Researchers have found that lower income individuals become more opposed to programs designed to help them if people they perceive as below them will also be helped. I don't have a comment on this except, COMEON!
Instead of opposing redistribution because people expect to make it to the top of the economic ladder, the authors of the new paper argue that people don't like to be at the bottom. One paradoxical consequence of this "last-place aversion" is that some poor people may be vociferously opposed to the kinds of policies that would actually raise their own income a bit but that might also push those who are poorer than them into comparable or higher positions. The authors ran a series of experiments where students were randomly allotted sums of money, separated by $1, and informed about the "income distribution" that resulted. They were then given another $2, which they could give either to the person directly above or below them in the distribution.
The other side of this is Warren Buffett wanting the government to charge him higher taxes.
(Via @chrisfahey)
When actress Anne Hathaway is in the news, shares of Warren Buffett's Berkshire Hathaway seem to go up in price.
Companies are trying to "correlate everything against everything," he explained, and if they find something that they think will work time and again, they'll try it out. The interesting, thing, though, is that it's all statistics, removed from the real world. It's not as if a hedge fund's computers would spit the trading strategy as a sentence: "When Hathway news increases, buy Berkshire Hathaway." In fact, traders won't always know why their algorithms are doing what they're doing. They just see that it's found some correlation and it's betting on Buffet's company.
(via @tcarmody)
Warren Buffett's annual letters to Berkshire Hathaway's shareholders are always interesting to read; here's the letter for the 2010 fiscal year.
Worth a read as always.
We will never become dependent on the kindness of strangers. Too-big-to-fail is not a fallback position at Berkshire. Instead, we will always arrange our affairs so that any requirements for cash we may conceivably have will be dwarfed by our own liquidity. Moreover, that liquidity will be constantly refreshed by a gusher of earnings from our many and diverse businesses.
When the financial system went into cardiac arrest in September 2008, Berkshire was a supplier of liquidity and capital to the system, not a supplicant. At the very peak of the crisis, we poured $15.5 billion into a business world that could otherwise look only to the federal government for help. Of that, $9 billion went to bolster capital at three highly-regarded and previously-secure American businesses that needed -- without delay -- our tangible vote of confidence. The remaining $6.5 billion satisfied our commitment to help fund the purchase of Wrigley, a deal that was completed without pause while, elsewhere, panic reigned.
We pay a steep price to maintain our premier financial strength. The $20 billion-plus of cash-equivalent assets that we customarily hold is earning a pittance at present. But we sleep well.
Here's to sleeping well.
Warren Buffet has published his latest annual letter to the shareholders of Berkshire Hathaway, the giant holding company of which he is CEO and chairman. His letters are always a fun read.
The table on the preceding page, recording both the 44-year performance of Berkshire's book value and the S&P 500 index, shows that 2008 was the worst year for each. The period was devastating as well for corporate and municipal bonds, real estate and commodities. By year end, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game.
As the year progressed, a series of life-threatening problems within many of the world's great financial institutions was unveiled. This led to a dysfunctional credit market that in important respects soon turned non-functional. The watchword throughout the country became the creed I saw on restaurant walls when I was young: "In God we trust; all others pay cash."
Paging through, I was surprised at how much stock Berkshire owns in some major companies, including 13.1% of American Express, 8.6% of Coca-Cola, 8.9% of Kraft, and 18.4% of The Washington Post. Berkshire's stock price is of interest as well; the stock has never split and the current price for one share is more than $73,000.
