2205 Big Engineering and Financial Discoveries

Friday, January 9, 2009

When I buy new eyeglasses, I always get two pair, because I'm blind without my glasses. If I pack an overnight bag, the spare pair goes in. Usually I alternate wear occasionally, and usually, when it's time for new lenses I get one new frame, and have new lenses put in the better of the old frames. Last time, about two years ago, I got two new frames because I caught a good sale and both of the old ones were ratty.

However, since day one, one of the new pair has been unwearable. The thingies that sit on the nose HURT! They leave red welts on my nose, that will go to blisters if I keep wearing them.

I've taken them back twice, and the first time they just adjusted them (didn't help much) and the second time they replaced the pads with smaller softer pads. Still didn't help. Part of the problem is that they feel ok at first, but within two hours they get painful.

This morning I got the hurty pair out and decided I was going to fix them somehow. If I broke them trying, I wouldn't lose much because I can't wear them anyway.

I bent and tweaked the nose pieces six ways from Sunday, and they still hurt. It felt like the glasses were too heavy on my nose. So I weighed them. They actually weigh less than the ones that don't hurt. I thought about that a bit.

Why do they feel heavier? Because they press on my nose harder. But they aren't heavier. So why do they press harder?

Because the thingies that go over the ears are too tight! That pulls the nose thingies hard against my nose!

I straightened out the ear thingies so they just rest over my ears instead of grabbing them, and wow, I've been wearing them 8 hours now, and they're fine.

It took so long to figure that out because they never hurt my ears.

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Interesting question. Suppose someone has been accused of some financial crime, say embezzling a gazillion dollars. Say that he is being sued in civil court for the missing money, and has been charged in criminal court with the crime. The civil court freezes his assets so he can't dispose of them before the case is decided. The criminal court is getting very nasty.

He needs to get two good lawyers, one civil, one criminal. He's rich. He ought to be able to afford great lawyers, and has a right to whatever he can pay for. Civil isn't too much of a problem, since any lawyer who isn't sure he can free those assets and get the guy off isn't one he wants on his side, anyway.

The criminal lawyer is the problem, and he needs him first. His assets being frozen, he can't pay a criminal lawyer up front. And the outcome of the civil case is likely to depend on the criminal outcome, because if he is found not guilty, the civil case will probably be dropped (although not definitely, as OJ will tell you, so he still needs the lawyer). Ye Olde Catch-22.

This is similar to the problem faced by Marc Dreier.

Not that I feel a whole lot of sympathy for him, but the situation has my head spinning.

He's innocent until proven guilty, right? And he's allowed the best criminal defense he can get, right? So is it fair to hamper his defense by freezing assets that are not yet proven to be ill-gotten?

Are a prosecutor and a civil lawyer allowed to arrange for assets to be frozen in order make it more likely to get a conviction? Isn't this collusion to hamstring a defendant? Is that ok?

It may be ok legally, but I don't think it's ok morally. You might argue that if the assets are stolen, it's right to ensure that he can't spend them before the rightful owner can get them back, but the counter to that is that until they are shown to be stolen, they're his.

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Speaking of moral arguments, Piper advised me today to sell off a bunch of stock from one of my private accounts, stocks that have fallen, bank the money, and then buy back the same stocks after 30 days. That way, after the 30 days, I am in the same position as before, but now I have a huge capital loss to claim on my 2009 income tax.

My chin dropped. Shock. "That doesn't sound right!" It's ok, he said. Perfectly legal. The law just says you have to wait 30 days.

I told him it may be legal, but to me it sounds immoral! He and Vinnie looked at me like I was crazy. "It's not immoral. It's BUSINESS!"

Eek.

I've "lost" a few hundred thousand in this rotten market (I don't consider it really lost because I haven't sold any, it's all good stuff, and will all come back when the market recovers). But if I sold off all the losers, then bought them back, I could end up paying almost NO 2009 income tax without hurting myself at all.

Now, think about that top 1%, the multi-billionaires. If I could eliminate taxes without damaging my bottom line, what do you think they could do? And if they did it, what would that do to the market? And of course it would be to their enormous advantage if the market not only stayed low for a while, but even better if it dropped a little more.

So with the bailouts raising the federal deficits, taxes will have to go up for someone. That bill's got to be paid. Everybody thinks, well, raise the taxes on those folks who have more than they need. But ha ha! They've found a way to not pay ANY taxes!

Another instance of the core mechanics of our economic system - "Give to them what got, and make them what don't got pay for it." That's the way it was designed.

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Which leads to a final thought: I don't understand why folks would trust someone named Madoff with all their money. (There's a joke in there, "made off with all their money", but I don't know how to write it.)
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