Tuesday, November 30, 2010


The European Commission has enough troubles keeping themselves solvent. Now they feel the needto launch a "formal" investigation into whether Google has abused its market position in online searches.

It seems the European Union may just be looking for some type of deep pocketed U.S. Firm they can trump up ridiculous charges against, order a "formal" investigation and hope to "extort" fines from in the form of a cash settlement.

No wonder there is such trouble everywhere over everything...


It's pretty rare that a CEO (let alone a co-founder) is escorted out of a building by the head of security. According to public documents that's how Lewis Sanders left his position at Alliance.

It doesn't seem logical that you escort a CEO out of the building with the head of security just because of client investment performance. It just makes no sense. What's the real story?

Alliance, you are a public company. Shareholders have a right to know why Lew Sanders, who has been lecturing students at Columbia University on investments, has been called a "legendary investor" in the press, and was CEO of your company would need the head of security to escort him out of the building.

I may misunderstand the figures but Alliance made a $600 million dollar settlement with the legal authorities for questionable activities in their funds. This seems like such a huge settlement and with company money, not management money. Why such a large punishment?

Was anyone being protected in the settlement negotiations?

Thursday, November 18, 2010


There is so much misleading information in all types of media that it’s absolutely a wonder that democracy can function at all. A few examples, the New York Times in a recent article titled Saving Momma From The Train Professor Richard T. Thaler states “The Congressional Joint Committee on Taxation estimates that eliminating the estate tax would cost over $500 billion over the next decade.” This piece of information is so out of context and leaves such a dishonest impression that it is “mind boggling”.

The Professor should know that to almost everyone $500 billion sounds like a heck of a lot of money. If you collected a billion grains of sand it would also sound like a heck of a lot of sand, but in reality, it’s next to zero percentage of the total sand in the world.

The government collects approximately $4 trillion of receipts from all kinds of taxes. Estate tax collections believe or not, are less than one percent of this figure annually. Over the next ten years the government’s receipts from taxes are estimated to be $45 trillion plus and the $500 billion in estimated estate tax receipts is not much over than one percent of the total. Obviously a very unimportant number.

The great attempt to mislead the public by claiming that the estate tax is important to the government balancing the budget is again misleading.

Furthermore, it is absurd to tax $7 million or $10 million estate the same amount as a person having a $1 billion estate. With a $1 billion taxable estate, even if it was taxed at 90%, there would be more than enough money left over to take care of all their children, charities and everything else. At the $10 million level the amount leftover after a 90% estate tax would hardly be described as leaving their biological heirs wealthy.

I said in an earlier blog that the political rhetoric, name calling and class warfare commentaries would inhibit the solving of the problems that exist in our society.

To make this discussion even clearer if someone makes a lot of money they either spend it or invest it. If they build a huge house, their money is transferred to the contractors, brokers, furniture manufacturers, plumbers and everyone else. If they buy stock the money is transferred to the seller, it’s not put under pillows. The same is true for money left to heirs, it circulates through the economic system. We will talk more about this at another time.

The New York Times often writes articles about the inequality of wealth. Without further comment, I looked at the total compensation of the top executive at the New York Times. This is a very poorly run company and in my opinion has done almost everything wrong. The total compensation of the top executive at the New York Times was approximately $6,000,000.00 in 2009. Enough said for now. Stay tuned...

Shepard Osherow. All Rights Reserved