Targeting Your 401k - WSJ.com
Tax breaks alone hardly explain the popularity of 401ks. Over the past 30 years, the number of individuals covered by them nearly trebled, up to 65 million accounts, while the number under defined-benefit pension fell 30%. People are attached to their 401ks because it is their property, which they can carry with them to new jobs unlike traditional pensions, manage as they see fit and bequeath to heirs.

My interpretation of this snippet is that “401k’s are popular not just because of the tax breaks, but because it is the property of the person.” Is that your interpretation?

If so, that’s pretty silly. It’s not like employees have a choice of whether they get a 401k or a pension plan - they get whatever the employer offers them, and few offer pension plans anymore.

Here’s another interesting snippet:

The main liberal objection to 401(k)s seems to be that they let average Americans control their own investment decisions for retirement.

I think there’s actually two issues here:

1. Is it really true that the main liberal objection to 401k’s is because it allows average Americans to control their own investment decisions? Are there other objections? I don’t know.

2. This supposes that it is a good thing that average Americans control their own investment decision for retirement. Is that really true?

In fact, this Wall Street Journal article from August 2008 tells the tale where 401k’s went horribly awry, forcing taxpayers to bail out teachers:

Seventeen years ago, West Virginia school employees joined millions of workers nationwide in a shift from a pension plan that guaranteed a monthly check, to a retirement-savings plan that would make the teachers, bus drivers, custodians and other staff responsible for their own investment accounts.

“It was horrible,” says Judy Hale, president of the West Virginia Federation of Teachers union. Most felt poorly informed, and they invested too conservatively, putting the largest sums of money into a fixed-rate annuity, a safe but low-yielding option that typically is inadequate for building a nest egg. As employees began to retire, most balances were pitifully small. So on July 1, after a vote authorized by the state legislature, 14,871 school employees, or 78 percent, switched to the old-fashioned pension plan.

After the vote, teachers were “jumping up and down and crying in the halls,” Ms. Hale says.

The school employees put their mistakes behind them, but their experience stands as a cautionary tale for employers and employees across the country. As large numbers of workers are starting to retire with 401(k) or 401(k)-like plans to support them, what happened in West Virginia is a window into exactly how things can fall apart for workers, and it serves as a wake-up call for figuring out how to avoid having plans go as badly off track as this one did.

[snip]

The West Virginia plan initially offered stock and bond mutual funds, a money-market fund, and an annuity, in this case from Variable Annuity Life Insurance Co., or Valic, a unit of American International Group Inc. In addition to the Valic annuity, current offerings include funds from Capital Group Cos.’ American Funds unit, Federated Investors Inc., Fidelity Investments and Franklin Resources Inc.

From the start, most employees favored the annuity. Some say they were swayed by Valic’s sales force, which included former educators and school employees who went into the schools during the workday to talk about the option. “These people came during your lunch or during your planning period basically to sell the program,” says Debra Elmore, a third-grade teacher in Ansted, W.Va.

Ms. Elmore acknowledges knowing little about investing. “Oh, Lord no,” she says. “I had no idea.” She set up her account so that 85 percent of her contributions would go into the fixed-rate annuity. “I just thought, ‘Well, these are safe. Let’s stay there.’”

Here’s a pretty interesting list of interviews about how 401k’s came to being. Some snippets

The 401(k) plans were originally introduced as supplemental plans. No one ever said, “Oh, let’s end these traditional pensions and replace them with 401(k) plans.” What happened was these 401(k) plans came in at the same time the stock market took off. People liked them because they liked having their own accounts that they could look at, and they liked being able to control their investments, particularly in an environment where stocks go up every year. And employers liked these plans because they didn’t have to worry about the risk and what it might do to their earnings. …

Apparently, the 401k was a one line change to benefit a few execs at a certain company.

On the other hand, 401k’s are better for people who change jobs regularly.

Suffice to say, there’s plenty more to 401k’s, the pros, the cons, the possible reforms than exist in the soundbites you hear in the news and from politicians.

Gov’t offers little help for stuck air passengers - Yahoo News
A federal task force approved voluntary guidelines Wednesday for airlines and airports dealing with passengers stranded for hours on the tarmac but produced no fixed limit on how long they can be delayed before being allowed to leave planes.

Passengers who had hoped for stronger protections were left empty-handed by the guidelines.

…

The task force report recommends that:

_Airlines update passengers delayed on tarmacs every 15 minutes even if there is nothing new to report.

_A secure room be provided for passengers from diverted overseas flights so they can avoid having to go through security checks when reboarding an aircraft to their final destination.

_When practical, refreshments and entertainment should be made available to passengers confined aboard aircraft awaiting takeoff.

_Airlines should make reasonable efforts to be keep airplane restrooms usable.

…

Ruden said his main objection is that the task force does not ask Peters to require airlines and airports to develop contingency plans.

I must say, I’m pretty disappointed. Those are not exactly the sweeping reforms I was looking for. Here’s to 2009 being another interesting year for the air travel experience.

“You’re resuming a download, but the file on the server has changed.”

And I fix that by doing … ?

But when it rains, it pours.

Last Monday I made a deposit at a Major Bank that I had just switched to, after 13 years with Citibank. Generally when I make deposits, I go to a teller. Call me old fashioned. I deposited a money order and I noticed that today, it still hadn’t been credited to my account.

So I called and they said they had no record of my deposit. Now at home, I found the receipt and it turned out that the amount had been credited to account ending 1141. Uh. My account is 1191.

Now I’ll be the first to admit that my handwriting isn’t great, so 9->4 is quite possible. But the fact is that before the teller accepted my money order, I had to swipe my ATM card and enter a PIN.

Shouldn’t some sort of alarm been raised at the fact that I was trying to deposit a money order to an account that was not mine? What was the point of swiping my ATM card and entering my PIN?

This raises all sorts of troubling questions. Hopefully I’ll uncover what happened tomorrow. Oye vei!

As an aside, I now understand why it is called crediting my account at the bank!

UPDATE: A few calls later, the money magically appeared in my account. Lesson learned - always check your receipt.

PHD Comics: Deadline

I remember that happening a lot in college in computer science - especially in my junior year when at the height of the Dot Com boom, all these people (including some wearing scrubs) decided they wanted to become database experts. As a result, the servers kept falling over, and in two separate classes that I took in Fall that semester, people could not submit their final projects until early in the Spring semester.

Extensions are not always a good thing.

Lehman Bros. bust hit San Mateo County hard
San Mateo County has been stung by the recent Wall Street investment crisis, absorbing about $150 million in potential losses that could result in public school budget cuts, delays on road and Caltrain improvements, and scaled-down city services.

…

Funds from these cities, school districts and special districts were pooled together in San Mateo County’s $2.6 billion investment portfolio. Critics have said the county needs to hire an outside expert for this portfolio.

Jean Holbrook, the county’s superintendent of schools, pegged countywide losses at $37.4 million for kindergarten through grade 12. The San Mateo County Community College District, whose three colleges serve 40,000 students, lost $25.2 million. The countywide school insurance fund lost more than $550,000.

“It’s hitting at the same time that we had a late and inadequate state budget,” Holbrook said. “Those losses are impossible for a school district to absorb. This is not money just sitting around in reserves. It’s used for our ongoing operating expenses - paying salaries, and making the payments on buildings and facilities.”

The Sequoia Union High School District, which includes schools in Belmont, Woodside, Atherton, San Carlos, Redwood City and Menlo Park, was hit especially hard by the bankruptcy, losing $6.6 million - more than any other district in the county, said spokeswoman Bettylu Smith.

…

Church and other supervisors are considering whether to limit the amounts invested from each issuer of commercial paper and corporate bonds, from 10 percent to just 2 percent of the county pool. The Lehman Bros. portfolio accounted for 5.9 percent of the county’s investment fund.

This is rather unfortunate. Given the precarious position that most schools are in already, this is just more bad news.

Did you know that there’s a secret security line that’s only open between 5am-11am and has no one in line (because it’s secret)?

Just walked a little further outside to the International Arrivals building. If you have a boarding pass already, and have only carry on luggage, apparently they will allow you to enter and be screened there.

I walked by Friday and then doubled back to re-read the sign stating the rules. A TSA agent noticed and actually tried to flag me down to enter because I guess there was no one there (I was trying to leave the airport though… not enter).

Pretty neat. But only between 5am-11am according to the sign.

Firefox 3: Google Browser Sync Discontinued, No Firefox 3 Support
googlesync-installed1.jpgReader hominid.todd says that a Google rep emailed him about the long-awaited status of the Browser Sync extension for Firefox 3. Turns out they’re discontinuing development on it. Here’s Google’s response to hominid.todd’s inquiry:

Thanks for trying out Google Browser Sync and for all of your feedback. It was a tough call, but we decided to phase out support for Browser Sync. Since the team has moved on to other projects that are keeping them busy, we don’t have time to update the extension to work with Firefox 3 or to continue to maintain it.

Good to know in case you were looking for it.

Bill Would Limit Customs’s Laptop Seizures - Yahoo! News
Democrats in Congress are proposing legislation to limit the authority of customs agents to search and duplicate Americans’ laptops, PDAs, and other electronic devices at border crossings.
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The move follows the release of documents showing that the U.S. Customs and Border Protection agency broadly expanded the authority of agents to search and duplicate materials from travelers entering the country without the requirement of reasonable suspicion.

Two Democratic senators, Russ Feingold of Wisconsin and Maria Cantwell of Washington, have cosponsored a bill that would require customs agents to establish a “reasonable suspicion of illegal activity” before searching the contents of laptops or other devices carried by U.S. citizens entering the country. The measure would also limit the amount of time that officials can detain laptops and other devices without a court order and forbids the use of race, ethnicity, religion, or national origin in search selection. A similar bill has been introduced in the House of Representatives.

Now this is a bill I can support!

Buffett’s company to buy $3B of GE preferred stock

For the second time in just over a week, Berkshire Hathaway has moved to shore up a company long known for its ironclad fiscal health. Buffett’s company invested $5 billion in Goldman Sachs last week after the famed investment bank’s shares had slumped. Investors feared Goldman could face similar funding squeezes as Bear Stearns and Lehman Brothers.

-

Berkshire, based in Omaha, Neb., is buying $3 billion of preferred shares of GE, which carry a 10 percent dividend. The terms are similar to those Buffett struck with Goldman Sachs. Berkshire also has the option to buy $3 billion worth of GE common shares for $22.25 each at any time over five years. GE’s shares closed at $24.50 Wednesday.

Today a taxi driver ranted to me about why he was angry with the bailout. (I really didn’t solicit his views being that I had slept only about 4 hours). Basically he was angry because were bailout out the rich Wall Street people who put his retirement at risk. Apparently, his retirement funds are at AIG. Fear was likely one factor in his anger. But he was also angry at the fact that we would have to borrow more money from China - and that the US was no longer the most powerful nation in the world, but rather China. A key piece of evidence? The number of medals that China won in the Olympics.

Now I don’t profess to have any insight on whether or not this bailout is the right thing to do or not. I know that something has to be done - but I’m not sure if this is the right plan. It’s a very complicated plan and I really wish I had more time to understand it. Why this specific plan? What were the alternatives? Why $700 billion and not $950 billion or $421.3 billion? I mean, this plan has been in the works for a while apparently:

White House Dispatches Team to Push Economic Bill

[White House Deputy Press Secretary Tony] Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.

It seems to me that much of the angst around this plan is driven by poor communication. If you don’t tell your story, other people will tell your story for you, or people will make up their own story in a vacuum - generally those aren’t good things. It seems to me that this would’ve gone much better had someone in the executive branch given a PowerPoint presentation on the exact details about how this $700B would be used. Instead, we got what I consider to be a lot of hand waving.

It’s all too late now, so it’ll be interesting to see how the next vote pans out. Salon has some interesting tidbits on the changes to bailout plan v1.1:

“A tourniquet for a hemorrhaging economy” - How the World Works - Salon.com
But here’s a taste:

* Sec. 105. Energy credit for geothermal heat pump systems.
* Sec. 111. Expansion and modification of advanced coal project investment credit.
* Sec. 113. Temporary increase in coal excise tax; funding of Black Lung Disability Trust Fund.
* Sec. 115. Tax credit for carbon dioxide sequestration.
* Sec. 205. Credit for new qualified plug-in electric drive motor vehicles.
* Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax.
* Sec. 309. Extension of economic development credit for American Samoa.
* Sec. 317. Seven-year cost recovery period for motorsports racing track facility.
* Sec. 501. $8,500 income threshold used to calculate refundable portion of child tax credit.
* Sec. 503 Exemption from excise tax for certain wooden arrows designed for use by children.

Children’s wooden arrows. Huh.

A Goodbye to Shea Stadium From the Cockpit - NYTimes.com

“You are so low and close you can see it and almost smell it,” said Glen Millen, who estimates that he has flown into and out of La Guardia 1,800 times since he began flying for American Airlines in 1986.

La Guardia is one of the few airports in the country where pilots use land markers instead of instruments to guide their landings, along with Seattle (a shopping mall) and Washington (a river). Shea Stadium, which from the sky looks like a blue circle with a green center, is a primary runway guidepost. For one of the more common landing routes, pilots are instructed to follow the Long Island Expressway until they arrive at the eastern side of the stadium, at which point they bank the plane left around the outfield wall and head straight for Runway 31.

Among pilots and air-traffic controllers, it is known as the “expressway visual approach.”

[snip]

Until the 1980s, when radios that were used in cockpits to pick up transmitters began to be phased out, some pilots would tune them to the local broadcasts of the Mets’ games during landing and take-off.

“You would dial in and you could hear your plane fly over,” said Sam Mayer, a pilot with American Airlines since 1990. “There were guys who would goose the throttles to make a louder noise so they could hear themselves on the radio.”

I never knew that Shea was a landmark for aviation. How unusual.

I’m glad was able to go to Shea one last time earlier this summer before it is demolished.

To the right, you can see Citi Field being constructed. While the brick work is nice (reminds me of Camden), it’s not as iconic as the blue-ness of Shea.

I’ve never been to the old Yankee stadium, and apparently I never will!

A demonstrator holds up a sign behind US Treasury Secretary Henry Paulson (left) and Federal Reserve Board Chairman Ben Bernanke during Senate a hearing at Capitol Hill in Washington, DC. Bernanke has said the US economic outlook may be “quite adverse” without a stabilization soon in troubled financial markets.

What? No Fail Whale?

I’m open to recommendations. Ideally it would be a place that has service via American Airlines so I can use my increasingly devaluing miles. I’ve ruled out London (though I love that place) due to British pound depresses me, and that it gets 1.75 hours of sunlight.

Thoughts?

Kiss of Death – Contract Provisions Entrepreneurs Should Avoid at All Costs | infoChachkie
Kiss of Death Provisions

The allure to of a company-changing deal with a BDC is strong. Big companies make a number of seductive promises, including access to large markets, significant financial resources and vital public validation of your solution see Pulp Facts. However, fight the urge to close such enticing deals on the BDC’s terms. Stand your ground and negotiate a fair agreement, even if it takes longer and forces you to expend more energy than you would prefer.

To this end, never agree to any of the following Kiss of Death Provisions when negotiating with a BDC, no matter how lucrative the potential relationship:

Allow the Other Side to Draft the Agreement
Deploy a Free Pilot
Cut a Multi-year Agreement
Lock Down the Escape Hatches
Give up Branding
Relinquish Press Release Capabilities
Approve Unilateral Provisions
Accept Unlimited Liability
Forgo Change of Control or Agree to a ROFO or ROFR
Serve up World-wide Distribution
Relinquish Joint Intellectual Property Rights
Execute an Ambiguous Statement of Work
Agree to Bundling Without a Minimum Price
Grant Most Favored Nations Status
Issue Unmitigated Exclusivity