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Royal BlogTwo Wrongs Don't Make A Right... But Three Lefts Do June 29 Michael Jackson 1958-2009Michael Jackson passed on Jun 25, 2009 at the age of 50.
I'll go out on a limb: Michael Jackson was the most beloved entertainer of all time.
Elvis. The Beatles. Mohammad Ali. Michael Jordon. Tiger Woods. Of course these are all worldwide megastars.
But none were/have been a worldwide megastar every single decade of their lives.
Because we are nearly the same age, I've had the unique vantage of watching him step-by-step.
He was odd -- tragic -- destructive -- though we'll never really know the true nature of his crimes.
What we do know is he was unlike any other entertainer the world has ever seen.
I don't think he was misunderstood... but I think what he had to live through was incomprehensible by mere mortals.
Thank you for the music, Michael. Rest in peace. June 25 AIG: You've Got To Be KiddingWow, back-to-back you've got to be kidding days.
Who is AIG trying to fool? Don't we already own 80% of AIG (we do)... and therefore, don't we already own 80% of whatever it is they are spinning out?
Why the hell are we paying $25 billion for something we already have?
I hope I have this wrong... but AIG is starting to look more like a real bailout than an investment of last resorts. That would be bad. June 24 Citigroup: You've Got To Be KiddingWho says Joe Average can't run a public company?
Here's today's headline: "Citigroup to boost salaries, cut bonuses."
Even Joe Average can tell that someone is getting scammed on that one.
And that someone? We tax payers/investors, of course. Like the AIG bonuses, this is just offensive.
Believe me, I understand the temptation to want to designate certain employees as invaluable.
But when you've lost $2 billion a month for the last 18 months, my guess is you don't know what the hell is valuable or not.
In truth, very few employees designated as "invaluable" are, in fact, actually invaluable. I'm saying that with a few decades of scars on my back.
I wonder why the CEO of Citigroup doesn't know this?
I also wonder why the CEO of Citigroup doesn't know that the financial industry has been decimated and there are tons of quality professionals dying for employment?
I also wonder why the CEO of Citigroup doesn't understand how incredibly offensive pay raises for the very people who lost $36 billion over the last six quarters will sound to shareholders... uhm... will sound to we taxpayers/investors.
So I guess I wonder: Why is this person still CEO? June 17 I Just Solved The Gas CrisisSeriously, I just solved the gas crisis. If we're going to spend $1 trillion on a war that has nothing to do with freedom -- unless you define freedom as our right to waste as much cheap oil as we damn well please (which, coincidentally, a lot of people do) -- then why not spend $1 trillion giving 100-200 million people a free smart car? I'm not talking about the current type of Smart Car... I'm talking about a new, even smarter version... one that only goes no more than 50 miles per hour... and one that's electric so the source of power is also efficient. And, one that gets the equivalent of 150-200 miles per gallon... that's more than a magnitude jump in efficiency right there. What's the incentive for building such a car? A trillion dollars! That's how much we're spending on Iraq... with nothing of substance to show for it except continued high gas prices and ridicule in the world community. Believe you me, GM, Chrysler, and Ford would love to lead the world in the popularizing the next generation of smarter vehicle, especially if the U.S. government is paying. Heck, they'd probably consider it a "do over." Culturally, this would create instant acceptance for a small, run-around-town vehicle. I mean, who wouldn't take -- for free -- a nifty little energy efficient vehicle that you can re-charge in your own garage? (And speaking of garages, who couldn't use more space in their garage? <smile>) Not only would it create an efficiency in the most inefficient driving situation (short haul, stop-and-go, around town driving)... but if would double urban parking capacity... a horrific problem in most downtown areas. And, dare I say, the new smart car would save lives, too. Unfortunately, speed kills... and who needs speed boppin' around town running errands? And, dare I say, the new smart car would save the environment, too. Unfortunately, fossil fuels kill, too... or, for those of you that still don't believe that, you'll at least agree with me that -- at best -- they make a stinky mess of everything. And, dare I say, the new smart car would do what this particular war can't do: Lessen our dependency on middle east oil. If this happens, we would no longer would have the hypocritical conflict-of-interest we have: How do we promote democracy and plunder the middle east of their oil? I suspect that without oil concerns, our war on terror would be quite different... more efficient... and much more collaborative... a real global effort, with a sincere mission... like WWII. There. The gas crisis... and a lot more... solved. June 12 The Future Is Tomorrow... LiterallySix decades of analog TV goes away today.
I've been alive for 50 of those years.
While I love progress, I will say this:
I miss the volume dial.
I miss the simplicity of less than 500 channels.
I miss great, innocent old shows like Gilligan's Island, Speed Racer, Mr. Ed (The Talking Horse), The Munsters, Hogan's Heroes... and of course, I Dream Of Jeannie.
And -- until technology can fix this -- I already miss being able to jump from channel-to-channel quickly.
No doubt, the future is going to feel a lot s-l-o-w-e-r.
Go figure that. June 10 Oil Is The TriggerThe world was crusin' along in 2008.
Then oil went up to $147 a barrel last summer.
Then the U.S. consumer stopped buying gas... and lots of other things. Unemployment was rising. Foreclosures were mounting.
Then the entire world went to hell in a handbasket.
But then oil started coming down.
The U.S. consumer started feeling better.. and started spending again... on gas and other things. Even in the face of rising unemployment and foreclosures.
Not coincidentally, the stock market started feeling better, too.
Now oil is going back up again.
What did we learn from the crash?
Unemployment is bad. Foreclosures are bad.
But oil is the trigger. June 05 I'm Responsible For Tanking GMMy dad always bought Cadillac. After all, it was the "Cadillac" of cars.
But I've never owned one. I was a bit of a renegade, opting for foreign cars waaay before it was popular to do so.
Guess you can say I was the one that brought GM down.
Which was a shame because GM got so close... had Cadillac put the Corvette power plant in their gorgeous Allante roadster 20 years ago, I would have been hooked.
Instead, they made it slower than a 3-cylinder Fiat.
What would cause me to change my car-buying ways?
The same thing that caused me to buy foreign cars for decades: Personality.
Something like the Tesla Model S.
Maybe even something like the Chevy Camaro... what a beautiful, muscle-inspiring machine... how's that for re-doing my youth?! If I get one and keep it for Elle, by the time she can drive, it will be a classic... again. <smile> June 03 Fire That Elected Official Right NowI was listening to the business radio as I was driving this morning. I heard an exchange between Ben Bernanke and some hopefully soon-to-be-fired elected official.
The exchange went something like:
"... the TARP funds are starting to get repaid... with interest, of course... and the warrants associated with these TARP loans should provide a nice upside for the U.S. taxpayer."
"So, Chairman Bernanke, many people say that the total cost to the bank of those loans, including the warrants, will be excessively onerous."
"Uhm... hmm... well... er... "
Bernanke was --as was I -- stunned when he realized what this hopefully soon-to-be-fired elected official was actually suggesting: That the U.S. taxpayer should somehow not make a return on our investment commensurate with the risk we had taken with the loans in the first place.
In other words, make the TARP loans actual kick-backs to banks.
Bernanke recovered in short order, saying something like:
"Please remember that these banks were in danger of going out of business. We taxpayers provided loans to avert that, and it's only reasonable that if the banks then went on to improve, that the U.S. taxpayer should share in any appreciation from that point forward with the banks. Blah, blah, blah."
I was too stunned to even hear the rest. This elected official is the last person in the entire world that I want to have watching out for me. My only regret is that I didn't catch his name... and I can't find the text or tape of the entire proceeding, only Bernanke's initial statement. Ugh! June 01 The GM Investment Won't WorkThis is a great time to be the investor of last resort... i.e., we taxpayers.
We're loaning money to some great businesses and actually getting (1) our money back, and (2) ownership in the form of inexpensive warrants.
Which is why our investment in GM stands in such stark contrast: Just because the U.S. taxpayer is the investor of last resort... doesn't mean we have to be the investor of last resort.
It was clear as daylight that we should have passed on "loaning" (a.k.a. wasting) the auto companies that $17 billion last December... that the auto makers didn't need a bail-out... they needed tough love...
... by the way, the same kind of tough love that all businesses around the world had to go through over the last nine months.
I didn't speak to a single person -- and I speak to people from all walks of life -- that thought bailing out the auto companies was a good idea.
It was so un-Obama-like for Mr. Consensus himself to have missed this one.
Which kills me to see him make the same mistake twice.
The GM investment we the taxpayers made today won't work. Chopping a business down to size is excruciatingly difficult work. Truth be told, the only way a person makes really hard, really necessary cuts is when they have no choice.
Think: "We have to cut off the entire leg... or else the patient will die... tomorrow."
No, there are no "cut off the leg" decisions when you can go back to a sugar daddy investor like the U.S. government -- driven by politicians who will fight tooth & nail to keep the aging, inefficient plant in their district open.
Don't believe me? This is the second time GM has been back to the well in less than five months!
Nothing would please me more than to be wrong about this one. But, can anyone say good money after bad? May 31 Change The GameI was recently asked how you compete against a dominant incumbent.
A dominant incumbent is a dominant incumbent because they've been doing something really well. It's hard to beat them at their own game... so you have to change the game.
For example, Blackberry is trying to sell their new consumer device using the same kind of "lifestyle sexiness" as Apple.
Are they really going to out-sexy Apple?
Nope.
It would be better if Blackberry changed the game... maybe used facts as a basis to get across marketing message.
For example, how about a stark white ad flashing a few "hot button" facts... such as:
Speed of mail delivery...
... Apple iPhone: 15-30 minute lag
... Blackberry: INSTANT.
This doesn't apply to just marketing messages... but distribution, too. Borders and Barnes & Noble pretty much had 100% of the book market distribution locked up... then along came Amazon... and they used the Internet to change the game. Boy, did they ever. May 26 Watch Out For The Price Of OilNo doubt, there's a lot wrong with the world economy.
But, for the last few months, I've been telling folks that I thought the average U.S. consumer -- the same consumer that drives 2/3rds of the U.S. economy -- the same economy that sparks the rest of the world -- was actually better off today than a year ago...
... primarily because oil at $30-$60 a barrel -- vs. $150 (or, God help us, $200) -- affects the U.S. consumer way more dramatically than just about everything else broken out there.
Two recent data points support this: Last week's Lowes' results (Lowes is home improvement)... and today's jump in consumer confidence. Both wouldn't have happened if the average U.S. consumer was actually, truly worse off.
So here's the flag: Watch out for oil prices.
If oil continues to climb -- and it's almost doubled in the last few months -- I think that could cause more consumer trouble than all the other bad stuff that may happen.
Like last time, I think $100 a barrel is the negative tipping point.
Update: Stephen Schork, editor of The Schork Report, which comments a lot on oil, recently said his tipping point is $75... at that price, gas is $3 a gallon... and at that price, that's when the Federal Highway Administration says drivers start scaling back, which means at $3 a gallon, the U.S. consumer isn't feeling so good any more. Which (with oil at between $75 and $100) makes me not feel so good any more about this market. Watch out for the price of oil. Update: Another noted economist, Nouriel Roubini, weighs in about the dangers of $100 oil. April 06 Will Obama Stay On Roll?President Obama wants North Carolina tonight in the NCAA finals. Let's see if he can stay on a roll.
APRIL 7 UPDATE: Yep, Obama is still on a roll, North Carolina cake-walked by 17. Everything he touches works. That's because he uses common sense and consensus. Something that was oh-so-painfully lacking in the last eight years. March 19 Right Idea... Wrong ExecutionI can't think of anything more offensive to shareholders than giving bonuses to people in a failed company.
And that's what AIG was when the U.S. tax payer stepped in as the investor of last resort and rescued AIG.
It's a crock -- no, a crime -- that bonuses would even be considered.
Few people realize that we're not just talking about $165 million in bonuses -- but $1.2 billion worth! -- the $165 million is only the amount due last Sunday. So, it's even worse than people think.
Reading between the lines, it seems that AIG's CEO is saying that if he didn't agree to these bonuses, he would have lost his braintrust.
Boy, he must feel foolish hearing himself say that... that's what AIG needs to do... get rid of the braintrust that got them (us) into this mess.
Maybe he was afraid he couldn't hire people at the "reduced" salary of $250K. If so, wake up, we're in a different world... there's a city the size of New York filled with financial types that would jump at such a job these days.
So I love EVERYTHING about going after these bonuses... EXCEPT the way they are going after these bonuses... with special "taxes."
Uhm... wasn't that what the Boston Tea Party was all about?
C'mon, we own the damn company. Just declare eminent domain. Or better yet, just say "no."
Whatever you do -- AND YOU HAVE TO DO SOMETHING -- don't unwind 200+ years of effort. March 12 "Viral Puckering" (You Heard It Here First)... And I'm Ready To Call A SidewaysI'm not an analyst. But I did call the oil top back in July of 2008.
Well, to be fair, I really just shared some market observations. Got lucky and those observations were meaningful.
I guess I'm ready to share some more observations.
Something has been bugging me. I finally figured out how to articulate: Normal markets don't totally fall off a cliff. Emotionally markets do.
No doubt all this extreme leveraging and speculation was horrible and wreaked serious havoc.
But, what made it worse was everyone -- in the entire world -- panicked -- at the exact same moment -- something that could only happen in a fully connected planet (which is why what we're going through is unlike anything we've ever seen before).
You've heard of viral marketing? Call this viral puckering. Whoosh. Everyone -- at the same time -- just squat on their money. Poof. There went spending for anything and everything... instantly.
Now, I'm not saying real people weren't really hurt... those that lose jobs are very much hurt... and speculators lost a lot of real money.
But were these hurts worth the Dow getting cut in half seemingly overnight?
If consumers make up 2/3rds of our economy, then I think -- for the most part -- the engine is far from crippled... it's still very much intact.
Let's review.
For the majority of people -- oil at $147 a barrel was financially far more damaging... a cost that ripped and rippled into almost everything they did and bought.
At $40-$50 a barrel, I might argue that -- even with portfolios decimated by 50% or more -- consumers are better off today than they were 12 months ago.
Why? Because the 2/3rds of people that make up the majority of consumer spending don't really have portfolios to get decimated.
But they have to put gas in their tanks... and heat or cool their homes... and buy necessities that require oil to build/grow/transport.
Call it the most effective, non-government, non-debt increasing stimulus package ever. (Wow, a free market at work.)
On to one of my favorite observations: Headlines always dictate mood... and mood always swings too far in one direction or the other.
Take the headline that new car sales have tanked 50%. That's horrible. But that headline makes it seem like there are half as many cars on the road. That's ridiculous. There are about the same number of cars being driven, it's just that people continue to drive their old cars (and still pay for gas, pay repair people, pay road tolls, pay for drive-thru fast food, etc.).
A final observation: Supposedly the U.S. is still growing at 150,000 people per month. At some point -- even if people cut back spending -- those new people will have to buy something, won't they?
Again, just observations why I think the engine is still intact.
So if the engine is still intact, what's the problem?
What we have here, people, is a crisis of confidence Internet-style. Viral puckering.
And as of yesterday, I honestly didn't know what would be the catalyst to change that.
WHY TODAY IS DIFFERENT
Enter today. Something big changed: We had our first official, action-oriented, congressional discussion about mark-to-market.
Did you ever wonder how a perfectly normal, humongous, rock-solid bank could go pfiff overnight?
(BTW, perfectly normal, humongous, rock-solid things that go pfiff overnight can create quite a crisis of confidence.)
Well, if someone said, "hey, you know all those houses that you're holding as security against your loans? Since no one is buying houses, please value them at zero. Hey, wait a minute, when you do that -- that is, value all your assets at zero -- why, you're not worth anything!" Pfiff.
That's not fuel for the fire... that's fuel for the inferno.
Don't get me wrong... I think the value of an asset should be valued at fair market. But this isn't a fair market in any traditional sense (an unintentional consequence of technology).
If the powers that be really intend to improve mark-to-market to account for modern society... and oil doesn't skyrocket again... then I think we've hit a bottom... or at least a sideways.
I'm not saying we'll shoot up from here -- lots of repair to do before that can happen -- but the death spiral may be over... because people will have more confidence to buy again... because they will have regained their confidence that the big things in life -- the stuff you're supposed to have confidence in -- just can't go pfiff overnight.
And, watch, slowly you'll hear things aren't so bad as they thought. That beaten down expectations get beat. That companies are hiring again.
And technology will save the day... because the good thing about a connected planet... viral puckering can end almost as quickly as it started.
UPDATE: 1 July 2009: Just a short few months later, the facilities that would take "toxic" assets off banks' balance sheets aren't being used: "The irony, of course, is the plan hasn't gotten off the ground and is hamstrung, most notably, by banks' reluctance to sell their "assets" at what they consider rock-bottom prices." There's your answer as to whether we were in a fair market or not back in March. February 24 I'm BackI'm back. The world is a much different place than October 11, 2008, when I wrote my last post. Everything we were taught really didn't work. Didn't matter if you bravely "stayed the course." Didn't matter if you were diversified. Didn't matter if you got into gold to hedge. In times like these -- when the whole world goes south -- it helps to remember a few things: (1) There really, truly is a natural cycle to things... this downstroke is a doozie... but, "this too shall pass." (2) Now is the time to do whatever you're doing to the very best of your ability. Man up. Muscle through this. (3) Out of crisis comes opportunity. Oh, and sometimes, it's ok to duck for cover! October 11 The Next Great Fortunes... From Tech... AgainWhat's there to say that hasn't already been said?
Good times don't last forever. But neither do the bad times.
To this end, technology has always helped the global economy repair itself.
Life sucked in the 70's... then the PC came along.
Life sucked at the end of the 80's... then the Internet came along.
Life sucked at the beginning of the 00's... then two of the massive industries in a capitalistic world -- advertising and information -- got turned on their heads by Search and Web 2.0.
Life is sucking now. Which means the global economy needs tech... again.
Next up? Using technology to disrupt two other massive industries in a capitalistic world -- transportation and energy.
The components will come out of a garage. (Which has to be among the greatest of ironies.) This is where the next great fortunes will be built. September 27 Paul Newman 1925-2008Paul Newman passed. One of the most entertaining actors ever. We had the pleasure to meet him a few years ago... my wife raced against him in a charity go-kart race and we got to spend a little time with him in the racer's trailer. He was exhausted but still was ever the elder gentleman... such a nice, gracious person. Very sad news. September 24 Did The World Skip A Day?Two days ago oil shot up past the $130 level. It eventually closed above $120. Lots of news agencies covered it. Here's the headline from Reuters:
Yesterday, oil was trading around $107.
Amazingly -- at least, I'm amazed by it -- I couldn't find a single headline that oil "plunged" $13.
What gives, did we skip a day?
P.S. Oil closed down again today, around $105. I finally found one -- buried-- report that said the jump in oil may have been artificially caused by a short squeeze and it was being investigated. Unfortunately, no retractions, even news coverage, from any of the major news services. September 22 AIG "Bailout"... And Other MythsThe entire weekend people kept calling last week's action "a bailout"... and how the very rich "screwed" everyone... and other such malarkey. It drove me crazy... I wasn't hearing anyone refute. So I did... and will here. FACT: Everyone called the S&L crisis of a few decades ago a bailout. But taxpayers made money from the S&L crisis. And -- important here -- taxpayers are setup to make money from AIG... we now own 79.9% of AIG... plus we get 11% interest! Where's the bailout? Looks like AIG got itself in trouble... and U.S. taxpayers were the only investment group of size that could step forward... which means we taxpayers got a helluva deal. Anyone who calls it a bailout is simply parroting political rhetoric. The dangerous, ignorant kind. ------------------------------- FACT: Hello? This is the United States of America. We elect our government every four years. We are the U.S. Government. ------------------------------- FACT: Well, certainly, some super rich folks gained. Because SEC regulations allowed them to over-lever. So they did. And while the underlying assets they were levered against were appreciating (the housing bubble), it worked... and not a single person complained... that's because everyone was making out-sized gains on their money... that is, anyone invested in a money market fund or a 401K fund or a pension fund... that is, everyone. Once the value of the underlying asset depreciated, that extreme levering bit everyone, causing out-sized losses. So excuse me for thinking that the people bitchin' about the current situation are a bit disingenuous. FACT: It wasn't lack of regulation... it was poorly administered regulation that got us in trouble. As I understand it, the SEC loosened up levering ratios in 2003 -- from 1-to-12 to 1-to-40. September 12 What's The Difference Between Financials and Tech?What's the difference between financials and tech?
Techs have cash in the bank.
Ironically, the financials, which are the banks, don't.
Which is why, ironically, the volatile techs are -- relatively speaking -- actually one of the safer investments these days. September 01 Surprise! Google Is Really A Two Product Company!It's getting about time to start talking about what I've been doing the last few years... egad... CAD*.
Let me start off with... you guessed it... an observation about my favorite company in the world: Google.
Everyone thinks Google is a one product company.
Not true.
Google owns a big hunk of another market, too. Turns out Google Earth is based on an innovative conceptual drawing product called SketchUp, originally from a tiny company called @Last.
When it became apparent that Google Earth was going to explode (so to speak), GOOG bought @Last.
That was about two years ago when they had about 0% marketshare in large CAD houses.
Now they're in about 70% and are giving fits to the 800lbs. gorilla in the precision design space, Autodesk.
Why? Because they give away their product for free! GOOG makes its money selling ads, not software, so they don't need to sell the software. They only care that everyone is using it. Which they are.
And since Google SketchUp is distributed online, Autodesk's sacred reseller channel -- the most tightly controlled sales channel in the history of sales channels -- doesn't even come into play.
Another way to say this: Autodesk doesn't even have the chance to strangle the life out of SketchUp like it does everyone else.
Pretty cool, eh?
* Sorry, my daughter is five, not nine, so I had to prime the Dr. Seuss rhyme just in time! August 19 And The Beat Goes OnToday's notable headline:
(And Outlook Web Access still doesn't recognize Google as a valid word.) August 18 Probably The Best EverOne more baseball post. I was in Los Angeles last weekend. It just so happened that the (dreaded) Los Angeles Dodgers were playing my (beloved) San Francisco Giants. I happened to find it on Dodger (bums) radio 790 AM.
Could there be anything better than listening to your team beat your biggest rival... on their radio station?!
I think not.
P.S. Their (losing) postgame show made me particularly smile! August 17 The Bonds QuestionBobby Bonds, Barry's dad, was my favorite baseball player growing up.
Turns out Barry went to my high school, even played ball with my brother-in-law.
Those that know him love him.
Those that don't, well, let's just say Barry is his own worse enemy.
After the San Francisco Giants let him go last season, I thought for sure the New York Yankees or Boston Red Sox -- some wealthy, in contention, American league team would pick him up as possibly the best designated hitter ever.
Not only can Barry still hit (28 homeruns and led both leagues in walks in 2007), but can still play the field in a pinch.
And, of course, he guarantees a sell-out crowd night after night, just as he did for years in SF... the chase for #800 -- just as the chase for #756 -- is simply too irresistible.
But, no one has picked him up -- despite many teams actually needing a player like him.
There's been talk about ownership "collusion"... him being black-balled. No doubt, with an impending steroids trial in 2009, he's a hot potato.
But we've always observed -- disdainfully -- that performance trumps behavior when it comes to professional athletes. (Watch how many people scramble to pick up Michael Vick next year.)
Could this be the exception?
I thought it actually might be because he was demanding too much -- but then I read this:
"Borris has said that Bonds would play for a pro-rated portion of the minimum salary, and he attempted to contact Friedman this week after Tampa Bay lost Crawford to a right hand injury and Longoria to a broken right wrist."
Wow. Barry Bonds at the greatest fire-sale for any athlete in the history of sports... and no one will touch him.
Confirms what my friend John Marino used to always say: What goes around, comes around.
UPDATE (8/20/08):
Come to think about it, why doesn't the Oakland A's pick up Bonds?
This is right up Billy Beane's -- A's GM and the central character in one of my very favorite business books, Moneyball -- alley. I mean, can you find a bigger inefficiency in the market today?
Not only in terms of "offensive production per dollar spent," but also butts-in-the-seats: Bonds would be a major draw... and goodness knows the A's need a draw. (Who knows? Maybe Bonds could help fill two new stadiums in his lifetime.)
After losing something like 18 of their last 20, what do the A's have to lose? August 08 Capital Gains Logic Explained Short & SweetFinancial writer James Altucher is a pretty smart market cookie. He recently wrote one of the best explanations I've heard for why cutting capital gains taxes is bad. Click here for the full piece. Below are the interesting outtakes.
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The idea behind raising the taxes [Capital Gains] is that this primarily effects the wealthy and does not affect middle-income or lower-income people.
This is a not a Democrat vs. Republican issue. In fact, the largest increase in capital gains occurred when Richard Nixon [R] became president in 1969 and raised the tax from 28% to 49%. What happened then? It effectively eliminated the revenue that the government collected from the capital gains taxes, because there was a negative incentive to sell shares. When there is negative incentive to sell, not only is less revenue raised by the government but there is less money reallocated from older business to new, entrepreneurial ventures. The market and the economy began to slide in the early '70s, creating the worst bear market since World War II... ...
Congress finally slashed the Nixon capital gains raises in 1978 (under Carter), giving rise to the venture capital boom that spurred on Silicon Valley all through the '80s and '90s. Anybody who thinks an increase in capital gains taxes will result in more government revenue only need look at the '70s as a prime example of the reverse.
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