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A friend of mine told me the other day how he’d hired H&R Block to do his 2012 tax returns. He is a regular W2 employee, married, and owns a house. No Schedule C, no rental property, no kids, and nothing else that would seem complicated.

“Every previous year I’ve done my own taxes, but the regulations and laws have gotten so complex that it is now finally beyond my comprehension so I’m paying about $600 to H&R Block. There is no way that I could conceivably keep up with all of the changes that Congress and the IRS make from year to year.”

What’s my friend’s job? He’s an attorney working for the federal government.

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Back in January I took my three-year-old to shop for a party at the Costco in Waltham, Massachusetts.

Reggie LeBlanc checked my receipt as I left the store and made a little magic marker drawing on it for my daughter. He has a genial grandfatherly appearance. As I arranged the child and receipt in the cart for the trip to the car, I overheard two women chatting.

Woman #1: “Do you know who that was? He won $11 million last month in the lottery and he is still coming to work. I would be out of there in a second.”

Woman #2: “He’ll be married to a gold digger within a year.”

Woman #1: “One of the cashiers told me that she’s already trying to get him to marry her.”

I’ve been back to the story a couple of times but I haven’t seen Reggie there again. Next time I will ask what he is up to.

Background: story about the $50 million jackpot split by two Costco workers

 

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I finally saw the movie “Lincoln” this evening. A companion asked me “Suppose that the Civil War had never been fought or the South had won. How much longer could they have continued with slavery given that it had been abolished in most of the rest of the world?” I didn’t have a good answer.

http://en.wikipedia.org/wiki/Abolition_of_slavery_timeline shows that legal slavery persisted in Arab and North African countries until as late as 2007 though the last country that was reasonably comparable to the American South, Brazil, seems to have completely abolished slavery in 1888.

What do readers think? How long would slavery have lasted in the South if the confederate states had been successful in seceding?

[Separately, I was shocked to learn from the movie that two Connecticut Representatives had voted against the 13th Amendment. But then I asked “the Google” (as George W. Bush referred to it) and the consensus seems to be that in fact Connecticut’s delegation was solidly in favor of the amendment. The screenwriters were apparently too lazy to use the Internet to check this seemingly ridiculous fact. If they got that wrong it is hard to know how much of the rest of the movie to believe…]

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DxO has published a test of three very costly Leica digital rangefinder cameras, heirs to the legendary M-series of film cameras. The results of the objective test are not pretty: “these cameras offer the worst image quality DxOMark have tested on a full frame sensor, with the exception of the 10-year-old Canon EOS 1Ds.”

The CCD sensors in these Leicas turn in numbers that are more like those of a point-and-shoot Sony RX100 and far behind the disposably-priced-by-comparison Sony NEX cameras.

Either the objective tests are missing a lot of what is important to the human eye or humans who praise the results from these Leicas in non-blind tests are highly suggestible.

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The stock market is up in nominal dollars (“mini dollars”). How are U.S. investors doing compared to 2007? The S&P 500 peaked at 1565 in October 2007. According to the Bureau of Labor Statistics, it would need to be 1738 today, about 12 percent higher, to yield the same spending power.

If we measure spending power in bars of gold, the S&P 500 has a lot farther to go to recover the losses since 2007. Gold was $800 per ounce in October 2007, so the S&P 500 was worth 1.9 ounces. With gold at $1600 per ounce today you’d need the S&P 500 to be over 3000 to have the same buying power.

If wealth is to be measured in spending power another consideration is tax rates. The only way for an investor to get a return is via capital gains or dividends. Taxes on that kind of income have gone up by roughly 11 percent of the total received since 2007 (federal income tax adds 5 percent; state income tax perhaps another 2 percent; ObamaCare surtax tacks on another 4 percent for people in households making $250k/year or more). Consumption taxes, e.g., sales tax and hotel and restaurant taxes, have gone up 2-3 percent. So it seems reasonable to conclude that the S&P 500 would have to go at least 15 percent higher in order to compensate for these new taxes.

My back-of-the-envelope calculation is therefore that the S&P 500 would have to rise at least another 33 percent, i.e., to about 2000, in order to yield the same spending power that it had in October 2007.

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Nearly thirty years ago I worked at an MIT spinoff company populated by troll-like computer programmers. In the midst of these frogs was a beautiful blond princess, the treasured daughter of a WASP family in Maine. Despite the multi-decade interval, she recognized me at the Whole Foods in Weston yesterday in the mid-afternoon [note: Weston is one of Boston’s wealthiest suburbs]. Despite being in her early 50s she was little changed: slender, beautifully dressed, perfectly coiffed. Her phone was full of photos of three healthy attractive children. I felt very happy for her as I watched her get into her Mercedes SUV. She had dodged so many bullets to get to this point in her life without anything truly bad occurring.

Today was unfortunately not as joyful. It started well when I gave an Antarctica slide show at my daughter’s day care center. One big difference between teaching 4-year-olds and MIT undergrads is that the MITers very seldom hug the lecturer at the end. The questions got fairly technical, though. One child asked how it was that whales were able to rise to the surface after diving deeply. This led to a discussion about buoyancy due to air inside the whale and the fact that the air expanded a bit every time the whale rose to a higher point in the ocean. Another child asked how were whales able to move forward when swimming, which prompted a discussion about Newton’s Third Law.

After lunch, however, I went to visit a 61-year-old friend who has been suffering with liver cancer (I lost a dog to this disease in 1991). He had been enjoying working and had planned to work until nearly the end, but a decision to try chemotherapy forced him to stop: “The side effects from chemo just destroyed my ability to do anything. But I didn’t want to just do nothing. Anyway, the chemo had no positive effects, which was the most likely outcome.” He was trying to stay home as much as possible: “Being in the hospital is horrible. They woke me up at 4:00 am once to ask whether I was sleeping well.”

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A friend of mine is a top science researcher working as a professor at a state university. Every year he is required to take several hours of diversity training and sexual harassment training. With a lab full of grad students and post-docs, an experiment on another continent, a full schedule of talks, and young children at home, how does he find time for this? “You can’t just turn the videos on and try to work. The software monitors your mouse movements. So I hire this company in India that Tim Ferris, the four-hour workweek guy, promotes. They take the training on my behalf.”

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A friend sent me this editorial cartoon showing the federal budget and proposed $85 billion “sequestration” put into perspective with a pie illustration. I think it a fun data visualization exercise, but when I looked a bit deeper I became skeptical. The cartoon shows federal spending as having grown 40 percent since 2007, from $2.7 trillion to $3.8 trillion. That did not seem credible but it is backed up by

• http://en.wikipedia.org/wiki/2007_United_States_federal_budget
• http://en.wikipedia.org/wiki/2013_United_States_federal_budget

What is it that we’re getting 40 percent more of?

[Related: my own attempt to make federal budget numbers comprehensible by dividing by 10 to the 8th power (April 2011). This analysis caught the public imagination and appeared in a bunch of magazines and Web sites, usually with the original source long forgotten.]

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The cruelly objective folks at DxOMark have tested the Sony RX1, a camera that has inspired Leica-like devotion (e.g., see the reader reviews at Amazon). It turns out not to be that exciting from an objective measurement point of view. The fancy Zeiss lens tests out with similar numbers to a Canon 35/2 lens and it lacks the Canon’s image stabilizer. The Sony’s Zeiss lens does come up with a better overall score but the notes say that is mostly because the Sony sensor is better than the Canon 5D Mark II sensor that was placed behind the Canon lens for the test. How about the sensor? Really great.. just like the same sensor, more or less, that Sony sells Nikon to put into the D600.

So for the price of a Nikon D600 and a good 35mm lens you get the same image quality and seriously compromised picture-taking capabilities compared to a standard DSLR (see the conclusions in the dpreview.com review).

The Sony does seem like kind of a fun toy for people who love the 35mm lens perspective (I’m not one of them) but the test results don’t show it to be magic compared to a modern Nikon body and well-engineered 35mm prime lens (e.g., from Sigma!).

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A friend of mine passionately follows New York Times articles about new medical diet studies, e.g., “eat blueberries and you won’t get Disease X.” My response to her admonishments to read and then adhere to these diet fads was always “You can read all of the best medical literature on diet and by the end of the project you won’t know any more than a good physician in Ancient Rome. The Roman doctor would have said ‘Don’t eat too much meat. Eat a lot of vegetables. Maybe some fish. Get exercise.’ What more or different would a modern doctor say?”

Now it turns out that even the New York Times is confirming what I was telling my friend for the last 10 years with “Mediterranean Diet Is Shown to Ward Off Heart Risks”. After 2000 years of progress the 10 lb. heads behind the study advocate that people eat “olive oil, nuts, beans, fish, fruits and vegetables, and even drink wine with meals.”

So that gets back to my question… what do we know today that the Romans didn’t know about diet and lifestyle? The main thing that I can come up with is the dangers of lead exposure.

[Separately, this video is a very thoughtful analysis of the latest diet bestseller… Wheat Belly.]

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