’s leadership and plans; but without being given any solid reason for doing so, and without being given any substantive proactive alternative leadership or plan beyond stay-the-course, I’m supposed to choose otherwise on the basis of simple fear.

I have investigated more, read more, watched more, gone far further into this election than for any before in the decades I’ve been a voter, because I have wanted desperately to vote for McCain. Alas, his campaign gives me only reason to vote against him, and he has shown no leadership whatsoever as his campaign gets only uglier and uglier. Is this what we want of our President: as the pressure and adversity get worse, the decisions made by the leadership only spiral out of control?

At first, McCain’s poor campaign decisions and abject lack of leadership only convinced me to abstain from voting for him. He and his campaign have finally convinced me what I need to do instead. I’ll be voting for Obama. With no regrets.

 

 

bumper sticker [www.internetbumperstickers.com] - jourbeau

Written by macheide

21 October 2008 at 9:56 pm

Posted in jourbeau

APM – Contrasts with Other Sets

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The Aftermath Pension Metric is determined on the basis of S&P 500 companies as of each business date. As of the same date the S&P is modified, the APM calculation picks up the change. For example, this past September 16, the S&P 500 dropped Lehman Brothers, for obvious reasons; so Lehman’s pension plans – reflecting almost $1.8 billion of pension assets as of the end of 2007 – were dropped from APM calculations as of that date. On September 19, Lehman’s spot was filled by Harris Corporation; since Harris has no defined benefit pension plan, that addition had no effect on the APM. Of course, the net effect of the deletion of a pension plan sponsor and its replacement with a company sponsoring only a defined contribution plan is simply the equivalent of the elimination of the departing company’s pension plan data from the APM calculations, previously noted as the typical phenomenon.

Typical, but not always the case. Today, the S&P 500 bids farewell to Dillards, which had been contributing only the liabilities of an unfunded supplemental executive retirement plan (SERP) to the APM. Its replacement is Nasdaq, which sponsors both a SERP and a mildly underfunded qualified pension plan; although both were frozen in mid-2007, they more than fill Dillards’ departure. But with only about $31 million in pension plan assets as of the end of 2007, this update won’t change the APM by any significant digit.

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Written by macheide

21 October 2008 at 4:04 pm

Posted in άctuary

Accidental Halt

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On 75 north near McKinney just after lunch, just one exit shy of where we’d be turning to get Jenny back in time for her 3:00 starting time for work today, the traffic came to a complete stop, all lanes. When a helicopter landed just ahead of us after we’d been sitting for maybe 5 minutes, I ventured out to see if anything could be seen. We were close enough to where traffic was stopped to guess that we’d probably been no more than 3-5 minutes down the road when the accident had occurred.

I took several distant snapshots, but hurried back to our car upon seeing a stretcher being readied for lifting to the helicopter, correctly figuring that once the helicopter lifted off, the traffic would be moving again.

bumper sticker [www.internetbumperstickers.com] - adrien

Written by macheide

19 October 2008 at 12:05 pm

Posted in Adrien