Stopping By Woods on a Snowy Evening, Plus an Absurd Delight

It's been a joy having our son Drew home for the holidays. This was my first White Christmas since boyhood in Michigan. The show socked us in on Christmas Day, and it was glorious.

This week is a convenient one for moving our office because of the quiet time between the holidays. Unfortunately, the weather is not cooperating, so we might not be able to finish the job. No matter; we will be settled in soon enough.

In the meantime, I have a couple videos you might be interested in. I made the first one yesterday as the snow continued to fall around our home. The scene was so quiet and peaceful that it reminded my of Robert Frost's famous poem "Stopping by Woods on a Snowy Evening" (my dad's favorite). Thus inspired, I made the video below, complete with a poor recitation of said poem.

The second video is an excellent example of that 21st-century phenomenon known as the "viral video." You have probably heard this term; it refers to the occasional online video that, for some reason or other, catches on with Internet surfers.

This particular example was pointed out to me by Drew. It comes from Eastern Europe and was made in the 1970s. It shows a man singing a song with no lyrics. But that description in no way captures the strangely captivating combination of musical oddness, un-self-conscious humor, and otherworld absurdity that has led over 7 million people worldwide to view it. Try it; you may find yourself replaying it several times.

It's the last week of what has turned out to be a pretty darned good year. Be safe on New Year's Eve!


Video 1: Stopping by Woods on a Snowy Evening



Video 2: An Absurd Delight

A Christmas Wish, and a Depot Mystery

With Christmas just a few days away, this week's commentary will be brief.

If your family is anything like mine, you'll have several get-togethers with loved ones from far-flung locales. But each family is different, and the same holiday season that brings joy to some can bring angst and even pain to others. With that thought in mind, we would all do well to share a bit of ourselves with those who need some cheer this Christmas.

May your own Christmas be blessed and joyful, and may you share that joy with those around you. Have a great week and a very Merry Christmas.

-Andy

Depot Update Millard & Company will be moving into our new home (the restored Tryon train Depot) within the next couple of weeks. I wanted to share this photo with you before we start hauling furniture. Early on in the renovation process, during the demolition phase, Mike and his crew uncovered this bit of writing on an interior wall of the freight room. It is written in chalk and evidently covers a period on some ten months. In case you're having a hard time deciphering it, it reads, "Burgin Didn't Check Anything On Aug. 19 1925." Below that, it says, "ALSO ON Nov 17, 1925." Then to the right is written, "also on June 24, 1926." Isn't this a curious bit of scrawl? It seems to me to be a reference to checked baggage or freight, but why would the non-checking of baggage warrant being written on the very wall of the station? Could it be refer to an underperforming depot worker? If you can interpret these obscure hieroglyphics, please share your thoughts.

Something for Everybody to Hate.

I'd like to direct your attention to the article below. It gives a concise summary of the pending tax deal between President Obama and Congressional Republicans (the first vote occurred recently in the Senate). This is important because, if approved, it would affect everyone whopays taxes. If the definition of a compromise includes a provision for everybody involved to be unhappy, then this one is a classic case.

A COMPROMISE.

The President agrees to preserve the Bush-era tax cuts for all, surprising his party.

Many expected a deal - but not necessarily this one. 

Political and economic analysts widely believed that President Obama and Republican leaders would reach a compromise on the Bush-era tax cuts. Many felt a deal would be struck early in December. Yet few forecast how agreeable the President would be.

The Bush-era tax cuts would be extended for the wealthy. 

Under the bipartisan plan, the EGTRRA and JGTRRA tax cuts would be extended through 2012 for all taxpayers. At a White House press conference Tuesday, the President simply categorized it as "a good deal for the American people."^1,2

In the eyes of some Democrats, it is just a sellout. Sen. Mary Landrieu (D-LA) termed the deal "unconscionable." House Minority Leader Nancy Pelosi (D-CA) offered more or less the same view: "Republicans have held the middle class hostage for provisions that benefit only the wealthiest 3%, do not create jobs and add tens of billions of dollars to the deficit." Rep. Jim McDermott (D-WA) referred to the compromise as "the President's Gettysburg." (At least he didn't mention Waterloo.) Sen. Bernie Sanders (I-VT) called the deal "an absolute disaster and an insult to the vast majority of the American people" and said he would attempt a filibuster.^3,4

Tuesday, President Obama noted that he would fight to repealthese tax breaks in 2012, emphasizing that the preservation of the cuts will be temporary.² (Of course, the EGTRRA cuts were considered "temporary" nine years ago.)

The deal could give us the lowest estate taxes since 1931. 

The fine points of this bipartisan accord haven't been hammered out yet, but here is what we know about it so far. Under the agreement,

• The 10%, 15%, 25%, 28%, 33% and 35 % marginal tax rates created by EGTRRA in 2001 would be preserved through 2012.
• A one-year, 2% cut in payroll taxes would make up for the expiration of the Making Work Pay credit. The Obama administration says this move will cost $120 billion with no impact on Social Security.
• The estate tax would be set at 35% with a $5 million exemption.
• Long-term jobless benefits would be extended through the end of 2011, at a cost of about $56 billion according to the White House.
• Businesses would be able to expense 100% of their investments in 2011 (retroactive to September 2010).
• The present R&D tax credit and other business-incentive credits would be extended through 2012.

The non-partisan Congressional Research Service figures that maintaining the Bush-era tax cuts through 2012 would cost America $314.9 billion.^1,2

Essentially, a trade was made. 

President Obama allowed the EGTRRA and JGTRRA cuts to live on for the wealthy in exchange for some of what he wanted - an extension of unemployment insurance and a payroll tax reduction.

Will partisan sparring stop the deal in its tracks? 

The accord is less acceptable to Democrats than the recent House bill introduced by Rep. Sander Levin (D-MI) and the Middle Class Tax Cut Act of 2010 introduced by Sen. Max Baucus (D-MT), which was defeated on December 5. Some Congressional Democrats are regarding the agreement the way a child regards spinach: not very palatable, but somewhat acceptable. Others are ready to fight it tooth and nail.

Or will opposition soften?

At last week's meeting of the White House deficit commission, Honeywell CEO David Cote made a striking remark on the process of compromise: "We can't let the perfect be the enemy of the good."

Here in December, Congress might want to abide by his advice - especially after President Obama's remark that "a long political fight that carried over into next year might have been good politics, but it would be a bad deal for the economy and it would be a bad deal for the American people."²

Citations

1 - online.wsj.com/article/SB10001424052748703296604576005430598327972.html [12/7/10]

2 - bloomberg.com/news/2010-12-07/obama-says-tax-compromise-will-spare-middle-class-americans-rate-increase.html [12/7/10]

3 - seattletimes.nwsource.com/html/politicsnorthwest/2013616523_mcdermott.html [12/7/10]

4 - content.usatoday.com/communities/onpolitics/post/2010/12/obama-democrats-tax-cuts-reaction-/1[12/7/10]

5 - www.montoyaregistry.com/Financial-Market.aspx?financial-market=the-balancing-act-weathering-the-burden-of-sudden-wealth&category=22 [12/7/10]

Stepping From Behind the Curtain -- Voluntarily

Two friends sent me the same link to a very interesting article in the November 26 New York Times. It is entitled A Dying Banker's Last Instructions, and it describes Gordon Murray, a Wall Street veteran of Goldman Sachs, Lehman Brothers and Credit Suisse First Boston. Like most others in his circle, he spent his career in a futile attempt to beat the markets. It didn't work, of course: after retiring, he discovered a different, simpler -- and better -- way to invest.

A terminal case of brain cancer led him to co-author a book about how this better investing approach involves simply "investing in a collection of index or similar funds and dutifully rebalancing every so often."

Quoting again from the article: "The mere fact that Mr. Murray felt compelled to write it is itself a remarkable story of an almost willful ignorance of the futility of active money management - and how he finally stumbled upon a better way of investing. Mr. Murray now stands as one the highest-ranking Wall Street veterans to take back much of what he and his colleagues worked for during their careers."

Why am I pointing this out? (Cue up the self-horn-tooting music...) Because this is precisely the investing approach that we have been taking with our clients for over a decade. In fact, Mr. Murray's book sounds like it could be a virtual re-write of my own Low-Stress Investing, published in 2002.

So, see? I'm not just making this stuff up.

Have a great week, and remember to shop locally!