CapitalistMarks

German export advantage…a valuable lesson!

Posted on 07. Apr, 2009 by scott.

The auto ‘crisis’ in the?U.S. is more than just an economic segment issue.? It is a broader problem having to do with our?trade deficit and?our (government as well as corporate)?lack of commitment to quality engineering and first-rate economical manufacturing.? This has been a problem in our country?for years…we would rather buy a cheap ‘knockoff’ from China than get the real deal for a bit more.? A bad precedent to set (and believe me if you shop at Walmart you will understand).

Our manufacturing sector is not in good shape.? Auto’s especially.? What a great time to make changes and?rectify what the last 40 years have caused.? If we let this opportunity to fix the problem pass, especially?by losing?more of our manufacturing base, then we have really blown it!? We NEED a ‘grade A’ auto industry.

BHO has recently made it clear that things have got to change in the auto industry.? Sounds like he is more flexible?with GM but has little patience with Chrysler (truth is?I feel the?same…I have owned three?Jeeps?and they have been the worst maintenance nightmares imaginable…you’d think?I’d learn…but, in my defence, the last one I?bought a few years ago was based on?’Consumer’s Report’ which rated them highly…believe me when I tell you I will NEVER subscribe to that ‘independent’ journal again!).?

Ahh, the auto industry.? Ours to lose and we are doing it pretty handily.? I have a Jeep, a Ford, and a Toyota Avalon…guess which one is most dependable?? The race isn’t even close and it is?not one made in America.?

BHO’s administration needs to remember that?we don’t (and can’t) operate in a vacuum independent of the rest of the world.? Declining auto sales (domestic and foreign sales of our Big Three) are a huge part of our trade balance problem.? We simply can’t afford to let it go.? Not now.? Not in the forseeable future.

If our government causes a further major ‘hiccup’ in auto manufacturing?the results could be disaster.? Not just in job losses but in world-wide credibility.

Let me use the ‘great’ exporter as an example.??For a number of years, the largest ($ volume) exporter in the world has been???? Buzuzzz!??Germany!? They export more than any other country.? On a percapita basis their track record is truly inspiring.? Amazing but not surprising if you look at the facts.?

Germany makes lots of things, but they generally do it well and consumers all over the world appreciate that fact.? This has helped them manage through the ’90’s trauma of?integrating East Germany.? Now there was a problem.? Imagine the U.S. creating five new ’states’ out of all of Mexico and Central America…all the while growing the economy and keeping living standards high.? Germany did just that with East Germany.? Exports were a HUGE part of their success formula (despite the?’socialist’ nature of their political leanings).?

Germany did it with great designs, quality, and reliability.??Face it,?they?makesgreat cars, great high-tech machinery, great chemical products and great electronical goods (and their all-natural hotdogs…they call them wieners…are the best!).??? Those big segments of their economy, their top four exports, just keep rolling along.? It is therefor not surprising they have a $250+ billion trade surplus in the last 12 months (with total exports of nearly $1.5 trillion).?

Surely we must be next?? Nope.

China, at number two in exports and #1 in trade surplus, leads the U.S.? And, in a big way.?

We have a trade DEFICIT of nearly $800 billion on exports of about $1.3 trillion.

Are we going to reverse this horrible trend by simply growing our veracious ’service’ industries.? Not just no, but HECK NO!? We need manufacturing, we need quality machine tools, we need the most modern production capability in the world.? Credibility.? Technology.? Productivity.? Have we forgotten how?

We simply can’t demure to China, Japan, or Germany on these issues.? They have been key to our past and will (must) be key to our future.

What to do?? We must force a remake of our auto industry (GM and Ford at least).? They must become more efficient, more productive and they must regain leadership in manufacturing, automated tool & die craft, and most of all design and consumer appeal (be it ergonomic or fuel economics).? They must become the frontrunners of new American manufacturing…to help with unemployment, to help our trade deficit, to make the $$ stronger, and to give our society credibility.

We just have to be the leader in some aspects of manufacturing for the world.? We have to be the envy of factories and workers worldwide.? We have to ‘make’ things that generate feelings of confidence like the German brands of BMW, Porsche, Volkswagen, and Mercedes.? The best, and most logical place to start again is the auto industry.? By the way, today GM announced a venture with Segway to make a two-wheel, all electric, urban two-seater (the P.U.M.A.).? Cool!? One small step for GM one giant leap for mankind?

So, don’t give up on GM Mr. President.? Force the change we need if you have to, but remember this ‘remake’ is going to take not billions but tens of billions ($$) to implement.? And it will be worth it.

I hate hearing about the ‘cost’ of bailouts and stimulus.? These expenditures are not so much cost as they are investments (if managed properly).? Years from now we can look back on 2009-10 as the time when American creativity and ingenuity won the war?again and it started by winning the manufacturing battle.?

We need another Henry Ford.? There are probably hundreds of us out there ready to fill those shoes.? Let capitalism reign.? Come on America, lets make some stuff!!

We?MANUFACTURE our own advantages.?

?

thanks for the photo to flickr’s schoschie

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China: stop America bashing! It could backfire dudes.

Posted on 03. Apr, 2009 by scott.

In the latest?Newsweek (April 6 — page 5)?there was an article warning about potential Chinese resistance to continued economic and military ‘dominance’ by the U.S..? I was shocked at the acceptance of the proposition.? It’s false and misleading.?

Recent rhetoric ( surchur.com) is not helping our relations with China.? This is a ploy, in my opinion, by Chinese leaders, to take the focus off troubles at home.? And it is a dangerous mistake.

This fairly recent?development by our economic partner/adversary?deserves some elucidation…and a word or two of cautionary warning.? Start with this.? Bully’s are not usually as strong as they act.? I had a problem with one once in?10th grade.? He was bigger, meaner and uglier.? He was a dude.? He also went down like a ton of bricks when I’d had enough (yeah, but I was the one that got in trouble at school, how does that work?).

First, China is openly beginning to?bring pressure to bear on the ‘American’ model in international finance and economic venues (like the G-20 conference).? Sure, we have failed in our own dilegence, and we have let?our capitalist model run beserk for a while, but let’s face it China is a far cry from achieving the long-term prosperity that our model has generated for decades (centuries).?

There is more to it than that.

Many of?China’s worried citizens, 9% of whom are unemployed (imagine 60 million+ people without jobs wandering the streets!) want the $2 trillion of U.S. debt their government owns to be returned and spent at home.? They also want the government to get tougher with us.? Some of their more vocal dissidents too (the government lets anti-Americanism flow freely, but not criticism of their own system).? Their leaders are behind this believe me.? It is a ploy, a tactic, and should not be allowed the light of day.

While the $2 trillion is a?tremendous lever against the U.S. and seems to be an equally tremendous?potential benefit for China, there is no reason to believe that button will be pushed.? Sure, $2 trillion is a lot for?improving their infrastructure, for their growing military (including a proposed aircraft carrier), for social spending or whatever.? But, that is not a real alternative.??A short term ‘fix’ at best.? Their leaders would be mistaken to?continue suggesting such a path?(even with?further internal pressure–though I doubt that pressure?is independently real).?

Our leaders must know it is a shallow threat and have to treat it as such.

China has the largest positive trade balance in the world (over $310 billion in the last 12 months–on total exports of about $1.4 trillion).? Where does much of that come from?? The U.S.!? We of course have the largest trade deficit (nearly $800 billion in the last 12 months).? Much, if not?all,?of that comes from our relationship with China.? That could end in an instant with trade barriers and further ridiculous ‘hints’ from them would encourage our rapacious, and hasty (usually only when inadvisable), Congress to act.

If China begins to?play recalcitrant in their financial ‘arrangement’ with the U.S. their trade balance would fall off a cliff . . . and unemployment would worsen rapidly.? That is a risk they simply cannot take.? Another 10 million or so added to their unemployment lines would be just enough to encourage open dissension.? Revolution.? Maybe.? No one wants that in today’s economic turmoil.

So, BHO and his team need to be firm when dealing with China.? Trade imbalances need to be fixed.? Currency imbalances need to be fixed.? Negative rhetoric needs to be stopped.? China needs to contribute more to the world-wide financial and economic crisis and forget about isolating?and distancing themselves from their original capitalist model (the U.S.’s by the way).?

Stop the negative vibes, China.? You need to make friendly with us, dudes, we are not (really) the bully here.? Let me be frank.? We need you to sell us the cheap inexpensive goods that fill the ‘five-high’ shelves in Walmart.? Shucks, I am not sure you can even buy a T.V. that isn’t made in China today, let alone one from Walmart (that I am sure of).? Yet, you need us to buy those goods.? And at ever increasing volumes.? At least for the forseeable future.?

Hu Jintao, start talking up the American/ Sino realtionship, we ought to be buddies, dude.? Make goodie – goodie with Barrack.? While you are at it, start paying your part of the international bill this recession has left.? China is not completely innocent in this scenario.? Start recognizing it takes two to Tango.? If you want to dance with ‘the star’ you’d better listen to the beat of the music.? Truth is I don’t even care if you become the star.? We’ll still be glad to dance (with all 1.3 billion of your partners for our 300 million).

As for our part.?? BHO should realize the hollowness of?the Chinese Rhetoric (what? A new currency to replace the $$ — yeah, Europe thought that would work too) and start playing hardball if it continues.? We are sure as heck not going to do all of this alone — our wonderful legislative branch (it hurts to say that) won’t let it happen.? Believe it, dude.

America can’t fight the worldwide recession on its own.? We don’t need to.? China needs to do?their part and stop whining.? Free trade means just that, free–open–transparent–competitive.? Try it for a change, China.

Let the Yuan float or trade freely against the $$ or any other currency.? I don’t care about the internal implications.? It’s a flat world.? Deal with it.? Start pushing your own consumer economy.? Let them buy American for a change.

I learned a long time ago.? You push a bigger guy too much and soon he is going to push back.? Goes the other way, too.? I realize that as well.? Stop pushing , Hu Jintao and all of your endlessly communist buddies.? Let your people think and act for themselves.

Worked for us.? Still is too, just see what happens a year or two down the road.?

Sure, America screws it up bad at times.? But, we innovate and create and pretty soon we are the prom queen (or king) again.

Gotta love it dude.

?

thanks for the flickr pic from chesi – photos cc

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CEO solution for economic stimulus and failed corporations.

Posted on 31. Mar, 2009 by scott.

I have been wondering lately if the key executives in American companies care about anything other than? their own fat paycheck.? With ‘boards’ (the director type)?loaded with their own ‘interlocked’ friends, is it any wonder execs get away with all the crimes we have been hearing about?? Interlocked boards are those with board of directors who all have interlocking relationships.? In other words, a CEO of company A, asks his buddy who is a CEO at compay B to serve on his board . . . and the favor is returned.?

Multiply the above scenario by way, way too many corporate boards and you have a recipe for disaster.? We are living the results right now (sort of like term limits isn’t it?).? We aren’t getting the ‘best and brightest’ to run our companies, we are getting the ‘best connected.’? A far different circumstance than the average Joe understands.? Truth is the government is the same way.? Shucks, on Fox network’s “24″ last night the President asked her own daughter to be her new chief of staff.? Where do you think the writers got the idea for that?? Yehhp, from the great example of our country’s top corporations and their ‘interlocked’ and demonstrably incompetent boards.

I have a solution.? Replace all?executive sin America with someone capable of doing everything required and still have time left over to help a few neighbors.??Don’t laugh, this is serious stuff.? Our corporations, directed by their ‘boards’, are failing miserably at their mandates (to make money for their shareholders and provide security for their employees).? We need real change.

We need executives with the following traits:

????????? honesty, integrity, concern for others, love (for what they do–not for what they can rip from the cold hands of shareholders), commitment, ability to multitask, focus, native intelligence, desire, decisiveness, analytical ability, willingness to learn new things and then make them work . . . aw Jeez Lousie, I could go on forever here.? But, you get the point.? All the things our current batch of exec’s don’t understand let alone possess.

So, I have searched my memory for all of the executive types I have ever met (myself included).? You know what?? None of them meet the proper range of above criteria.?

So I thought some more.? Do Execs need to have MBA’s or Law degrees or Phd’s?? Heck no.? Do they need to have tons of experience in the field they are working?? Heck no (now this may not be ovbious, but good execs delegate and only make decisions when provided with reasonable alternatives).? Do they need to be the smartest dudes around?? Heck no (and here I need merely refer to the numerous knuckleheads who have failed miserably in their exec positions lately — throw a dart at any group of execs and you are probably going to hit one with an IQ lower than Forest Gump’s).

Back to the drawing boards.?

Then,?Eureka!?

I realized there are a whole bunch of folk out there that meet ALL of the above criteria.? They are faced with multi-task situations every day and make them work.? They labor more hours?than a first year law student.? They are honest, to a fault usually, with all those around them (except when it might hurt feelings and then they just tweak the truth to make it more palatable).? They learn quickly and prove it many times every day.? They?hit the floor running with every new situation that is thrown at them.? They are committed to doing–and doing well.? They are masters of the ’steep learning curve’.? They are intelligent and prove it over and over again.? They can analyze, compute the options, figure out the risks and then decide, and when they do decide nothing on earth will change their direction–unless the facts, or the needs,?change.? Then they are superbly adaptable.? They run around all day long like chickens with their heads cut off, but they do it purposefully and with great efficiency.

We have hundreds of thousands of this special type of person out there.? And let me tell you, they would love those ‘cushy’ executive jobs with the high pay and the?superb benefits and the much shorter hours.? Heck they would probably do all that is required for freaking?FREE.??Just give them hope that they?might enjoy the positive outcomes of their labors with a few restful days at the beach.? Maybe breakfast in bed.? Who knows, a few stock options wouldn’t hurt.

Yeah, they are out there and they are waiting, willing and able.? Call ‘em, telegraph ‘em, fax ‘em, but get them to work on our problems and then get outta the way?’cuz they will make things happen and fast!

I’m talking about stay-at-home moms.?

Right.? you read it correctly.?

Those underappreciated and?overworked bunch of loving, committed, intelligent, wise (there is a difference), quick-witted, top-notch executive capable, women are waiting for the call.

Use them America!??The rest of the world would have to watch out.?

Stay-at-home moms.?

America’s last great resource.?

The best Executives you could ever find!

Stimulus, shimulus!? Problem solved.

?

A special thanks to my mom, my wife, my daughter and three daughter-in-laws — everyone of them great mothers and potentially super-great executives!

?

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Thanks to flickr’ cornish.pixie07 for the photo

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Tesla motors launches an all electric ‘family’ car!

Posted on 27. Mar, 2009 by scott.

Tesla motors’ first launch was of a sporty all-electric car that would cost well over $100,000.? Not exactly within the reach of most Americans.? Effective but not efficient.? Yet,? it looks great and goes FAST.? All on batteries.

This proves the point of my previous blog i.e. we are really starting to do something about energy independence.? Well, sort of.? Doesn’t help a whole bunch to be free of ‘cartel’ oil if the solution costs us an arm and a leg.? But that could change.

I have followed Tesla’s progress for years now, hoping that they would get the economies of scale to the point that I could drive one of their cars to a movie or up to the ski-resorts (in the summer anyhow).? The price, frankly, just kept getting higher and the probability of me ever driving one with the wife and four kids in it were well below zero.? Not just the cost either, the dang thing only held two people (and none over 6′5″ or 200 lbs.–me and two of the boys are in that category).

Until today.? They just announced the family car of the future.? Maybe that future will be in my life time.? Not yet for sure.? Just maybe.

This car is hot! And cool! And roomy! Well, if two of the seven passengers are tiny kids. And affordable!? Wait a minute here.? Is $50,000 affordable for a family of 7?? Not in my world, and I only have 4 kids and a wife!

Still, this is a great announcement and a real movement forward in energy independence. All kidding aside I loved reading this. ? The company projects a 300 mile range on a single (over-night) charge!? I can drive to about 11 of Utah’s ski resorts in a single day with that promise.? All the golf courses I could possibly play in a day too!? Without using any cartel oil.? Not even an ounce of their stuff.? Now THAT really is cool!

Maybe I can afford this ‘baby’ when it comes out in 2011.? I’ve got an idea to help the economics of it work.? I’ll park it at the side of the house every night.? Fortunately my neighbor had a convenient outlet there.? By plugging in to THAT convenient outlet, my cost of miles/watt will be way low…like ZERO!? If my personally advantageous ‘charging’ process offends my neighbor, well…I will just let them take it to the store once in a while.? I can only hope they will appreciate the sacrifice I will be making for THEM!

The way I have the economics of this all figured out, I can borrow the money for the car at 11% per annum and it will pay for itself with all that ‘free’ electricity. . . eventually.? I just wonder if it will still be running when the debt is paid off.? 2034 according to my calculations.? Hey, honey, isn’t this making sense to you?

Stay with me here America, this is still good, even awesome news.?? Affordable Electric cars are here!? Ah, shucks, in 2011 anyway, maybe.

Here’s to you Putin, Ahmadindjad, and Chavez.? How far can YOU drive without any gasoline at all?

By the way, the above foto is NOT of the actual Tesla family sedan.? It is of my ‘other’ car…you know, the one my wife drives!

thanks for flickr’s photo from poom!

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Oil prices rising, a forecast.

Posted on 25. Mar, 2009 by scott.

Lately the prices of oil have been going up.? I thought they would, since OPEC and Russia have been actually cutting back on production.? This is something they often threaten, but rarely achieve.? Are they shooting themselves in the foot?

I think so, and that is a good thing.

BHO is serious about achieving energy independence, at least he talks like he is.? Further, though some 55% higher than just a month or so ago, oil prices are only about 1/3 of what they were late last summer.? The threat of $150/barrel oil is still real, but all of the world is aware of that and beginning to recognize the need for consumption restraint.

The biggest thing is that America is noticing and ‘we the people’ are doing something about it.? A large part of this next series of statistics is due to the ugly recession of 2007-2009 (see I am putting a time frame on it…and it doesn’t go into 2010!) but a bunch of it is just due to recognition that high oil prices are bad for everyone.

towit.

According to the Department of Transportation ( March 19 press release) Americans are driving a LOT less than they were a year ago, or specifically 14 months ago.? In the period of Dec 2007 thru Jan 2009 Americans have driven 122 billion less miles than in the period of Dec 2006 thru Jan 2008.? This is 122,000,000,000 miles!? And, we drove 7 billion less miles in January than we did in the same month a year ago.

Go figure.? Are we getting smart?? Driving less? Taking public transportation more?? Carpooling?? Yes, yes, yes, and yes.

That is a lot of miles.? Figure 15 mpg average (and that is probably very conservative) then we have saved about 8 billion gallons of gasoline in the last 14 months.? That is about 150 million barrels of oil!? What with lower prices and less oil consumed, it can be argued that Americans just sent $22 Billion less to Chavez, Putin and Ahmadinejad. Take that one on the chin, dudes.

So, are OPEC’s cutbacks helping them??? I think not.? Not only are we using less oil, but so are the Chinese, the Indians, the Japanese, the Europeans and a whole bunch of others (not the Iranians nor the Venezuelans who pay only a subsidized 25 cents or so per gallon).

We are all smarter now.? OPEC is NOT going to dominate world economics like they have at times in the past.? Cutting back is going to hurt their economy not ours.? They will sell less oil for less $$ and their economies (dependent on that oil) will suffer.

Hey Putin, Chavez, Ahmadinejad…how do these ’shoes’ fit?

As I watch oil approach $55 a barrel I smile.? Not because I bought some oil tracking shares a month ago (oil at $36) and so even if prices increase more at the pump, my gains will pay for my extra costs.? No, I am confident that we will NOT see oil at $150 a barrel anytime soon, We will continue to use less and we will get much further into the? renewable energy cycle of investment as Obama moves us along (of course the Chinese need to help here too, but they have reasons of their own to do so).

Yeah, I am mentally sitting on the beach and watching the calm sea as those dufusus’ in Iran, Russia and Venezuela watch their hoards of? my our dollars decline.

AHHH!? It is beautiful out there!? Care to join me?

Thanks for the photo from flickr to eindzel

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Geithner –Zero to Hero!

Posted on 23. Mar, 2009 by scott.

Finally the Treasury Secretary, Timothy Giethner, has done (read ’said’) something positive!?

Today he announced a plan by the Treasury to mitigate the disaster of ‘toxic bank assets’ with both public and private $$$.? The amazing thing (given his recent track record) is he has gotten it right.? This?dog is gonna hunt.??

The plan provides government guarantees and?equity participation in private manager?purchases of huge blocks of toxic assets from troubled banks (they are troubled because real-estate backed assets have lost enormous value in the current recession).? Private money managers will price the assets (through bidding presumably) and use their own capital (highly leveraged) to purchase the so-called blocks.? Also key, these deals are done at the incredibly low interest rates the Fed is promoting?so there is even more profit built in.??Of course this ends up being an inflation hedge since ‘real’ values (real estate assets)?are involved.

It is anticipated that, over time, these assets will increase in value — and they will?(a whole bunch of pretty smart market and economic ‘experts’?think so too).

When (not if) these assets go up in value, the blocks will be sold to third parties (in whole or in part) and LOTS of money will be made.? The government will share in any profits (basically 50-50) and everyone involved today and tomorrow will benefit.

There are a lot of details (something Geithner has been woefully short on in the past weeks and months) in the plan but all of them are right on track or can be adjusted so they?fit as things progress.

As I am writing this the DOW is up over 320 points.??The people?who make a difference more than any other right now, i.e. the professionals that analyze and risk their own $$ in the markets, are betting this will work.? This is a first for a plan or statement from anyone in the current government.? The stock markets are going UP on an announcement from the TREASURY!!

This plan is an improvement on?the RTC (S&L bailout) of the early 1990’s that made money for a lot of people AND the government.? I know, I bought a building from the RTC (that cost $750,000 to build in 1975) ?for only $112,500 in 1991 (it had actually been an S&L and was three year’s?vacant).? I sold it in 2004 for a healthy profit.? Now the government didn’t make money on ‘my’ RTC deal, but then they didn’t put up any of the money.? This time around they (the Treasury) have it figured out better.? All money that is made will be shared with the government…and there will be a LOT of?$$$ to be made in the next 5-15 years as the economy gets back on track and real estate returns to ‘fair’ and reasonable market values.?

Everyone wins in this new program.? The only problem is that the little guys like you and I won’t be able to get in on the ground floor.? It will take at least $500 million of assets to get in.? But, if you wan’t to ‘get in’ then all you have to do is buy the shares of some of the financial companies that will be doing this…like PIMCO (I heard Bill Gross today saying they will) or any of the others that will be jumping on this ‘bank wagon.’? I would guess there will be ‘toxic asset’ funds you can buy.? Just make sure they are from a reputable company (one without the name Maddof in it would be a good start).

Now watch the ’side-sitters’ start piling into the market (see my earlier blog) seems I was just a few weeks early in the call.

Congratulations BHO and TG.? In the past two weeks you both have become hero’s.? In the case of TG (Giethner) it really has been a case of ‘zero to hero.’?

thanks to flickr’s photo from adactio

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Vacancy!

Posted on 20. Mar, 2009 by scott.

Over 100 days into the new administration and there are still lots of vacancies to be filled.? The most troubling is in the Treasury Department.? The Secretary, Timothy Geithner, is trying to do the job without any of the necessary subordinates.? He is all alone in that big empty building (except career employees) and that is no good.? He is not doing a good job and the ‘vacancies’ have to be part of the problem.

Some Senators are already clamoring for Giethner’s resignation.? Makes for a good sound bite,?but, the fact is that if we don’t have a fully staffed Treasury Department now, then how could we expect to have one any time soon if Geithner resigns or is fired?? Too late to reinvent the wheel, we have to make a go of it with the one we have.

Let’s get real here, folks.? The Treasury Department is even more important than the Defense Department at this juncture.? And it needs to have a full complement of staff.? You know, intelligent, hardworking, honest people who can start figuring out what to do and how to do it.? I am no fan of Giethner’s…he has done a horrible job so far of communicating?and,?perhaps the only thing he has done worse is–well, anything else.

However, he does have some great minds consulting to him (Warren Buffet among others) and he needs staff to get anything done.? Show me the staff!

The trouble is that about 20 or so key positions are political appointees who have to ‘pass muster’ with Congress (advice and consent).? And therein lies the problem.? How to find somebody willing?(or honest enough) to allow Congress’s public mauling

Given his failure to pay taxes, Giethner shouldn’t have been appointed in the first place…that is for sure.? That mistake has created an environment where the obvious choices won’t take the risk associated with their ‘vetting.’? No one wants to go through the kind of scrutiny that?Giethner’s ?’bad example’?will mandate.?

?Further, who could ‘pass muster’?

One of the things we can be certain of in this country is that if you have money, and/or power, you are going to do what you can to make more money (or save it) and/or gain more power.? Too many recent examples of potential appointees prove that.? Hiring illegals, not paying taxes, abusing power… and the list goes on.? That combination does NOT fit well with public service, and yet those are the people at the front of the list.?

The problem is exposed!? Career politicians and beauracrats seem to be a big bunch of … jeez, Louise, words fail me.

President Obama, bless him–I want him to succeed (unlike that knucklehead Rush Limwhatever), created this problem with some of his early (and later) picks for administration posts… smart people, but with so much baggage of the negative type that there have been multiple drop-outs and burn-outs.? He is struggling to get anyone he thinks is capable to enter the ‘gauntlet’ that congressional oversight will create.

Take charge, Mr. President.? Fill those vacancies.? There are a whole lot of good people that could step in right now.? And they are NOT in Washington D.C. or anywhere close by.? I’ll take any one of those jobs and do a better job than 95% of those?on your list…and there are about?1,000,000 of the 14,000,000 unemployed who could as well.? A ton of people over 50 are qualified and willing, I even know a few.? There is nothing magic or special about the problems.? The skillset required is some education, some experience and a lot of good old common sense.? Not too tough.? The ones you are looking for don’t have to create the solutions, just sort through the options and choose ones that will work!

You might have to find some people that are NOT rich and/or powerful.? You just might have to lower your standards and pick some average ‘work-a’day” people who are neither rich nor powerful…just smart, patriotic folk who are?willing to work for the ridiculously high compensation and benefits the government provides in this time of failed government and economy.

Post the jobs on MONSTER or some other?job site…but do it?now.?

I am waiting to see the ‘NO VACANCY’ sign.?? You are looking in the wrong places Mr. President.??Hope you are reading this.

I should live so long.

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The photo is from flickr’s felipe skroski

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Bernanke steps up…BIG!

Posted on 19. Mar, 2009 by scott.

Four thumbs?up for Fed Pres. Ben Bernanke.? Yesterday he made a huge move(s)?in terms of affecting the economy.? It is big.? It was good. It will impact in soooo many ways.

Here are the basics (you can read the Fed’s press release) The Federal Reserve will spend an?additional?$1.2 TRILLION very soon.? This will include an additional $750 Billion to buy up even more MBS’s (mortgage backed securities — think here of the ‘toxic’ assets on banks financials that are causing so much difficulty with balance sheets and lending).? It will also include another $100 Billion in purchases of Agency debt, bringing it’s total commitment here to $200 Billion (agency debt is the debt of government backed agencies like Fannie, Freddie and Sallie Mae).? Finally, and I think most importantly,?it will use $300 Billion to buy long term U.S. Treasury bonds (10 years or more) over the next six months … and that time period is key as I will explain.

All three of these moves will have a nearly immediate impact: on banks, mortgage lenders, consumers . . . and the economy.? The basic macro-econ thing to understand here is that buying huge amounts of ‘debt’? will effectively drive UP the prices of the debt? (focus here on mortgages) and this will force the interest rates DOWN because much stronger demand lowers the required?rewards (interest) for owning the debt (focus on mortgages again).? Because the Fed is buying LONG-TERM bonds the impact will be to drive DOWN long-term interest rates (mortgages).?

The Fed has?already put short-term rates at all-time lows (basically ZERO — although you won’t ever see rates like that … just the big banks).? Now long-term rates, i.e. mortgages will drop very quickly and that drop will last for up to the next six months (I told you the six month period was key).?? My prediction is that mortgage rates will drop to?around 4-4.25%, and it will happen very soon and last about six months (barring further Fed moves).

This is a generational opportunity and it won’t happen again in?our lifetime.? Interest rates at 4% for a 30 year mortgage is?a big GREEN light to buy a home, refinance an existing loan, or just go out and hug your local mortgage banker (since you can’t get near Big Ben)!?

The demand is going to be incredible for all three of the above (well maybe not hugging your banker) and so the window of opportuinty is going to be a few short months.? Don’t dilly-dally, all your mortgage broker now and start searching/waiting for great rates.

AND, if you buy right now (Fed) you also get this special TV and internet bonus?– you will get some other wonderfully direct impact on economic stimulus, towit: if a whole bunch of people refinance they will?get an additional $200, $300, $400 or?more into their own pockets every single month!? That is a whole dang lot better than the $13 a week that Obama/Pelosi/Reid’s stimulus plan provides for!!

This is the first time since the 1960’s that the Fed has done anything like this to impact long-term interest rates.? Make your move now if you want to take advantage.? If not then take a deep breath?because the economy is going to improve soon?(even faster if BHO and his team will refocus their efforts on unemployment).

Get your share of the stimulus NOW.? And send a short email of thanks to Bernanke at the Fed (go to their website contact page to do this).

I’ll be back later … gotta get to my banker’s office to get in line!

?

thanks for the photo to flickr’s stage88

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The nut cleanup begins!

Posted on 17. Mar, 2009 by scott.

Two thumbs up for Obama and Giethner.? They have shown the courage to take a stand against the exisiting culture of unyielding arrogance in American corporate life (and in particular the financial/banking sector).

I was so very disappointed and angry about?AIG?bonus’ announcement yesterday (see yesterday’s blog) ?and couldn’t believe the administration was letting it go.

To the President’s credit, he acted, and quickly.? To Secretary Geithner’s credit he was outraged and promised to followup aggressively on the President’s demands to halt the bonuses.? It seems that the three of us (and a whole bunch of other Americans) are equally incensed at this pompous disregard for our tax $$.

President Obama has insisted that everything possible be done to stop the bonuses and to recover them if any have already been paid.? I would have given him three thumbs up, except for the fact that he made no strong condemnation of AIG’s irresponsible and immoral management.? I may upgrade to three thumbs up in the future, depending on the Government’s actions down the road.? A four thumbs up is? possible (the highest award to government, corporate of personal action on behalf of capitalism) IF Geithner manages (of course on behalf of the President) to stop/recover these bonuses and take appropriate actions against any executives involved in the outrage.

Frankly, senior executives of ALL public corporations in the US have a moral and ethical obligation to do what is best for their shareholders and employees.? There is also a good argument that such selfish actions (i.e. by AIG’ leaders) ?are also a breach of common-law and fiduciary obligations that just might (and hopefully will) lead to prison terms for those that are found guilty of any such, or similar defalcations.? We should be going after executives of MANY public corporations, and especially those that are public?and have taken public funds as part of a bailout.

I hope this serves as notice to other corporate leaders.

Thanks, Mr. President, you are restoring my original faith and hope in your administration.? Go get them, Mr. Secretary, prove to the faithful that the Treasury Department really does have some moxy and ‘teeth’ with which to enforce and control the way our BILLIONS are being spent.

The cleanup is starting.? Hopefully the kitchen will be clean soon and we can move into the ‘living’ room.

thanks got flickr and the picture from bimurch

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AIG’s management — are they nuts?

Posted on 16. Mar, 2009 by scott.

I just don’t get the audacity, ego and insanity of a good bunch of America’s top industrial/financial leaders.? Key exhibit?? AIG.

First, AIG takes more than $160 BILLION from us taxpayers in lieu of a bankruptcy that would have wiped out any and all further compensation for their management . . . this is not, by the way all, at once but in at least FOUR seperate bailouts over the last 6-7 months.

Hold on here, there is probably something before the above first.? It is the fact that management of AIG found the capacity and intellect to turn one of the biggest (and profitable) corporations in the world into a joke and house of cards with their stupid and reckless investments in derivative financial transactions.? With a company this big (over 100,000 employees) there must be at least 1,000 executives that are grossly overpaid and thus there are 1,000 job openings for the unemployed.

Back on track now. Second, AIG manages to loose more than any company in history last quarter.? The total is an incredible $161,000,000,000!? IN ONE THREE MONTH PERIOD!

Third, with our taxpayer investment to bail out AIG and their incompetent management we (the taxpayers) now own about 80% of the stock of this failed company.

Fourth, the management of AIG has been responsible for ‘pushing’ the stock too hard.? Yeh, pushing it all the way from $74/share to a low of $0.34/share? on March 2, 2009.? Don’t get out your calculators, I’ll do the work for you.? That is a decline in stock value of 99%!!

Fifth, our leaders (from Bush and Paulson to Obama and Giethner) believe that AIG is TOO big to let fail.? Well, the market cap of that entire company was only $1 Billion just a week ago (it is about $2.2 Billion today).? To give you some perspective some other ’struggling’ ?companies today have a market cap (multiply shares outstanding by the price of a singe share) of: GM — $1.5B, CITI bank?– $13.6 B, Ford — $5.5 B, and DELL — $18 B.

Sixth, we (and I guess here I have to mean the Treasury Department by default) ought to be making the key decisions about this company going forward.? Certainly NOT the management who got the company into this mess.? (As a further aside here, if the mafia had any money invested in AIG?then maybe we won’t have to worry about current managment much longer — unless they can manage from the bottom of the Hudson while wearing stylish cement boots)

And lastly, there is an argument out there that we have to keep the idiots who are managing this company in place to complete the workout.? Holy Cow!? Hey, Batman, isn’t it true that hundreds of thousands of the best financial minds in the business (oxymoron) are UNEMPLOYED right now.? NOBODY NEEDS BONUSES IN THIS MARKET TO KEEP A JOB.? There are?at least?10,000 capable people who would do anything right now to get any job let alone one like helping turn around AIG.? Count me in that list.

AIG is a mess.? The picture above, represents the executive kitchen at AIG.? It is indicative of how management there operates.? Make a mess … go on to the next thing … make another mess … go on to the next.? They just don’t bother to clean up first.? My mother would send me to my room if I went out to play before cleaning up!

Clean this mess up President Obama, they are NOT to lare to fail.? Stop any bonuses from being paid Mr. Giethner, this company does not need the kind of management they have now.? Send the knuckleheads responsible for the bonuses to their rooms (and I hope they are 12′x8′ rooms with bars).

Stop the bonuses.? Don’t permit the American taxpayer to be a part of such incredible ‘hutzpah’ and insensitivity.? These guys managing AIG don’t deserve a second chance.? Can ‘em.? I have enough experience to step in right now and there are thousands of?unemployed out there who are a whole lot smarter than me and would jump twice as hard to get any of those?jobs.

AIG’s management — are they nuts?? Heck, yes!

thanks to flickrs photo from eschipul

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