U.S. Treasury Runs Into Theories on Irrational Investing

This post is by WSJ.com: Real Time Economics from WSJ.com: Real Time Economics

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The Treasury Department’s decision to shelve its plans to sell its stake in Citigroup Inc. struck us as a prime example of a popular theory in economics called ‘loss aversion’ at play in the real world with large stakes.

The Treasury abruptly shelved plans to reduce its 34% stake in Citigroup Inc. after investors balked at buying the bank’s shares. Given the tepid demand, Citigroup had to sell its stock at a discounted price of $3.15 a share. That’s 10 cents below what the Treasury paid for each of its 7.7 billion shares. Unwilling to take what would have been a politically embarrassing loss, the government backed away for at least 90 days.

Princeton University psychologist Daniel Kahneman has noted that individual investors have an irrational tendency to avoid selling their losing investments.

Say you have two traders. One buys a stock when it’s at $90 per share and another buys it when it’s at $110. If today the stock is at $100 per share, the person who bought at $90 is much more willing to sell than the person who bought at $110.

Mr. Kahneman’s insight helped to make a broader point –- individuals often act in emotional or irrational ways, counter to the view that individuals act purely out of self-interest. He won a Nobel prize in economics for the insight.

In the hypothetical case above, the fundamental value of the stock is no different for either investor. But the person who bought at a high price and faces a loss is so anchored to what he paid for it that he can’t make a decision based purely on today’s fundamentals. Guys on Wall Street also call this “cost trading.”

Here’s how Mr. Kahneman described it in an interview in 2007: “People in general don’t like cutting their losses. They’re willing to gamble on in the hope of recovering their losses, and that is a very well known characteristic of individual decision making, and in national decision making it’s exacerbated because the national leaders who have led the country close to defeat, for them there is really nothing further to be lost by putting more at risk. There is a real divergence of interest between national leaders and their communities when the time to cut losses arises, because cutting losses is rarely beneficial to the decision maker.”

It should be said that the Treasury has made money on many of its TARP investments, and the broader benefit to society of steering the financial system from collapse with TARP investments and other rescues was clearly large.

But when it comes to this particular Citi decision not to sell, Mr. Kahneman’s thoughts seem very apt. What will the government do in March if the shares have fallen even further?

More Pain in the Portfolio

This post is by Joanna Glasner from PE Hub Blog: Venture Capital Deals

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Pain and suffering are in the business headlines a lot lately. However, it’s not usually in the context of sought-after investments.

But, looking at venture investments over the past two months, it’s clear that pain – or, the least, the treatment of it – is very much in vogue. Since late October, VCs have backed rounds totaling more than $86 million in at least five companies developing novel pain therapies.

The latest, Palo Alto, Calif.-based Afferent Pharmaceuticals, announced today that it closed a $23 million Series A round to develop treatments for chronic pain based on research licensed from Roche. Pappas Ventures, and Third Rock Ventures led the financing round, with participation from Domain Associates and New Leaf Venture Partners. The money will go toward accelerating development of pain therapies that work with a targeted class of receptors, or protein molecules that respond to neurotransmitters.

Two others that raised big rounds recently are Spinal Modulation and Zogenix. Spinal Modulation, based in Menlo Park, develops a spinal cord stimulator system to treat patients suffering from chronic back pain. It raised $27 million in November from backers including MedVenture Associates, Johnson & Johnson, Kleiner Perkins Caufield & Byers, De Novo Ventures, and DFJ InCube Ventures.

Zogenix, based in San Diego, develops medicines to treat central nervous system disorders and pain. It raised $35 million in December, bringing total funding since 2006 to $150 million. Backers in the most recent round include Scale Venture Partners, Chicago Growth Partners, Domain Associates, Abingworth Management, Thomas, McNerney & Partners, and Clarus Ventures.

AIKO Biotechnology and Neuros Medical raised smaller rounds. Portland, Maine-based Aiko,  an early stage drug discovery company focused on pain management and opioid addiction, raised $1.2 million in December from Small Enterprise Growth Fund, Action Equity, LLC, and Supply Chain Ventures. Cleveland-based Neuros Medical, developer o technology or treating chronic pain and spasticity, raised $1.8 million in late October from backers including North Coast Angel Fund, Ohio Tech Angels Fund, and Glengary Ventures.

The impetus for all these rounds? Pain treatment is a growth industry, particularly for innovative players. Research firm Decision Resources estimated in a November report that the neuropathic pain drug market—driven by the launches of several novel therapies—will increase from $6 billion in 2008 to $9.7 billion in 2018 in the United States, France, Germany, Italy, Spain, the United Kingdom and Japan.

Bernanke Endorses Limited Audits of Emergency Fed Lending

This post is by WSJ.com: Real Time Economics from WSJ.com: Real Time Economics

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Federal Reserve Chairman Ben Bernanke, in written responses to lawmakers this month, maintained that he’s open to congressional audits of the central bank’s emergency lending programs.

But he said the reviews should be narrowly tailored to avoid probing the Fed’s monetary policy decisions.”A review of the operational integrity of these facilities could be structured so as not to involve a review of the monetary policy aspects of the facility, such as the decision to begin or end the facility or the choices made regarding, the structure, scope, design, or terms of the facility,” he wrote to lawmakers including Sens. Jeff Merkley (D., Ore.) and David Vitter (R., La.) in response to written questions tied to his confirmation. (Read responses to Sens. Merkley and Vitter.)

Bernanke said the Fed was open to the congressional Government Accountability Office reviewing aspects of the central bank’s emergency programs authorized under section 13(3) of the Fed’s statute, as a bill by Merkley would allow in some circumstances.But he maintained his view that a broader audit, as some lawmakers have proposed, would hurt the economy. “Actions that are viewed as weakening monetary policy independence likely would increase inflation fears and markettt interest rates and, ultimately, damage economic stability and job creation,” Bernanke wrote.

Pandora could be a hit in 2010 IPO parade

This post is by Chris Nuttall from Tech Blog

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Pandora, the personalised internet radio service for music, goes from forte to fortissimo, announcing on Wednesday it reached 40m registered users this month.
At a media dinner the previous evening hosted by Crosslink Capital, the VC which led a Series C round for Pandora, Peter Rip, general partner, and Tim Westergren, Pandora founder, elaborated on its […]

How Jefferies Scored the XTO-Exxon Deal

This post is by Stephen Grocer from WSJ.com: Deal Journal

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A deal the size of Exxon’s purchase XTO Energy usually involves only the heaviest of Wall Street heavyweights. So how did Jefferies & Co.. – a firm on the rise but not in Wall Street’s top tier — end up as an adviser to XTO Energy?

The answer dates to Jefferies’ 2005 acquisition of Randall & Dewey — an oil and gas advisory firm. Randall & Dewey had long ties to XTO Energy. Its founder — Jack Randall — has been a director at XTO Energy since 1997. The firm also advised on five of XTO’s top 20 deals, according to Dealogic.

A review of XTO proxy statements shows that Jefferies’ Randall & Dewey advised XTO on a number of deals and issuances over the years and was paid $8 million for “advisory services in connection with the acquisition of certain properties” this year and $10 million for the firm’s stake in “producing properties in Alaska’s Cook Inlet in 2001, according to SNL Financial’s Joe Mantone.

So when XTO decided to look at options, it turned to Jefferies and two Randall & Dewey bankers — Ralph Eads III, now chairman of the Jefferies’s energy group and David Rockecharlie, the group’s co-head. (Interestingly, the two bankers themselves have a long history together. Prior to coming to Randall & Dewey, they worked at SG Warburg, DLJ, and El Paso Corp.)

Jefferies looked at options from the sale of the company to possible joint ventures, which some other firms in the space like Chesapeake Energy have pursued, according to people familiar with the matter. Jefferies’ preferred path was for XTO to sell itself to Exxon. Keith Hutton, XTO’s CEO, agreed and pitched the sale to his counterpart at Exxon, Rex Tillerson, according to these people.

The deal propelled Jefferies up the league tables (the rankings of M&A advisers by announced deal volume). Since 2005 the firm had failed to crack the top 40 in the global league tables. As of last Friday, it ranked 39th. After the Exxon-XTO deal, it moved to 18th.

Tokyo Stocks Waver on Bank Caiptal Worries

This post is by Darlington Musarurwa from 123Jump.com: Market News

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Fuji Electric Holdings Co., Ltd led the decliners in the index with a loss of 3%. Mitsubishi UFJ Financial announces additional newly issued stocks. Banks declined ahead of the Basel regulators statement. American Airlines may increase its $1.1 billion offer for JAL to keep it in One World Alliance.

WSJ/NBC Poll: Wage Worries Trump Unemployment Fears

This post is by WSJ.com: Real Time Economics from WSJ.com: Real Time Economics

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Americans are more worried that their overtime will be slashed or their wages will be cut than they are about losing their jobs.

Just 15% of people surveyed in the latest WSJ/NBC News poll said it’s likely that they, or someone in their household, could lose their job. The majority, 72%, said it’s only somewhat or not very likely that will happen. (Read the full poll story here.)

Instead, they were more concerned that their overtime hours or bonuses would be slashed. A full 29% said it was likely compared to 52% who said it was just somewhat or not very likely.

The December poll comes as the worst of the recession appears to be over. The unemployment rate dropped to a still-high 10% in November as the economy shed just 11,000 jobs. But wages are still taking a hit. Real average hourly earnings fell a seasonally adjusted 0.5% in November from a month earlier, the Labor Department said Wednesday, an indication that finances are still tight even for those who are employed.

Of those who were surveyed in the WSJ/NBC poll, 11% said someone in their household had already experienced a drop in overtime hours or bonuses and 7% said someone in the household had already lost a job.

Looking ahead the next 12 months, 22% said it was likely that someone in the household would have to take a lower-paying job and 20% said it was likely their wages could be cut.

Meanwhile, more people said they were providing financial support for adult children than for other types of relatives. Some 19% said they were helping support their children over the age of 21 compared to 11% who said they were helping out parents 65 years or older. And 13% said either a parent or adult child was living with them for financial reasons.

Oracle earnings preview: Holding its own as Sun deal closes

This post is by Trey Thoelcke from BloggingStocks

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Enterprise software giant Oracle Corporation (ORCL), which finally completed the deal to acquire Sun Microsystems, Inc. (JAVA), is scheduled to discuss its financial results for the second quarter of fiscal 2010 in a conference call Thursday, December 17, at 5:00 PM (ET). You can catch the live webcast of the call on the company’s website.

The three months that ended in November saw Oracle deny that its proposed acquisition of Sun Micro would reduce competition and detailed its plans for Sun. Analysts surveyed by Thomson Reuters are looking for Oracle to report that earnings for the quarter rose two cents per share from a year ago to $0.36. Revenue is expected to the same as a year ago, or $5.7 billion.

Continue reading Oracle earnings preview: Holding its own as Sun deal closes

Oracle earnings preview: Holding its own as Sun deal closes originally appeared on BloggingStocks on Wed, 16 Dec 2009 18:30:00 EST. Please see our terms for use of feeds.

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Insider Trading Taints Private Equity (Again)

This post is by Dan Primack from PE Hub Blog: Human Resources

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When the SEC first brought charges in the Galleon case, it promised that many more insider trading suits would be forthcoming. We wondered how many would include private equity firm employees, given that the 2006-2008 boom in take-private deals often included spikes in trading volumes just before the formal acquisition announcements.

We got our first taste early last month, when the SEC charged former Friedman Fleischer & Lowe CFO Chen Tang.

Today we got some more, with SEC allegations that former TPG Capital associate Vinayak Gowrish schemed to illegally profit on deals for Sabre Holdings Corp., TXU Corp. and Alliance Data Systems Corp.

Gowrish’s alleged partner on the scam was Adnan Zaman, a former investment banker with Lazard Frères & Co. The way it worked was that Gowrish would get inside information about a pending deal, and then pass it on to Zaman who, in turn, would pass it onto a pair of options traders named Pascal Vaghar and Sameer Khoury (via yellow sticky notes, no less).

Each of the trades was deliberately small, so as not to tip off authorities. The total illicit profits were around $500,00. You can read the SEC’s full complaint below:

Comp 21339

SnowBear Farm – Ten Thousand Hours and Counting

This post is by Jason Bradford from The Oil Drum - Discussions about Energy and Our Future

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This guest post from Jim Dunlap (Oil Drum name Wyoming) is a progress report on the development of his farm in Virginia.

A year ago I wrote a lengthy article for Oil Drum – Campfire describing the beginning of my conversion from a career of professional life often an desk to one of a farmer. Due to the interest and spirited responses to my article of last December I thought that Oil Drum readers might find it interesting to know what has transpired this past year on the farm and what I think I have learned. If you get lost a bit I would recommend reading the previous article.


For a variety of complex reasons (which continue to evolve as this experiment continues) I have come to believe that our future world will require a significantly larger number of farmers than it has today. The short term causes of this need can be found in energy issues as often discussed on TOD and in the status of our financial system/consumer economy, while the primary long-term driver is the onrushing freight train of climate change. I believe that we have unwittingly raced into a civilizational dead end and need to quickly retrench and reconfigure our place in this world (although I do not expect this to happen). I am convinced that we cannot avoid massive change nor probably catastrophic upheaval. I do have hope we can adapt. With this in mind I have chosen to move forward and work towards a possible future. Many of us must learn small scale farming. Farming needs to become more local and it needs to be performed as ecologically as possible (sustainable farming being something of an oxymoron). We need to grow our numbers of farmers and reduce their average age from approximately 60 to a more demographically supportable age. We will need to reclaim land from suburbia and the pet horse industry. Who is going to do this? Well, for one, I am.

A quick bit of additional background to add to last years data; whether it clarifies or obscures what I am doing is open to one’s interpretation I guess. I am 55 years old and a retired CIA officer. I was formally educated as an electrical engineer and spent my entire professional career with the United States Government. I have traveled the world extensively and have directly witnessed some of the highs and lows of the human race on this earth (more lows than highs I am sorry to say). I am of an analytical bent imposed upon an operational background. I have expended significant thought and heavily researched the issues, mentioned above, which have brought me to my conclusions. I performed the due diligence, to the best of my ability, which such serious concerns demand. I am convinced and, thus, my duty is to act.

Year Three


When one compares the below production figures for this year with those presented in last years post it is critical to remember that the farmed acreage was significantly greater this year than last. I had about 2 acres in vegetable crops this year (as opposed to 1 in 2008) and about 1 acre in fruit this year (roughly the same as last).

During the growing season this year we raised 35 different vegetables, 4 herbs and various fruit/berries. For reference: in 2008 we grew 23 different vegetables and the fruit/berries. With the extra acre in production this year we naturally grew a lot more produce than last year. However, the difficult and unusual weather during the year mostly wiped out our fruit production and adversely impacted many of the other crops. The only fruit we grew in any volume this year was blackberries and pears. The rest did not survive the weather.

For 2008 I estimated that sold production was about 1 million calories of food and that total production (to include that sold, what we consumed, what had to be thrown away due to it not selling, donations to the poor, and that composted due to its not being deemed of sufficient quality for sale) was 2 million calories.

For 2009 I estimate that sold production was about 2.9 million calories and that total production was 5 million calories. We are getting better at this.

FYI: The total calories of production of produce of any kind that were edible are naturally higher than the above sold production numbers indicate. A lot of product never gets harvested due to its quality not being sufficient for sale in the current environment, lack of labor to harvest and/or insufficient markets to sell the product at. This may change in the future.

Energy Use

For 2009 the farm consumed the following energy inputs (actual thru end of Nov and estimated thru end of Dec):

Total Fuel: 1067 gallons
673 gallons – Gasoline/Vehicle – Pickup and Van
217 gallons – Gasoline/farm tractors/mowers/weed eaters, etc
31 gallons- Diesel for tractors
87 gallons – kerosene for greenhouse heater
59 gallons – propane for greenhouse heater

Electricity, $60/month May to Nov – primarily for AC for refrigerated vegetable storage room but also consumption due to the presence of farm workers

Numbers for 2008 were respectively:

Total Fuel: 950 gallons
681 – Gasoline/Vehicle – Pickup
200 – Gasoline/farm tractors/mowers/weed eaters etc
17 – Diesel for tractors
52 – Kerosene for greenhouse heater

Electricity aprox $30/mo

Of particular note is that the largest component of my farm’s energy use is transportation fuel that is almost totally consumed in delivering product to my markets. This year’s transportation fuel number of 673 gallons was 8 gallons LESS than it was in 2008 while the product delivered was approximately three times higher.

Production/Energy Ratios

I have used the same methodology to calculate total calories as detailed last year. The results are impressive (to me at least). Once again these figures are sold production. Another interesting number, in survival terms perhaps, is Total Production to energy consumed, but that is more of a topic for a different post. FYI: there is great room for improvement in the area of sold production as having more labor and sales outlets would generate much greater revenues from the same amount of crops.

2009 Results – Sold Production
Produce Type cal/lb lbs calories
Vegetables 145 20,000 2,900,000
Fruit 272 300 81,600
Total cal 2,981,600

2008 Results- Sold Production
Produce Type cal/lb lbs calories
Vegetables 145 6500 942,500
Fruit 272 500 136,200
Total cal 1,078,700

Production per Gallon

For 2008: 7.4 lbs Production per gallon of fuel
For 2009: 19.0 lbs Production per gallon of fuel

Labor Issues

For the first 2 years of farming I was the sole worker (with small amounts of assistance from my wife – approx 10% of my hours). This last year I intended to have one full time worker in addition to the time my spouse could spare. The issue of hired labor has proven to be a hard lesson in one of the ‘gotcha’s’ of small scale vegetable farming. A few items for illustration purposes.

I advertised for one full time worker for the season; 50-60 hours per week, Mon – Sat, all farm labor duties, etc. The first worker signed up for the season and lasted 2 months. He decided he wanted to work 40 hr wks, not on weekends, only was interested in greenhouse work and was bothered by having dirt stained hands. This kid grew up on a large cotton farm. The next 3 workers were laid off landscapers from the local area. One worked one day and did not return. The other two I fired for lack of effort, talking/texting on cell phones while working and not showing up for work on time or for entire days. The next worker showed up after driving clear from Massachusetts, and did not even work a full day. The next worker was a dream. A 17 year old 6 months out of Mexico (US Citizen – but non-English speaker) who worked rings around me and more than twice as hard as the best of the others. He had to return to high school at the end of August. The last worker was a recent college graduate who had failed to find work after graduation. Nice person but not a very hard worker and kind of depressed.

I have heard from many other vegetable farmers that it is very difficult to find good farm workers among young Americans. Most farmers want to train and use young Americans as they recognize that our future is dependent on finding our replacements, but the core requirement is to get the work done efficiently. Almost all of the small farmers I know, however, are heavily dependent on immigrants to get the heavy hauling done. Why is this the case? It may be because young Americans are not willing to work hard, as I frequently hear stated, but I am not so sure. I believe it may be because most young Americans do not know “how” to work hard. In my limited experience they have simply never been trained how to work hard physically. I tried to explain to them how my father taught me to work hard when I was young and just got the minimum wage stare in return. I would tell them that, even if you are 20 years old, if you work hard physically all day for 10 hours you will not be going out to the movies at 11 pm during the week because you will be asleep before that time. It just did not sink in. My parents thought my generation was getting soft and told me so. It seems that the current crop of youngsters is mostly clueless when it comes to hard times and giving 100% effort. I suspect that they are going to get to learn how to perform the hard way.

Another annoyance was that none of the American kids I hired spent any time thinking about what they were doing and trying to become better at it, as on the last day they were here they still had not adequately learned the tasks we were doing, nor had their ability to work harder/faster improved. The Mexican boy was completely different and worked like his life depended on it from minute one. He was smart. He never wasted time. He immediately found something to do when he was done with his last task without being told; he learned my way of doing things within a day or two (rather than arguing about it); he was always thinking ahead to the next thing to do, would jump right in and take something over if he could see that he could do it faster than I could, was never late, never wasted time, etc. I was amazed. I paid him much better than the others as well.

For next year I will return to the well for American workers, but I am going to try and be much more selective. I want to find 2 workers who are really motivated to learn this type of farming; hopefully they will have some experience and ideally they would be a couple. And I am going to try to hire the Mexican boy again for the summer. Plus my wife intends to join me full time on the farm as she has decided that she really likes the lifestyle and has all sorts of plans on how to add to our operation. So that means 4-5 full time workers next year. A big change. And probably some big headaches!

Labor for 2007 – Approx 3000 hours
Labor for 2008 – Approx 3300-3500 hours (spouse included)
Labor for 2009 – Appox 3300 hours, spouse 800 hours, hired labor 1400 hours for a total of about 5500 hours

Equipment Issues

For three years I have used the type and scale of equipment (2 wheeled walk-behind tractor, small power equipment and heavy use of hand tools) recommended in the very popular Eliot Coleman organic farming books. I have come to the conclusion that this scale of equipment is not suitable if one is trying to operate a profitable farm as opposed to operating what most would consider a large personal garden. By ‘operating a farm’ I mean that one is trying to grow an amount of food well in excess of one’s family needs and to try to generate a workable income. A ‘family’ feeding operation can exist and persist with significant inefficiencies, especially in the presence of a large number of family members, but a profitable farming operation must be highly efficient in order to turn a profit. My presumption is that large farm families with many children, structured along the traditional lines of the past, are not only going to be much less common, but are not desirable in any sustainable sense. The only other farmer that I know who was using this same type of small equipment has evolved to larger more capable machinery.

The 2 wheeled (walk-behind) tractors are excellent machines for certain tasks (tilling, running a flail mower and limited rotary plowing), but are not capable of efficient work at many required farming tasks; among them being furrow plowing, as they are not capable of rolling the sod over to speed its rotting nor are they capable of flipping over large rocks; cultivating, as it is not possible to exert sufficient steering control over the machine to cultivate close enough to the crop rows; pulling a transplanter; bed forming; root digging, as the machine is not powerful enough to pull a root digger even when loaded with substantial amounts of wheel weights; etc. One’s opinion may vary on this issue if the soil they have to work is very soft and largely rock free. That is not the case here in Virginia.

For my operation there are 3 core farm efficiency issues: weeding (cultivating), bed preparation, and transplanting. None of these activities can be efficiently performed using small scale equipment. It is either not powerful enough, accurate enough or just does not have enough weight and HP. A large amount of hand labor is required and with the problems in finding good workers and the cost of such labor it seems better to use human labor on tasks that generate greater return on investment.

Future Equipment – Year 4 and beyond
I have purchased a 45 HP Kioti DK45S tractor with creeper gear
I will purchase the following this winter:
Spader with power harrow
Bed former/drip tape/plastic layer
Transplanter – water wheel
Rotary Mower (Bush Hog)
26’ by 60’ greenhouse

Current Equipment
1994 Chevy pickup
2004 Ford van
11 HP Diesel BCS 853 2 wheeled tractor
Flail mower
Rotary plow
Tool Bar with cultivating teeth
Root Digger
Troy 20 HP garden tractor and wagon
MTD 25 HP riding mower
Troy Built rototiller
MTD rototiller
Stihl weed eater
Cub Cadet mulching mower – 20 inch push
Wheel Hoe
Stirup Hoes 2 ea
Mechanics tools – large set
Carpenters tools – extensive set
Plumbing tools – medium set
Electrical tools – extensive set
Chain Saws, axes, mauls
10’ by 40’ greenhouse
Large shop
Refrigerated room
Large wash room
Misc – lots

Profits (or Not?) and Costs

Last year I chose not to discuss revenues as I considered it, at the time, to be extraneous to the subject at hand. I no longer consider that to be the case and wanted to offer some comments on this issue as it does directly impact those who might consider attempting to transition to this occupation.

If one is embarking on even very large scale family gardening where the goal is to provide their family’s total sustenance then scaling for profit is not the point. Rather keeping expenses to the absolute minimum is critical, otherwise you are better off financially going to the supermarket. In this world using mostly hand tools, physical labor and maybe a tiller is all that is necessary.

Farming is another story. The purpose of this occupation is to grow large amounts of food so that others can work at other tasks. Doing one’s part for The Division of Labor. After 3 years of using small scale equipment, inputting huge amounts of labor and having access to fairly lucrative farmers markets to sell my produce at, I think I can say with confidence that one cannot make enough money via the above methods to make this a viable occupation. At this point in time I am just about even in terms of expenses and revenues (not counting as the CPA’s do – depreciation and all that- but in raw terms). This means that I have worked about 10,000 hours and my spouse has worked about 1100 hours for $0/hr. That is not a typo. $0/hr.

I am not counting as income the decent collection of equipment, tools and knowledge I did not posses before I started that could come in very handy in the future. But we are attempting to build an intermediate future that lands somewhere between the unsustainable present and civilizational collapse. So it is necessary to scale up the farm’s capabilities without drifting into full industrial farming practices. I expect that in my “research/experimentation” process that I will try a number of the modern practices of vegetable farming used on 5-15 acre vegetable farms and see how they fit my needs/goals. Examples of these techniques would be plastic mulch ( I am using straw at this time and will do both in 2010) and a heavy concentration on using transplants.

It is worth noting that my 2009 revenues were 2 ½ times that of 2008 which were 2 times that of 2007. This indicates to me that I am learning and making progress even though I have not made a “profit” yet.

Costs: Home gardening can be done on the cheap. Even large scale home gardening can be done relatively inexpensively providing that one has the time and physical strength or a large family. Farming requires resources. Those resources can be partially counted in terms of family, paid workers, draft horses or slaves (the future anyone?), but it is certain that those resources will need to include lots of equipment and (dare I say it) machinery if the farmer is expected to generate enough extra product to allow others to perform their part of the division of labor. Equipment costs…a lot.

For this kind of farming to succeed in the future food is going to have to cost the consumer a lot more and a lot of other professions are going to have to give up their overpaid ways.

Health and Welfare Issues

Another factor pushing me towards increased mechanization is the physical toll that minimal equipment farming takes on your body. I have reached the age where, no matter how much effort one puts into maintaining strength, there is an inevitable physical decline year on year. Over the last three years I have noticed some of that decline and suffered a number of minor issues that I can attribute to aging. My knees and lower back cause me problems if I kneel or bend over for many hours while harvesting and weeding. This will only get worse and is a common complaint of vegetable farmers much younger than I. I have one shoulder that is very painful at times due to arthritis and one can expect the other to follow in due course. I have a partially bum hip due to an old work injury that flares up occasionally. I age … unfortunately. Increased mechanization will allow me to extend the timeframe that I can perform the physical work of the farm. On the plus side I think that I can claim that I am much more physically capable than the average 55 year old and the positive impact of this occupation/lifestyle on ones mental health cannot be overstated.


These are resources that are very useful to someone working towards the type of operation I am running. Always keep in mind that what works for one expert grower on his farm in a certain part of the country may not work well in your circumstances. Some of the claims that people make in books leave so much of the rest of the story out that they may as well be making it up (Though I have seen it written I do not believe that one person can farm 2 acres of crops, harvest them and sell at markets and gross $25K an acre. That is a 5000 hour/yr job).

Growing for Market – magazine
Johnny’s Seeds – catalog, has great info on growing various crops
High Mowing Seeds – catalog, great growing info as well
How To Grow More Vegetables – Jevons
Square Foot Gardening – Bartholomew
The New Organic Grower – Coleman

Though I have a lot of books on farming/gardening and have read many others, I have not found a really good book on how to farm. People like Coleman write books on advanced gardening and other farmers write books that are for experienced farmers. I do not think a high quality book on beginning farming exists. Most of farming seems to have to be learned by direct observation, hands on attempts and through trial and error. Planning skills are crucial. Crop knowledge is crucial. Markets are crucial. Everything is crucial.

The Future

One can always change their minds of course or have life decide to shove you down a different path, but I think this is it for me. I figure to run this one full out to the end. My wife is planning on ending her own personal life sentence in the business world and will join me in the spring. She has a lot of ideas and is very enthusiastic not to mention a workaholic too. It looks like full commitment with no intention of looking back.

Fed’s Newest President on Central Bank’s Failure to Communicate

This post is by WSJ.com: Real Time Economics from WSJ.com: Real Time Economics

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Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, has given an interview to his local paper, the Minneapolis Star Tribune, in which he comes out against breaking up big banks, says the government (including the Fed) did a lousy job of explaining its actions during the crisis and makes an argument for bailing out homeowners instead of banks.

Mr. Kocherlakota, an economic theorist with unconventional views, became Minneapolis Fed president in September and has done little public speaking since getting the job.

The best passage from the interview that runs with the story:

Q: Do you still think there was a failure to communicate the purpose of the bailout to the American people?

A: I think we’re still living with that failure. I don’t think I’m exaggerating when I say that in Congress, at least, this reflects popular opinion to a certain extent. There are some concerns about what the Federal Reserve did last year in September of 2008. I think that failure to some extent reflects our, now it’s going to be on my shoulders as well, to make the case that we were facing a disastrous situation.

The best detail in a questionnaire he filled out for the paper:

He likes a band called “The Killers.”

Sprint Nextel’s moves Boost Mobile head to oversee 4G development

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Sprint Nextel Corporation (S) is taking the executive that was in charge of its Boost Mobile prepaid brand when subscriber growth exploded almost a year ago and putting him in charge of the company’s 4G wireless expansion efforts.

Continue reading Sprint Nextel’s moves Boost Mobile head to oversee 4G development

Sprint Nextel’s moves Boost Mobile head to oversee 4G development originally appeared on BloggingStocks on Wed, 16 Dec 2009 18:00:00 EST. Please see our terms for use of feeds.

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HarbourVest Makes Promotions

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HarbourVest Partners has promoted Peter Lipson, Julie Ocko and Mary Traer to the position of managing director. Traer also was named chief administrative officer. Other HarbourVest promotions include: Karin Lagerlund to chief financial officer, Sebastiaan van den Berg to principal and Bruce Pixler, Catherine Shih, and Abraham Soquar to vice president.

HarbourVest Partners, LLC (“HarbourVest” or the “Firm”), a leading global private equity firm, is pleased to announce that Peter Lipson, Julie Ocko, and Mary Traer have been promoted to Managing Director. Ms. Traer was also named Chief Administrative Officer. Additionally, Karin Lagerlund was named Chief Financial Officer, Sebastiaan C. van den Berg was promoted to Principal, and Bruce G. Pixler, Catherine Shih, and Abraham Soquar were promoted to Vice Presidents.

“We are pleased to recognize these individuals, who represent HarbourVest around the globe in Boston, Hong Kong, and London,” said Brooks Zug, Senior Managing Director of HarbourVest. “These promotions illustrate the growing leadership of our firm, our commitment to promote from within, and the depth and breadth of our team.”

Mr. Peter Lipson joined HarbourVest in 1997. After completing HarbourVest’s associate program, he left the Firm to attend Harvard Business School and returned in 2001 after receiving his MBA. Mr. Lipson is a senior member of HarbourVest’s direct team, with a focus on growth equity and buyout investments in operating companies. He currently serves as a director of Mimeo.com, Photobox, Towne Park, Tropitone, and xpressdocs. Mr. Lipson received a BA in Economics from the University of California, San Diego in 1993, an MS in Information Systems from the University of Virginia in 1995, and an MBA from Harvard Business School in 2001.

Ms. Julie Ocko joined HarbourVest in 2001 as a member of the primary partnership team focusing on U.S. buyout, venture capital, and credit investments. Since that time, she has expanded her responsibilities within the primary partnership group, and with this promotion, she will be taking a more senior role managing the primary partnership programs. Ms. Ocko holds a BS in Business Administration from the University of North Carolina and an MBA from the Colgate Darden Graduate School of Business Administration at the University of Virginia. She also serves on the advisory boards of several funds, including Berkshire Partners, Francisco Partners, and Thoma Bravo.

Ms. Mary Traer joined HarbourVest in 1997 as the Director of Taxation and became a principal in 2003. As Chief Administrative Officer, she oversees the tax and compliance teams, and her responsibilities include coordination and administration of all statutory compliance for the Firm’s global operations. Ms. Traer is also integrally involved in the investment side of our business, working to structure fund offerings and underlying investments in an appropriate manner, taking into account the legal, regulatory, and tax regimes applicable to the HarbourVest Funds and their stakeholders. Ms. Traer is a CPA and holds a Bachelors degree in Economics and a Masters degree in Accounting, both from the University of Virginia.

Ms. Karin Lagerlund, Principal and Chief Financial Officer, joined HarbourVest in 2000 as the firm’s Controller. She manages the firm’s accounting and finance activities, which are coordinated by a team of 39 professionals that generates annual and semi-annual financial statements, as well as quarterly limited partner capital account statements and other client reporting. The team is also responsible for portfolio valuation and fund level performance measurement. Over the past year, Ms. Lagerlund led the process of indentifying, documenting, and assessing HarbourVest’s control environment and worked closely with the HarbourVest’s external auditors, resulting in HarbourVest becoming one of the only private equity managers to issue a SAS 70 Report. Ms. Lagerlund is a CPA and received a BA from Washington State University.

Mr. Sebastiaan van den Berg joined HarbourVest Partners (Asia) Limited in Hong Kong in 2005 as a vice president responsible for partnership investments in Asia Pacific and emerging markets. After four years with the firm, Mr. van den Berg has taken on increased responsibilities across the Asia and emerging market investment portfolio of HarbourVest International Private Equity Partners V (HIPEP V). He serves on the advisory boards of several Asian partnerships, including funds managed by Brait Capital Partners, CHAMP, CVC Capital Partners Asia Pacific, MKS Consulting, Unitas Capital, and Unison Capital Partners. Mr. van den Berg received a Doctorandus degree in International Financial Economics from the Universiteit van Amsterdam and an MSc in Economics from the London School of Economics and Political Science (LSE).

Mr. Bruce Pixler joined HarbourVest in 2005 and became Assistant Director of Taxation in 2007. As a vice president and Director of Tax, Mr. Pixler is responsible for coordinating the U.S. federal and state income tax compliance function for all of the HarbourVest entities, which entails oversight of the preparation of approximately 1,400 federal and state tax returns annually. He has also played an integral role in building HarbourVest’s tax team resources through recruiting, hiring, and training to ensure that the Firm is properly staffed to comply with ever-increasing global tax reporting requirements. Mr. Pixler is a CPA and holds a BS in Accounting from Bowling Green State University.

Ms. Catherine Shih joined HarbourVest Partners (Asia) Limited in Hong Kong in 2007 as a senior associate to concentrate on partnership investments in Asia Pacific markets. Ms. Shih has taken a lead role in portfolio construction planning for HIPEP VI Asia, and she is responsible for market coverage and deal sourcing in India, Japan, and Australia. She is active with many of the Asia Pacific fund managers across HarbourVest’s portfolios. Ms. Shih graduated from Brown University with a dual degree in Computer Science and Business Economics and received an MBA from Harvard Business School.

Mr. Abraham Soquar joined HarbourVest Partners (U.K.) Limited in London in 2002 to focus on primary and secondary investments in Europe. During 2008 and 2009, Mr. Soquar worked in Hong Kong (HarbourVest Partners (Asia) Limited), where in addition to investment responsibilities in Asia Pacific and South Africa, he played a valuable role in team leadership, mentoring, and integration across markets. Most recently, he returned to London to focus on primary investments in Europe and emerging markets, where his broadened regional experience is valuable across HarbourVest’s Europe, Asia, and emerging markets programs. Abraham serves on the advisory boards of several private equity partnerships. Mr. Soquar received an MA in Economics and History and a Masters degree in Economic and Social History, both from Oxford University.