Saturday, July 2, 2011


Of all the old traditions that have slipped away due to email, text, instant message, plus the changes in society where there are no societal penalties for lying; the one thing I most miss is conversation.

I do not see people sitting and talking, with or without alcohol. Just plain conversing, sharing ideas, opinions, and perspectives on the world. The young in bars seem to NED loud music so that talk is hard and barest communications must be shouted... Houses lack front porch to sit and observe the passing parade... Living rooms are dominated by flickering b lights and sound systems, combined which cost more than the vehicle in the driveway... A visit to the home of a friend is often done with the TV going. I'm old. I cannot focus my complete attention on two things at a time. I give my priority to the person, live, and present.

Funny thing is, when I mute the TV or turn it off, the person stops talking. They seem to feel they are interfering somehow... yet, what they do not -get- is that I value their presence and words more than the babbling heads or silly drama/comedies that are selling me products.

I am presently reading "Robert Frost The Poet as Philosopher" by Peter Stanlis.

Robert Frost felt he could not be a true poet until he found his conversational voice. He paid attention to what people say, how they said it and what they meant. English is a growing, broad and inclusive language. We have many words. we can use them in a wide variety of ways

Prosody is a very interesting are for me. Being a Southerner, I have been aware of the way people speak my whole life. The rhythms, spacing, phrases chosen can be almost musical. Some people have a wondrous melody in their language. Others can say the same words and it sounds like metal being hit with a hammer. Words are not the sole conveyors of meaning. Prosody tells much more to the listener.

Songs are good examples of conversation in melody. Nobody would compliment Bob Dylan solely on his voice. His words, phrasing and voice complete the story and make it memorable and him entertaining. I have long loved the cello and violin for their resemblance to the human voice. They can convey such a range of warm emotions and feelings...

The songs of older generations had a phrasing that reflected rhythms of walking, rocking or movement. The newer music sounds, to me, as tho the person does not exercise. The music is short, choppy, and the voice conveys momentary passions. I do not hear the thought behind the feelings, just the emotion. Is it me- or- ?

I have had a few conversations with friends, strangers and relatives that resonate through the years. I don't remember so much what I said, but what I learned. We shared conversations that lasted an hour or two or all through the evening. I must have contributed something of value for them to stay and educate me.

I've wondered about the great leap in human evolution when we went from hunter-gatherer to farmer-herder... Some books on paleo-anthropology think that we grew a larger brain to handle to larger society and political inter-play that came with all the changes. I'm not sure that is the complete answer.

Supposedly we needed a larger language to convey messages between more people. We needed to band together for protection and to share crops, surplus, winter supplies and seeds for the coming year. We neded warriors to protect us, leaders to lead the warriors, taxes to pay for people who fight and train, and writing to note who has payed and who owes their taxes, plots of land, how many animals etc. All of which seems logical and probibly true.

I have read others who say that as hunter bands we used sounds more sparingly and specifically. That we needed to communicate across distance but could not use a human voice as it would frighten the prey. Some writers see us dancing to share our tales of the hunt. Where we went, what we encountered and how we overcame it... all of that seems also true... Mostly, we taked. With words, melodious sounds, music we spent a great amount of time learning from one another and learning about one another.

Now, we have the electronic medium that allows strangers to communicate, share/buy/sell music, spout any idea we wish, say any foolishness and spread any lies we wish... We have no way of identifying the speaker. we have no way of confirming their knowledge, wisdom, experience as actual, real and not fantasy. Children are wonders at mimicking their parents and other adults... how do we know if we speak/listen with an adult or precocious child-?

for me, it's time. Children have a short attention span and cannot hold their interest for long. I also use big words and look for them in return. English has approximately 100,000 words. On average we use less than 5,000 in our daily conduct. All those left over words just lie there, waiting. Why so many-? specific words for specific feelings, meanings, items-? adoptions and adaptations of other languages that have blended in. Examples would be Boutique, Boondocks and you can supply your own...But when those words are used we know specifically what they mean... we also know the way they sound and the song we are composing as we form the next sentence.

Learning is something we do without even being aware. We find meaning in several levels with each sentence we say or hear. What was meant-? What was not meant-? Why -those- words-? did the word jangle with the rest of the sentence-? Yes, we are more complex than we thought... and more simple... After all, we're human. what -exactly- that means is something we are each defining as we go ahead with the business of living.

Now that I read for my personal pleasure I take time to read all the words and consider what the author meant. I am not fighting a clock to find nuggets of information that I can shape into bullets for my next encounter across the boardroom table o large desk.

Poetry has more meaning now. So should blog. I fear that blogs like poetry has more creators than consumers.

Wednesday, June 29, 2011


I wish that Paul Eckman had been more successful. Perhaps he was. But Heisenberg struck again. Humans being adaptable we have only gotten better at presenting the false as the true.

Finding truth is hard. Truth is time dated. Truth is often situational and based on the perspective of the observer. Truth is mostly something we avoid. We accept words from others as true. We don't examine our own words, motives and beliefs. We swear that we are speaking the truth. Yet, we're not sure that it is anything more that the "at this time" truth.

I have met people who lie as a test of my integrity, memory, and honesty. I have met those who lie simply because it is convenient and short. They see the truth as something that will require a long story, possibly revealing details about themselves or their loved ones best kept private.

When I meet a new person, I almost never inquire too deeply. Why ask for something uncomfortable to be revealed or force a lie-? Let each person sing their own song. If it's pretty, pleasing and accepted then that is all required for social chat.

Words say only 10% of our meaning. Or so I read long ago from an author I cannot remember. Most communication is done by body language. Some say that body language is 60-70% of our communication. Inflection, intonation and phrasing make up the remaining 20-30% of meaning. My Mother-in-Law was a master at speaking in an insulting tone then reverting to pained defense when repeating her words. Hard woman to be around. Luckily she made it clear she disliked me from the start. I tried to be social, polite and agreeable. I was there because of my wife and later the grand children. It's easy to be around people who dislike you and you know it. There is no wondering what you have done wrong, this time or at any time. She was an enigma. I have yet to meet anyone who felt they knew her.

The tale about the Garden of Eden is a lesson that too few actually spend much time considering. It is the first time (earliest-?) we have a tale about nakedness (and idea that something is wrong with seeing one another uncovered), lying and punishment.

I have wondered about that tale often. Some think it harkens back to a time before we began farming and herding for most of our diet. The tales of Cain and Abel are of a hunter and a farmer, murder and again a lie. What puzzles me is the Tree.

Specifically, "The Tree of Knowledge of Good and Evil"

Why the "Knowledge of Good and Evil"-? Why Both-?

Spending time around animals, dogs mostly these day. But around horses, cows and chickens as a child, I find no memory of an animal knowing either good or evil... Why-? Animals understand right and wrong. They learn behavior. They know what -we- their leaders demand and expect. We humans also know what our leaders expect, demand, coerce. If we don't we soon find out.

Hitler, Mao, Stalin, Pol Pot, Saddam, and unnamed butchers around the world slaughter and slay humans using the efforts of other humans. Are they speaking any objective truth to convince their accomplices-? Do they simply lie and manipulate their desires to please, do good, help, improve, share the burden of leadership, etc. to convince others that slaughtering the innocents is a good thing-?

Where is "Good" and where is "Evil"-? Most will not see -real- good in their life. There are acts of kindness. But finding, observing, doing a real act of sacrifice for another is beyond them. We also refuse to recognize "evil" in an act and most particularly when it is laying latent, resting, within another. We listen to smooth blandishments and accept them as something true that explains to our naive ears/eyes what we thought we perceived was wrong.

We have had peace for a long period of human history. Europe has not had such a long period with neither wars between nations or bands of roving brigands seizing territory and conquering tribes to claim status as a nation, in a very long time.

Does this mean that Evil is vanquished-? That Good prevails around the world and that only confusion exists today-?

I wish I could accept that. Unfortunately, I have too much background, too much reading, too many associations with warriors to see the world as safe and peaceful.

So back to the original thought; What is "Truth"-? And why do we think we live in it-?

Life is precious. It is easy to kill and ruin life. It is hard to bring it into being, to nurture and protect it, and to educate tthe next generation that bad things happen to good people far too often while good things happen to bad people more often than we wish. How do we teach our children to know Truth from Lie and Good from Evil-?

What was really in that fruit-? Did we eat enough or just enough to grow foolish and believe we can aspire to meet a diety as an equal-?

As I age, I get more questions and find fewer answers... When I was young, I had many more answers and fewer questions.

AS I age, and as I listen-watch-observe, those would be our masters perform; I wonder if it is more dangerous to speak the truth or to simply ignore, cover it or spin it (a polite way of lying)... Which breeds more monsters-? Which feeds their analysis of the speaker/leader's strength and weakness-?

The chattering class who leap in and tell us how to think about what we just heard seem mindless, credentialed-but-ignorant, people who have never walked down a street they did not belong alone and unarmed.

Sunday, June 5, 2011

Why Is The Economy Stalled-?

Michael Barone has a piece in the Washington Examiner asking this question. The responses reflect the absence of much adult, knowledgeable thought. No surprise as the internet allows anyone to spout off and demonstrate their wisdom. America has been known throughout our history as a place where the "yahoo's" and loudmouths are free to babble whatever they wish. Often, like the innocent lad watching the parade who asked "Why is the Emperor naked-?" the scales fall and we see our leaders revealed as mere mortals and not very respectable, honorable, wise ones at that.

Here is my view of the present economic situation....yes, it like everything on this blog or the internet is "For What It's Worth"...

I was hearing about Obama in the 4th quarter of '07. I was doing an acquisition and speaking to finance people-mostly high-net-worth-individuals. They were heading for the bunkers. stopping and unraveling their small business ventures. They foresaw a rise in taxes, capital gains and regulations. Since then, most small-mid-sized owners have felt that their government has drawn a gun and is using smoothing talk to make everyone ignore it. The rise in regulations, potential regulations, changes in law interpretations of established practices all make us uncertain.

Banks and lenders are all facing unknown regulations and capital reserve requirements. It is cheaper and safer to borrow at close to 0% and lend via T-bills. Balance sheets look safer and no questioning the lenders creditworthiness. They are raising what fees and charges they can as often as they can. Nobody knows what the rules will be in 2-3-5-10 years.

This is first time in over 40 years I have no payroll to meet. That is uncomfortable as a changed habit. However, I cannot see placing any resources at risk in this environment. We simply have no clue about what the rules will be, how much we must raise prices to pay for compliance, what changes in equipment will be, whether the consumer or buyers will pay the increased prices.

High risk for low or modest reward is a fools game and very likely criminal. Low risk for high reward is a lottery ticket. Most of us seek a modest/manageable risk with a slightly higher foreseeable reward. we manage risks and provide our personal bond to guarantee the trust a buyer places in us, lenders and suppliers place in us. This climate is fraught with too many variables that are simply unknown and unknowable.

"Fundamentally Transforming America" is something that we cannot quantify or evaluate and respond to. Profits are great, but losses are personal. We pledge our property, our name and our honor behind our ventures.

Who chooses risks their reputation in this climate-?

Who accepts our personal bond, in this climate-?

It is better to sit and watch, awaiting a clear path than to risk so much for so little.

Wednesday, June 1, 2011

Not THAT Unexpected

The headlines from the White House and other news people is that the current economic situation is -unexpected-... They never say -who- didn't expect it. But they sure are saying it often. Headlines from the past two weeks show the use of the phrase again and again. -WHY-?

I don't geddit.
These are supposedly smart, adult type humans. They have told us again and again how smart and capable they are. I doubt they would even be elected as a high school class president or members of the student council with this silliness. This is even below sophomoric. It's just bull garbage-! By being "surprised" they are hoping that that we will not notice that they were hired to -not be surprised-.

Even if they lack the personal experience of the grade school playground, marketplace dynamics, competition...they should know better. Seemingly, they are admitting their ignorance. So, -why should we re-elect them?-

Today's WSJ has a front page about the housing mess. That was a surprise to somebody. I'm not sure why they didn't see these numbers coming. As they say in Washington, "It's politics..." Which means "How can we spin this so it won't blow back on us-? Quick find someone to blame."

The WSJ, today, has a column by John Huntsman concerning our predicament.

"Unless we make hard decisions now, in less than a decade every dollar of federal revenue will go to covering the costs of Medicare, Social Security and interest payments on our debt. We'll sink even deeper in debt to pay for everything else, from national security to disaster relief. American families will fall behind the economic security enjoyed by previous generations. Our country will fall behind the productivity of other countries. Our currency will be debased. Our influence in the world will wane. Our security will be more precarious. "

"Those who disagree with his approach incur a moral responsibility to propose reforms that would ensure Medicare's ability to meet its responsibilities to retirees without imposing an unaffordable tax burden on future generations of Americans. "

The online journal has a video conversation about what these economic reports mean for President Obama's re-election prospects with John Fund for those who like video. Me-? I like written words... spoken words and video are ok, but not my preference for the computer. OK- I'm old fashioned.

They have a column by George Melloan regarding the -mess- our Federal Reserve Bank has created and how difficult it will be to change things.

Melloan cites this article in Forbes by William F. Ford and Walker F. Todd

"The Federal Reserve has responsibilities and powers that no other American bank has. It can create money, for one thing, without being limited in its monetary expansion by the reserve requirements that bind ordinary banks. Also, the Fed's Board of Governors interprets the relevant statutes expansively as including a mandate to be the "lender of last resort" to the American banking system. "

"Finally, a major portion of the Fed's huge reported profits resulted from its heavy use of leverage since 2007, as the Fed roughly has tripled the size of its balance sheet in response to the financial crisis. By doing this, the central bank ignores the leverage ratios that both U.S. and international capital rules mandate for private commercial banks. At year-end 2007, the Fed had capital equal to about 4% of its total assets, or 25:1 leverage. By year-end 2010, the Fed had only 2.2% capital (now 1.95%), which implies leverage of 45:1 (now over 51:1). The Federal Reserve Bank of New York also now has an astounding 98:1 leverage ratio.

Even if you have never read an economics book, discussed finances with your banker, or done much more than balance your check book and buy your house, you owe it to yourself to understand the dynamics of the times we face. These articles will be a good place to start. A subscription to -both- The wall street Journal and Forbes magazine would be great. At first, it may be confusing. Keep reading. In a short time all this goobledy-gook will make sense. And you will get upset at our leaders and hired "wise-people". They are fools and do not live in the same world we inhabit.

They have bitten deeply of the poisoned apple and drunk deeply into the well of Marxism-Socialism-Progressive-ism... They truly believe that -they know best- and that we, Americans, will be best served by re-distribution of the wealth of the rich. It is a scam. There are not that many rich people. Soon, their massive government will need to tax anyone foolish enough to still be working to pay for 1) govt employees and their golden retirements 2) all the "poor and needy" that will come in sliced and carved up groups. No more -AMERICANS- just groups all coming together under some mystical leader to achieve something wonderful...

The most wonderful thing we can do is to vote em out of office and demand a smaller government. Americans do not need to be herded, ranched, branded, and coddled so that we can produce more, more, ever more for an ever larger government. Let's stop this next year.

Tuesday, May 31, 2011

Housing Market

I must be dense
. The problems with housing prices, new home starts and foreclosures doesn't seem that big a deal. The market keeps trying to act as markets always do. When there is a huge supply, prices go down. When there is a limited supply, prices go up.

Our government keeps throwing money at the markets trying to keep house prices high. The lenders get hammered by political winds concerned about foreclosures, lowered prices, demands for higher quality loans and lots of politics. every politician wants to give away the property to the deserving and needy poor... But that seems to mean that someone has to take the loss. None of the lenders want to lose any more than they must. So, with political pressure, they hold off foreclosing and pretend the loans are being serviced. In the meantime Fannie and Freddie keep spending money like they had it...well, they do now. They have no other shareholders but the U.S.Government. Why do we allow those companies to remain in existence-? Oh-! Yeah, politics. slush funds for constituents and jobs for lovers-du-jour.

In the meantime, New Home starts are not finding loans, buyers with large enough down payments and face competition from older homes, less-than-10-years-old that are in foreclosure... meaning possibly more square footage, more prestigious community, established schools and safe neighborhoods...

Also, underlying -ALL- of the above is the dynamic of demographics. Yes, Boomers are retiring at large numbers. They will likely inherit their parents house at about the same time as they retire. They will have two houses, paid off or mostly so. Will they sell at discount to shore-up and replace damaged retirement accounts-? Will they hold and try to rent them out while seeking warmer climes for their golden years-?

All of this is playing out and would move faster with probably a bit more predictability -IF- the politicians got out of the housing game. Is that likely to happen-? Nope. Giving away the property of others is a great way to be re-elected again and again... plus depressed housing prices slows the migration to warmer, non-union states... meaning less stress from redistricting and new boundaries with un-bribed constituents... SO; Nope the politicians have found some catnip and will roll all over it...

The old saying that "Demographics is destiny" applies here. Boomers are the first generation, in history, whose numbers are larger than the preceding generation and the following generation, combined. That means huge demands for entitlement spending, medical services, and changes in their discretionary buying patterns... They have everything. What will they spend their "play money" aka "entitlement largess" on-? Will they invest in businesses-? some may-not many. Will they get scammed by schemers like Bernie Madoff-? Yes, quite a few will. They have never had money to blow and the promise of secure, safe, outsized returns will be too hard to resist. (I saw an ad in the WSJ today promising 22% return on capital over 5 years.... P.T. Barnum said "There's one born every minute"... WHY would anyone thing they can -SAFELY- get a 22% ROI without taking an outsized risk-?) Most boomers have been "wage slaves" their entire life. They may have enough to remain comfortable as the years come in. However, I'm betting that the sharks smell greenbacks in the water and will soon be swirling about.

While we're -all- focusing on the housing market and return of "stagflation" we are ignoring the -boom- in new car sales. why are cars selling so readily-? GM spun off it's old GMAC in bankruptcy and then bought a new bank to make loans to their new car buyers. Why-? Cause new car sales mean big sales results, a quick IPO and pay-back to the U.S. Government... And the sooner the unions can sell the stock they took in the bankruptcy....then the Unions can turn about and demand more- everything-, cause that's what unions do. When your pension plan is invested in the company you gotta have profits to make investors buy the stock. So, as a union, you can't go on strike, make crappy cars and return to war against evil management and the shareholders and lenders... BUT...Nobody is looking at the quality of the new car buyers to continue to make payments. Nobody is examining -who- is buying all these new cars. Another financial meltdown-? Maybe-maybe not...but the politicians, unions and deal-makers who securitize the new car loans would sure benefit until it collapses...

Housing and automobiles are two huge drivers of the national economy (jobs). They consume lots of resources, require lots of transportation services, and mean jobs for a very large number of people. More than the military, but I doubt they mean more jobs than the combined state, county, municipal and federal government... I suspect that governments make more paychecks and have more promised in retirement.

The cash for clunkers wiped out a bunch of the used car used car prices are up...almost equal to a new car... I get suspicious when I see the market acting in unusual ways... I like the old "buy low, sell high" and "surplus equals lower prices, scarcity equals higher prices" rules... When the politicians fingers are playing in the marketplace, one must be very quick and very clever to stay on the good (profitable) side of the deal. Politicians never worry about consequences...Why-? Cause voters (and our media proxies ) are lazy, have short memories and don't want to dig into the details of why-what-and what next-? They profit from our carelessness... and year after year, they keep doing it.

They depend on our being too busy with our lives to notice how they are robbing us...or they used to... Since they have over promised us into near bankruptcy, everyone is watching where the money goes.... Plus this internet thing allows ideas to flow unfiltered... We can communicate without the usual bribed gatekeepers and media guardians... Do we really need the pretty people explaining everything in baby talk-? Are we really -that- ignorant, naive, trusting, complacent-?

They depend on it. So do the predators who are coming for the scarce retirement dollars available when boomers suddenly have too much time and nothing to do all day.

Monday, May 30, 2011

Risk Assessment

The purpose of good management and good investing is to find the most realistic/likely scenario out of all the rosy and frightening scenarios. As the risk of loss goes up the rate of return must also go up. We expect more for the amount of risk we are willing to face. Natural and prudent in almost all situations. The problem these days is that it is really hard to accurately see what the future holds 12-18-36 months from now. Is it truly as rosy as the Administration says-? If so, why do they "fudge" the numbers-? I say "fudge" because it seems someone is selecting the data that will support their political needs.

From Yahoo News/Reuters comes the report that "Nervous Investors Demand Bigger Returns".

"The world looks a lot more dangerous than it did only a few months ago and signs are that U.S. stock investors are starting to demand more for the added risk.

With important manufacturing and jobs data due next week, it could start to get even riskier.

That means nervous investors are likely to keep a lid on equity prices this year as they grapple with slowing global growth and a host of geopolitical risks from the Arab Spring to debt defaults in the euro zone.

Are we facing a period of higher economic and military risks. Will our political leaders/masters actually do something responsible and adult-? will we get words and spin or action-?

I have little faith in those sheep who claim to be our leaders but act like masters. Deeds count for more than words. Washington and our politicians generate words by the metric ton. Yet, even they do not know for what they are voting. They know little and careless about the effects of their pounds of verbiage. If it has a good sounding title, then what devilment is inside is fine. Their only concern is that no angry responses come back to them, specifically. Words are easy to hide behind. What have they done-? The Democrats haven't offered any budget proposals for over two years. Why-? Do they lack ideas or fear the reality that comes from standing for something-?

A question I have not found anyone able to answer; " We have borrowed and spent over one trillion dollars in something called stimulus. Have we received as much national economic good as if we had chosen one million citizens at random and given them one million dollars, tax-free-?"

I doubt that most people can tell you that a trillion is one million, millions. That number is simply too large for most of us to comprehend. We are running a debt of almost one million, five hundred thousand millions at present. We are strapped. If we have a national disaster we will be hard pressed to respond.

The usual answers are to raise taxes. But most often our sheepish leaders sell us a tax increase as applying only to the rich. What they do not tell us is that there are not enough rich people to pay for the mess we're in.

Their forecasts imply that a tax increase will bring no change in behavior on the part of those feeling the brunt. we all now that if our taxes go up, much like the cost of food and transportation, we have less to support the lifestyle. It does not take a leap of genius to realize that those who earn less also pay less. The rich own things. Our tax structure is based on income. Their income can be adjusted to earn less with much less pain than the poor or middle classes. As a past company owner I know that if we needed new equipment that cost would come from my income. Same with new facilities, repairs, upgrades, and increased wages. The owner gets paid last. Raise my taxes and I spend more on my company. I doubt that I am the only one who would make that choice.

The middle class has no such option. They are stuck with what they earn. If the company can't pay more then change jobs. But with this current high level of unemployment there are easily a couple of hundred people who will step up for that "low" paying job... So in reality, any tax increase is going to hit the middle class hardest. Our leaders cannot understand that -or- they think we can't. Either way, we're being lied to.

If we raise taxes and they hit the middle class will they demand higher wages or buy fewer consumer goods or simply hunker down and wait for this cycle to end-? My guess is a bit of all. Raising wages would work if customers would pay a higher price. If they refuse to buy the company goes under. A bankrupt company gets no praise for raising wages and paying more in taxes...

How does a country go bankrupt-? When we have no more credit and have refused again and again to cut our expenses what happens-? When a country spends itself into insolvency-what happens-? We don't know. It hasn't happened to the U.S. before. smaller countries have been rescued and placed on strict fiscal austerity budget. Do we turn over our country to the IMF and World Bank-?

So, yes. These are perilous times. Things must change and change quickly. will our "leaders" actually lead-? They claim to be Leaders every two years. Yet, now, when we really need some leadership we seem to be lacking.

Sunday, May 29, 2011

Always Surprised-?

The headline says "Pro-Obama media always shocked by bad economic news"

The article then goes on to explain, expand and support the headline. What it also explains is who is surprised and why.

Michael Barone (author of article) is very good with numbers. He is too much a gentleman(?) or has too much to lose by saying what most of us would say...

"We're being lied to." Like children who will be frightened if we know the truth.

Unemployment figures are -only- the numbers of people drawing unemployment checks. It does not include the numbers of people who have exhausted they benefits, who never had them (contractors, consultants, sole proprietors, etc) or those who have given up looking. Some wise people estimate that the true number of those without a job and who wish they had one is double the official figures. Why not simply count the numbers reporting income pre-depression and subtract the numbers of people reporting today-? They do not include everyone who has graduated from college, high school, graduate school or released from active military service... -Why-? These are surely people who are unemployed... But they are ignored in official numbers.

Inflation numbers are rigged. They do not include the cost of food or transportation. The most obtuse and dense shopper knows th food prices are going up and not coming down. Food makers are doing two things to hide the fact. Some use smaller packaging. Some use "bonus" extra sizing and some are doing both... The fact is that food prices are up. Gasoline and diesel costs more. That means it costs more to get to/from work, go shopping, go on vacation, go anywhere. It also means that the average family is spending $168 dollars per month more on fuel. Higher prices dry-up demand for consumer impulse and non-essential products.

Companies, big and small, are sitting on their cash. The WSJ's Intelligent Investor column on Saturday ran an article asking "What Will It Take for Companies to Unlock Their Cash Hoards? "

He says "There is a cash crisis in corporate America—although it comes not from a shortage of the stuff, but from a surplus.

In the first quarter, the five companies with the greatest cash hoards—Micr, Cisco Systems, Google, Apple and Johnson & Johnson—added $15 billion in cash and marketable securities to their balance sheets. Microsoft alone packed away roughly $9 billion, or $100 million a day. All told, the companies in the Standard & Poor's 500-stock index are sitting on more than $960 billion in cash, a record.

To be sure, at many companies the cash piling up is at global operations that generate "undistributed foreign earnings" that can't be brought home, under U.S. law, without incurring taxes of up to 35%. But hundreds of billions in cash remain available—and idle.

What the author fails to report/recognize is that 1) Bank lending criteria has changed. 2) SEC regulations have changed 3) The affects of Obama Regulations and legal judgements are unknown 4) If the cash is paid out and a disaster or opportunity arises, the company will have a hard time replacing it. Even re-tooling to remain compliant and up-to-date will require cash, from where will it come-?

The biggest culprit is the affect of unknown/unknowable regulations. The new financial act creates new agencies that write new regulations. It creates a czar who cannot be fired by the President. Who Congress cannot control and cannot even de-fund. Who is unaccountable to the Chairman of the Federal Reserve. And finally, who can tap the public Treasury for unlimited funds at any time, for any reason. Sarbanes-Oxley has killed the IPO market without touching -any- of the ills that led Congress to act. The new financial act will do nothing to regulate or control the root cause of this depression. FASB is still thinking of another mark-to-market rule. Fannie and Freddie are still alive and draining the Treasury of unknown future amounts. They are also still not being addressed as the problems they are. The fools who created them, ran the and enjoyed the perks/benefits of their irresponsible behavior have not been chastised or punished. Probably never will either. Crimes and moral turpitude at high levels and among the political class are never punished...

As a small/mid-sized businessman, -at this moment-. I am glad I have no employees, no business involvement, no exposure to the unknowns and the scary knowns, implied or implicit, or possible future unknowns... I have no payroll or employees for the first time in 40 years. It is a strange feeling. I never planned to retire this way. I don't like it. Being idle is uncomfortable.

I keep looking for opportunities. I see some. However, before -anyone- makes a commitment to invest time, money or reputation; they want to see a reasonable chance of success 3-5-10 years down the road. At this moment, I cannot see any opportunities that justify risk. The future is frightening. As entrepreneurs and managers our jobs are -not- to run away from risk. We must mitigate risk vs reward and choose the path(s) that best provide a shot at producing a return that justifies the expense. Breaking even/staying alive is good, but it's not enough.

The future will change. How an in what direction is unknown, by me, at this time. I cannot make a reasonable forecast and discuss it with others... Are the changes permanent-?

What affect will regulations have on the cost of supplies, transportation, funding, employees, taxes-? If I know the costs, I can compute the necessary price. Is the public ready to pay -that- amount so that my products/services will provide the return I need to repay lenders, trade creditors, investors for what they have put at risk-? will my competitors allow the price in their marketplace-? How will they respond-? Yes, unlike the governments, colleges, NGO's and other parasites; private enterprise has competition. We must serve the customer a good value for a fair price. We do not re-distribute the profits from the efforts of others. I am a bit blinded by the current economic mess.

I am open to suggestions.

Saturday, May 28, 2011

Charles II

The Earl of Rochester said it best ""Here lies our Sovereign Lord, the King whose word no man relies on: He never said a foolish thing nor ever did a wise one"."

King of the World
seems the best job. So much better than mere President of the United States.

From the above citation; "Obama has always preferred the symbolic authority of the grand utterance to the actual authority of a directed policy—a policy fought for in particulars, carefully sustained, and traceable to his own intentions. The command to kill or capture Osama bin Laden and the attempt to assassinate Anwar al-Awlaki in a drone strike, which closely followed the bin Laden success, are the exceptions that prove the rule: actions of a moment, decided and triggered by the president alone. His new Middle East speech, at the State Department on May 19, was in this sense a return to a favorite genre. "

Americans do not need a king. We do not need to be herded into a mass of bi-partisan compliance. Our native emphasis on the individual as the fount of all government powers is deeply ingrained... Of course, this speaks mainly for and applies mostly to generations soon passing.

Americans are unique among all nations. we can create our own jobs, our own futures, and our own style of both. Calling for us to "come together" is akin to the same herding mythology used by -all- totalitarian governments. Leave us alone.

We are not children. Explain things, reasons for an action.

DO NOT BEND TO PERSONAL DESTRUCTION, treat us as you would another grown-up. -WHY- is this proposed action important-?

If you want my vote, tell me why -you- can do what you promise. Tell me where/when you have done something before. Show me more than a pretty face, a pleasant manner and vague words with unknown meaning... America does not need another President-as-Celebrity or even President-as-talk-show-host. Leave those shallow people to TV and deal in facts.


Can we change-? Will we change-? Who has a plan-and- the backbone to weather these adult changes of direction-? Do we see anyone like that-? Is there anyone who can deal in details-?

Is it really that much easier to see the personality and ignore the danger-? Fix these serious problems and then we will go back to eating our Lotus Blossoms...

Do we dare demand our politicians act as adults and treat us as such-? That would be a huge change in our cultural acceptance of the Big Nanny who takes care of us and everything else in our lives. We have become domesticated and are now herded like animals for slaughter.

The boomer generation is retiring quickly. This generation is unique in history. We are the only generation that is larger than -both- the one that preceded and the one that follows, combined. We will be a huge burden on the entitlement system. We will sell our houses and free our capital to pay for living expenses as we head into our dotage. That means housing prices will soon be falling and staying low. Yes, a few will own more than one home. Not many. we are in danger of many more not having a home at all. and little/no way to pay property taxes, maintenance, repairs and monthly running costs... It is going to get ugly...and unless our "fearless leaders" act like adults; it will get worse.

Funny/Ironic how every politician says "Vote for me. I'm a leader" then gets to the legislature and becomes a sheep following when the Judas Goat of their party walks past.

Enough lies. Enough fasle directions. Enough silly numbers that are selected to scare and mislead... be an adult and speak the truth as one adult to another. Fire the consultants. Be yourself. Who knows-? You might win simply by speaking the truth. There is no free lunch, Social security or health insurance. Everything has a cost. Explain how you would deal with it.

THAT would be a huge and pleasant change.

Thursday, May 19, 2011

Where Are The Grown-Ups-?

The speech-a-day Presidency is wearing too thin. No new ideas, no new plans and we can't believe what he says. Saying and Doing are two different things. In this person they are two very different planetary orbits. What Will He Do Next-? I don't think even he knows.

He is poll and focus group driven.

We seem to have a new crop of the cautious fingers-to-wind-testers running as -THE- GOP candidate. I thought leaders -led-. Usually from the front. I thought they articulated 1) the problem and b) their solution and c) started marching in that direction. So far, nobody is for anything. They are against Obama and the present course.

That is not good enough.

We need people (some one would do) .

Being against something is fine. -IF- you can define it and state the flaws.

Then offer a solution.

Merely being against it is not enough. Your reasons for disliking it may not be mine or vice versa. Why you oppose something will let me understand what/how you will act to fix it. I may not like your methods or solution.

We need to stop listening to politicians who speak in such nebulous terms that whatever they said, we can agree with-even if we cannot repeat it or explain it. Speak plainly.

I don't want a litany of what's wrong with the other guy. How about we start from the proposition "He's good. I'm better. Here's why;" -? Let's be for something. Let's be for doing better, getting things right, striving for a better goal. What is the goal-? How will we get there-?

The present abuse of each other and wishy-washy vaporous speech is old. We've bought too many fools with results that surprise and embarrass us. Stop Spinning everything...

We, the adults, must demand better answers and more intelligent perspective from those who would be our leaders.

Let's start by asking harder questions. Every one of them have writers, coaches, trainers, make-up and hair stylists... We need-want-hunger for some real adult answers.

Where have you been-? what have you done-? Why do you think your way is the best way-?

What, in detail, is your plan-?

Nothing is free. So, how much-?

The Evil Rich-? everyone-? Cuts in programs-? Where will you cut-?

We know things will cost. We know changes are not free. Not everyone will be happy.
However, things are bad and quickly getting worse. what will -you- do-?

Or is it just me-?

Tuesday, May 3, 2011

Recovery-? What Recovery-?

I notice the usual wise people are saying we are having a recovery.

Where is it-? I look around and do not see any signs of a recovery.

The numbers of -NEW- filings each week is down. BUT, the numbers of unemployed is fudged. They only count those receiving unemployment checks. Those out of work for lengthy period beyond the compensation period are not counted. Student graduates, but high school and college, are not counted. IOW we're being fudged, fiddled, diddled.

Low because we don't count food prices or transportation, heating, electricity prices in our calculations. When it costs more to feed the family, drive the car, heat/cool the house...then it's inflation.

Stock Market is back up-?
Lessee, first we get the Chinese to raise the value of their currency. This means more people/countries shift away from US dollars to buy Chinese goods. Things priced in US dollars
cost more dollars but the dollar alone, buys less. US buyers of Chinese good must pay more.

Gold, Silver, Oil, Grains, Coffee all heading for record prices. Nobody wants US dollars when other currencies are worth more. BUT it also means that the US dollar is cheap compared to others. This makes not only our products less expensive but also our stocks, land, buildings and even companies. Is the stock market up because US investors are buying value -or- because overseas investors are finding safe haven and good bargains-?

US Dollar Stable-?
The Federal Reserve has kept interest rates low meaning no savings, except for security of institutions. Low interest is supposed to stimulate borrowing. Yet, the new regulations and heightened oversight of lending institutions mean that even the most creditworthy are struggling to find loans. The Fed has pumped $600 thousand-millions into the Treasury to flood the market with cash. This was supposed to make it easier for people to buy homes, cars etc. But again, new regulations and new enforcement interpretations mean that lenders do so at their own risk.

Housing prices -may- have bottomed out. Those who can afford em are staying, even if under water (i.e. owe more than underlying present market value). Foreclosures and sales are slow. They estimate we have a 20-month supply. IOW, if we sell at this rate the inventory will be sold in 20 months. Does this mean that no new homes will be built-? Probably only a few. This forecast also -assumes- that NOBODY will list a home for sale for the next 20 months. Really-?

New cars-? OK, the lack of sales is spurring pent-up demand. However, UAW contracts expire soon... will there be a strike-? Or do we go in a circle again-?

Gas prices are up. Yes, and some wise pundits are forecasting $6/gal by end of summer. That is going to curtail a lot of driving and driving vacations. The President says "BUY a new car." What he hasn't said is "Whose money-?" Big SUVs are safer than liddle cars. They burn more gas, but hauling the kids is not a compromise issue for most Americans.

OTOH The President has shut down drilling in the Gulf. Permits are hard to get and all the goo-newer rigs have moved offshore. One went to help Israel discover it's new oil field. another is going o do the deep ocean drilling that Brazil needs done. Cuba has signed leases with China and other countries to explore their deep Gulf oil fields between Cuba and the US. so, instead of the US having American jobs, rigs and companies we can regulate and penalize should there be a spill, we now face sovereign nations who can easily thumb their nose at our claims. I seriously doubt that Cuba, China and others will willingly dump $20 thousand millions into a fund to pay damages.

The EPA won't allow a pipeline to be built to carry the high sulfur oil from Canada to the Gulf refineries that presently process the Venezuelan high sulfur crude. Venezuela sends us 10% of our oil imports.

We are restricting, delaying and regulating the newly discovered oil and natural gas fields. we are doing everything we can, via regulation and litigation, to stop-slow the use of carbon based products. BUT the price spike is blamed solely, exclusively on "speculators". The US has -never- found any speculators behind the rise in pump prices before... Maybe this time...

The EPA is trying to regulate "Carbon" in the atmosphere. Congress has never given them this power. They and the enviro lawyers are trying to get carbon emissions adjudicated before a court rather than having to actually -prove- it is harmful before Congress, the American people or even other regulators. They have done this before in funding studies via grants to NGO's who in-turn sued the EPA and thus increased their mandate. Regulatory power accretes. It never retreats willingly and only in the face of massive political force.

Businesses are being slow to hire. They cut back and saved jobs by voluntariy hourly restrictions by their employees. Only a non-union company can save jobs and avoid harming a community. The unions have shown, almost completely, their unwillingness to adopt flex hours or even reduced hours in order to save jobs. Businesses will increase their hours worked to reward their loyal workforce before they hire strangers.

Businesses are also hesitant due to the uncertain regulatory environment we're facing. The EPA rules may drive up the cost of transportation of all goods. If the public balks at buying new stuff, the trucking companies will be stuck with employees and no work; new trucks with no feight and new loans they cannot service. Yes, I know that the present demand for trucks and drivers is it temporary-? are thet putting old equipment back to work or-?

When prices rise, the public hunkers down. The employees are -ALWAYS- the last to see any increase in wages. suppliers must pay more for raw material. Manufacturers must pay more and -hope- their good will not be refused because of the new price. Only when the new prices are firmly entrenched will employees get raises. It is impossible to give a raise then take it back and keep a good employee. we live in an age where "Stuff is cheap and labor expensive" but unfortunately many of us are still making decisions based on "Expensive stuff and cheap labor"... Higher prices for the same goods will face resistance from buyers.

It's not complicated..
.but it gets that way when we are lied to about; numbers and facts regarding our situation, when we are given spin and not answers, when new regulations are hiden inside bills an proposed regulations to avoid upsetting the public, when nobody knows what to do but keeps talking/spinning the yarn without explaining anything.

Does anyone know what needs to be done and is willing to make the adult decisions-?

Where are the adults-?

Friday, April 29, 2011

10 Thoughts on Trump v. Obama 2012

1) No. He has no depth beyond his celebrity. Real estate is not the same as service or manufacturing. He has been to bankruptcy several times. If you cannot make money running a casino- you are not a manager. He has also taken his partners into bankruptcy several times. His style of business is fine for NYC gentlemen. People who know the rules, are aware of the NY & federal laws, and who need to play fair-ish because of their next deal. It won't work against really evil people who are not afraid to use violence or cause deaths on a large scale. He has never faced anyone who has nothing to lose and is willing to burn everything down.

2) "Birther" and Affirmative Action
Issues. Side shows attractions. The sizzle and aroma that brings in the crowd. The fresh baked cookies or bread that set the stage and bring the crowd to see/buy something.

3) Trump's appeal...WHY he is gaining traction over Romney, Huckabee, Pawlenty, etc... He is an America Is Great advocate. He does not apologize. He does not accept arguments that mistakes are errors of current social policy are fatal character flaws. He proudly and loudly states that America is a good nation. Americans are a good people. Americans are better at guiding our own future than any other nation.

America is the best friend any democracy seeking people will find anywhere. We are there when disasters happen (our military budget pays for this largess-remember the military budget-?) We do not say "You -must- have and American style democracy". We don't really care what for type of democracy you choose, as long as you do it peacefully.

Trump is saying all this (by his actions and boisterous challenges more than words alone) after almost three years of non-stop apologies, withdrawal from confronting evil, and following the hard Left turn to Collectivist-Redistribution path towards insolvency. No country has ever accomplished what Obama proposes without slaughtering 5%-10% of their population. America is not -that- country.

4) Money... Trump's wealth is locked up in assets. He is usually short of the "readies" aka ready cash. He cannot raise enough from other donors to win. He has celebrity because he has time to develop it-for his business i.e. building overly posh, over priced buildings for people with too much money.

5) Trump sets the narative for a strong, fiscal conservative and strong defender of America. If the Republicans say to the social Conservatives "You talk to the states"...The game changes. No more need for federal money, regulations or laws to distract from the mess we're in

6) Obama is a known commodity. He is no longer the perfect blank slate spouting aphorisms that we can interpret to fulfill our fantasies. He is known. He appears bored with the job. He makes it seem beneath him and not really worth his time. He is afraid of a mistake and therefore dithers, delays and delegates waiting to claim victory or blame others. He makes no efforts or commitments

7) Obama's financial machinery won't work this time. The rope-a-dope donations where the internet accepts -any- name as long as the credit card numbers are good. The laws are based on the names. So long as no single named person+address donates over the limit-he's in good shape. The question is whether the Republicans will follow this bit of sophistic legalistic magic or take the high road-? I doubt the F.E.C will ever respond to this hole in the laws. Obama & Democrats are counting on Republicans playing by the spirit of the laws while they play by the tight, legal defintions of each word. ( a nation of lawyers ruling us peasants-?)

8) The $3 billion given to A.C.O.R.N
. and all it's newly named groups may not work. The public is aware that false absentee ballots are being applied for, false names are being registered as voters, no photo ID's mean that any person can vote multiple times, that the elderly and enfeebled are having their ballots filled out for them, etc... Will that practice continue-? Do we value our votes or simply not care-? This is a local issue...what are -you- doing about it-?

9) The Unions are busy fighting for their continued existence. Their right to continued extortion of employees and state governments is being challenged in many jurisdictions. Their manpower and money is going in many directions this year before the November 2012 election.
If they lose the "Check-off" they will not be able to have the employers -TAKE- money from the workers paychecks and -GIVE- it to the unions. They must then go hat-in-hand (or baseball bat in hand) to ask for the monthly dues... Not a pretty sight. People tend to thing the money thy earn belongs to them. They will also start asking the famous consumer question "What are you doing to earn my money each month-?"

10) Trump has never taken a ten-year full time commitment to anything. Obama is only committed to his own sense of magnificence and his definition of glory. He was The First. His place is sealed in the history books. Any future (aka The Next) candidates -will- be investigated, known, understood and examined -MUCH- more closely. No more stealth candidates... We learn slowly, but we learn and remember.

Thursday, April 28, 2011

Where Are We-?

Like that hoary olde joke about the Fugawi tribe... I sense Americans are asking each other "Where Are We-?" and even more importantly "Where Are We Going-?"

I suppose we need t ask "Where Have We Been-?" Lyle Lovett once sang "You've got to look at what you've been thru to see what you've become"... That's us.

We are uncertain. We voted for "Change" but never knew we were signing up for "Fundamental Change to American society"... We got both, in varying degrees. Now we can only "Hope" that we can find ourselves and a way out. We are not like we were. The path we're on has never been done by anyone in the real world. Only academics, enjoying govt funding, have professed the collectivisation and re-distribution of wealth as a sustainable model. Even then, they assume humans are closer to angels than our own selfish, self-interested nature.

The TARP plan was flawed, but we faced a crisis of confidence in our financial institutions. Pres. Bush doubled down and requested the rest of the funds so that Pres. Obama could have flexibilty as needed. Pres. Obama then got the Stimulus Package and added bits of money. My memory-guess is approx $1.4 Trillion. How much has been spent-? We don't know. The rabbit holes got filled with cash. Some 200,000+ new federal employees were hired to monitor where it went.

I'm a simple guy. It seems to me that handing out $1 Million, tax-free to 1,400,000 (one million four hundred thousand) people chosen at random would have done more for the country.

People would have bought a lot of stuff; new cars, houses, furniture, started new businesses, paid down credit cards and so on. Plus No New Federal, State, County or Municipal employees would have been hired. So, our costs into the future would have been lower. The strings attached ar just beginning to be felt. They now hurt the states who took the poisoned money.

I'm tired and confused by all the funny numbers being batted around. I'm one of those who wants to know what's behind the numbers and what are the assumptions. we're not getting the TRUTH. Every set of numbers has a different source of actuals and different set of assumptions about the future. I've always believed that Revenue Forecasts are Promises. Expense Projections are Commitments. The revenue numbers are too rosy. The expense projections are short on details.

We owe money. We have NO way to pay it back. In business, that would be cause for great alarm. When a company files bankruptcy and you asked the owners/managers "What Happened-?" almost invariably they say "We Ran Out Of Time". Unless we recognize our problems; we will run out of time. when a person, business or country is stretched this thin, they lack any flexibility to act should an emergency arise.

Over 47% of US citizens pay no taxes.
Only 2% of those who do pay taxes pay over 56% of all our bills.
Over 50% of all of us, receive some type of check from the government.

We don't have a sustainable business model...
IOW, We are in deep _______ and know no way out of this mess.

We even refuse to believe we're in trouble.

So, should those who worry stock the bomb shelter and hunker down while we away the inevitable-? If we wait for those who say "Nope, No Problems" now to say "Oh S---!" won't it cost us a heck of a lot more-?

No business deserves to stay in business longer than it's value to its customers.

No country lasts forever.

What do we choose for our future-?

I'm thinking it's time for some more change. Hope alone is not gonna get us out of this mess.

Marxism Fails
You can't re-distribute what hasn't been collected because there is none to collect.

Friday, April 15, 2011

So Many Words

We are drowning in a sea of words. TV is radio with pictures. we watch people tallk and get into/out of situations with words. we watch politicians use an endless flood of words. Nobody knows what they said. They are skilled and feeding tidbits to -your- prejudices. This allows them to be for/against any issue at any given time. What they said was ,exactly, what you thought they said. Did they mean it-? Who knows-? I doubt even they know what they said and what they really meant.

When I first went to Washington, I was told "Politics is a conversation that never ends." It's true. They speak about endings, the future, changes and lots of hopeful things. They never set a date when THIS if finished and THAT can begin. Both keep being issues forever.

Straw-man argument or style or rhetoric is when you say "Some have said" or "We all know that this country is not like THAT". This fits your prejudices. There is never any person who actually said it to them or even proposed it. BUT it fits the bias that "Well, somebody could have said it/done it/meant it." Nobody ever pins down the -WHO- of it.

If all relationships ar based on trust; how can we trust anyone who never stands still. a person who keeps talking-? Anyone who talks more and faster when they think you may be catching on is -UNTRUSTWORTHY-. iF YOU CAN'T TRUST SOMEONE, -WHY- Are you granting them any more of your time, energy, confidence, faith, hope or money-?

I remember when a handshake meant something. A man was a man because he kept his word. Those who told lies, said anything at any time were either children or liars and usually a thief.

The world has changed. People are different. Yet, we still need to trust each other to have any society or value in our lives.

I live by the modified version of Caesar's Wife.s Virtue that "Not only must I appear to be trust worthy, I must BE trustworthy"

It places the burden on me and all I meet to be trustworthy. Then we can look hard at whether we think the other's definition of "trustworthy" is similar and just how different are we...

I sometimes wish that more felt this way. Unfortunately, we must have some nasty, ugly, -very public- betrayals and transgressions before the lesson is learned. Society functions best on a 'by exception' basis. we all hold similar values, except here and there or even this person. If we're not similar in our values we simply have no basis for trusting each other. Do we-?

Tuesday, April 12, 2011

Scared of the Future-?

I ran across another post by John Hawkins noting what happens to you and me when America goes broke.

I'd rather not believe that it's all a scare tactic. Well, I would, but too many years of watching my pennies and letting the dollars follow plus examining company financials to see how they are dealing with their present and future lead me to believe that either we have some leaders with some backbone or we continue to follow the fools who expect "The-Rich" to pay for everything.

we're in trouble and nobody seems to want to pay attention. It's almost like the pop quizes in school when the-cool-kids hadn't done their homework... "Nobody Told Me There Would Be Math" cries and whimpers...only this is not an exam. This is reality.

We are losing $200Billion ( i.e. $200,000 millions) every month. The interest on our debt (notice how nobody speaks about the interest) is another $200 Billion. Japan has been hurt and will not be in a position to buy our paper promises when the ones they hold run their course. Britain is doing all it can to handle it's solutions and problems. Canada seems to have avided the issues. However, we're refusing to allow a pipeline to be built that would move Canadian crude to the Gulf for processing. we continue to buy 10% of our oil fro Venezuela. Chavez hasn't shown much love to us. we haven't shown much towards Canada. (NOTE: Bot sources of crude are extra specially heavy in sulfur and need special refineries. Iran has a similar problem.)

That leaves China who hold more than $1 Trillion in our paper promises. (A trillion = $1 million million)

We are stretched financially and militarily. We have Iraq and Afghanistan plus the build-up of the Orwellian named Homeland Security. we have just gotten entangled in something in Libya. Nobody knows what we're doing or why we're doing it.

Being stretched removes our flexibility and ability to respond. Should we have another Katrina or SF earthquake we'd be hurting. The American people would pull together -but- would it be seen as simply -another- crisis not to waste for political advantage-?

We don't trust our Political leaders. It seems that -everything- has become political. will we ever be able to go back to sleep and simply pursue our lives and enjoy our families-?

I wish I had a clue. Right Now; I don't know. When I speak with other business folks; they don't know either. The political landscape is ugly, unfamiliar, and filled with so many "Useful Idiots" in Lenin's famous term. IOW, people who have lots of outrage and will tur out to provoke and attract headlines ...but who have no real idea why they are there or the consequences of their actions.

Donald Trump is FAR more interesting than Charlie Sheen. whatever he does it is interesting and beats seeing the usual dwarfs playing it safe... I keep hoping/expecting a -real- candidate. My choices/secret hopes are Jim Rogers of Cypress Semiconductor and/or David Petraeus.

I think the good general has -earned- his seat as Chairman of the Joint Chiefs of Staff. It seems that The "Good" General and politician who has never fired or seen a shot fired in anger will assume the role. Petraeus seems destined for Head of the CIA or maybe Head of NATO.... What an insult-! Musical chairs will move the head of the CIA to run the defense Department...and I may be the only one who remembers Leon Pineta as the bag man who retired ahead of an investigation... Guess he showed -them-

Noodling in the dark... Blogging on the internet.... random thoughts running out my fingers.

Aggregators, Adults And's

I usually read Instapundit and Lucianne for my quick take on the news of the day. Well, at least for my political and social commentary news. Drudge holds the lead for the hard news of actual events.

Instapundit links to John Hawkins interview with Dr. Thomas Sowell. The occassion is the publishing of his latest book; Economic Fads and Fallacies second Edition. as usual, Dr. Sowell cuts thru the crapola. He reports that We Are Broke and provides details...

I have enjoyed reading his works for over 20 years. He is good, incisive and no nonsense...
It's hard to argue with his conclusions since he shows how he arrived. Listening to the children who march, protest, lobby and inhabit most of our education and political establishments is tiring. He is an adult who speaks to adults.

I have ordered my copy. Have you-?

Monday, April 11, 2011

So, Now I read on-average, a book a week. Sometimes more. Sometimes less. Amazon has a phenomenal number of good books, used, for sale. My tastes run from paleo-archeology , Roman history, Economics, Politics of the past, American history, Chinese history, Silk Road and India. Why-? Because good books make reference to other people-other times-other places. Nothing happens alone and singular.

Amazon and have spurred a renewal my interests in music. Watching the whole industry evolve and adapt to the internet is educational. The big giants have had to scramble. Their music has become a commodity and following the laws of economics "Markets reward the low-cost provider" Buying used CDs allows me to experiment. I can risk some small dollars on an unknown but intriguing artist.

The internet continues to be a disruptive force, mainly for good. Some bad things happen. However, the world is not a safe kindergarten where the adults protect and assure comfort should anything go wrong. Americans, especially the Gen X, Gen Y and Gen z are a mix of brilliance at technology and using the internet. They are also incredibly naive about scams, falsehoods and betrayals of confidence. They get irrationally upset at any slight. IOW, they act much like the spoiled children they are. Such behavior is tolerable in a small child, unpleasant in an adolescent and wrong in an adult. The world is not a completely safe and nurturing place. Bad things happen to good people as often as good things happen to bad people.

Watching the antics of our "leaders" on TV is funny. They are very risk-adverse. They run for office promising to Lead. They claim that they are LEADERS and know the right thing to do. Once elected, too-often, they become sheep. They wait and wait for the "Judas Goat" (look-it-up) to come and show them the path out of the thicket. They ignore their campaign promises. They become petty, arrogant and officious when challenged....

The 2010 election brought forth a new crop -who, so far- seem ready to honor their promises and do what is best for the country. For too long we have had politicians who simply used the public purse to reward special interests. Nobody was paying attention. Polls continually showed that the electorate disliked Congress as a whole and even the President. But they loved -their- Congressperson...even when they had no idea what they did or even if they showed up. For many years my Congressman Tom Lantos, held the dubious award of being "The Most Absent Man In Congress". He had a safe seat. He voted the union line. They showed up before the elections to provide manpower for phones and driving the voters to the polls. They walked the neighborhoods and handed out signs and leaflets. ... The Republicans always had some token opposition. Most never polled more than 50,000 votes. But Lantos won in a slow walk. The entire country grew accustomed to such relationships.

Now we are broke. I studied business company's that filed bankruptcy as well as those who were successful. I interviewed the leaders of the failures and read their filings and interviews. Consistently, they said "we ran out of time." watching the fight over our national debt, it seems one side says "Quick-! we must change our ways" The other side says "No. Go slow. There is plenty of time. We don't want to upset everyone." what do out debtors say-? How much time will they give us-? will they buy our bonds as we pay off the old and borrow anew-?

Increasingly, people are seeing a round of inflation as the only way to pay off this mountain of debt. Devalued dollars will hammer lenders and reward those holding assets. Will the US do it-?
will This President and This Chief of the Federal Reserve use cheapened money to harm those who gave us their trust-? watching the rise in commodity prices, oil, gold, silver, copper, grains etc. The answer seems to be a resounding "YES-!"

Inflation will hit the wage earner hardest. The wage earner cannot raise the price of their services as fast as commodities rise. Their employers cannot raise their wages until/unless the public accepts the new pricing. Hard Times seem just-around-the-corner.

Good managers, good entrepreneurs anticipate the worst, hope for the best, and plan for the most-likely. Right now, I;m glad I have no employees or customers looking to me for answers or a plan. I have no clue how ths will play out.

The U.S.A. has never been in -this- position before. We have a huge government that costs more every day in wages, regulations, rules and infrastructure. Businesses cannot plan because they don't know what regulations will be coming. The new Congress has proposed a law that would require a vote by both houses of Congress before any rule with an impact over $100 million is enacted. It is a good idea. However, political appointees who are True-Believers will quickly write regulations that impact the nation in $90 million increments. Then they will flow like the cars on a freight train crossing the desert, one-after-another is quick succession.

we are n a mess and no clear path seems available. The large companies are now deemed Too-Big-To-Fail. This means that they are both a bulwark against government -and- a captive pawn of big government. Our future lies with the small and mid-sized companies. we need a more fertile ground for entrepreneurs to take The Risk of ther wealth and good name to fill a need with new products or services.

Rules and regulations cripple small businesses. It diverts scarce capital, people and management attention to comply. The government cannot do away with the oldest maxim in the marketplace; "Caveat Emptor". More rules, laws, regulations, and enforcers will not protect the fool and his money from a "Great Deal"... All they do is confuse and hinder the growth of skepticism.

All business relationships are ased on trust. Trust is earned slowly and destroyed quickly.
Good business managers know that they, like Caesars wife, must not only be beyond reproach but they must appear beyond reproach at all times. This applies to all levels of the company. Good Will is earned slowly and is worth a lot, especially in times of uncertainty and adversity.

Sunday, April 10, 2011

World Slows Down

Since 2008 my world has slowed dramatically. The economy started backing off in '07. Many of the HNW (High Net Worth) people I was meeting to raise capital saw a cold wind coming from Obama-land and started pulling back on their risk tolerance. They expected huge tax increases as he was promising them. They also expected a landslide of new regulations and enforcement.

Nobody saw the Financial accounting standards Board changing the rules and destroying the balance sheets of highly regulated financial institutions. The FASB enacted their Mark-to-Market rule in November '07. Bear-Stearns hit the wall in January. When the FASB finally rolled back the rule in April '09 the economy recovered. They're now talking about re-enacting it again. Personal observation is that nothing will happen for a decade. That change wiped out the value of performing loans that were not in doubt or even due for 10-20 years. The bundled mortgages had a mixture of good and dubious mortgages. The good ones were paying a low rate and the dubious a higher rate. when the rule hit nobody knew what was a good bundle or a bad one. That made it impossible to sell without unbundling. However, the holder didn't have the authority to act.

The result of all the chaos and uncertainty loans were stopped-mostly. Even the most credit worthy were forced to pay high rates. The alternative was a pay-off or default. The system worked because people built equity as the assets appreciated and the debt was reduced. Eventually one would have a paid loan, a free asset that had appreciated above the original purchase price. This is the secret of most family homes and real estate investment wealth.

We need to grow. Funding evaporated for acquisitions. Our equipment was old and we had held off replacing it expecting to merge the business into a new and larger entity. With no funding available for acquisition, we began seeking funding for replacement equipment. Despite the popular Marxist myth, no responsible owner ever compromises safety for profit. Lacking any source -at a reasonable rate- we closed the doors and went home. Only an idiot/fool/desperate person takes a loan at 37.5%... Course, the lenders take a fixed and floating on everything the company and owners own... They know what is happening. It hurt to walk away but the alternative was too ugly.

The economy has not returned. The surge in stock prices shows mostly a draw-down of inventory and extension of existing equipment and work hours for those still employed. The EPA has a new raft of rules and regulations that will soon be enacted. Mostly these will raise the cost of -ll- energy and its usage. The new financial regulations haven't been written, but nobody expects the small and mid-sized to benefit from the weight. Healthcare is a mountain of cost with as yet unknown regulations.

The country is broke. Bush gave a stimulus to keep Nancy happy. Then the TARP bailout. Then the Obama use of TARP to take over the auto industry and pay-off the unions. Then we had the $1 trillion stimulus. Supposedly for "shovel-ready" work. However, there is no such thing where govt money is concerned. Every penny must be watched, accounted for, bid for, granted and then measured as it is spent. The govt keeps adding people. Course, most of these jobs will become SEIU union workers so, It's OK.

I've grown cynical and disillusioned.

I was taking the whole political sphere WAYTOO seriously.

I stepped back.

Re-discovered the stack of books that I had been meaning to read.
Re-discovered music that I had been to busy to hear.

I think it's been good for me.

What next-? I'm not sure.

But that's what being human is all about. Isn't it-?

Don't we all keep coming back to see what happens next-?