Geeks are knowledgably.
They know that exercise is hard, which is a problem.
They know that technology can fix any problem.
Ergo, with the right technology, exercising can be easy.
Corollary – Knowledge is power, which is why bookshelves groan with diet books.

Because they set the rules, schedule the games, helps set the pay – which makes more teams competitive and the game more enjoyable. Mostly housekeeping stuff. So I have low objectives here.

Here is a link.
http://www.npr.org/blogs/money...

That being said, I am looking at a construction site for a new sports stadium which I am helping to pay for via my taxes. Subsidies for billionaires. That I grumble over.

I would agree. However .4% multiplied by a dollar does not give you 40 cents - 40% does. Your calculator slipped 3 digits someplace.

Stock Analyst 101: How do we compare 2 different stocks? By price?
AMZN ($287 per share)
MSFT ($46 per share)
SPY ($196 per share)

MSFT could do a reverse 10 for 1 stock split tomorrow as AMZN does a forward stock split of 1 to 10. Stock prices would change but no real economic activity would occur. It is same a converting a 1 $10 dollar bill into 10 $1 dollar bills. Earnings? But large companies will have big earnings, but big earnings are not necessarily good. Maybe for a company that size they should be bigger? Or maybe smaller.

One of the most basic ways to compare companies is to normalize the companies so the values mean the same thing. The most popular one is the P/E ratio, which is Stock Price / Earnings (Profits) / Shares outstanding. I prefer earnings yield, which is just the inverse: earnings / shares / stock price

$275m in profits, split by millions of shares, which are sold at a very high price, leaves you with the fact that for every $1.00 of AMZN stock you are buying, you are buying $0.40 of earnings (some would call that yield) in 2015.

Let me clarify my point since you have seen to missed it.

Yes, Amazon's assets have grown in assets. Yes, Amazon reinvests massive amounts of free cash flow back into their company. For their investments, IIRC, they get a return of 1.7%. The average company in the S&P get around 3.5%. So, by itself, this is the opposite of being impressive. High growth does not necessarily translate into growth of profits.

Yes, Amazon had 745m in operating income, or profits of 274m. These are large numbers. Can we put them into human scale?

Amazon has a forward P/E ratio of 243. I don't like P/E ratios. I like to use earnings yield, or the E/P ratio.
S&P 500 = 6.1%
MSFT = 5.7%
AMZN = .4%
10 Year US Treasury Yield: 2.27%

What does this mean? For every 1$ I invest in Amazon, I expect to get 40 cents of profit over the next 12 months. Now, why anybody want to do that? If the average investor demands 6.1%, why would I chose a company with such low CURRENT profits.

The answer is growth. If AMZN grows at anywhere near what it is expected to grow, it won't growth enough this year or over 2 years, but over 5 to 10 years. Only with high growth over that time period with AMZN's earnings yield justify its current price.

But that is missing my point and the evidence at hand. Amazon has huge turnover, narrow margins, and is making a low profit - as evidenced by its tinny ROI. Small profit, not large. It has growth - which is not profit. Plenty of companies have had high growth before they went supernova. I don't think thar will happen to Amazon but it is a possibility.

Let me be the Devil's advocate.

First, Amazon is not "re-investing profit into more and more expansion." Amazon has one of the worse Return on Investment (ROI) in the S&P. That is, it has below average profits on its investments. What it is doing is exchanging profits for growth. It is a subtle but importance difference.

You are right, Amazon could be today's profits for bigger future profits. That is the general consensus among stock analyst. Which is why Amazon's stock price tends to flop around so much. Stock analyst have to guess what Amazon's profits will be in 10 years, which is shrouded in risk and uncertainty.

However there is a contra view. That Amazon is stuck in low margin business that will never generate large profits. That the only way to expand is to offer lower prices than anybody else, resulting in a "Red Queen's Race", where everybody has to run faster just to stay where they are. If that is true, Amazon will never be able to generate "normal" profits, so future profits will be small, not large.

Only time will tell on who is right.

No, we can be pretty sure that this will be the model for the next 2 years. Probably for the next 5 to 10.

Amazon has one of the lowest Return of Investments (ROI) in the S&P 500.
It has one of the highest Price to Earnings ratio (P/E) in the S&P.

The only way this makes sense is if Amazon is trading growth for profits today for bigger profits tomorrow. Depending on what model you use, you get 5 to 10 years. Combine that with the public statements of Bezos, and I doubt it is 2 years.

It's like King Cnut commanding the seas – maybe not the best idea.

Should the government discourage training the youth because they threaten the grey breads? How can the US government prevent the rise of coders (and other STEM jobs) in the rest of the world?

Unions are good (or at least, should be good) at redressing the balance of power between a strong centralized management and diffuse workers. They do little good and much harm against fundamental changes in labor or market structure. Trying to hold back these changes is like trying to hold back the sea. Compare and contrast the fate of Germany autoworkers against French or US autoworkers over the past 30 years as a reference point. German unions adapted to the times and are vibrant. US and French unions – less so.

I am not saying there is not a place for government policy. I am saying that fighting against the future is a losing battle. Look forwards, not backwards. If you can't embrace the risk that an uncertain future brings you will fail.

Let's extend your argument and look at doctors. What if we cut the number of admissions to medical colleges by 1/2? By reducing the number of doctors we could boost the wages of all doctors! Wouldn’t' that be great? Would that not make our future brighter?

Probably not.

You are talking the same position as the old guild members, fighting to keep their privileged position as more productive factories raise productivity and living standards for everybody. I mean it is great that you beat everybody else in the great land rush, but I don't think you should close the gate behind you. I am not even sure you can as I look at India, China, etc. Give them 25 years. Don't focus on short term gain but on long term greed. You will benefit more from vibrant economy than a stagnant one.

Coders (well, STEM jobs in general) will build the future. The more coders that we have the faster we will reach a bright future.

We are discouraging large chunks of people who have the intelligence to train as coders, thus our future is dimmer.

While I have not read the article, I suspect the article is being too simplistic. Culture is pushing away girls (As Barbie says, "Math is hard!") to woman. Most women pick careers that are "family friendly" or offers a good life / work balance.

Your comments would have been spot on 20 years ago. Things have changed. Read up on Basel II.

Let us start with reserve requirments. The banks need to keep this reserve at the Fed (where there is a required minium) or in other safe assets like US Treasury Bills. T-Bills always offer a higher rate – unless intrest rates are zero. Then you use the Fed becasue it is more convient. What you are showing is the banks preference in where to park their reserves, not overall excess reserves.

Second, high poewr money is no longer high power.

http://research.stlouisfed.org...

Which results in this:
http://research.stlouisfed.org...

(M1 is the bit that the Fed has indirect control over. The rest less so.)

Why is this? The Fed issues currency – a.k.a. high power money. But anybody with high quality liquid assets can create money. 20 years ago that was primarily banks and the Fed had a 1 size fits all when it came to reserve ratios. To maximize profits, banks need to be as highly geared as they could be. Any new cash from the Fed would be turned into loans fast.

Then Basel II came along and said that reserve ratios had to be risk adjusted. Was your lending safe, then you have have a high ratio and a low reserve. High risk loans meant a low ratio and a high reserve. Banks would create a computer model.

Or you could lend off books. Issuing loans via MBSs dod not require any reserves. The shadow banking system does not require any reserves. Both of these methods could indirectly create money. The Feds have very little control over these markets.

Then the banking crisis hit. The computer models toe calculate the reserve ratio blew up and the shadow banking system shut down.

Which takes us to your point on the reserves – exchanging productive assets for Fed reserves. To be a little glib, managing reserves is one of the primary functions of the banks – a necessary part in converting 30 year home loans into 0 years savings products. Banks want to gear as high as possible to maximize profits while central banks want to keep the gearing low to reduce risk. The current environment is not that bad. In the past 100 years I can point to 20 to 30 years where it was worse.

And I am not sure what you mean by the comment that MBS and Treasuries will soon be worth far less. I can't think of any way the one could make Treasuries worth less without making the Fed's reserve dollars taking a even bigger hit. Nor do I know what you mean by big fish. Banks and the wealthy hold much of the government debt and MBS so they would suffer the most. My personal vote is for financial repression, but for that to happen we would need to have some inflation over the next 10 years, and the market does not think that will be happening – we know that because the price of TIPS.

http://www.pimco.com/en/insigh...

I would severely contest that statement. If you are quoting negative basis points implies you are from the EU where banks still routinely fail stress tests because they have too little capital. Back during the financial crisis banks where operating on very thin reserves (a.k.a. risk capital) / highly leveraged / high geared ratio / whatever term you want to call it. This is one of the reasons why the crisis was so bad. On a relative measure (reserves / assets), they are recovering but are still historically below average.

Which takes me to 2 points.

First, what you are seeing is a fight between the politicians (and by extension, the central bankers) and the stock holders. The banks need to recapitalize and deleverage – everybody agrees on that. The central banks want this done fast and remain the same size by issuing new stock to raise fresh capital. The central banks argue that would take the risk out of the banking sector as well as stimulate the economy. The stockholders are resisting this idea. This would water down their stock. They prefer a slower, more organic approach. As loans come due, bring in the profit into the reserves instead of lending it out, shrinking the overall balance sheet. This means reducing the rate of lending.

Secondly, let us consider secular stagnation

This is what I hear: People are not looking to borrow because there are few projects with an adequate risk / return profile, ergo demand is low. What is difference in what we are saying?

Interest rates are set by the supply of credit (savings), demand for investments.

I would argue that supply is high. See central banks pushing the money supply.

To extend on the theme that demand is low. Always use a risk / return framework. If not you can get skunked.
There are a variety of measures of risk aversion (VIXX, credit spreads) and these have been falling.
Return is tied to overall growth. If growth sucks, than return sucks. Look beyond the banks to almost every out asset class out there – stocks, real-estate, bonds (government, corporate, high yield, short term, long term) – expected returns are at very low levels.

Here is a link to a excellent source – with arguments for both sides.
http://www.voxeu.org/sites/def...

Can you cite something that is 1. Not a vague content free preview of a future article and 2. Not behind a paywall?
Here is mine.

http://www.economist.com/news/...

“The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing” – Jean Bapiste

What does "fund the government" mean? And how does a high income tax promote wealth equality? Is this some vindictive punishment against the wealth, who be definition are evil? By destroying innovation and driving away high performers away? France's 75% income tax rate plus its wealth tax is doing that quite well. But I suspect that you don't.

I suspect that you are confusing taxes (inputs) with government policy (outputs), and you fear that a consumption tax by itself won't raise enough money to fund the government policies that you want.

I will point out that the current US tax system is kind of flat. High earners are in a higher tax bracket but have more opportunities for tax breaks. The overall effect is that everybody has about the same marginal tax rate after $50,000. And what does this added complexity buy us?

If you further up the thread you can see that I support a consumption tax, a flat income tax with a negative income component.