Conversation

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 bhttp://www.blogger.com/img/blank.giflue 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.

Truth

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.

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.

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 itshttp://www.blogger.com/img/blank.gif 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.

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 market...so 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.

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.
http://www.blogger.com/img/blank.gif

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.

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 thhttp://www.blogger.com/img/blank.gifat 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—Micrhttp://www.blogger.com/img/blank.gifosoft, 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.