CapitalistMarks

Compensation . . . Goldman starts to get it right!

Posted on 11. Dec, 2009 by scott.

0

I was cruizin’ down the road contemplating the Universe and the Utah Jazz’s win last night over Dwight Howards’ Orlando Magic. Then I heard something on NPR’s news broadcast that made me swerve to the side of the road and listen intently.

Could this possibly be true? Was Goldman Sucks Sachs really paying their all-important bonuses in a new, innovative and fiscally responsible way that might benefit shareholders?

Sounded like it in the brief overview NPR (typically) provides important economic/corporate news.

The gist?

Goldman executives were not going to receive cash bonuses at all this year. Instead bonuses would be paid in stock . . . stock that could not be sold for at least 5 years!

One round of the Hallelujah chorus please (Christmas is coming early).

Wow, I was blown away. A major U.S. financial institution doing something right for a change?

I tried to call my broker and buy the three shares of their stock that I can afford. Sadly his line was busy for, well, like ever! Probably on another line (buying some of that stock for himself?).

Good thing, too.

I turned the car around, headed for home and rushed to my computer to buy on-line (where the commission is actually less than the total purchase price).

First I checked out the breaking financial stories on the net and reigned in my enthusiasm.

Turns out this ‘BIG’ news only covers the 30 top execs at the firm. You know the ones that get bonuses big enough to buy small tropical islands or perhaps entire former Soviet republics.

The other 31,000 employees? Same old same old.

Of course my rapidly diminishing enthusiasm brought me to a standstill.

Then I remembered Wednesday’s news and started smiling again.

You see, the dastardly and fiendish Inland Revenue Service (the British answer to the IRS) has been instructed to come up with their own solution to ridiculous bonuses.

Its true. They now have a handle on the equity of all this. Effective immediately they have been instructed (by the Queen or whoever there is like our Congress I guess) to levy a one-time tax on any bonuses paid to bankers in excess of $40,000.

And the tax rate?

A whooping but well-deserved 50%!

Another chorus please.

As frequent readers know, I have pontificated on this before (see Capitalism Redux as one example).

Executive compensation in this country is out of control. Same for the outlandish pay that goes to movie stars, singers, athletes and such. Same for the equally outlandish compensation, perks and benefits that go to Senators and Congresspeople.

It has to end.

We have to stop paying any ‘big-wig’ in today’s dollars for tomorrow’s expectations (same for giving out Nobel prizes by the way). The big bucks must be earned the old -fashioned way. Hard work . . . over a period of time. That means not just one quarter or one year but–well, five sounds about right. (As a side I must add this important thought: how about paying all elected officials the minimum wage until they finish serving and then giving them a bonus based on performance? Think that would solve a lot of problems? shoot, yeah, we wouldn’t even need term limits.)

Back to the issue at hand (and excuse me for wishin’).

I think Goldman is starting to get it right but they didn’t go far enough.

A five year time frame for performance compensation is fair! I could live with that as an investor and a tax-paying citizen.

Any less and it is not earned or worth it.

Let me give you an example that irks me right now.

Utah’s Carlos Boozer.

A great basketball player when it suits him but apparently not when it suits the team. He has been mostly a no-show for the last couple of years . . . until now. Right, his contract is up soon and he will have to negotiate a new one. Holy mackeral, Batman! The dude is putting forth ‘all-star’ caliber play and big numbers. At the end of his contract? Where has that been when we needed it?

Apply that to everyone who makes more than the President of the most important nation on earth.

On top of that, no one, and I really mean no one, is worth anything close to a $million a year (at least in direct compensation). Not with more than 20,000,000 people under or un-employed.

Let the high-flyers earn their $$ over a long period so that shareholders (investors, owners, producers etc.) see some benefit. Lets do it the ‘old-fashioned’ way. Earn it!

Otherwise we are just letting the hyenas into the corral–alone–with the sheep–at night–with the lights out–and ketchup by the gate.

I guess I really don’t care if companies want to pay out the big $$ without risk to the payee. . . but if they do then the recipient should be taxed at a marginal rate of at least 50% and probably more like 70 or 80%!

Capital gains? The stuff from working hard and holding your stock bonuses for a long time while proving your worth? While putting your own capital at risk?

Different story entirely.

Let it ride to encourage and promote American ingenuity. Little or no taxes on that because everyone benefits and the economy grows.

Up the ante Goldman. Push the limits IRS. All big bonuses must be long term. All exorbitant compensation must be taxed fairly at VERY high rates!

If you don’t agree then you are either working for Morgan Stanley or are a modern day Rumple Stiltskin.

Your comments are appreciated and will be given the consideration they are due (unless you disagree in which case I will be tempted to turn you name over to Britain’s tax dudes!).

Have a great weekend!

thanks to flickr’s timmy for the photo

Continue Reading

Tarp windfall? Maybe.

Posted on 07. Dec, 2009 by scott.

0

So, I wake up this morning to the news that Obama’s roughly $350 billion Troubled Asset Relief Program (TARP) is in trouble. Kinda good trouble to have in the circumstances too. wow the news just keeps getting weirder.

Seems the banks and other lenders who seemed to need this huge bailout or relief don’t really need as much as anticipated and provided for. But, makes you wonder . . . when over the weekend we learned that a few more banks have failed and now the count is up to 130 (and will continue through the end of the year). Remember that this is more than FIVE times the number of banks that failed last year.

What is going on here.

The truth is that the few big financial institutions that are left are eating a LOT bigger piece of the money-profit pie. Instead of needing more money they are paying the TARP funds that they got from the government back (with a profit no less). To the tune of tens of billions of $$. Means that the total TARP funds available should be even higher than announced right?

Good for them (the big banks) I guess and too bad the regional and smaller banks are taking it on the chin.

Bottom line here: Obama and the democrats smell something pretty good for them. They think they have just found at least $200 billion that is already in the budget (yeah, that $1.5 trillion or so deficit we are faced with) and is NOT going to be used for its intended purpose.

What does any government (city, state, county or federal) do with money they have left over each year? Oh, come one . . . have you ever heard of them returning it? Gotta find a way to spend it . . . and fast! That’s the attitude in Washington.

Of course Obama just had the big confab last week on unempl0yment and tomorrow he is going to talk about how he wants to deal with this horrendous continuing problem (Tuesdays seem big to him lately — Afghanistan and now unemployment).

But the $200 billion?

Republicans want to use the funds to pay down debt. Makes sense.

Democrats want to use the funds to increase employment. Makes even better sense right now. We are, after all, not of out the recession woods yet and unemployment is still 10%.

Spend the $$ on improving employment.

We need it.

But do it right.

No more of these projected ’saving or creating jobs’ deals that take months and years.

Get some (or most of the $$) into the hands of the needy masses right away. Do it like they did during the depression. Hire the infrastructure workers directly by the government and bypass the private sector (could save many months and still let the big contractors bid the jobs to save $$).

If this works we get the infrastructure improvements we need (some of them anyway –fix roads with pot holes, bridges, dams, levies etc.) much faster and the government puts people to work NOW. Then later (I know that is a scary thought) government employees can be transitioned to the private sector as the economy picks up.

$200 billion? That is a lot of jobs Mr. President.

Hope you are reading this Obama, Pelosi and Reid.

Stay the course, spend the $$ and put people to work before Christmas. What a great present that would be to this great United States of America!

thanks to flickr’s ciaran mcGuiggan for the photo

Continue Reading

Employment surprise . . . an early Christmas gift to President Obama!

Posted on 05. Dec, 2009 by scott.

0

Friday was an early Christmas for the President. He must have thought it was his ATM going crazy! I’ll bet he was beginning to think just about everything would go wrong if it could. It has been that kind of Presidency for the first 11 months.

But then the labor department comes to the rescue.

About time . . . and only hours following the President’s highly anticipated conference on employment. Good timing huh?

Frankly the numbers blew me away. After I heard them I thought markets would be up 3oo points . . . they were that good and that surprising . . . but markets took the news in stride and closed up marginally. Go figure.

Take this republicans: the unemployment rate fell from 10.2% to a near single digit 10.0%, this coupled with a job loss of only 11,000 for the month of November. This was great news and was followed by further smaller positives such as an increase in average work week (33.0 hours in October to 33.2 in November) and average weekly earnings up $4.08 to $622.17 (to put that in perspective it is less than 1/5th of what an average Congressperson or Senator makes — uh huh!).

I would like to take this all in stride and accept the news as all good but then I would have to ignore the fact (listening Democrats?) that the average length of unemployment is now more than 28 weeks (the longest since 1948) and the fact that we have lost jobs in America for a horrendous 23 months in a row.

I hope this is a beginning for further good news. But, I an holding my breath as the mixed news on Christmas shopping keeps hitting the wires. I have done my part, bought a golf cart cover to go with my golf cart heater . . . made it possible for me to get 7 pars on the front nine yesterday in 25 degree weather! I had a hard time convincing my wife that I did it for the sake of America . . . but then I paid for it before I told her so her impressions were offered too late.

If you all will help by spending wisely maybe American businesses will start hiring again. If not we always have President Obama and the Democrats burgeoning plans to stimulate hiring (the good news had better now slow down that process???).

thanks to flickr’s cjc4454 for the photo

Continue Reading

Dubai, a potential economic reality show.

Posted on 30. Nov, 2009 by scott.

0

Yet another bubble has dominated the world-wide financial news for the last week. This time it is half a world away and no way can the Chinese and Russians point fingers at American financial structure.

Thank heavens for that. The news of pending default, or at least failure to meet interest payments, on around $80 billion of commercial debt centered in the desert coasts of Dubai first hit the wires last Wednesday. CNBC was all over it then and gave it the attention it deserved . . . moderate to be frank. Then, when U.S. markets were closed for the Thanksgiving holiday, Asian markets tanked and European markets followed suit as they worried while we partied. Drops of 3% were the norm and when American markets opened on Friday further carnage was expected but did not happen (1% or so in typical in recent market swings).

Yet the news still resounds with talking heads and financial analysts who want to force markets down.

The truth of this story in Dubai is all about greed, pride and stupidity. Sounds familiar but we really haven’t seen anything recently on the scale of witless investors in the desert. Consider. Dubai is soon to be home to the tallest building in the world (I caught a glimpse of it while watching my favorite reality show ‘Amazing Race’ recently . . . and it is awesome). Dubai is already the home of shopping mall overkill with a mall that houses an entire indoor ski resort where the idle rich can ride a lift to the top of a man-made hill and ski down man-made snow in freezing temperatures while it is 120 degrees outside (also on the show). Not far off shore are a number of man-made islands( ‘designer’ types) where lots are selling for multi-millions of $$ (the operative word here is selling not sold).

This pending default shows how stupid people can be. Why would anyone want to even visit a place where the temperatures can be in the 120’s in the shade? Let alone invest hundreds of billions of $$ to create a Disney Land environment that no masses will ever have any interest in let alone see?

Sure, oil was trading over $100 a barrel when much of this insanity took place, but that is no excuse.

The average Joe is gonna want to vacation somewhere they can breathe without having a heart attack . . . Hawaii sounds about right. The rich folk couldn’t care less. So who were the Dubai-ees (?) going to market all that insanity to? Iraqis wanting to escape a war zone? Saudis wanting to get away from a dry (as in alcohol) place to wile away the summer hours? Maybe but not even that makes sense in the world today.

So, in a month when the DOW and S&P were up over 5% the Dubai crisis proved to be a very localized and mostly uninteresting bubble. A study in bubble economics that won’t burst to the harm of anyone with an ounce of brains on this side of the pond.

Rather than worry about how the sheiks are going to make their payments (the total potential default is less than 10% if America’s total debt service next year) we should be focusing on black-weekend retail sales that were up nearly 1% and with on-line sales up over 10% for the same period.

Americans are starting to spend again and we should join each other in the fun of the next three weeks of Christmas shopping insanity. If you really want to be cool you might think about helping those that are less fortunate (like the unemployed for example) and spend some money to help their families have a good season.

Sit back and relax.

The only thing to worry about right now is how President Obama will handle the Afghanistan strategy during his talk to the nation tomorrow.

Stay tuned. This could be fun!

Thanks to flickr’s larsploughmann for the photo

Continue Reading

T-day views before the feast.

Posted on 25. Nov, 2009 by scott.

0

In this time of thanksgiving and being grateful . . . I look for signs to rejoice about the economy and the political/social scene. Here are a few to ponder on while you rest from gorging yourself with the traditional feast.

The national credit card delinquency rate fell for the first time in 10 years. Smakin’ and smokin’ this really is good news. Details: the % of U.S. credit card holders who are more than 90 days delinquent fell from 1.17% in the second quarter to 1.1% in the third quarter. Means that consumers are paying off debt and controlling new debt at a much better pace. If that is real then they must also be feeling better about both saving and spending. Three stars!

The somewhat powerful influencer ‘Conference Board’ has informed us that consumer confidence rose from a 48.7 revised figure in October to a preliminary 49.5 in November. Also good news even though it takes a number above 90 to reflect a more balanced economy. Two stars!

President Obama has finally made up his mind about Afghanistan and will announce his revised strategy at a nationally televised press conference next Tuesday. Whisper numbers are an increase of around 35,000 troops. More than anticipated but less than the General in charge wants. Two stars! (would have been more if he had decided earlier)

The Indian Prime Minister Manmohan Singh has met with President Obama this week and bowed when he met our President. Even lower than Barrack Obama (apparently as a private individual since American’s have a general disregard for hereditary leaders) bowed to the Emperor of Japan recently. Four stars! (just kidding but wouldn’t that be great!)

On that note I am leaving to buy the biggest bird in the city which I will proceed to masacre in a cruel and unusual manner which will make it barely edible but certainly something else to be grateful for. 5 stars and counting.

thanks for the photo to cygnus921

Continue Reading

Earnings and the Economy. A tough read.

Posted on 21. Nov, 2009 by scott.

0

With the third quarter’s earnings reports just about finished it seems the news has generally been pretty good. However, with the average better than expected, to me it seems the corporations doing best are those that are large and that have significant international exposure. The defensive plays as I call them (not the traditional ones you will hear about on CNBC though). Companies such as Proctor & Gamble, IBM, and Intel.

This is to be expected I suppose with the continuing weakness of the Dollar. You sell the same, or perhaps a few more, number of products overseas at the same price in local currencies and you are going to get more $$ in return. This is particularly true of the companies mentioned above because they have a big presence in countries like China, India and Brazil where last quarter’s (or 2009) GDP estimates are MUCH greater than those in the U.S. For example, China’s economy is expected to grow at a rate of over 8% in 2009 (negative 2.4% for the U.S.) and Brazil’s GDP grew nearly 8% in the third quarter, or more than twice the GDP growth rate for the same period in the U.S.

Governments and people alike are spending in these countries. And they are buying great consumer products made by American companies such as those I mention above. Cause for joy?

Tack on to this a DOW that is well above 10,000 (even with a 100+ point loss in the last two days of last week).

Sounds pretty good doesn’t it?

Maybe so, but I am concerned about a few things . . . like Obama’s public satisfaction ratings dropping below the 50% level in two major polls this week. I think that these polls are forward looking (6-12 months) just as much as the markets normally are (and here I feel I must remind you that they are still WAY below levels from two years ago). Hold on here buckaroo!

Tack on to that a few other parcels of data such as the unemployment rate at post-depression highs, the real unemployment rate about 17.5% (adding in those job-hunters who have just quit looking or have taken part-time/underpaying jobs), almost ONE IN FIVE AMERICANS un- or under-employed, more than 120 banks have failed this year, lenders are being more restrictive, consumer confidence is low, and credit card companies are raising rates (in the face of record low rates from the FED) and they are adding all kinds of crazy fees for dumb little things (you know what I mean if you have read a CC statement lately).

This has been a good year as far as market equities go (since March 9’s low anyway) but after any kind of Santa Claus rally there is bound to be a big dose of concern and dubiosity.

Ah huh, times are great for employers (who are still in business) . . . they can hire the best talent out there on the cheap, and they are cutting costs in other ways too.

However, you and I know that this is not a great time for consumers or workers and it sure as heck isn’t a good time for government (spending our tax dollars for the next five years this year).

Truly, this is all a tough read economically right now.

If you read or hear about highly positive thoughts from economists in the next couple of weeks you had better check who they are working for (banks, lenders, GM, or others with TARP $$).

If you hear or read about highly positive vibes coming from any politician in the next couple of months you had better check who they are working for (and it ain’t you my friend!).

Two problems reign supreme now: unemployment and public (the government’s) debt.

If President Obama and Congress don’t get a handle on BOTH of these pretty quick then you had better lock the barn doors and hide the chickens.

This isn’t a gloomy forecast . . . it is more of a warning of what could be ahead IF . . . . . .

And, IF you want change you had better be calling and writing your elected leaders to get to work on the two problems noted above.

It doesn’t take a genius to recognize this (I am sure you do) but our elected leaders are rarely genuises (as history has amply proven).

That means you know what to do even if they don’t!!

thanks to flickr’s danoxster for the photo

Continue Reading

Weak Dollar? Jeez Louise!

Posted on 16. Nov, 2009 by scott.

0

A recent Time article was titled “The Dollar in Danger” and of course I read it. Magazines use all kind of gimicks to get you to read them. Frothy headlines, tantalizing covers, stories that upset . . . you get the idea. With all the magazines I read they rarely tempt anymore . . . I normally ‘quick’ read to see if there is anything real in the article and if not skip on to the next.

This one I read. I am not going to rate it but I will say that the headline caught me and the story was one I would not attribute to an economist.

Let me set the record straight.

The dollar is weak and has been for years. In fact though, it is not even as low (particularly against the Euro) as it was a year ago. Heck, all you need to do is travel outside of the Americas to know that this is true. I paid the equivalent of $8 for a Whopper Combo in Turkey not too long ago. Before that there was the $5 one scoop (tiny at that) ice cream in Rome (they call it Gillato so they can charge more — who says they Europeans haven’t learned American marketing techniques?).

But that was over a year ago. Long before the FED and the Goverment started printing money and whaling on our debt structure.

Of course you would expect the dollar to be weak and continue so when the government is creating money out of whole cloth ( ad nihilo I think the philosophers call it . . . out of nothing).

The sad fact is that this doesn’t seem even close to ending. Money will be pouring out of the proverbial presses for months, if not years to come. The government thinks it has to do it to spur the economyl

If you have forgotten, or never paid attention to your Econ classes let me tell you how this works.

Right not there is one main way.

First, the FED creates money by buying bonds from the Treasury (in March they announced plans to buy at least $300 billion over the next year or so). The government needs money to spend on stimulus packages (two at least and more likely to come) so they sell a few billion $$ of short term or long term bonds to the FED who pays for them with $$ they don’t have. It is really all an electronic transaction but it works. Say, $30 billion last month in 6 month notes purchased by the FED.

What does the government do? They get that $30 billion electronic transfer and then spend it by sending it to the states or individuals in another transfer. At the end of this loop the electronic transfer goes into someone’s (like you or me) account at a bank and we draw on it (usually with electronic spending with credit cards).

Bingo $30 billion into the economy. But wait, there is more, if you spend it now you also get, this one time only — or actually everytime it happens . . . yes you get PUBLIC DEBT! The government now owes $30 billion more to someone (often foreign government buy the debt . . . like China, which is a whole nother story).

I think you probably get the idea now.

The problem is that now our PUBLIC DEBT is becoming an increasing portion of total GDP. Public debt was only 37% of GDP only two years ago and this year it is going to be north of 55%. Sure interest rates are low and so the government doesn’t have to spend that much to pay the interest . . . but what happens when the economy really turns and the FED has to raise rates? Crippling debt coupled with crippling debt service (interest) bring . . . a bust. But there is a way out.

President Obama is starting to recognize this and you should too.

The debt has to be paid and there are limited ways for the government to raise $$ . . . think taxes (by any name . . . excise fees on tires from China or increases in individual tax rates). Tax receipts were down nearly 17% for the year ended Sep. 30 due to the economy (people stop spending) and corporate receipts were down nearly 55% (companies stop making profits . . . and how!).

Weak Dollar? Jeez Louise! Of course it is weak and it is going to get weaker.

What you need to know is that this can’t let this happen without planning ahead.

Saving money under the mattress is throwing it away as $$ weaken and are worth less (Germany in the 1920’s, Argentina in the 1980’s and Zimbabwe as you read.

So, like I pointed out last week, one great answer is to spend to stimulate the economy (buy things or invest). That is what is beginning to happen but not nearly enough!

Markets are up, retail figures are not as disappointing as expected and consumer confidence is artificially low right now. A great time to invest or spend!

Spending turns that $30 billion mentioned above into $60 or $90 billion in the marketplace by something called the ‘multiplier’ (something for another day). This helps the economy which puts tax $$ in the governments coffers and lets them pay of debt. It also helps businesses put $$ to the bottom line and that means jobs.

Bottom line. Weak dollar, shmaller . . . the answer is to spend (wisely) or perish (not really quite that bad but you get the idea).

Start Christmas spending now. Beat the rush and support our spendthrifty government!

Oh I can’t wait for 2010!

Thanks to flickr’s chego101 for the photo

Continue Reading

Autumn economics: the leaves of confidence fall. HOPE!

Posted on 13. Nov, 2009 by scott.

0

In my yard all the leaves have fallen. There are red, yellow and even a few green leaves decorating my lawn. I will take the time to clean them up, but first I am determined to go shopping (caveat: my wife usually tells me when I am determined to go shopping).

Apparently I am one of only a few that feels this way.

The preliminary consumer confidence number is out — 66 — lower than 71 expected by the average economist (a frightening prospect since no economist I have ever met is average.) This 66 is lower than the 70.6 for October. A decline in consumer confidence is certainly not welcome at this point.

On top of that our trade deficit is widening. August showed a $30+ billion deficit. September (the number released today) revealed a deficit of $36+ billion.

Taken together the sum is a worsening economy. At least on the surface.

Consumers are less willing to shop (or at least buy). Moreover when they do buy they are buying the cheaper stuff that is imported from countries with steeply lower labor costs . . . mainly China.

But not to fear!

Lately I have ridden a black horse to every blog written (a magnificent steed fed by the faux hay of unemployment).

Today, however, I arrived on a white horse that is thin and appears to be starving . . . but white none-the-less.

Why?

Well, the number are not good true. I have had to look far and wide to generate even a modicum of positive feelings. Yet, I have found something to encourage me.

My wife, the perfect model for America’s stay at home mom, has changed from the window shopping mode of the past year to a genuine ‘let’s go shopping today and spend some money’ mode that makes me shiver and shake in my ‘boots.’

Years ago when we were fist married and money was scarce, our dates were mostly ’shopping’ dates. Lots and lots of shopping but never any buying. We would drive, or walk. around and pretend to be shopping for things we desired. There were couches, TV’s, kitchen appliances and much more that were chosen but never bought. It was fun since we actually believed we were preparing for a more prosperous future.

As you might imagine, that fake shopping mode has been the trend in our household for the last year or so.

Now it has changed. Judy is ready to spend . . . convinced we can afford to be more generous this year. It has worked too. There are Christmas gifts filling a corner of our bedroom and today she wants to find some more.

Why the change?

Great bargains are out there and she wants a bunch of them.

Retailers are lowering prices(and here I mean really lowering) to attract customers and there are some fantastic deals out there! With Black Friday (when retailers finally get their ‘net’ into the black) weeks away you would be shocked to know how many great prices are lining the aisles. Customarily the best deals are after ‘Black Friday’ when stores are forced to get rid of everything left so that their inventories are low and they can start ordering next years favorite products.

Not this year.

The standard seems to be 50% off on most end-caps (the valuable display space at the end of each aisle). We have seen 70% some places. Even I am getting excited. Maybe there is a good golf-cart cover out there at a really good price (hint, hint).

My wife is like a kid (or me) in a candy shop: too many good deals to pass up. “Maybe we should get a little extra for each of the kids and grandkids” she says, “you know, because we were so stingy last year?” And then the ‘holy grail’ for retailers: “We might even want to buy this for later, even though we don’t need it now.” Holy Mackeral!

Fact is I agree. We WILL spend more this year than last (lots more if Jude gets her way).

So the real good news?

I think as reality sinks in (the 2nd great depression failed to appear and is no longer a concern) others will start thinking the same. The pain of last year is a still vivid memory but the future looks brighter. Stock markets are way up. Government spending is starting to have the intended affect and President Obama is calling for a “jobs’ conference next month. Unemployment might finally get the attention it deserves.

All of a sudden there is HOPE!

Bottom line?

Get out and spend, don’t go crazy but spend all the same. Buy two Christmas presents instead of one for those you love and care about. Buy something for yourself while you are at it. Take advantage of the best prices on toys, electronics, stylish clothes and golf stuff (any of my family reading this can take notice . . . please).

We, the people, can take the final step to pull ourselves out of this recession. Spend this Holiday season. That alone will create jobs, increase confidence, and increase profits at our domestic companies so that they will start hiring again.

Can’t wait for 2010 — only two years away from the end of the world: spend some $$ and go see the blockbuster(?) movie ‘2012′ this weekend . . . and get candy as well as popcorn.

Remember spend what you can and do it wisely but for heavens sake lets do our part and start spending our way out of the recession!

This message is brought to you by all the mothers and grandmothers who can never buy enough ‘cool’ stuff for their kids and grandkids

thanks for the photo to flickrs allybeag

Continue Reading

The real unemployment numbers!

Posted on 09. Nov, 2009 by scott.

0

Friday unemployment numbers for October were released. Politicians, media ‘experts’ and economists thought they were acceptable considering existing conditions. For me they represent circumstances that are far worse than public figures are willing to admit.

Here is the reality:

Factories closed. Warehouses shut down. Homes in foreclosure. And more.

Unemployment at 10.2%. That means nearly 16 million Americans are unemployed (the highest in history). Add to that those who have quit looking or have taken part-time or low paying jobs and the percentage soars to 17.5 and climbing. A total of 190,000 jobs were lost in the past month. Imagine the entire population of a medium sized city losing their jobs in one month. Imagine the entire population of sixteen of our smaller states without work.

Consider that we have now had 22 straight weeks of employment decline in our wonderful United States of America. The longest streak of loses in 70 years! Ah, but who seems to be counting?

Consider that 7.3 million of our fellow citizens (and probably several that you know quite well) have lost their jobs since December of 2007 when this recession started. I can think of ten myself without straining. Ah, but who seems to notice?

Consider that the average workweek is only about 33 hours and that average hourly earnings are only $18.72 (including of course the many bankers, investment managers and politicians who have become rich while the real work force strangled on their greed and self-interest). Ah, but who seems to care?

If you do not have a good friend who has lost their job in the last two years then you are an exception — an exception that likely means your own head is dangerously near the chopping block.

This is frightening stuff.

And yet congress works the weekend to pass a deficit numbing health care bill. Our President makes the extraordinary Saturday visit to congress to push his agenda. The like of Microsoft, Eli Lily and Boeing announce layoffs of thousands more people.

When will it end?

The stock markets hit new 2009 highs earlier today, oil is trading at around $80 per barrel, interest rates are so low that saving any money is worse than going to Las Vegas for the weekend with our your available cash.

When will it end?

The President talks with congress, congress talks with each other and nearly one out of five Americans are under- or unemployed. Two people on my street have lost their jobs already this year. What about looking around your own street?

The real unemployment numbers? Yeah, they are horrible and include people we all know.

Families are in danger of losing their homes. Mortgage failures have not peaked — not by a long shot with this kind of continuing unemployment.

I get tired of writing about it.

But . . .

Our leaders are not leading. They debate with no purpose, they argue for the sake of argument, they blabber on TV just to get a few more votes, they get sick and benefit from the best medical-care available at little or no cost, they vacation and travel on taxpayer $$, they sleep soundly at night, they . . . just . . . don’t . . . seem . . . to care! They talk but they don’t act.

Call, write, email or fax. Join the growing number of Americans that are angry about inaction or misguided action. Vote out ALL incumbents and press new electees for term limits.

You think this is a joke?

Wait until next year when the economy falls off another cliff because there have been no real fixes for the biggest problem of all — unemployment.

Jobs, jobs, jobs . . . when will they get it!

thanks to flickr’s shoes on wires for the photo

Continue Reading

The Senate greases their re-election with unemployment!

Posted on 05. Nov, 2009 by scott.

0

Of course you have heard that this week the Senate (asleep at the wheel again) passed a bill providing for extension of unemployment compensation. No one should be surprised. Billions of $$ down the drain . . . that is how I feel about it. And, of course, yet another reason for term limits.

The details aren’t all that important to most of us — including the 15,000,000 unemployed — because while the bill shows some elements of ’sensitivity’ to the problem it isn’t for charity’s sake but rather to keep the Senators who are running for office next year from joining those 15 M in the unemployment lines.

The bill provides for up to 99 weeks of benefits . . . much longer than ever provided before (the previous record was 65 weeks in the 1970’s). That is an extension of another 20 weeks and the fourth extension since June of 2008. You can do the math yourself knowing that the average benefits are $300 per week. Billions of $$ that should, and could, be better spent elsewhere. And I really am for helping the unemployed . . . but remember that if you teach a man to fish he can live forever!

While you can do the math, you may not be prepared (mentally or emotionally) to figure out what this really means.

Let me tell you.

Numero Uno. Ninety-nine weeks of unemployment. That is nearly two years and isn’t higher than that only because of the political implications of providing TRIPLE-DIGIT UNEMPLOYMENT BENEFITS! So the main reason for this is political . . . not economic. Okay . . . we got that straight.

Secondly. It is businesses who pay for much of this benefit by nature of their contributions to the unemployment funds of each state and the federal government. So, on a macro-micro level this benefit represents billions of $$ that businesses simply can’t spend on JOBS! Ah, know you are seeing further political implications here . . . more democratic income shifting (a favorite ploy of the socialist left).

Thirdly and finally. This extension of 99 weeks means that most (or at least a whole lot) of the unemployed (and their friends and family) will appreciate the impacts of these benefits extended right up to the critical elections of 2010. Oh, yeah! Get the picture?? What a dang obvious ploy by the majority democrats (and all of congress) to buy votes so that they can stay in office (if it isn’t a direct political maneuver, it sure stinks like one).

Or course anyone who has been reading CapitalistMarks for more than a week knows that our #1 priority right now is unemployment. But paying people to stay on unemployment even longer just isn’t right. Fact is I know of one talented young guy who feels perfectly comfortable taking unemployment benefits (just about anyone can live on $1,200 a month tax free for 99 weeks) until he simply has to look for work. That isn’t good for him and it sure isn’t good for you and me.

Congress is enabling again. Just what we don’t need.

What we really need is all of those billions of $$ being spent to CREATE jobs (and a few hundred billion $$ more). Stop paying people NOT to work and create jobs for them. Or provide education so they can get better jobs. Put them to work and not in front of their TV’s.

Another failure of moral balance by our Congress (democrats and republicans alike really). Another great reason for term limits. Another great reason to NEVER, EVER, EVER vote for an incumbent (and that goes quadruple for any that have had two terms or more!!!).

Light up the phones once again. Swamp the web. Write those snail-mail letters. Get congress back on the right track. Get America back to work.

Thank you and good-night for Pete’s sake!!

thanks to flickrs kaibara87 for the phots