How To Make $72B a Year, Save Lives, & Serve Justice

There's no way I could I could go through Fiscal Cliff week without sharing the following. We're desperate for funds? How about picking up the $72 billion a year that's going to criminal drug cartels? The United States accounts for only five percent of the world's population, yet we hold a staggering 25% of the world's prisoners, and it's all because of the ridiculous War on Drugs. Home of the free indeed. The following is a new documentary released six days ago which lays out the case for ending the War on Drugs and decriminalizing all drugs in America. The cost savings alone is reason enough to do it, even if you hate freedom like most of the people who support our draconian drug laws. Doug Stanhope said it best when he pointed out that there are only two kinds of people who are against drugs: people who have never done drugs, and people who suck at doing drugs. I challenge any of you to make a case for continuing this ridiculous prohibition. Enjoy:

The Preventing Paris Hilton Act of 2013

"The Floor recognizes the gentleman from Paris France for five minutes."

Ladies and Gentleman of Congress, I present to you today a proposed overhaul of the estate tax system in America, an overhaul which will raise trillions of dollars, close egregious tax loopholes, and bring the burgeoning aristocracy of the One Percent to heel. The proposed legislation will heretofore be known as the Preventing Paris Hilton Act of 2013.

The estate tax has long been a hot-button issue in our country. For many, the estate tax represents a double (and sometimes triple and quadruple) taxation on income and assets already earned and taxed. While I'll admit that this is a logical and legitimate argument against an estate tax of any kind, I would respond with the equally legitimate fact that they don't make hearses with luggage racks. In other words, not only can you not take it with you, the fact that you had it in the first place was due in no small part to your membership in the Lucky Sperm club and little else.

Under the Preventing Paris Hilton Act of 2013, the estate tax would be administered as follows:

Welcome to Fiscal Cliff Week!

We're doing something a little different on WSO this week. Since you can hardly turn on the TV or the radio, or go online without being inundated by stories about the Fiscal Cliff, we thought we'd give the Fiscal Cliff the old WSO treatment. To that end, TheKing and I will be doing a series of posts this week dealing with the two issues at the crux of the issue: taxation and spending. And we'd like your help to put it together. First things first:

What is the Fiscal Cliff? Essentially it's the "perfect storm" of several macro-economic factors colliding all at once early next year. These factors include the expiration of the Bush tax cuts, a mandated increase in the payroll tax, and the violation of the debt ceiling yet again. Thus far, Congress and the President have made half-hearted overtures at getting a deal done to forestall the expected crisis, but as yet nothing concrete is in place. The ramifications of not getting a deal done, or "going over the cliff", include another hit to our national credit rating, a fairly drastic increase in taxes (more or less across the board), and a potential cataclysm in the stock market. The US dollar is already suffering against rival currencies in response to the looming deadline and lack of a solution at the moment.

Anyone who has watched American government for more than 15 minutes knows that this is mostly Kabuki theater; no reasonable person thinks for a moment that a deal won't be reached to kick the can a little further down the road. It's what we do. But that doesn't mean we can't have a little fun with it in the meantime.

Travel Hacking 101

mod (Andy) note: "Blast from the past - Best of Eddie" - This one is originally from December 2010. If there's an old post from Eddie you'd like to see up again shoot me a message.

"The world is a book, and those who do not travel read only one page." - St. Augustine

Bonus Bananas December 7, 2012

1) Morgan Stanley CEO: More bank deals on the way (CNN Money) - James Gorman sees a lot more bank consolidation on the horizon.

2) Another Goldman Creature Given Vital Government Post (Rolling Stone) - Another rant by Matt Taibbi, this time showcasing the appointment of ex-Goldmanite Mark Carney as the head of the Bank of England. We've seen this movie so many times already that I'm not even sure Taibbi's indignation is real anymore. How could it be?

3) Law School Classmates Arrested in Insider Trading Case (Wall Street Journal) - An insider trading scandal in the House of Schiff??? Say it ain't so. Pro tip for would-be inside traders: don't text your buddies about the sick ride you're gonna buy when this inside info pays off.

Learn R for Free

It never hurts to increase your skill set, especially in this economy. And when you can do that for free, so much the better. And when you can learn something for free that is in demand all over Wall Street, well that's just the icing on the cake. So I wanted to let you know about a new course that
Codeschool is offering called Try R as an introduction to the R programming language.

For those who don't know, R is quickly gaining steam among the quant trading set on Wall Street and was recently listed among top skills on Wall Street's wish list. The way it's been explained to me is that R isn't really Excel on steroids, it's more like Excel got exposed to a near-lethal dose of gamma radiation and morphed into the Hulk. So if you have a head for coding, it's definitely something you'll want to check out.

One of the cool things about Codeschool (and several other training sites, to be fair) is their in-browser programming environment. So you don't need to download anything and clog up your hard drive with DE's and a bunch of other junk. In fact, you do all your programming right there on your screen within the course. Now that I think about it, Khan Academy offers the same set-up in their new Computer Programming track.

"It's Just a Matter of Math."

The fiscal cliff is dominating the news and the markets at the moment, and it's anyone's guess whether DC will have a solution in place by the end of the year (I'm not particularly optimistic). Bloomberg sat down with the President yesterday to discuss the issue, and I have to say he sounded pretty reasonable. When pressed on the cuts vs. increased taxes issue he responded, "It's not me. It's just a matter of math." TheKing and I are going to be doing a week's worth of posts on the fiscal cliff starting next Monday, but this interview is as good a way to kick off Fiscal Cliff Week as any. I'm no fan of Obama, but I defy you to make the case that this doesn't make sense.

Full Tilt Players Hosed by DOJ

We have a robust poker community here on WSO, and I know at least some of you got jammed up on Black Friday - April 15, 2011 - when the Department of Justice seized Poker Stars, Full Tilt Poker, and Ultimate Bet. I personally know a guy who has a 6-figure Full Tilt account which is still in limbo, despite the fact that Full Tilt was sold to PokerStars in January. So what's the hold-up when it comes to getting your money out?

It turns out the DOJ is really big on seizures, but not so much on restitution. Even though the DOJ made over $500 million in profit on the sale of Full Tilt, it has yet to return a cent to players despite promising to do just that after the sale.

According to Steven L. Kessler, an attorney based in New York City who specializes in forfeiture law and is representing high-stakes pro Adam Webb's attempt to recover nearly $59,000 in this case, it's business as usual to make seized funds difficult to recover. "Any forfeiture case is about fund-raising," he says. "In one of its publications [the 'National Asset Forfeiture Strategic Plan 2008-2012'], the government talks about bringing in $2 billion in forfeitures and returning only $700 million." Recouping Full Tilt funds will be "a long, drawn-out process to the point that you will need to be out five or six or seven figures for it to be worth pursuing. The system is set up so that you are discouraged from going after your money.

The Bizarre Case of John McAfee

Mmmmm....that's good bath salts.

Have you guys been keeping up with this case? I love a good eccentric billionaire case as much as the next guy, but this is one for the books. For those of you who've been living under a rock for the past month, anti-virus software mogul John McAfee is a person of interest in the murder of his neighbor on tiny Ambergris Caye in Belize on November 11. But that's not the weird part.

It is believed by some that McAfee committed the murder while under the influence of bath salts; hallucinogenic drugs he'd been dosing himself with for some time to improve his sexual performance with dozens of women, at least one of whom was underage. After the murder, he slipped into the jungles of Belize and disappeared. It was rumored that he was captured trying to cross into Mexico last night, but that rumor has since proved to be false.

Better to Have Been Rich and Lost It, or Never Been Rich at All?

mod (Andy) note: "Blast from the past - Best of Eddie" - This one is originally from November 2010. If there's an old post from Eddie you'd like to see up again shoot me a message.

When I was in my teens and early 20's, all I could think about was being rich. I didn't care what I had to do to make the money, I just knew that I wanted to be rich. Not just wealthy, either. I wanted the private jets, the boats, the mansions, the proverbial "fuck you" money. What I didn't spend any time thinking about was what would happen if I made that kind of money and then lost it.

I was reminded of this when I read the story of the Martin family of Paso Robles, California. This is the story of a husband and wife with three kids who made $10 million after taxes from the sale of his father's company in 1998. Today all the money is gone, along with their sprawling estate, his Aston Martin, and her horses - one of which cost $173,000. He went from jet-setting and dinners at the "21" club to teaching at a community college in Kansas in just over 10 years. And it got me thinking about which was worse: to be rich and lose everything, or to have never been rich and not know what you're missing?

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