Why Tom Steyer May Be Right About The Buffet Tax

You might be wondering who Tom Steyer is so I'll begin by sharing with you a little about Tom before I state his argument.

Tom Steyer is a quiet Billionaire who lives in San Francisco and is the co-managing partner of Farallon Capital.  His firm focuses on managing funds for high net worth individuals, college endowments and foundations. As of 2011, Farallon Capital Management is the 12th largest hedge fund in the world managing US 21.5 billion in assets.  Maybe you're asking a perfectly logical question, "why am I even mentioning this guy?'

Fair question. I went to Prep School with Tom at Phillips Exeter Academy in balmy Exeter, New Hampshire (you will need more than flip flops and board shorts to get through the Winter).

Tom and I entered Exeter in 9th grade. He began in the first semester, I entered quickly after my late first semester interview with the former Admissions Director, Arthur Peekal.  After I swam with the varsity team I got out of the pool and was given an invitation to enroll in the academy after the Christmas break.  Soon thereafter I met Tom. Coming from a mess of a childhood and no parenting I was receptive to people with character, Tom was one of those people.

Tom was always on time for classes, a great student, a hard nosed athlete (don't ever bet against him in any sport) and one of the few people I looked to as a great model of what I wanted to become.  Everyone knew Tom would succeed in his career. 

Tom Steyer is advocating the now renowned "Buffet Tax" bantered by the pundits on the left as necessary and on the opposing side as "silly, egregious, and ruinous."   You know what they say about opinions don't you?

Tom is vicarious as are most Democrats and Republicans. High net worth Republicans are bitter of the thought of higher taxes despite having plenty of money.  Some have threatened to pull up stakes and leave, even renounce their citizenship and head for perceived greener pastures.

Despite the fact I'm a jaded 54 year old Independent who has heard so many silly campaign promises that never materialize, I pondered Tom's primary selling point, frankly after much deliberation it's a pretty good one.  

Tom Steyer's rationale is we are blessed to be citizens of the United States. He's right, imagine living (where my best friend lives) in Nigeria? There you are fortunate if you have food and water on a daily basis.  Tom is on to something, despite all we complain about, I can list one hundred places in the World where things are not as good as they are here in the United States.  Being here and being part of the World's primary economic engine despite shipping jobs overseas, is still better than living in London, Munich or even Beijing. 

Republicans have moaned about the "Buffet Tax" and I hear their argument and to an extent it's true, a higher tax on the upper 1% is to some extent pretty silly especially with so much government waste.  We may see many high net worth individuals move to Canada where there are no capital gains taxes, or even Hawaii (oops I almost forgot that's part of the United States). 

Having spent much of my adult life in the top one percent of taxpayers I found myself on the side of Republicans until I heard Warren Buffet and especially Tom Steyer's argument.  

There is however a caveat that may be demonstrative of my Independent status, "what about the expense side of the equation?"  If I'm going to pay more why don't we cut a  billion in expenses weekly and stop debasing the currency by monetizing debt?

Why can't the sanctity of Larry Summers, the Clinton administration and a balance of power in the House and the Senate be revived? There's something to vote for...no new legislation.

The Clinton years were pretty good for the United States and at time things were entertaining to say the least. I knew that President Bill Clinton was effective in his administration's control of spending when I heard several members of the armed forces complain about a lack of things that they grew accustomed to in other administrations.  During the Clinton years, the dollar was far stronger for eight years than it is now and you didn't need to sell an internal  organ to travel to Europe.

Why can't we cut spending and raise taxes for the wealthiest taxpayers for a specific time period? It worked for President Clinton.  Like him or not, he learned a lot about math at Oxford.  Larry Summers also has a few sharp number two pencils and understood prosperity comes from the Government living within its means, first and foremost.  

A return to sanity would be refreshing.  However make no mistake, we are in a Holy War...so the "back to the past" financial model may bring prosperity" but the lack of keeping our foot on the throat of the enemy will allow the enemy to gain strength.  I would like us to be more fiscally responsible but we have shoved hundreds of pitchforks into a giant snake pit; leaving will most likely lead to some unparalleled consequences.  I am convinced that most of Al Qaeda owns the complete box collection of "24" and the fictional Jack Bauer is no where to be found (he might be hiding out at the Mondrian on Sunset). 

Despite my argument for the coordinated fiscal effort, the utopia of a balance of power and fiscal responsibility we are in a real conflict that will come to our door.  Either you are on offense or you are on defense in a war.  I always liked shooting the ball rather than blocking it. Offense applies pressure, defense often waits for it.   

As you may surmise I am now leaning more so towards higher taxes on the wealthiest taxpayers due to the fact that like it or not, the World has changed substantially since President Clinton spent two very prosperous terms as President.  We are in the greatest Holy War of all time and don't forget the advantage of being on offense especially when you are already on offense.

Regardless of my leaning towards Tom Steyer's viewpoint, I still think we are pouring billions every month down dark bottomless holes with no regard for the debasement of the Dollar or job creation.  I doubt my view on spending and the lack of job creation is unique.

Maybe Tom Steyer can take over when it comes to domestic job creation, he's pretty good at attacking big problems and leading. Come to think of it so is Warren Buffet. 


Be grateful and count your blessings you are still in the United States.

                      written by Brad Richdale copyright 2011 all rights reserved
                                         

How Does Phototherapy and PBM Work On The Human Body by Brad Richdale

• Increase RNA and DNA synthesis. This helps damaged cells to be replaced more promptly.
• Light therapy has been shown to increase vascular circulation by increasing the formation of new capillaries, which are additional blood vessels that replace damaged ones. New capillaries speed up the healing process by supplying additional oxygen and nutrients needed for healing.
• Increase lymphatic system activity. Edema, which is the swelling or natural splinting process of the body, has two basic components. The first is a liquid part which can be evacuated by the blood system and the second is comprised of the proteins which have to be evacuated by the lymphatic system. Research has shown that the lymph vessel diameter and the flow of the lymph system can be doubled with the use of light therapy. The venous diameter and the arterial diameters can also be increased. This means that both parts of edema (liquid and protein) can be evacuated at a much faster rate to relieve swelling.

• Stimulate the release of adenosine triphosphate (ATP). ATP is the major carrier of energy to all cells. Increases in ATP allow cells to readily accept nutrients and expel waste products faster by increasing the energy level in the cell. All food turns into ATP before it is utilized by the cells. ATP provides the chemical energy that drives the chemical reaction of the cell.
• Reduce the excitability of nerve tissue. The photons of light energy enter the body as negative ions. This requires the body to send positive ions, calcium among others, to flow to the area being treated. These ions assist in regulating the nerves, thereby relieving pain.
• Stimulate fibroblastic activity which aids in the repair process. Fibroblasts are present in connective tissue and are capable of forming collagen fibers.
• Increase phagocytes, which is the process of scavenging for and ingesting dead or degenerated cells by the phagocyte cells. This is an important part of the infection control process. The healing process depends upon the Destruction of infection and cellular clean up.
• Induce a thermal like effect in the tissue. The light raises the temperature of the cells although there is no heat produced from the diodes themselves.
• Stimulate tissue granulation and connective tissue projections, which are part of the healing process of wounds, ulcers or inflamed tissue. Stimulate acetylcholine release. Acetylcholine causes cardiac inhibition, vasodilatation, gastrointestinal peristalsis and other parasympathetic effects.

                   written by Brad Richdale copyright 2011 all rights reserved

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Phototherapys Mood Altering Effects by Brad Richdale Marketing Newsletter

The most significant general advantageof LEDs can be found in its mood-altering  properties. The motivational advantage pretty much applies to alltherapeutic solutions with LED—direct or indirect LED light therapies. That effect is connected either to colors (also known as frequencies, wavelengthor spectra) or light intensity (we commonly call brightness).  So first we look at the result of the variousLED light therapies and then what role motivation plays in how a therapy can actuallywork with LED.

Bright white light (called white waves) are used for dawnsimulation to treat depression. Redhues are either used alone or often used in combination with bluehues for muscle and other deep pain recovery as well as for circulationimprovement. Color therapy is aspecial field where a combination of colors is used to regulate emotional moodand lift mental conditions (Zezell,2001).

Using LED light in those therapiescan have broad based advantages. The ability to customize light spectrums and color combination togive off the exact kind of light needed per condition allows LEDsincredible flexibility.  And because nofilter is needed to regulate light, LED light therapy is much more effective—noloss of light happens since there are no filters used to obstruct it.

LEDs pack huge punch in termsof intensity and brightness that in turn come from great number tiny units. Yeta package of a large array of them is still relatively light and can have avery compact design which makes portability easier to manufacture.

When LED light therapy employs blue light it is designed to alert your body as the bright blue skiesof daylight does. Apollo, acompany with a long-term interest in commercializing light therapyproducts concluded through extensive research that LEDs have a significantmotivational effect.  On the other hand many independentresearch organizations have found that redlight also has profound effects on the body. According to two studies bythe Mayo Clinic, IR light or red light can be employed to regulate your body's circadian clock(the biological clock) that is otherwise done by the daylight of the sun.  In either case - blue or red light – enhance primal regulatory systems thatsubconsciously control the body and offset poor triggering from the lack of sunand blue sky light. Psychological problems such as depression brought on by systemsthat are poorly triggered by the lack of sun and blue sky can be counteracted with Phototherapy (Willis, 1997).
 
                                                              story written by Brad Richdale

                                                           blog founded by Bradford Richdale

                                                       blog founded by Bradford Richdale 2011

Congrats To Ryan Lochte For USA SWIMMER OF THE YEAR by Brad Richdale

I've known Ryan Lochte for 15 years. He was just a kid who didn't comb his hair when I first worked out with him.  Three years later he rocketed to 99th in the world in the 800 meter freestyle for his first FINA World Ranking.  That summer he turned 16 and came from behind with 50 meters to go and mowed down a field of college swimmers in the 400 meter freestyle at Bolles to win at just above four minutes.  He was on his way and now has made history once again.

Ryan proved all the experts wrong and in the post era of swimmers using wet suits that shattered records in Rome in the 2009 World Championships.  Lochte broke the World Record in Shanghai this summer r
London 2012 will rock, the Americans are coming!

http://www.usaswimming.org/ViewNewsArticle.aspx?TabId=0&Alias=Rainbow&Lang=en&ItemId=3753&mid=9874

Ryan Lochte story written by Brad Richdale on his Swimmer of The Year Award

INSURANCE REFUNDS IN CALIFORNIA by Brad Richdale

Disagreements sometimes arise regarding an amount due on an insurance bill, the amount a company has paid on a claim, or even the nonpayment on an insurance claim. posted by Brad Richdale When you’ve been taken advantage of monetarily by an insurance broker, it’s often very difficult to navigate through a library of resources on the Internet and through insurance commissioners to find the appropriate information on how to file a dispute. In this chapter, we will discuss what to do before you file an insurance complaint along with a step-by-step process on how to file a dispute with your state’s insurance commissioner.

To begin, an insurance commissioner is an elected executive office or cabinet position who is also in charge of the Department of Insurance in the state in which you reside. Each office differs state by state. The individual’s duties are to: Oversee and direct all functions of the Department of Insurance; licenses, regulates and examines insurance companies; answers public questions and complaints regarding the insurance industry; and enforces the laws of their state’s Insurance Code and adopts regulations to implement the laws.

In some states, the insurance department or division is autonomous; in other states, the department is part of a larger body of government. The National Association of Insurance Commissioners (NAIC) is the professional association for these officeholders.

Before you file an insurance complaint, there are a few factors you should go over and fulfill before bringing the case to an official commissioner. Varying by each state, the commissioner handles most insurance problems involving home, business, auto, health, HMO, life, dental, among others. These problems may include claim disputes, sales misrepresentations, coverage issues, premium problems, policy cancellations and refunds. Some insurance commissioners will also investigate complaints against insurance producer/brokers and public adjusters. Depending on which state you reside in, it could take upward of 45 days for investigation and resolution of a complaint.

Contact your insurance company first if you have a claim dispute. When contacting your insurance company, have your policy number on hand. Ask the insurance representative where your written dispute needs to be sent. State your complaint and how you anticipate the company to resolve it. Keep in mind that sending the dispute in writing encourages a written response.

Remember to always document your phone calls by noting the phone number you called, name of the person with whom you spoke, date of the call and a concise summary of the conversation. Keep copies of all written communications for future use. Along with the written complaint, send copies of letters, invoices, notes, advertising collateral, canceled checks, or other certificates that support your complaint and keep the original copies safely stowed away.

There are also a number of items that your state’s insurance commissioner cannot aid you with during the filing process:

• Take on the role as your legal representative, in or out of court.
• Get involved in a pending lawsuit or case where you are represented by legal counsel, or execute a judgment.
• Give a medical decision of an individual’s medical condition. However, some commissioners can investigate to conclude if the denial is arbitrary or impulsive and whether or not the denial decision was made in accordance with the terms of the insurance contract and state insurance laws and regulations.
• Determine disputes between policyholders or claimants and insurance companies, or their  representatives, that involve the following matters:
• Who is negligent or at fault;
• The facts surrounding a claim, meaning who might be telling the truth in the matter when accounts of the case differ;
• The value of a claim or the total of money owed to you; or
• Any other factual disagreements between you and any other party.
• Classify an insurance company with whom a person may have a policy;
• Settle complaints against service providers unless the objections involve the actions of insurers.

In order to resolve your dispute efficiently and agreeably, consider these following steps on how to file a dispute with your state’s insurance commissioner.

Gather all the information and documents available regarding the insurance policy. If you know where the actual policy is physically, then make sure it is available to you. Check all your files for any communication between the insured and the insurance company. Any suggestion that the policy exits and that the insurance company had a contractual obligation will be significant to your case. It is important to also look to see how the policy was being paid.

Speak with the adjuster associated with your claim. Ask for an explanation of the details reason why your insurance claim was denied, unpaid or taken advantage of. They will tell you if it a policy interpretation question or any other concern that may have risen. They will be prepared to offer you more information than simply denying your claim.
For more information go to http://insurance.ca.gov/

                                      written by Brad Richdale 2011 all rights reserved

QDIA QUESTIONS ANSWERED BY BRAD RICHDALE

• that would be caused by large amounts of stable value investments being liquidated and moved to other QDIAs. posted by Brad Richdale
• No Redemption Fees or Expenses – The regulation provides that (a) any transfers or withdrawals within 90 days from the QDIA by a participant “shall not be subject to any restrictions, fees or expenses (including surrender charges, liquidation or exchange fees, redemption fees and similar expenses charged in connection with the liquidation of, or transfer, from the investment)...”, but (b) that restriction “shall not apply to fees and expenses that are charged on an ongoing basis for the operation of the investment itself (such as investment management fees, distribution and/or service fees, ‘12b-1’ fees, or legal, accounting, transfer agent and similar administrative expenses) and are not imposed, or do not vary, based on a participant’s....decision to withdraw, sell or transfer assets out of the qualified default investment alternative...”

The proposed regulation had prohibited any penalties on transfers or withdrawals, without time limit. This limits any transfer fees or restrictions, but only for 90 days. As a result, plans need to determine whether their default investments impose redemption fees for short-term trading; if so, those investments will not be QDIAs and will not have the fiduciary safe harbor.

• 100 Percent Equity Funds Are Not QDIAs – The regulation provides “...the Department believes that when an investment is a default investment, the investment should provide for some level of capital preservation through fixed income investments. Accordingly, the final regulation, like the proposal, continues to require that the qualified default investment alternatives, defined in paragraph (e)(4)(i), (ii) and (iii), be designed to provide degrees of long-term appreciation and capital preservation through a mix of equity and fixed income exposures.” In other words, as we interpret it, for lifecycle, lifestyle or balanced funds, or managed accounts, to be QDIAs, they must have an allocation to fixed income. The unanswered question is whether a lifecycle, or target maturity, fund’s “glidepath” to an allocation in fixed income satisfies this condition. This discussion also raises the issue of how much is enough? For example, is a three percent allocation to fixed income satisfactory for a 2050 fund? We have posed these questions to the Department of Labor (DOL).
• Asset Allocation Models – The proposed regulation, in effect, required that asset allocation models be managed by a fiduciary investment manager. The final regulation changes that requirement and allows plan sponsors to manage the asset allocation models for participants, which is consistent with existing practices. This is a welcome “surprise.” (As a disclosure, we commented to the DOL that this change should be made, as models are used successfully for many participants. Also, in large plans, the models incorporate the plans’ low-cost funds – such as institutional shares and collective trusts, thereby substantially reducing the cost to the employees.)

As you can see there were many requirements that these corporations were given to comply to. The biggest issue they had was handing this responsibility off to the mutual fund companies who were yearning to get the extra assets, which allowed for more fees. The burden was on the corporations and unfortunately they believed the mutual fund companies had kept them in compliance. In many cases they weren’t kept in compliance, which opened them up to massive amounts of liability.

                                   written by Brad Richdale copyright 2011 all rights reserved

QDIA QUESTIONS CONTINUE DESPITE SEMINAR by Brad Richdale

institution. As a practical matter, we believe plans will use money market accounts or similar short-term vehicles for this purpose.  posted by Brad Richdale

The long-term QDIAs are target maturity funds or models (e.g., lifecycle or target date funds), balanced funds or models (including risk-based lifestyle funds) and managed accounts.

The grandfathered QDIA is a stable value investment. The regulation defines it generally as a product “designed to guarantee principal and a rate of return generally consistent with that earned on intermediate investment grade bonds.” (Note that there are additional limitations in the definition.) Defaults in this grandfathered option on the date the regulation was issued (October 24, 2007), plus any additional amounts that are deposited into the stable value option on or before December 23, 2007, will be grandfathered as a QDIA. However, to obtain fiduciary protection for deposits for those previously defaulted participants that are made after December 23, the new amounts must be placed in a long-term QDIA.

In a future bulletin, we will discuss each of these QDIAs in more detail.

Q: What must fiduciaries do after selecting a particular category or type of QDIA investment?

Once a fiduciary has identified the type of QDIA that will be used by the plan, the fiduciary must engage in a prudent process to select the particular investment fund, model portfolio, or managed account service. In addition, the fiduciary must monitor that selection to ensure that it remains a prudent choice.

The preamble states the general rule regarding a fiduciary’s duties and provides an example to illustrate the application of those duties: “the plan fiduciary must prudently select and monitor an investment fund, model portfolio, or investment management service within any category of qualified default investment alternatives in accordance with ERISA’s general fiduciary rules. For example, a plan fiduciary that chooses an investment management service that is intended to comply with paragraph (e)(4)(iii) [the investment manager alternative] of the final regulation must undertake a careful evaluation to prudently select among different investment management services.”

Similar standards would apply to other forms of QDIAs, for example, to the selection of a suite of target maturity funds.

Q: Were there any surprises in the regulation?

• 120-Day Short-Term Investment Option – The money market QDIA – for the limited period of 120 days – was not in the proposed regulation. As a result, it was somewhat of a surprise. We assume it is primarily intended to coordinate with the provision in the Internal Revenue Code allowing automatically enrolled participants to request the withdrawal of their accounts within 90 days. However, it will also be helpful for avoiding transfer fees (e.g., redemption fees) for withdrawals and transfers within the first 90 days.

Grandfathering for Stable Value – The regulation provides for permanent QDIA protection for stable value defaults made before December 24, 2007. However, any defaults of deferrals, rollovers or company contributions for those previously defaulted participants after the effective date of the regulation must be put into a long-term QDIA to be protected. Undoubtedly, this is a concession to the insurance industry, which was concerned about the potential financial disruption. 


                                written by Brad Richdale copyright 2011 all rights reserved
                                             blog founded by Bradford Richdale