Archive for August 18th, 2012

August 18th, 2012

“Dark Shadows” by John Edward

by DickH

John Edward, a resident of Chelmsford who earned his master’s degree at UMass Lowell and who teaches economics at Bentley University and UMass Lowell, contributes the following column.

Investing is not for the faint of heart. Danger lurks in these unstable times. Thankfully, money market funds offer a risk-free place to protect your money.

Or not.

During the financial crisis, the “shadow banking system” gained notoriety. People on Main Street heard more than they ever wanted to about obscure Wall Street contraptions such as collateralized debt obligations and credit default swaps.

The money market is part of the shadow banking system. Money market funds need to come out of the dark shadows. They may not be as safe as you think. There are steps you can take for your own safety – more on that later.

A money market is just what it sounds like. It is a place to borrow or lend money.

Businesses, and governments, often need to borrow money for just a few days or weeks. For example, a company needs to cut paychecks before customers pay bills. Going to a bank requires too much overhead and the interest rate might be too high. Instead, they borrow in a money market.

The money market is for exchanging IOUs. The Securities and Exchange Commission (SEC) requires that IOUs in money market funds have a high credit rating. Any IOUs they invest in must have a short length of time before payment is due. At the end of July the average maturity for money market fund IOUs was 45 days. Money markets are considered safe due to the high credit rating and short duration of the loans.

There is plenty of evidence that savers consider money market mutual funds to be perfectly safe. The evidence is the 2.5 trillion dollars deposited in these funds. That is a lot of money tied up in an investment with an average return of 0.03 percent. With inflation, shareholders are effectively paying more than two percent to park their money in what they think of as a safe place.

If you have money in a money market account, you are lending money. Lending is risky. Borrowers do not always pay up. The financial crisis started with homeowners failing to make mortgage payments. Many of the securities based on mortgage IOUs also had a high credit rating.

Like other mutual funds, money market funds have a share price. With stock and bond funds, the share price reflects the value of the underlying securities. Those values, and therefore the share prices, can be quite volatile. read more »

CategoryCurrent Events | CommentNo Comments »

August 18th, 2012

Woman Suffrage Amendment Ratified ~ August 20, 1920

by Marie

From The Saturday Evening Post: “It is 1913 and about darn time for equal rights for women! This “young suffragette” is putting aside her dolls and taking her brother’s turn at bat. Alas, many of our terrific covers were by artists long forgotten. Violet Moore Higgins was an illustrator for children’s books and magazines, and for one memorable Saturday Evening Post cover.”

 

On this day August 18, 1920 the 19th Amendment to the Constitution - guaranteeing women the right to vote – was ratified by the state of Tennessee. This vote gave the 19th Amendment the two-thirds majority of state ratification necessary to make it the law of the land. After more than 70 years of struggle by woman suffragists of all ages, the woman suffrage movement in the United States found success!   Its two sections read simply: “The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of sex” and “Congress shall have power to enforce this article by appropriate legislation.”

Read more here at history.com: http://www.history.com/this-day-in-history/woman-suffrage-amendment-ratified

CategoryCulture, History, Politics | CommentNo Comments »

August 18th, 2012

Murdoch, Bloomberg call for GOP to have courage on immigration by Marjorie Arons Barron

by Tony

The entry below is being cross posted from Marjorie Arons Barron’s on blog.

News Corp chairman and CEO Rupert Murdoch and New York Mayor Michael Bloomberg came to Boston Tuesday to hail immigrants’ contributions to our economic vitality.  Touting the findings of a report by the Partnership for a New American Economy, the two cited the shortage of skilled workers in the STEM (science, technology, engineering and math) fields, the fact that only four percent of U.S. graduate students are skilled in those areas (compared to 31 percent of China’s), and that our failure to allow foreign students to stay after graduating leads to damaging brain drain.  Both advocated some pathway to citizenship for undocument children of  illegals, but neither  spoke to the desirability of allowing young illegals brought here as children to pay in-state rather than out-of-state tuition at public universities.  Moderator Jerry Seib of the Wall Street Journal, a Murdoch employee, failed to push them on the issue at the event sponsored by the New England Council.

 

photo Boston Globe

Both Murdoch and Bloomberg see immigrants as self-selecting, ambitious and entrepreneurial, a plus for the economy.  Shockingly, Murdoch says that native-born individuals aren’t as successful entrepreneurs because they’ve gone soft with subsidies (“we’ve made it too easy for them to go to college.”)  Both scoff at the idea of subsidizing immigrants in any way. One Bloomberg idea for the federal government: assign eager would-be immigrants to one of our older depressed industrial cities (e.g. Detroit), get them to agree not to seek any government benefits, to obey the law, and lead productive lives.  Assuming they’d start businesses and rehab abandoned houses, under those terms, he’d grant them full citizenship if they’re still there after seven years.

Both credited President Obama’s executive order (which went into effect yesterday) not to go after illegals under 30 years old as “brilliant” political strategy, though Bloomberg noted Obama has actually deported more individuals than the previous five administrations. Both criticized Romney for not pushing immigration reform, which, Murdoch said, “wouldn’t take a lot of political courage for a Republican candidate” because Republican critics on the right aren’t going to vote for Obama anyway. Bloomberg agreed “there’s no down side for Romney.”

Bloomberg scoffed at the political fixation and dollars spent on controlling the Mexican border. ”If you want to come to America illegally, don’t waste your time coming across the border and going into the desert. It’s dangerous.  Just get on an airplane. Fly here and overstay your visa. They don’t track.” He got an uneasy laugh and reminded his audience that the problem of undocumented workers has been less in our tough economy.

Neither held out much hope for action on immigration in the current political climate but expressed hope we’d see it within two years.

“It’s not a Republican issue, it’s not a Democratic issue, it’s an American issue,” said Boston Mayor Tom Menino in introducing the two.  He should know.  Immigrants, he said, have “helped to make Boston, reinventing it again and again.”  Today, 8800 own businesses, employing 18,000 people and generating more than $1 billion in taxes.  Walking the streets of Boston, you can hear some 140 languages.  Boston, said Menino, is concerned not about where people come from but where they can go.

Too bad the majority of our political leaders don’t see it that way!

 

CategoryUncategorized | CommentNo Comments »

August 18th, 2012

Canoeing on the Concord

by PaulM

I am a bit ashamed to say that until this week I had never paddled a canoe on the Concord River. Countless times I had driven past the canoe rental place on Main Street in Concord, Mass., the South Bridge Boat House. The weather was good this past Wednesday, so Rosemary said, Let’s go.

Kayaks are to the right (8/09)

The process could not be easier. Park your car on the side of the road in a small lot, cross the street to the boat house, pay $20 for an hour on the water, choose a paddle and a life jacket, and follow the attendant to the row of canoes for the one that will be yours. I had not been in a canoe for years; among my various canoe adventures is a capsizing at Lakeview, Lake Mascuppic, when a friend and I got flipped by the wake of a power boat that zoomed too close. Another friendly captain fished us out of the drink. This was a no-wave day, however, as the placid Concord flowed through the green backlands of town. Our destination was the famous Old North Bridge at Minute Man National Park, Emerson’s “rude bridge that arched the flood” where “the shot heard round the world’ was fired.

Winslow Homer, “The Blue Boat” (1892)

Herons stood in the shallows, a band of about 60 Canada geese occupied one bend, other birds called here and there, and the river flowed by like time coming off a clock. On the way to the bridge we had the current in our favor, and it was strong enough to notice. Recent rain had topped off the channel. The bankside growth was lush with plants, bushes, and trees so familiar to us in central New England that we hardly notice the individual species. To a car driver, the vegetation can become a dense green sidewall. Slowed down in a canoe, you become more aware of the difference between looking and seeing. When you have to swing out into the middle of the river to avoid tree limbs dipping into the water, you notice more. The water was dark, and I didn’t have a good sense of how deep it was. On the route out and back we passed many kayakers and a few canoe duos, but mostly kayaks. The etiquette seems to call for “hi” when passing another traveler. The paddlers were young to old. On shore were a number of hikers and dog walkers. Most of this stretch of the river takes in back yards of suburban homes, but there are areas where the fields and woods come right down to the water.

I thought about the Thoreau brothers on their boat trip up the Concord and Merrimack. I thought of Emerson roaming the banks and the colonial farmers lined up against the British regulars. We saw a National Park ranger near the Old North Bridge orienting visitors to the grounds. The Minute Man statue of Daniel Chester French kept watch near the bridge. On the way back a squad of geese flew past us about eight feet off the water, flying under the radar no doubt, going someplace they just had to be. When we got there, not much seemed to be happening, but they were there patrolling.

File this under the category “Local Things To Do,” and give it a try if you have not been down that way. There’s talk about trying to do more with the waterways in Lowell and getting people onto the rivers and canals more easily. The audience for these experiences is out there. I would do this again, maybe when the leaves turn red and yellow.

CategoryGreater Lowell, History, Lowell | Comment4 Comments »

Tags: