30 years from today, I'd like to come back and re-read this particular post.
UMB Scout Funds recently had an excellent market commentary on their perspective on the recent financial blow up and the longer term implications. Here are snippets. It's truly brilliant and I agree with their analysis.
From a longer-term view, we feel that the economy is beginning a debt super-cycle contraction. We stand firmly in the camp that a secular shift is occurring within the U.S. economy which will have significant effects on the sustainability of final demand and a shift away from debt-created consumption towards investment.
...
we expect the growth in consumption to be negatively affected both by baby boomers attempting to increase savings and consumers struggling with debt repayment. This is likely to lead to less growth stability than we have seen for the last 20-25 years.
...
Longer term, we believe a seismic shift has begun where the soil which spawns capital and wealth creation will be more fertile in many overseas economies than in our own. That being said, we maintain our view that, over the long run, the dollar will continue to weaken against many foreign currencies. The dollar’s reserve currency status may not be under attack within the immediate future, but it may be forthcoming, adding pressure for investors to favor foreign holdings.
Source: Click here.
Sunday, March 22, 2009
Saturday, March 21, 2009
Tuesday, March 17, 2009
Senator to AIG: "Resign or Go Commit Suicide"
"The first thing that would make me feel a little bit better towards them if they’d follow the Japanese model and come before the American people and take that deep bow and say I’m sorry, and then either do one of two things — resign, or go commit suicide." - Senator Grassley, R, Iowa
The Bastards of AIG
You think I'm done with AIG, eh? No way. Here's more cool stuff that you and I are working our rears off for (ok, I'm not working right now, but I am accumulating massive amounts of debt to work later).
New York Attorney General Andrew Cuomo confirmed in a letter to Congress that AIG paid 73 employees bonuses of more than $1 million each.
Cuomo also wrote that 11 of the employees no longer work for the company. The largest bonus paid was $6.4 million; seven other people also received more than $4 million each.
$1 million for *ucking up. $6.4 million for *ucking up more?
Welcome to the new America. I mean, the old America. The America that's always been there... on Knockturn Alley. In times good and bad for each other, enriching neighbors and robbing tax payers of their hard work.
So my numbers weren't too bad - they did make off like robbers. Jerks. I really hope Senator Schumer's idea to tax the bonus recipients for the entire amount works. But you know what, I bet you nothing happens. I bet there's some stupid privacy law in which AIG can't release their names. This sort of bull$hi+ where corporations screw the government (and hence tax payers) has been at the crux of deals for decades. I really hope there are wrestling matches in heaven/hell/whatever-it-really-is, and I get to wrestle these people, WWE style.
New York Attorney General Andrew Cuomo confirmed in a letter to Congress that AIG paid 73 employees bonuses of more than $1 million each.
Cuomo also wrote that 11 of the employees no longer work for the company. The largest bonus paid was $6.4 million; seven other people also received more than $4 million each.
$1 million for *ucking up. $6.4 million for *ucking up more?
Welcome to the new America. I mean, the old America. The America that's always been there... on Knockturn Alley. In times good and bad for each other, enriching neighbors and robbing tax payers of their hard work.
So my numbers weren't too bad - they did make off like robbers. Jerks. I really hope Senator Schumer's idea to tax the bonus recipients for the entire amount works. But you know what, I bet you nothing happens. I bet there's some stupid privacy law in which AIG can't release their names. This sort of bull$hi+ where corporations screw the government (and hence tax payers) has been at the crux of deals for decades. I really hope there are wrestling matches in heaven/hell/whatever-it-really-is, and I get to wrestle these people, WWE style.
Bonus nightmare
The Jayhawk is happy to see that the AIG bonuses are a big deal - people are finally paying attention!
Along the same lines - enjoy this cartoon from the Washington Post - sent by the wonderful yellowgondola.blogspot.com
By the way, Wall Street's name should be changed to Knockturn Alley (if this doesn't make sense to you, read Harry Potter).
Along the same lines - enjoy this cartoon from the Washington Post - sent by the wonderful yellowgondola.blogspot.com
By the way, Wall Street's name should be changed to Knockturn Alley (if this doesn't make sense to you, read Harry Potter).
Sunday, March 15, 2009
AIG = American Imbecilic Greed
This just in from the WSJ:
American International Group Inc. will pay $450 million in bonuses to employees in its financial products unit. That division was at the heart of AIG's collapse last fall, which compelled the U.S. government to provide $173.3 billion in aid to keep it running.
Those payments are in addition to $121.5 million in incentive bonuses for 2008 that AIG will start making this month to about 6,400 of its roughly 116,000 employees. AIG, which was rescued in September as it faced potential bankruptcy, is also making over $600 million in retention payments to over 4,000 employees.
Together, the three programs could result in roughly $1.2 billion in retention and bonus payments to AIG employees.
Let's do some math:
Incentive bonuses: $121.5 million + $450 million = $571.5 million
Employees receiving bonuses: 6,400
Bonus per employee: $89,296.88 - each person! a bonus! bonus!!
Since English is my fifth language, I sometimes wonder if I don't know what words really mean, so I looked up "bonus" at Merriam-Webster. It says:
bo·nus
Pronunciation:
\ˈbō-nəs\
Function:
noun
Etymology:
Latin, literally, good — more at bounty
Date:
1773
something in addition to what is expected or strictly due: as a: money or an equivalent given in addition to an employee's usual compensation b: a premium (as of stock) given by a corporation to a purchaser of its securities, to a promoter, or to an employee
Okay, so my English is not that bad. Let's move on and see more American Imbecilic Greed financed by you and me:
Retention bonus: $600 million
Employees receiving: 4,000
Retention bonus/employee = $150,000
So, you run a company to the ground, take tax payers down with you and you make out rich! I love America - it really is the greatest nation on earth - I bet AIG bonus recipients love America more though. The only adjectives that come to mind: corrupt, vile, evil, disgusting, unethical.
Is there really any argument in favor of these figures? Anyone?
American International Group Inc. will pay $450 million in bonuses to employees in its financial products unit. That division was at the heart of AIG's collapse last fall, which compelled the U.S. government to provide $173.3 billion in aid to keep it running.
Those payments are in addition to $121.5 million in incentive bonuses for 2008 that AIG will start making this month to about 6,400 of its roughly 116,000 employees. AIG, which was rescued in September as it faced potential bankruptcy, is also making over $600 million in retention payments to over 4,000 employees.
Together, the three programs could result in roughly $1.2 billion in retention and bonus payments to AIG employees.
Let's do some math:
Incentive bonuses: $121.5 million + $450 million = $571.5 million
Employees receiving bonuses: 6,400
Bonus per employee: $89,296.88 - each person! a bonus! bonus!!
Since English is my fifth language, I sometimes wonder if I don't know what words really mean, so I looked up "bonus" at Merriam-Webster. It says:
bo·nus
Pronunciation:
\ˈbō-nəs\
Function:
noun
Etymology:
Latin, literally, good — more at bounty
Date:
1773
something in addition to what is expected or strictly due: as a: money or an equivalent given in addition to an employee's usual compensation b: a premium (as of stock) given by a corporation to a purchaser of its securities, to a promoter, or to an employee
Okay, so my English is not that bad. Let's move on and see more American Imbecilic Greed financed by you and me:
Retention bonus: $600 million
Employees receiving: 4,000
Retention bonus/employee = $150,000
So, you run a company to the ground, take tax payers down with you and you make out rich! I love America - it really is the greatest nation on earth - I bet AIG bonus recipients love America more though. The only adjectives that come to mind: corrupt, vile, evil, disgusting, unethical.
Is there really any argument in favor of these figures? Anyone?
R.I.P. suburbia?
Are we seeing the end of suburbia?
A writer at Fast Company seems to think so. Check it out here.
My reaction:
1. While urban sprawl may not continue at the pace at which it once did, at least in the short-run i.e. the next 10-20 years, the sprawl that exists will continue to be developed.
2. Yes housing prices at many places have come crashing down and many vacant homes may be destroyed, but this will not end suburbia.
3. As long as the population of the country continues to rise, people will need a home.
4. Given our love for 'space' and 'personal bubbles,' suburbs will not die.
5. Good housing in the city is so incredibly expensive that it makes a lot of sense to buy a home outside of the city for a fraction of the cost. The data today show this. At some point, the prices of houses outside the city will come down to a point where people will see value in them and purchase them.
6. Inner city schools are, in general, terrible.
7. Telecommuting and working from home are catching on, and will continue to do so in light of corporate expenses and in an effort to slash them.
8. Companies are more likely to move to the suburbs, again as evidenced over the past decade or two, to take advantage of cheaper real estate and a calmer, friendlier environment.
9. Such articles almost always come at a trough of a cycle - when doom and gloom is the only supposed sensible prediction. I'll take the contrarian approach and say housing prices are about to turn soon, i.e. in the next 6-12 months.
10. The suburbia as we know will change, but everything as we know it will change over the years. It's always done so. Suburbia will become more efficient - homes may be smaller, homes may be more technologically advanced and energy savvy, there will be more hybrid/alternative fuel cars, suburbia may become more compact... but will it die? Yours truly says no way dude.
Anyway, the point is that it's an interesting article on a very applicable topic. I hope to revisit this entry in 2019 and then again in 2079 to see how it turns out.
Do you have thoughts? If so, share away! You, dear reader, have been very quiet - except leftarrow who gets a shout out for commenting!
A writer at Fast Company seems to think so. Check it out here.
My reaction:
1. While urban sprawl may not continue at the pace at which it once did, at least in the short-run i.e. the next 10-20 years, the sprawl that exists will continue to be developed.
2. Yes housing prices at many places have come crashing down and many vacant homes may be destroyed, but this will not end suburbia.
3. As long as the population of the country continues to rise, people will need a home.
4. Given our love for 'space' and 'personal bubbles,' suburbs will not die.
5. Good housing in the city is so incredibly expensive that it makes a lot of sense to buy a home outside of the city for a fraction of the cost. The data today show this. At some point, the prices of houses outside the city will come down to a point where people will see value in them and purchase them.
6. Inner city schools are, in general, terrible.
7. Telecommuting and working from home are catching on, and will continue to do so in light of corporate expenses and in an effort to slash them.
8. Companies are more likely to move to the suburbs, again as evidenced over the past decade or two, to take advantage of cheaper real estate and a calmer, friendlier environment.
9. Such articles almost always come at a trough of a cycle - when doom and gloom is the only supposed sensible prediction. I'll take the contrarian approach and say housing prices are about to turn soon, i.e. in the next 6-12 months.
10. The suburbia as we know will change, but everything as we know it will change over the years. It's always done so. Suburbia will become more efficient - homes may be smaller, homes may be more technologically advanced and energy savvy, there will be more hybrid/alternative fuel cars, suburbia may become more compact... but will it die? Yours truly says no way dude.
Anyway, the point is that it's an interesting article on a very applicable topic. I hope to revisit this entry in 2019 and then again in 2079 to see how it turns out.
Do you have thoughts? If so, share away! You, dear reader, have been very quiet - except leftarrow who gets a shout out for commenting!
Saturday, March 14, 2009
We've had Enough.
Lee Iacocca, who rescued Chrysler Corporation, 82 years old now has written a new book: "Where Have All The Leaders Gone?" Here are some excerpts:
Lee Iacocca Says:
"Am I the only guy in this country who's fed up with what's happening? Where the hell is our outrage? We should be screaming bloody murder! We've got a gang of clueless bozos steering our ship of state right over a cliff, we've got corporate gangsters stealing us blind, and we can't even clean up after a hurricane much less build a hybrid car. But instead of getting mad, everyone sits around and nods their heads when the politicians say, 'Stay the course.' Stay the course? You've got to be kidding. This is America , not the damned, 'Titanic'. I'll give you a sound bite: 'Throw all the bums out!'
"You might think I'm getting senile, that I've gone off my rocker, and maybe I have. But someone has to speak up. I hardly recognize this country anymore.
The most famous business leaders are not the innovators but the guys in handcuffs. While we're fiddling in Iraq , the Middle East is burning and nobody seems to know what to do. And the press is waving 'pom-poms' instead of asking hard questions. That's not the promise of the ' America ' my parents and yours traveled across the ocean for. I've had enough. How about you?
"I'll go a step further. You can't call yourself a patriot if you're not outraged. This is a fight I'm ready and willing to have. The Biggest 'C' is Crisis! (Iacocca elaborates on nine C's of leadership, with crisis being the first.)
"Leaders are made, not born. Leadership is forged in times of crisis. It's easy to sit there with your feet up on the desk and talk theory. Or send someone else's kids off to war when you've never seen a battlefield yourself. It's another thing to lead when your world comes tumbling down.
"On September 11, 2001, we needed a strong leader more than any other time in our history. We needed a steady hand to guide us out of the ashes. We're running the biggest deficit in the history of the country. We're losing the manufacturing edge to Asia , while our once-great companies are getting slaughtered by health care costs. Gas prices are skyrocketing, and nobody in power has a coherent energy policy. Our schools are in trouble. Our borders are like sieves. The middle class is being squeezed every which way.
"These are times that cry out for leadership.
"But when you look around, you've got to ask: 'Where have all the leaders gone?' Where are the curious, creative communicators? Where are the people of character, courage, conviction, omnipotence, and common sense? I may be a sucker for alliteration, but I think you get the point. Name me a leader who has a better idea for homeland security than making us take off our shoes in airports and throw away our shampoo?
"We've spent billions of dollars building a huge new bureaucracy, and all we know how to do is react to things that have already happened. Everyone's hunkering down, fingers crossed, hoping it doesn't happen again. Now, that's just crazy. Storms happen. Deal with it. Make a plan. Figure out what you're going to do the next time.
Name me an industry leader who is thinking creatively about how we can restore our competitive edge in manufacturing. Who would have believed that there could ever be a time when 'The Big Three' referred to Japanese car companies? How did this happen, and more important, what are we going to do about it?
"Name me a government leader who can articulate a plan for paying down the debit, or solving the energy crisis, or managing the health care problem. The silence is deafening. But these are the crises that are eating away at our country and milking the middle class dry.
"I have news for the gang in Congress. We didn't elect you to sit on your asses and do nothing and remain silent while our democracy is being hijacked and our greatness is being replaced with mediocrity.
"What is everybody so afraid of? That some bonehead on Fox News will call them a name? Give me a break. Why don't you guys show some spine for a change?
"Had Enough? Hey, I'm not trying to be the voice of gloom and doom here. I'm trying to light a fire. I'm speaking out because I have hope - I believe in America . In my lifetime, I've had the privilege of living through some of America 's greatest moments. I've also experienced some of our worst crises: The 'Great Depression,' 'World War II,' the 'Korean War,' the 'Kennedy Assassination,' the 'Vietnam War,' the 1970's oil crisis, and the struggles of recent years culminating with 9/11.
"If I've learned one thing, it's this: 'You don't get anywhere by standing on the sidelines waiting for somebody else to take action. Whether it's building a better car or building a better future for our children, we all have a role to play. That's the challenge I'm raising in this book. It's a "Call to Action" for people who, like me, believe in America '. It's not too late, but it's getting pretty close. So let's shake off the crap and go to work. Let's tell 'em all we've had 'enough.'"
Taken from a Motley Fool Blog found here.
So, are YOU fed up and ready with an action plan? Thoughts?
Lee Iacocca Says:
"Am I the only guy in this country who's fed up with what's happening? Where the hell is our outrage? We should be screaming bloody murder! We've got a gang of clueless bozos steering our ship of state right over a cliff, we've got corporate gangsters stealing us blind, and we can't even clean up after a hurricane much less build a hybrid car. But instead of getting mad, everyone sits around and nods their heads when the politicians say, 'Stay the course.' Stay the course? You've got to be kidding. This is America , not the damned, 'Titanic'. I'll give you a sound bite: 'Throw all the bums out!'
"You might think I'm getting senile, that I've gone off my rocker, and maybe I have. But someone has to speak up. I hardly recognize this country anymore.
The most famous business leaders are not the innovators but the guys in handcuffs. While we're fiddling in Iraq , the Middle East is burning and nobody seems to know what to do. And the press is waving 'pom-poms' instead of asking hard questions. That's not the promise of the ' America ' my parents and yours traveled across the ocean for. I've had enough. How about you?
"I'll go a step further. You can't call yourself a patriot if you're not outraged. This is a fight I'm ready and willing to have. The Biggest 'C' is Crisis! (Iacocca elaborates on nine C's of leadership, with crisis being the first.)
"Leaders are made, not born. Leadership is forged in times of crisis. It's easy to sit there with your feet up on the desk and talk theory. Or send someone else's kids off to war when you've never seen a battlefield yourself. It's another thing to lead when your world comes tumbling down.
"On September 11, 2001, we needed a strong leader more than any other time in our history. We needed a steady hand to guide us out of the ashes. We're running the biggest deficit in the history of the country. We're losing the manufacturing edge to Asia , while our once-great companies are getting slaughtered by health care costs. Gas prices are skyrocketing, and nobody in power has a coherent energy policy. Our schools are in trouble. Our borders are like sieves. The middle class is being squeezed every which way.
"These are times that cry out for leadership.
"But when you look around, you've got to ask: 'Where have all the leaders gone?' Where are the curious, creative communicators? Where are the people of character, courage, conviction, omnipotence, and common sense? I may be a sucker for alliteration, but I think you get the point. Name me a leader who has a better idea for homeland security than making us take off our shoes in airports and throw away our shampoo?
"We've spent billions of dollars building a huge new bureaucracy, and all we know how to do is react to things that have already happened. Everyone's hunkering down, fingers crossed, hoping it doesn't happen again. Now, that's just crazy. Storms happen. Deal with it. Make a plan. Figure out what you're going to do the next time.
Name me an industry leader who is thinking creatively about how we can restore our competitive edge in manufacturing. Who would have believed that there could ever be a time when 'The Big Three' referred to Japanese car companies? How did this happen, and more important, what are we going to do about it?
"Name me a government leader who can articulate a plan for paying down the debit, or solving the energy crisis, or managing the health care problem. The silence is deafening. But these are the crises that are eating away at our country and milking the middle class dry.
"I have news for the gang in Congress. We didn't elect you to sit on your asses and do nothing and remain silent while our democracy is being hijacked and our greatness is being replaced with mediocrity.
"What is everybody so afraid of? That some bonehead on Fox News will call them a name? Give me a break. Why don't you guys show some spine for a change?
"Had Enough? Hey, I'm not trying to be the voice of gloom and doom here. I'm trying to light a fire. I'm speaking out because I have hope - I believe in America . In my lifetime, I've had the privilege of living through some of America 's greatest moments. I've also experienced some of our worst crises: The 'Great Depression,' 'World War II,' the 'Korean War,' the 'Kennedy Assassination,' the 'Vietnam War,' the 1970's oil crisis, and the struggles of recent years culminating with 9/11.
"If I've learned one thing, it's this: 'You don't get anywhere by standing on the sidelines waiting for somebody else to take action. Whether it's building a better car or building a better future for our children, we all have a role to play. That's the challenge I'm raising in this book. It's a "Call to Action" for people who, like me, believe in America '. It's not too late, but it's getting pretty close. So let's shake off the crap and go to work. Let's tell 'em all we've had 'enough.'"
Taken from a Motley Fool Blog found here.
So, are YOU fed up and ready with an action plan? Thoughts?
Friday, March 13, 2009
Jon Stewart vs. Jim Cramer
This is a must-watch. Stewart brings up excellent points and articulates his thoughts extremely well. Cramer's a little sober here.
http://www.thedailyshow.com/full-episodes/index.jhtml?episodeId=220533
Enjoy!
http://www.thedailyshow.com/full-episodes/index.jhtml?episodeId=220533
Enjoy!
Thursday, March 12, 2009
Tuesday, March 10, 2009
Monday, March 09, 2009
Sunday, March 08, 2009
Short circuited
Once upon a time, there was a store called Circuit City...
http://finance.yahoo.com/news/After-60-years-Circuit-City-apf-14576739.html
http://finance.yahoo.com/news/After-60-years-Circuit-City-apf-14576739.html
Do you tip?
Ever wondered about the American culture of tipping? Have an opinion yourself? You should share it. Here's an article by a British journalist who looks into our tipping, er, 'tradition.' The comments at the end of the article are especially amusing.
My opinion - tipping has gotten out of control. While I believe that I'm generally very generous because I realize that the people providing the service are not always paid very well, I wonder if it's gotten to the point where employers just exploit the tipping expectation and have deliberately decided to pay minuscule wages. Tipping 15-20% in restaurants is understandable since the wages are absurdly low, but when you have to tip the cab driver (for what?! He simply drove the car like you'd expect!), the delivery guy (generally after paying a heavy sum for delivery!), movers (although their work is really, really hard)... it's getting too much. We should have a 'no tipping' day - I'm guessing no one will show up to work.
What do you think?
My opinion - tipping has gotten out of control. While I believe that I'm generally very generous because I realize that the people providing the service are not always paid very well, I wonder if it's gotten to the point where employers just exploit the tipping expectation and have deliberately decided to pay minuscule wages. Tipping 15-20% in restaurants is understandable since the wages are absurdly low, but when you have to tip the cab driver (for what?! He simply drove the car like you'd expect!), the delivery guy (generally after paying a heavy sum for delivery!), movers (although their work is really, really hard)... it's getting too much. We should have a 'no tipping' day - I'm guessing no one will show up to work.
What do you think?
Wednesday, March 04, 2009
Bush, Cheney, Darfur
You should read this: http://www.cnn.com/2009/WORLD/africa/03/04/darfur.rape/index.html
And then consider that it's happened under Bush and Cheney's watch - they who considered themselves messengers and liberators from God himself and took it in their own hands to go plundering and murdering people in Iraq (which by the way was a fully functioning country), while genocide of the worst kind known to the world was taking place not too far away from the Middle-East. Some day when history is written (and not the revisionist kind of history that Cheney tried so hard to write in his final days as VP), I believe we'll look at the issue of Darfur and we'll look back with great remorse.
It doesn't help that nothing much has been said of Darfur or is being done even today, but at least we don't have a president who believes he is *the* 'axis-of-good.'
And then consider that it's happened under Bush and Cheney's watch - they who considered themselves messengers and liberators from God himself and took it in their own hands to go plundering and murdering people in Iraq (which by the way was a fully functioning country), while genocide of the worst kind known to the world was taking place not too far away from the Middle-East. Some day when history is written (and not the revisionist kind of history that Cheney tried so hard to write in his final days as VP), I believe we'll look at the issue of Darfur and we'll look back with great remorse.
It doesn't help that nothing much has been said of Darfur or is being done even today, but at least we don't have a president who believes he is *the* 'axis-of-good.'
Sunday, March 01, 2009
A New American Paradigm?
WSJ outlines the new realities in corporate America - the massive cutbacks of professionals. Some interesting points:
1. The consumer-led economy of the past few decades created niche markets of people who learned to write, to advertise, etc. These jobs are getting axed - what are these super specialized people to do? They certainly can't build roads and wind turbines.
2. Getting a professional degree has been a way up - is it now going to be a way down, especially after you add up the debt required to get one?
3. Will the cost of professional services as a whole decrease as good talent is laid off and will eventually compete with each other?
4. Have we - as a society - become increasingly dependent on others? Of course, we have. Must there be a revolutionary change in these fundamentals, i.e. should a nuclear engineer also learn how to grow potatoes and tomatoes?
5. Will we finally have fewer ambulance chasers?
6. Did somebody say back to basics...?
7. Should we rename our country NUSA (New United States of America)?
Anyway, the list continues - here's the article.
1. The consumer-led economy of the past few decades created niche markets of people who learned to write, to advertise, etc. These jobs are getting axed - what are these super specialized people to do? They certainly can't build roads and wind turbines.
2. Getting a professional degree has been a way up - is it now going to be a way down, especially after you add up the debt required to get one?
3. Will the cost of professional services as a whole decrease as good talent is laid off and will eventually compete with each other?
4. Have we - as a society - become increasingly dependent on others? Of course, we have. Must there be a revolutionary change in these fundamentals, i.e. should a nuclear engineer also learn how to grow potatoes and tomatoes?
5. Will we finally have fewer ambulance chasers?
6. Did somebody say back to basics...?
7. Should we rename our country NUSA (New United States of America)?
Anyway, the list continues - here's the article.
Saturday, February 28, 2009
See your cell in action!
An absolutely amazing 3D video of our cells by medical illustrator David Bolinsky.
Click here
Simply amazing stuff!
Click here
Simply amazing stuff!
Friday, February 27, 2009
Thursday, February 26, 2009
Wednesday, February 25, 2009
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