My thestreet.com tutorial on dividend plays
Category: News and Politics

I wrote a tutorial for thestreet.com on how to pick stocks based on their dividend.  It's at:

How to Pick Dividend Stocks at thestreet.com

I also wrote a series of 6 tutorials on aggressive stock picking for thestreet.com university.

Enjoy!

7:55 AM - 0 Comments - 2 Kudos - Add Comment

Ira Krakow Interview On Subprime Mortgages, Cramer’s Rant, And Other Topics
Category: Jobs, Work, Careers

Christopher Penn, of The Financial Aid Podcast, interviewed me recently.  We discussed the mechanics of subprime morrtgages, investing in student loans, how to start investing in the market early, saving for college and retirement, Cramer's Rant, and many other topics.   

Listen to Christopher Penn interviewing Ira Krakow  (MP3 file, 35 minutes).
Show Notes for Interview
About Financial Aid Podcast
Add Financial Aid Podcast to iTunes

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I'm now on facebook!
Category: Friends

I am on Facebook as well as MySpace.  I'm looking forward to networking with you there as well as here.

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How to Play the Spanish Stock Market
Category: News and Politics

I am a contributing writer to thestreet.com and stockpickr.com.  My wife and I just returned from Spain and I wrote an article on whether Spanish stocks are a good investment.  

How to Play the Spanish Stock Market

7:13 PM - 1 Comments - 2 Kudos - Add Comment

How Intel and Microsoft Are Killing the $100 Laptop Project
Current mood: angry
Category: Web, HTML, Tech

Intel and Microsoft are making sure that 1 billion poor children in the world will permanently be excluded from cheap PC access.

MIT's One Laptop Per Child (OLPC) project, the brainchild of Professor Nicholas Negroponte, has built a revolutionary laptop for $100 that has wi-fi, email, word processing, and so on - a full featured Fedora Linux based laptop, with an 8 hour battery life that can be recharged by hand crank. 

Unfortunately, it will NEVER see the light of day because Intel and Microsoft are combining to dump an obsolete x86 based laptop, with a mere 2 hour battery life, in these developing countries.  The Classmate PC costs $400 to build but will be sold for $200 to kill the  the OLPC computer.

PLEASE REDISTRIBUTE THIS LINK TO ALL YOUR FRIENDS AND REPOST THIS ON YOUR BLOG.  THANK YOU.

1:21 PM - 6 Comments - 14 Kudos - Add Comment

Will the Supreme Court Strike Down All Handgun Laws?
Category: News and Politics

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I'm not a lawyer.  However, I want to understand the recent ruling of the DC Circuit Court of Appeals which appears to set the stage for the Supreme Court striking down handgun laws.  The Second Amendment to our Constitution states:

A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed.

On March 9th, the DC Circuit Court of Appeals, in Parker v. District of Columbia, ruled that the Second Amendment protects the individual's right to bear arms.  According to the Brady Center to Prevent Gun Violence, this is the first time that an appeals court rejected a gun law on second amendment grounds.  The Supreme Court frequently accepts cert petitions from the DC Circuit, so it is a good possibility that the Supreme Court will hear the case if it is appealed.

The wording of the Second Amendment is unclear.  If the emphasis is on "a well regulated militia" then the "right of the people" is tied to the collective right of the government to keep and bear arms.  However, if the emphasis is on "the right of the people to keep and bear arms", then this is an individual right.  If the latter, how can any gun control laws be legal?

The case was brought by Shelly Parker and five others, who wanted to possess what they called "functional firearms" inside their homes.  They wanted to possess loaded handguns to ward off intruders.  The District of Columbia argued that the Second Amendment "protects private possession of weapons only in connection with performance of civic duties as part of a well-regulated citizens militia organized for the security of a free state."  In other words, the right to bear arms only extends to citizens performing their duties as part of a well-regulated militia.  According to Decision of the Day, a blog about Federal appellate decisions, the DC Circuit is divided.

Writing for the majority, Senior Judge Silberman concludes that the District's reasoning is far off-base. Not only does the majority hold that the Second Amendment is alive and well, but it also rejects the view of most other circuits that the Second Amendment encompasses only collective rights and not individual rights. Instead, in a tour de force of constitutional interpretation, the Court joins the Fifth Circuit (and several state appellate courts) in concluding that the Second Amendment protects an individual's right to own firearms.  Under this analysis, the District's efforts at gun control are clearly unconstitutional.

However, Judge Henderson, the minority judge in the 2-1 decision dissented.

She cynically describes the majority's opinion as a superfluous addition to the Second Amendment's "dueling dicta," in which "each side of the debate offering law review articles and obscure historical texts to support an outcome it deems proper." But she thinks the debate is wholly academic in this instance, as the Second Amendment only applies to states, and the District of Columbia is not a state.

The last time the Supreme Court addressed the 2nd Amendment directly was the 1938 decision, United States v. Miller.  The decision contains arguments which can support both sides in the gun control debate.  Here are the facts, according to the wikipedia article:

Jack Miller and Frank Layton were suspected bank robbers and moonshiners being watched by agents of the Department of the Treasury. On April 18, 1938 Miller and Layton were arrested for transporting an unlicensed sawed-off shotgun (defined as "having a barrel less than eighteen inches in length") across state lines while engaged in interstate commerce, in violation of the NFA.

This was a federal case and was therefore heard by the United States District Court for the Western District of Arkansas. On January 3, 1939, U.S. District Court Judge Heartsill Ragon agreed with the defense's claim that the NFA was intended to restrict the individual ownership and possession of arms, in conflict with the Second Amendment to the United States Constitution.

    The National Firearms Act is not a revenue measure but an attempt to usurp police power reserved for the States, and is therefore unconstitutional. Also, it offends the inhibition of the Second Amendment to the Constitution -- "A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed."

Ragon declared that the National Firearms Act of 1934 was therefore unconstitutional and void. U.S. Attorney Clinton R. Barry appealed to the Supreme Court.

The Court accepted the case.  The attorneys for the United States asserted that:

1. The NFA is intended as a revenue-collecting measure and therefore within the authority of the Department of the Treasury.


2. The defendants transported the shotgun from Oklahoma to Arkansas, and therefore used it in interstate commerce.


3. The Second Amendment protects only the ownership of military-type weapons appropriate for use in an organized militia.


4. The "double barrel 12-gauge Stevens shotgun having a barrel less than 18 inches in length, bearing identification number 76230" was never used in any militia organization.

So there's ammunition, so to speak, for either side of the argument.  For the gun lobby, it appears that any military-style weapon, such as a sawed off shotgun, a machine gun, or an assault rifle, must be OK for a private citizen to own.  In fact, if the Supreme Court rules this way, handgun ownership may be the least of our problems.  For the anti gun lobby, the Court specifically let the National Firearms Act stand, thus allowing both the states and the Federal government to continue to create laws to restrict gun use.  If the Court takes the case, the law appears to support either side.

1:15 AM - 10 Comments - 19 Kudos - Add Comment

How I Almost Won A Million Dollars
Category: Games

Last Monday, March 5, 2007, CNBC launched the Million Dollar Portfolio Challenge.  The idea is that you get $1,000,000 of play money (CNBC Bucks) to buy stocks with, just like in the real stock market, without having to risk your own money.  At the end of the contest (May 27, 2007), however, you can walk away with $1,000,000 of real money, if your portfolio performs the best.  Unlike the lottery, signing up is free.  You can enter the contest here.

I created a discussion forum to track the contest's progress.

So I signed up on Monday, right before the start.  Here I am, one week later, among the top 15%, comfortably sitting at #36,787.  Nine more weeks to go.  Plenty of time to catch the leader.  All I have to do is pick the right stocks and the million bucks is mine.

Not so fast.  The contest is rigged.  One person, Nancy Beaumont, has captured 11 of the top 20 places.  According to the scuttlebut on the Internet, she opened 800 accounts under her name.  Possibly, she picked 800 stocks, and bet her million dollars of play money on each stock in a separate account.  As of 5:19 pm on Monday, March 12, 2007, she's in first, second, third, sixth, seventh, eleventh, twelfth, and fifteenth place.  (The link I gave is live, so maybe CNBC will have changed this by the time you follow it.)  I feel like I'm competing with 800 Secretariats in the Kentucky Derby.

Another problem:  insider trading.  The Portfolio Challenge is a game.  A hedge fund manager who might have access to inside information - say, a takeover - could theoretically exploit that knowledge here without having to answer to the SEC.  According to the FAQ,  CNBC can declare that a trade is inappropriate, but how can they police it?  Elliott Spitzer has gone on to bigger and better things.

Insider trading may have already happened.  Syke Enterprises (SYKE), picked by all the leaders, ended up as the highest percentage gainer the next day.  How could all those people be so clairvoyant?

Another stock, New Century Financial (NEW), which specializes in subprime mortgages, was the most active stock on Day 1.  Unfortunately, it tanked on Day 2, prompting hundreds of thousands of simultaneous sell orders, temporarily shutting down the CNBC game server.  Because of the overload, some people reported that their portfolios were wiped out.  The reason NEW tanked was that the lenders shut off the company's borrowing power, forcing the company to be delisted.  This led to yet another glitch - what was the last price to value NEW?  It seems that there's a wide discrepancy between the last trade and the posted price for the purposes of the CNBC game.

So, you ask, why should I complain?  After all, it's only a game, right?  I don't think that's how CNBC sees it.  CNBC bigwigs rang the opening bell at the New York Stock Exchange.  Is the NYSE endorsing the game?  There are even celebrity traders, like Johnny Bench, who have their own special Web page.

Insider trading, system shutdowna, competing against impossible odds...On second thought, maybe it is like the real stock market.

3:21 PM - 5 Comments - 6 Kudos - Add Comment

How To Win $1,000,000
Category: Games

Last Monday, March 5, 2007, CNBC launched the Million Dollar Portfolio Challenge.  The idea is that you get $1,000,000 of play money (CNBC Bucks) to buy stocks with.  At the end of the contest, however, you can walk away with $1,000,000 of real money, if your portfolio performs the best.  There's some competition - at this point, over 220,000 people have signed up.  Unlike the lottery, signing up is free.  You can enter the contest here.

The contest started Monday, March 5th, 2007 at 9:30 am and will run until May 25, 2007 at 3:59:59 pm. However, in order to be eligible to win the million dollar grand prize, you must register by May 7, 2007 at 9:29 am. If you register that late, you will be able to qualify if you win the prize for that week. So it's not too late to enter and play.

I created a discussion forum for the CNBC $1,000,000 Stock Contest.   You can see sample portfolios, discuss strategies, complain about whether this is just a game or really reflects what the stock market is about, or find out if Maria Bartiromo's hair length influences the market.

Good luck, and enjoy!

10:51 AM - 3 Comments - 8 Kudos - Add Comment

How Recent Education Legislation Affects Native Americans
Category: News and Politics

I received this message from one of my Native American MySpace friends and thought I'd pass it on.

While this does fly in the face of your constitutional law studies, please take note: this is an update on legislative actions that will very negatively affect a broad spectrum of young people at various stages in the educational system. If you scroll down, you'll note that they mention that rural schools (especially those on Indian reservations) are poorly funded, have high faculty turnover/underperforming teachers, and are lacking funding to begin with. I'm guessing the last thing you wanted to deal with was an Indian woman on a racial inequality tear, but the fact remains that it is very much a part of society, and trying to deny it's an issue by removing affirmative action is further decreasing diversity in higher education.

This doesn't just affect Indians; poor populations across the United States of varying ethnic backgrounds have to deal with this every day, and it is statistically much more probable that minority populations have a higher incidence of poverty than white populations overall.

And it is true that the law is the law and is not meant, in theory, to further racial inequality, but I think you do have to admit that the Constitution was written for the white population in what once were the American colonies; slaves and Indians (including what would now be the Latino population) were not citizens. Indians didn't become citizens of the United States until 1924, AFTER serving in the U.S. Armed Forces as guests during WWII.

Anyway, scroll down.

UPDATE ON INDIAN EDUCATION

Topics covered:

* Successful program in existence for 73 years slated for elimination

* Reauthorization process for Head Start and No Child Left Behind begins

Much is at stake this year for Indian education. As part of his Fiscal Year 2008 (FY08) budget, President Bush has proposed eliminating an effective Indian education program, requiring Indian Country to play defense to save it. Congress is also scheduled to reauthorize two laws that have a great effect on the education of Indian children, the Head Start Act and the No Child Left Behind Act, giving Native organizations a chance to be pro-active to improve the Native American elements of those programs.



PROGRAM THAT AUGMENTS CLASSROOM LEARNING MAY BE ELIMINATED

The White House proposes to not fund the successful Johnson O'Malley (JOM) program, which serves the unique needs of tribal children age 3 through grade 12. Rather than providing extra money to the school system, JOM provides supplemental financial assistance to institutions and communities serving Native children. This program, begun in 1934, makes available academic services, such as tutoring and counseling, and cultural programs to the 500,000 American Indian children attending public schools. It gives Indian communities an opportunity to set priorities for the use of the funds. The program has fostered scholastic achievement and stimulated some students to complete PhD programs.

The administration has been trying to defund this program for several years. Although the president proposed to reduce its funding in FY06, Congress funded the program at $16.4 million. The Senate and House also restored funding to JOM in their FY 07 Interior appropriations, but the Bureau of Indian Affairs has yet to give that full funding and support to this program. For FY 08, the administration wants to eliminate the program. In response, Senator Baucus (MT) has objected in writing, and 30 members of the House from both parties have sent a letter of support for JOM to Interior Secretary Kempthorne.

For more information:

National Indian Education Association: http://www.niea.org/issues/tracking_detail.php?id=34

Indian Country Today article on the program: http://www.indiancountry.com/content.cfm?id=1096414502



HEAD START BENEFITS YOUNG NATIVE AMERICANS

The respected Head Start program has been invaluable to early childhood development in the U.S. and in Indian Country. Despite its proven record of improving the health, education, family, and community needs of low-income children and their families, funding for the entire Head Start program was cut in FY 06 and could be cut again in FY 08. Such cuts are harmful to the most-at-risk children, such as Native American preschoolers who are served through the Indian Head Start program, because fewer funds mean fewer services for all children now enrolled and fewer slots for children eligible to be enrolled. Currently, only 15.4% percent of age-eligible American Indian and Native Alaskan children are actually enrolled in this program, due largely to the combination of lack of funding with geographic isolation of families in need. Yet, a quarter of Native families are impoverished.

Native leaders will seek changes during discussions around this program's reauthorization to increase funding of Indian Head Start and to make programs more available to low-income Indian families. It speaks well for past congresses that a portion of Head Start funds must be used for Indian children. Unfortunately, only 2.9% of Head Start funding is allocated specifically to Indian Head Start programs, which is not enough, especially for an increasing population.

The Health, Education, Labor and Pensions committee in the Senate edited (marked up) the Head Start reauthorization bill (S. 556) on February 12, 2007. S. 556 would set aside four percent of funding for Indian children. Such an increase would be a significant step in assuring that the services the program provides are made available to more people in Indian Country. An optimistic estimate is that reauthorization bills could pass in the Senate some time in April and be voted on shortly after that in the House.

For more information, see http://www.nhsa.org/download/advocacy/fact/HSSetAsides.pdf

To view the bill, see http://capwiz.com/fconl/issues/bills/?bill=9473051



CONTROVERSIAL NO CHILD LEFT BEHIND NEEDS IMPROVEMENT

President Bush succeeded in passing the No Child Left Behind Act (NCLB) in 2001. The administration points out that "Prior to the passage of the No Child Left Behind Act, the U.S. did not track the achievement gap between American Indian/Alaska Native students and their peers. In 2005, only about one in six American Indian and Alaska Native 8th-graders was proficient in reading and one in seven is proficient in math." (Department of Education website). Thus, NCLB has the potential to improve pre-elementary, elementary, and secondary education programs for Indian children. However, since the program was enacted, many critics have argued that schools with a high percentage of disadvantaged students--of many backgrounds--are being penalized more than assisted.

In 2004-05, only 49 of 184 Bureau of Indian Affairs schools achieved adequate yearly progress. Richard Williams of the American Indian College Fund described some of the special Native education problems this way:

"Consider the sanctions. Under NCLB, parents now have the right to transfer their children to a 'successful' school within the same district. But the reality for Indian parents in remote areas like Pine Ridge, S.D., and Rock Point, Ariz., where there is likely only one school, busing and transfers are simply not viable alternatives. Removing underperforming teachers also presents a problem. On the reservations, the annual turnover rate is as high as 70 percent. How will these school districts replace underperforming teachers when turnover is already a chronic issue? Additionally, changing administrations or shutting down the schools in communities with very limited resources and trained personnel is simply not an option for a population with the least access to education of any racial or socio-economic group in the country."

The act is set to expire at the end of September 2007. The House Education and Labor Committee and the Senate Health, Labor, Education, and Pensions (HELP) Committee, which have jurisdiction over NCLB, have both named reauthorization of NCLB as one of their top priorities.

This reauthorization process provides an opportunity to introduce provisions to NCLB that will improve elementary and secondary education in Indian Country. Advocates hope to see changes made that will allow Indian educators to attain the academic goals set forth by NCLB and still encourage the use of traditional native knowledge, languages and history which are not measured by the test. The use of culturally appropriate teaching methods often help Indian students succeed. Currently, only 30% of Indian students are achieving adequate yearly progress, according to the standards of NCLB.

Title VII of NCLB recognizes that Native children have unique academic needs, and provides supplemental grants to ensure that programs serve these needs. Advocates of Indian education will be working hard this session to expand Title VII, improve cooperation between governments, and provide better support to teachers of Native students.

For more information:

National Indian Education Association's legislative tracking information

http://www.niea.org/sa/uploads/legislativetracking/42.53.NIEA_Briefing_NoChild_2-9.pdf

Preliminary Report on No Child Left Behind in Indian Country (National Indian Education Association)

http://coe.asu.edu/cie/29.23.NIEANCLBreport_final2.pdf

3:54 AM - 9 Comments - 11 Kudos - Add Comment

Supreme Court Approved Forced Sterilization
Category: News and Politics

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Virginia just apologized for slavery.  An apology to African Americans and native Americans is way overdue.  Not as well known is that Virginia also legally sterilized some of its white citizens because it considered them as mentally inferior.  A 1924 Virginia statute allowed this.  In 1927, the Supreme Court, by an 8-1 decision, Buck v Bell, upheld the Virginia law, allowing the sterilization to proceed.  The celebrated Justice Oliver Wendell Holmes, Jr. was the author of the majority opinion, writing that "three generations of imbeciles is enough".  Buck v Bell must rank right up there with Dred Scott and Plessy v Ferguson, as one of the worst Supreme Court decisions in our history.

In reading some of the decisions of the Supreme Court, sometimes we get lost in the legal details of the case.  We run the risk of forgetting that someone's life is directly affected by the outcome, sometimes profoundly.  Even worse, people in a similar situation will be affected.  Dred Scott was condemned to slavery again.  Fred Korematsu spent 40 years marked as a convicted felon simply because he was a Japanese American.  And Carrie Buck, the person around the case I'm discussing in this diary, was forcibly sterilized, leading to many more repetitions of this practice.

The Court's decision condemned Carrie Buck, "a feeble minded white woman", as well as her mother and daughter, to a salpingectomy.  In a salpingectomy, one or both Fallopian tubes are removed.  In the case of these three people, they were sterilized.

In the late 19th century and early twentieth century, a social theory called Social Darwinism greatly influenced our country, including of course our lawmakers and judges.  The main Darwinian idea was that as species compete for survival, only the fittest win. Francis Galton, a relative of Charles Darwin, thought this was a Good Thing.  This unfortunately was interpreted in racial terms, that there are superior and inferior races, and that even within a particular race, there are people with more innate intelligence whose worth to society is greater than those with less intelligence.  Superior human beings could be bred, in a manner similar to thoroughbred horses.

In the early twentieth century, the eugenics movement promoted such a policy.  An example of this kind of thinking was a popular book called The Passing of the Great Race; or, The Racial Basis of European History, by Madison Grant.  His book, which referenced favorably the superiority of the Nordic race, was the first non-German book reprinted in Adolph Hitler's Germany.

The eugenics movement profoundly influenced legislation.  The particular set of laws that affected Buck v. Bell were the 1924 Virginia Eugenics Laws.  One law, the Racial Integrity Act of 1924, required that the racial makeup of persons be recorded at birth, with the purpose of preventing intermarriage between races, and thus the degradation of the gene pool of one of the races was white.  An interesting side note is that in the original version of the bill, Indians were considered one of the inferior races.  However, many influential Virginia families were proud of their descent from Pocohantas, and thus the legislators cleverly devised the "Pocohantas exception", exempting white (or nearly white) descendants of Pocohantas from the Indian racial classification.

Virginia passed another law, SB281, which was titled "An ACT to provide for the sexual sterilization of inmates of State institutions in certain cases".  This is the Virginia law under which Carrie Buck was to be sterilized.

The 8-1 decision, Justice Butler dissenting, was handed down on May 2, 1927.  Some other quotes from the Holmes opinion:

The judgment finds the facts that have been recited and that Carrie Buck "is the probable potential parent of socially inadequate offspring, likewise afflicted, that she may be sexually sterilized without detriment to her general health and that her welfare and that of     society will be promoted by her sterilization," and thereupon makes the order.

It is better for all the world, if instead of waiting to execute degenerate offspring for crime, or to let them starve for their imbecility, society can prevent those who are manifestly unfit from continuing their kind.

Many sterilizations were performed, in Virginia and elsewhere, until 1942.  The Court ruled, in Skinner v. Oklahoma, that sterilization was not a legal punishment for a crime.  While this did not directly address Buck v. Bell, it put a legal damper on the legality of sterilization for other reasons.

The story of Carrie Buck and the court case was made into a TV movie called Against Her Will:  The Carrie Buck Story, with Melissa Matlin as Carrie Buck.Additional Resources:

• Buck v. Bell wikipedia article


• Buck v. Bell decision, by Mr. Justice Holmes, from findlaw


• Virginia Racial Integrity Act of 1924


• From Darwin to Hitler, by Richard Weikart, a history of the eugenics movement


• Skinner v. Oklahoma wikipedia article


• Skinner v. Oklahoma decision, from findlaw

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