X's Pension Realities

Underfunded pension plans can be quite terrifying in some circumstances. The above exhibit, extracted from page F-38 of U.S. Steel's 2011 10K filing, reveals that PBO of $10.8b exceed the fair value of plan assets by $2.4b and "other benefits" exceed plan assets by $2.7b, for a total underfunded status of $5.2b. As David Trainer points out in a 6/20 Seeking Alpha post, this massive deficit is just under twice the size of X's current $2.76b market cap.

Great News!

"The Fed isn't going to be buying European sovereign debt."

-Ben Bernanke, 6/20/12 Federal Reserve news conference

Evolution

The New Yorker seeks to explain the results of a recent poll which initially baffled me, stating that 46% of Americans adhere to a strict creationist view -- that humans were created in their present form within the past 10,000 years.  The prevalence of this belief -- one which is categorically and demonstrably false -- can be explained, at least partially, in terms of neurophysiology.

Jonah Lehrer's Why We Don't Believe in Science, features a study showing that comprehending a scientific concept counter to intuition involves two specific brain processes, among others. The first of which involves a triggering of a part of the brain which perceives intuitive inconsistencies, and then a separate area in the more developed part of the brain whose role it is to suppress unwanted thoughts.

In essence, our brains are hardwired in their cores to detect intuitive inconsistencies - even if they are factually correct - and it is the more developed areas of our brains which are able to over-ride our knee-jerk reaction which blurts out  "it doesn't make sense, so it can't be true!"

May Post

Here is our one post for May.

Presidential Power

For the first time since WWII, no presidential candidate in either Party has served in the military. As Jeffrey Toobin points out, this is the culmination of a recent trend in American Politics over that last two and a half decades: " In every election since 1988, the candidate with the better military record lost." Some may lament the fact that military experience has played a decreasing role in how we evaluate a person's ability to become Commander and Chief - and there are valid points to be made in favor of electing a person who has seen the horrors of war up close - but there are also persuasive arguments against electing a person purely on the basis of military prowess.

Once such argument can be found in Richard Neustadt's seminal work, Presidential Power, where the author asserts that a President's greatest asset is his ability to persuade others - whether the public or in the administration - to do his bidding. As opposed to in the Military where a soldier is legally bound to obey his General, there is no such obligation in politics. This fact was not lost on President Truman when he commented that Eisenhower, should he become president, will just "sit here, and he'll say, 'Do this! Do that!' And nothing will happen. Poor Ike-it won't be a bit like the Army. He'll find it very frustrating."

And after being elected, Eisenhower found this to be true. In his very own words, "I sit here all day trying to persuade people to do the things they ought to have sense enough to do without my persuading them.... That's all the powers of the President amount to."

Americans say they don't want professional politicians in the White House, but a politician is the exact type of person who embodies and has spent his career honing these skills. We just want a politician so good, that he persuades us he isn't one.

Freedom

This actually looks like a staged photograph one would find at a fine art gallery in New York or Philadelphia. The facial expressions are tremendous, each one different from the next. The hand gestures add an additional layer of emotion and subjectivity.

Tehran, Then and Now

As Carla Parks of Foreign Policy puts it, "when Westerners think of Iran today, images of women wearing chadors, American flags burning, and militant crowds shouting nationalistic slogans often come to mind." It was, however, not always thus.

Parks' Foreign Policy photo essay, Once Upon a Time in Tehran, puts on display a city that once was, but no longer exists outside the memory of those who walked the streets of the modern pre-Revolution Tehran. What is truly striking about these photographs is how they seem as if they could have been shot in any American city during the 1970s. Needless to say, such a societal parallel is now just a distant memory.

The story of Tehran's descent from cultural bastion to Theocratic stronghold is reminiscent of Berlin's in the early 20th century. Let us hope that the former can break through its tyrannical chains without the bloodshed that accompanied the latter's accomplishment of this feat.