Let’s say I have two positions, one with $3000 in unrealized gains, and one with $3000 in unrealized losses.  Common wisdom says to realize them both now, in order to net the effects.  The result is zero capital gains tax liability.

But if I realize the losses now (in 2008), I can net them against personal income.  The tax benefit is, say, 30% of $3000: +$900.  Then if I realize my gains in Jan 2009, I will be taxed 15% of $3000: -$450.  With this simplistic strategy, I gain a real +$450.

What am I missing?

Venture Capital Hits a Cash-Call Crunch

By PUI-WING TAM and CRAIG KARMIN

Cash-strapped investors are starting to renege on their commitments to venture-capital funds, dealing a blow to an industry that has been the bedrock of Silicon Valley start-ups.

From pension funds to rich individuals to once-deep-pocketed financial institutions now in desperate shape, this year’s plunging markets have made it much harder for some investors to come up with the money they promised to invest in venture-capital funds.

…

Sent:    Tuesday, December 02, 2008 5:02 PM
To:    *Citi Finance Controllers 909; *Citi Finance CBS 909; *CFA All Staff
Subject:    Join Us For Some Holiday Sweets

You are invited to bring some of your favorite and/ or traditional holiday cookies (treats) and exchange them with our Finance colleagues as we gather to sample these tempting treats and a holiday moment.

If you are interested in participating, bring your treats to Conference Room C by Noon on Wednesday the 17th.

When: Wednesday December 17, 2008

Time:  Beginning 2:30 p.m.

I liked this:

What is rational behavior, anyway? In economic terms, Mr. Ariely said, “rational would mean that you take all possible information into account and you make the optimal decision. But I have a more relaxed definition, which is that rational decisions are those you make and don’t regret later.” Seen in this way, the pleasure of the $4 coffee you still drink may be rational. That is, “unless I interview you three years from now,” Mr. Ariely added, “and you tell me you regret not saving that money for beer.”

http://www.nytimes.com/2008/11/20/garden/20math.html

The logical way to fight generational risk is to borrow money to make large, regular investments in stocks while young, then use a proportion of later savings to pay back the loan rather than to pile into the stock market in middle age. That sounds risky, but it is, in fact, exactly what people do in the housing market. Knowing that they will need a place to live all their lives, they tend to buy a small house and gradually trade up to a bigger one, paying off their mortgages only late in life.

–Tim Harford, “Only the Good Buy Young”, Slate, November 15, 2008

But even Costco was forced to rein in its no-questions-asked policy a year ago because so many people were returning televisions, computers and big-ticket electronics. The problem was that prices were dropping for these items, and a year-old TV was worth only a fraction of what it was sold for. The chain was racking up losses of between $180 million to $200 million a year exchanging big-ticket electronics devices that had to be salvaged or destroyed for “cents on the dollar,” says Chief Financial Officer Richard Galanti.

http://online.wsj.com/article/SB122653664088122679.html

China tainted milk crisis triggers global recall

(from the SF Citizen blog)

Palin’s husband is a commercial fisherman. Outside the fishing season, Todd works for BP energy corporation at an oil field on Alaska’s North Slope and is a champion snowmobiler, winning the 2000-mile “Iron Dog” race four times. The two eloped shortly after Palin graduated from college; when they learned they needed witnesses for the civil ceremony, they recruited two residents from the old-age home down the street.

Sounds like someone you’d love to get to know.

On September 11, 2007, the Palins’ eighteen-year-old son Track, eldest of five, joined the Army. He now serves in an infantry brigade and will be deployed to Iraq in September 2008.

Street cred for the “war on terror”.

She also has three daughters: Bristol, 17; Willow, 13; and Piper, 7.

Quirky.

On April 18, 2008, Palin gave birth to her second son, Trig Paxson Van Palin, who has Down syndrome. She returned to the office three days after giving birth. Palin refused to let the results of prenatal genetic testing change her decision to have the baby. “I’m looking at him right now, and I see perfection,” Palin said. “Yeah, he has an extra chromosome. I keep thinking, in our world, what is normal and what is perfect?”

Serious street cred on her pro-life stance.

Details of Palin’s personal life have contributed to her political image. She hunts, eats moose hamburger, ice fishes, rides snowmobiles, and owns a float plane.

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