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To: DMaA who wrote (20446)1/10/2012 1:45:21 AM
From: ahhaha
of 24467
 
That pile of nothing paper written by hoodwinkers had nothing to do with my comments.

Concerning that paper, maybe you guyz can be fooled by the use of, ah ha ha, discrete Fourier transforms, but pleaz. The transforms merely "shape up" the time series data. Tells you nothing that the raw data didn't already say.. The whole paper tells you nothing. Evidently, it was written to show that the airline industry is on a 11 year profit cycle, and it was written to show off elementary math. This is a requirement in econometrics. We don't discuss econometrics here since it's mathematical (there's nothing in the math. It's superfluous), and therefore boring.

Every nuance of that paper whose carefully secreted ulterior motive is to build a case against deregulation makes false assumptions and reaches false conclusions. That's in the nuances alone. How could a collection of nonsense reach truth? For example, dereg had no discernible effect on airline profitability. Why not? How could it? They weren't deregged! Please explain how any industry could consider itself deregged under Tip O'Neal and the McGovern leftover 'crats still roosting in Congress.

The recession of '81-'82 was extremely intense, far worse than what we have now except then housing went inflating right on through not scratched one iota, and this had the salient effect of reducing the psychological intensity of 15% inflation and 20% interest rates since the majority felt all hunky about their ere inflating assets, Bring it on! This recession distorted airline profitability because the airlines hadn't recovered from the '79 oil embargo. Do those clowns mention any of these factors? No! They have socialism to promote.

Ironically, they fail within their own bounds and their own casting of some unknown data that doesn't square with, say, S&P airline profitability for that era, to show this ethereal 11 year cycle. You can check the long term stock charts to find the true profitability. They look like the averages where no 11 year cycle is purported to exist. Just ask da_chief!

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To: Lhn5 who wrote (20448)1/10/2012 2:13:28 AM
From: ahhaha
of 24467
 
Yes for phrase 1 and 3 silly of me to leave out that lower price increases demand.

And you say you're unstained by the milieu...but the above shows you're deeply in. Lowered price doesn't increase demand. Just removes inventory. Don't you remember Grace's Tomatoes and the lesson there? Increased supply raises demand, but lowered price causes supply to decrease at least initially. In econ 1 they use terms like "quantity demanded", and "demand", two words which don't mean the same thing, to depict a differentiation between a quantity in flux from one in stasis. Part of the problem here was touched in an earlier post. All economic quantities have to be expressed in their marginal forms.

Quality in service industries are also harder to quantify.

Service is just another product. Maybe service is easier to quantify but for heuristic purposes they're taken equal.

Which hygienist does the best teeth-cleaning?

There's no free market there and so no one will be allowed to find out.

Or is the entertaining banter more important than the teeth?

In socialistic milieu everything is confused. There must be a hundred 20th century novels, not all written by Solzhenytsin, that explicate this. You go to get your teeth cleaned but you wind up with a lecture on the glories of green energy.

Gore saves, green stamps.

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To: ahhaha who wrote (20449)1/10/2012 8:33:41 AM
From: DMaA
of 24467
 
I didn't intend for you to read the paper. All I said was see figure 3.

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To: ahhaha who wrote (20450)1/10/2012 10:00:45 AM
From: dvdw©
of 24467
 
Your smoking today....eom.

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From: ahhaha1/10/2012 10:22:52 AM
of 24467
 
More on AA (from Briefings)

Dahlman Rose notes AA reported 4Q11 adjusted EPS (exclusive of $159 MM in restructuring charges related to capacity curtailments) of ($0.03) versus firm's est of $0.01 and consensus of ($0.02), which compares to adjusted EPS of $0.15 in 3Q11 and $0.21 in 4Q10. Overall performance suffered from realized pricing decreases, despite sequential shipment increases in the alumina and primary aluminum segments. Free cash flow increased to $656 MM versus $164 MM last quarter

Realized price decreases? Read, AA didn't want to lower prices because they knew it would hurt the bottom line, but to move dead inventory they had to give discounts because that's all the market would bear.Meanwhile, shipments rose, so AA is moving metal at an ever greater loss. This is recession data and AA is headed for BK unless they downsize. What did they fail to do? Lower prices 18 months ago, a move they didn't think they could do because of looming pension liability costs. So they had to run hot which left them with excess inventory even while their order rate was rising they were taking a loss on every marginal ingot!

It's a disasta.

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To: DMaA who wrote (20451)1/10/2012 10:23:35 AM
From: ahhaha
of 24467
 
What do you have to say about fig 3?

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To: ahhaha who wrote (20454)1/10/2012 10:30:25 AM
From: DMaA
of 24467
 
We were discussing airline profits. I thought it might be useful to have some facts to ground the discussion.

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To: DMaA who wrote (20455)1/10/2012 11:19:16 AM
From: ahhaha
of 24467
 
Which facts?

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From: sixty2nds1/11/2012 6:31:48 AM
of 24467
 

online.wsj.com
Class Warfare and the Buffett Rule


Implementing a surtax on 'millionaires' would hurt just about everyone but the super rich like Warren Buffett.

By ARTHUR B. LAFFER

The political season has barely begun, and yet we already know that class warfare will be President Obama's key issue in the 2012 general election. It's even reared its ugly head in the Republican primaries, with the candidates trying to paint front-runner Mitt Romney as a cold-hearted capitalist and Rick Santorum proposing targeted tax breaks for the "working class" manufacturing sector.

But none in the GOP can compare with the progressive intelligentsia's obsession with tax increases on the rich to raise revenues and achieve social justice. In a New York Times op-ed last August, Berkshire Hathaway CEO Warren Buffett famously asked Congress to "stop coddling the super-rich," complaining that his effective tax rate was half that of the other people in his office. He then instructed Washington to raise tax rates on millionaires and billionaires like him and retain the employee payroll tax cut on those "who need every break they can get."

Waving Mr. Buffett's op-ed for all to see, Mr. Obama wasted no time in proposing a surtax on millionaires called the "Buffett Rule." Putting aside all the oohing and ahhing over Mr. Buffett's selflessness, his effective tax rate on his true income would hardly budge if this "Buffett Rule" were applied. What's worse, raising the highest tax rates would most likely worsen the budget deficit and lead to a further weakening of the economy. Everyone would suffer.

Mr. Buffett stated in his op-ed that he paid $6,938,744 in total income and payroll taxes in 2010, representing 17.4% of his taxable income, which puts his taxable income just under $40 million. Although certainly a fantastic sum, $40 million actually understates Mr. Buffett's income in 2010 by more than 250-fold.

Mr. Buffett's net worth rose by $10 billion in 2010 to $47 billion, according to Forbes Magazine. That increase, an unrealized capital gain, is part of his total income by any standard definition, including the one used by the Congressional Budget Office. After also including a $1.6 billion gift to the Bill and Melinda Gates Foundation, Mr. Buffett's true income in 2010 was much closer to $11.6 billion than the $40 million figure cited in his op-ed. Hence his true effective tax rate was only 6/100ths of 1% as opposed to 17.4%. And these are just the additions to his income that we know about.

The "Buffett Rule" would not tax the vast majority of his shielded income, including either his unrealized capital gains, which are currently taxed at zero percent, or charitable contributions, which are tax deductible. If the "Buffett Rule" were applied as President Obama proposes, then Mr. Buffett's federal tax bill would have been $14.4 million, rather than the $6.9 million he actually paid. As a fraction of his true income, his effective tax rate would only have risen from 6/100ths of 1% to 12/100ths of 1%.

Mr. Buffett's donation to the Gates Foundation goes to the heart of my critique of his public call for higher tax rates on the rich. Just look at the second contractual condition for his ongoing pledge to the Gates Foundation: "The foundation must continue to satisfy the legal requirements qualifying Warren's gift as charitable, exempt from gift or other taxes."

In other words, if his gift weren't tax sheltered he wouldn't give it. So much for "shared sacrifice."

Incidentally, I'm not the first to question Mr. Buffett's commitment to "shared sacrifice" in balancing the federal budget. In a 2007 CNBC interview, when asked why he shelters his money through tax-free strategies rather than writing big checks to Uncle Sam, Mr. Buffett responded: "I think that on balance the Gates Foundation, my daughter's foundation, my two sons' foundations will do a better job with lower administrative costs and better selection of beneficiaries than the government."

So Mr. Buffett thinks he and his family can put their money to better use than the government can. I guess he's really not so different from the rest of us after all.

Mr. Buffett also stated in his op-ed that in his 60 years working with investors he has yet to see anyone "shy away from a sensible investment . . . even when capital gains rates were 39.9% in 1976-77." Mr. Buffett's choice of 1976-77 is prescient because the economy in 1977 was a basket case. The official Bureau of Labor Statistics unemployment rate was 7.1%, consumer price inflation was 6.7%, and the S&P 500 dropped a whopping 17% after adjusting for inflation. Indeed, 1977 is a good illustration of the type of economy Mr. Buffett's policies would deliver.

He also said in his op-ed that "people invest to make money, and potential taxes have never scared them off." To make his point he compares the 1980-2000 period when 40 million jobs were created to what's happened since 2000 with lower tax rates and fewer jobs created.

Surprisingly, Mr. Buffett is actually trying to cite the phenomenal growth during the Reagan-Clinton period of 1980-2000 as a result of high taxes. But the facts reveal that the 1980s and '90s should be used as Exhibit A for why Mr. Buffett's proposals are dead wrong. Between 1980 and 2000, the top marginal income tax rate was slashed to 39.6% from 70%, and between 1977 and 1997 the capital gains tax rate was cut to 20% from 39.9%.

When it comes to raising tax revenues by raising tax rates on the rich, Mr. Buffett would again appear to be on the wrong side of the argument. Between 1921 and 1928, the top marginal income tax rate fell to 25% from 73%. During this period, tax receipts from the top 1% of income earners rose to 1.1% of GDP from 0.6% of GDP. The top income tax rate dropped to 70% from 91% after the Kennedy tax cuts began in 1964, while tax receipts from the top 1% of earners rose to 1.9% of GDP from 1.3% of GDP in the period 1960 to 1968. By the way, these periods were two of the biggest booms in U.S. history.

Guess what was the third period of boom? Since 1978, the top earned income tax rate fell to 35% from 50%, the top capital gains tax rate fell to 15% from 39.9%, and the highest dividend tax rate fell to 15% from 70%. After taking office in 1993, President Clinton virtually eliminated the capital gains tax from the sale of owner-occupied homes and cut government spending as a share of GDP by the largest amount ever.

Meanwhile, the top 1% of earners saw their tax payments climb to 3.3% of GDP in 2007 from 1.5% of GDP in 1978, while the bottom 95% saw their tax payments drop to 3.2% of GDP in 2007 from 5.4% of GDP in 1978. Why would Mr. Buffett want to reverse these numbers?

Of course, cynics and die-hard progressives might object to the above evidence on the grounds that it was driven by an explosion of income gains. But that's largely the point.

Mr. Laffer, chairman of Laffer Associates and the Laffer Center for Supply-Side Economics, is co-author, with Stephen Moore, of "Return to Prosperity: How America Can Regain Its Economic Superpower Status" (Threshold, 2010).

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To: Lhn5 who wrote (20437)1/11/2012 10:07:30 AM
From: dvdw©
of 24467
 
Yes it usually does. The lowest cost producer is the producer who has the most controls over associate variables. The best of the best understand and live this. The rest....pretenders.

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