Monday, November 24, 2008

Credit Cards and Autocars

I just saw a nice news article about how we the tax payers just gave 300 Billion to CitiBank. This is of course followed closely by the Auto Makers flying to Washington on private jets looking for 25 Billion so they can continue to run their companies into the ground and keep the dead wood UAW (U Ain’t Working) employees on the payroll.

The next huge crisis that we are facing belongs to the holders of all this credit card debt. I mean the banks who issue the cards. With all the layoffs and work in flux we are going to see defaults on a major chunk of this debt. Now, also unfortunately, the same people who got mortgages under these stupid lending practices had a nice piece of information to put on a credit card application. I own my own home. So these same folks who are financial geniuses probably have built up some credit card debt on top of their unpaid mortgages that they are not paying. Now I have made a late payment on a credit card from time to time and guess what happens when I do that, my 9.9% rate jumps to 19%. I immediately pay off that card and stop using it just in case it ends up with a balance for a few months. Well these folks don’t have that option so guess what. Their rates are at 19%+ and they will stay there until the balance is paid off. This is loan sharking and it will hurt our already damaged credit markets. I think that any company who gets 300 billion from the people of this country needs to fix the rates on those cards to something reasonable so the folks who own money on them have a chance to pay them down. For my money to go to these banks and they continue to rape my neighbor who is down on his luck is criminal.

Here is what needs to happen to the automakers. Now I know some you have family members who belong to the UAW, so sorry for the reality check here but we have very few options. They need to collapse and the UAW needs it’s back broken. Let it all shake out and we may end up with a single auto maker which encompasses the best of all the lines. Then can then hire back the workers based on merit and productivity rather than stupid union seniority. The simple fact is, as stated in my previous post, those that occupy space in a company and don’t contribute to its growth need to find something else to do.


Wednesday, November 12, 2008

Business in the new great depression

OK, I am a small business owner. My firm employs 6 people and we service about 125 customers all over New England. I was very interested in the presidential election from a standpoint of what impact the choice would have on my business. I want to let you in on a few facts of how the economy works from the prospective of small business which collectivly employs over 15 million Americans (More than either the government or the big companies) and is in reality the best hope for economic prosperity. Now I'm not rich, my wife and I both work. We don't worry about money too much and all our bills are paid. I want to let you know what it will take for my company to expand (Yes increase my income) and allow me to hire more people.

I don't worry too much about economic downturns and even recessions. There is opportunity in every situation. You can't sit back and just let things just happen to you. My company continues to grow even in this "crappy environment" because we have moved into business sectors that are have more resilience to bad times, medical and automation. As work forces shrink there is higher demand on technology to complete the work. This is an opportunity, if the bottom doesn't fall out I can ride it down and then be in a fine position for the upturn. If you are worried about your current economic future have a few beers, think about your industry and identify opportunities that arise when things get bad. One of my fathers favorite quotes " Chance favors the prepared mind" let that sink in for a few... Back to what this country needs to do to create jobs.

There are 3 types of people (I am not counting the ones who are so rich that no matter what happens they always have money, Honestly we spend too much time talking about them politically and their numbers don't amount to anything. You could take away all their money collectively and you still wouldn't have enough to run this country for a month. (I hope to be one of them some day)

The 3 types

Those that that work - For the most part these people rely on the current economic situation to guarantee their employment. If times are good they have have a job and are well paid. If times are bad they get laid off and wait/look to get hired again. Look around your workplace. You will see them and hell, you may even be one of them. This is a good percentage of our workforce. You can do whatever you want to help them but it won't create a single job or expand the economy one little bit. Their biggest enemy is handing them cash when they are out of work because it saps any incentive they have to find another job. We all have the capability to become this person. I know because I fell into that trap once, I'll explain. I was let go once, it was during a big economic downturn. I had a nice little side business brewing so figured I would just make that work. I am a go getter kind of guy so why not. Well I had to make ends meet so I decided to file for unemployment. I filed online (No embarrassment of having to go to some office and stand in line) and low and behold a nice check showed up that Friday, 13 more to come. Wow this was great, it actually covered the base expenses. I decided to sit back and relax for a bit, enjoy this down time. Well the checks kept coming and I kept relaxing. It got close to check 10 and I decided time to get off my butt and get some income flowing. 2 Days after that decision I got a letter in the mail. The federal government is extending all unemployment benefits for 52 weeks. You can take one guess at what this did to my motivation to work. It was the kiss of death. Needless to say this only derailed the start of my business for a year or so. Now I am not "live on the public dole" kind of guy but let me tell you. Easy money does strange things to you. If they had just pushed me out the door after say 8 weeks I would have been fine.

Those that get work done - These are the employees that are not necessarily career orientated but who are efficient and know what it is they want to do and how to get it done. They are innovative and adaptable. These people will never have trouble finding work and staying employed. Don't worry about them too much. If they loose their job they will probably never file and will be working before you know it. If things get really bad they may need some help but chances are they have a support network to provide that until they get on their feet again.

Those that make work - These are the people who start and grow businesses. You may live next door to one. They seems pretty well off and but not flashy. Under that they are very much risk takers. If you were to have a conversation they would probably reveal that they threw their entire financial future on the line in hopes of building something. They are also willing to take risks in order to grow, risk that average person will never take.

It is the last group that will get us out of any economic downturn. Until they feel comfortable enough to take risks no one in group 1 will ever find a decent job. Group 3 doesn't need a hand out, bail out, or anything else. They need an environment to flourish in and that environment is not one where we tax him to death and give his money to group 1. I don't want to get into a huge philosophical discussion about wealth distribution or anything like that. I want the economy to grow again and I'm telling you how that works through the eyes of someone who employs people.

So what we need to do is encourage small business owners to take risks. The more we talk about raising their taxes or forcing them to up Heath Care contributions the less risks they will take. I am in a holding pattern on my next hire because of the future uncertainty. My business is still showing growth but I have this nagging feeling that things could go the other way. Change my mind and I'll create a job or 2.


Friday, October 10, 2008

Frank and Dodd, WTF

OK I'm starting to get a bit pissed off by these two guys and what they are saying. Here are some facts. Twist them however you want.

Presidents can't spend a single nickle, Only Congress can.

Banking oversight is the responsibility of Congress.

If I hear either of those 2 pass the buck one more time I will scream. If they get reelected it will be proof positive that the majority of voters are STUPID.

Monday, October 06, 2008

My Take on Afghanistan and the war in Iraq

OK, as from my other posts I do not pretend to be an expert just a guy who looks at things and form opinions based on what I see. Some of it may be skewed by the sources of information but I like to take in a good variety of this of stuff and form my opinions. Most of my research comes from hearing people say things in conversation and this runs the gambit of my acquaintances that are everything from full blown liberal communists to right wing Christian conservative hawks. They say stuff and I weigh it. If I find flaws or things I disagree with then I do some research and read the stuff both sides are saying. From there I form an opinion or hypothesis.

The war on terror has been a big subject since the attacks. Let’s focus on the combat actions in Iraq and Afghanistan. I was a big supporter of the war at first based on the information my government was giving me about the instability of Saddam Hussein and his development of WMD. Needless to say I was a bit disappointed when nothing showed up. The kooks went right to conspiracy mode and said it was all a ploy just to start a war so younger bush could fulfill his father’s legacy of finishing the job. I don’t buy that. I have always viewed the U.S. as clumsy giant that does things for what it believes is the right reason and screws it up a lot. I see very little malice just bad decisions based on bad information or emotions. Call me simplistic but that is what I see.

I never believed Iraq it was going to be a quick deal. The combat military operation to take ground was going to be swift and very successful but the occupation had a 10 year life span in my mind. So from that perspective things have gone well in Iraq so far. There were massive mistakes and the correction of them took a lot longer than they should have but when was last time we took over a country and rebuilt it from scratch. (Japan and Germany come close but they had a government we kind of left in place, in the end they seem to have turned out OK). I do view one part of the Iraq operation a massive success and our leaders never stated it pre or post invasion. Al-Qaeda (AQ) and other Muslim extremists flooded into Iraq and engaged us. I got so mad when people pointed this out as a problem or bad thing. From my perspective AQ started the war by attacking civilians on US soil. They then were forced to move their operation to attacking US Infantry on foreign soil. Isn’t this what we want to happen, doesn’t it make good tactical and strategic sense? I would rather have them targeting a fully trained and armed US combat trooper than my Grandma on a subway. Dragging AQ into open combat somewhere was critical to keeping them from attacking US civilians. Anyone who doesn’t believe that is idiot in my book. Proof of effectiveness comes from the fact that they have not been able to launch any kind of meaningful attack on Western countries since 9/11. They are fighting this war on our terms and to be honest they suck at it.

It seems fairly clear to me that we are kicking the crap out of AQ, so much so that they are withdrawing from Iraq. We haven’t killed all of them but they are giving up the fight and going somewhere else. We have adapted tactics and equipment to deal with the environment and have made it very difficult to for them to cause mayhem on a large scale. The Iraqi populace is also seeing the light of day. Travel is much safer and the economy is starting to pick up and by most accounts Iraqi civilians are starting to feel hopeful. I think AQ is in the process of a general withdrawal from Iraq, it has become their Vietnam. I believe their fallback position is Afghanistan, this is evident by the increased military activity and there. I believe they are setting up an ambush for us in Afghanistan. They cannot beat us in open or urban combat. We just keep getting better at it and there are only so many psychos who want to die for their cause. If they can slow down our effectiveness and get back to killing more soldiers in every attack they can again get the American populace into second thought mode.

The only way AQ can beat us is with impatience. Keep nibbling away at our resolve until we give up and go home. Their best chance of doing that is a protracted campaign in the mountains of Afghanistan like they did to the Russians. Us putting more boots on the ground and going out looking for them is a bad idea. It is up to the generals on how to best keep them under wraps but from my perspective we should secure the population centers and launch an intelligence and special operations campaign against them. Keep them on the run and unable to launch terror attacks against civilians. They will never go away for good but they can be kept very busy while we sit on what believe to be their soil. I think in the end what will cause them to get back to 9/11 capabilities is us going back to xenophobe mode and them finding a stronghold like Afghanistan again. We can’t let this happen and the surest way for it to happen is a bad economy. We will get too involved with our internal problems and the beast will grow again.


Friday, September 26, 2008

A simple morons understanding of the financial crisis

I am a self proclaimed moron when it comes to high finances. This financial stuff give me a headache but it seems important so I tried to figure it out and what prompted that was this email that has been going around It starts something like this

“I'm against the $85,000,000,000.00 bailout of AIG.

Instead, I'm in favor of giving $85,000,000,000 to America in
a We Deserve It Dividend.

To make the math simple, let's assume there are 200,000,000
bonafide U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman
and child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billon that equals $425,000.00.”

It kind of made me mad because it it is just wrong. Here is my take on all this:

The math is bad $85,000,000,000 / $200,000,000 = $425.00. I don’t know about you but $425.00 won’t solve a lot of problems for me unless I wreck my car and need to cover the deductible.

The big problem here is liquidity. The banks and financial institutions are not lending money to each other because no one know the exact value of how much has been lost with these crappy mortgages. So these 1B - 30B SIVs (There are many forms of these things but I'm going to call them all SIVs for simplicity), that have had sub prime loans (Or just pieces of them) sneaked into them, have no concrete value and no one wants to lend money against them. They shouldn’t have been in there anyway and this is what leaks back to guys like Dod and Frank because they are in charge of watching over these types of things. Some shit loans ended up with AAA ratings because they were packaged with good loans and securities in the form of these SIVs. Compounding this is the fact that value of the SIVs, like most things on Wall Street, are kind of inflated so the $250,000 sub prime loan sitting in the SIV may be arbitrarily valued at $2,000,000 (These numbers are being pulled out of the air to show you that they are being counted as worth more then they actually are in the financial world) which companies are trying to use as collateral. So when this 250K loan defaults it could equal a loss of equity on a financial statement of 2M.

AIG is invested in these SIVs (Most large institutions are) and they borrow against them (as collateral) short term to meet their immediate cash needs (payroll and expenses) now the banks are not lending AIG (and others) the money because they are afraid of the SIVs. If they do lend the interest rates are very high. Now companies like AIG can’t meet their obligations.

The banks have to find out how much the SIVs are worth and start lending money against them, no one seems to know how to do that. The 700,000,000,000 is just a band aid so money will start flowing again. When money flows the banks loosen lending. Not the requirements but the amount of cash they will lend out. The more cash that is out there the more we spend. Happy economy…

The huge problem is how much money has been lost in the SIVs and how much worse can it get.

If you ask me this all goes back to stupid notion that every American should own their home. (Guess who said that) so we built an environment where that was possible but guess what, some people do not have financial sense to own and maintain real estate and manage their finances. Big friggin surprise.

So someone, somewhere (this isn’t a single person) decided to hide all this Utopian crap money in with the building blocks that make up the foundation of the house that is our complex financial system. Well no one knows how shitty the foundation is (even though to the average schmuck like me it should be simple math) so we all stand around staring at the house wondering if or when it will fall. Well the governments idea is to prop up the house with 700,000,000,000 worth of lumber and let the bankers and financial wizards go in and figure out what is exactly wrong with the foundation. Hopefully it isn’t as screwed up as they think it is. The other issue is that in truly valuing the SIVs they are most likely going to worth much less then what banks were valuing them at for loan collateral so no matter what the news will not be good.

On a side note, the other stupid notion is that every American should be able to go to college (Same guy said that too). While not as economically damaging it is more of the same Utopian crap that sounds so nice when you hear it, but when you think about it something just isn’t right. All it leads to is an over educated workforce where stupid people now have college degrees and those that don’t can’t get a job (or in my case start companies that employ people). A bachelors degree become the new high school diploma or GED

Unfortunately, as stated before I am a moron when it comes to high finance. The information I have found comes from conversation with smarter people than I and rudimentary research, like most big mouth A-Holes I can only point at the problem and have no clue on how to solve it. Also don't correct my grammar or spelling, as stated before I'm one of those guys who didn't go to college (I also almost flunked HS English). If I’m wrong about this please let me know. I just decided to float it as I’m sure there are millions like me who don’t really get it but want to know.


Thursday, March 15, 2007

Government web site pictograms will protect you from terrorist attacks

Another from the mind of Ron M

We all know pictograms are used to communicate simple actions in visual format

The US government has a website; They have informative pamphlets
in PDF format for surviving terrorist attacks loaded with these images. And example
can be found at
It's another attempt at quelling public panic, in the style of the old "duck and cover" advice after WWII.

The funny thing is that these pictures are so ambiguous they could mean anything! Here are a few interpretations:

If you have set yourself on fire, do not run

If you spot terrorism, blow your anti-terrorism whistle. If you are Vin Diesel, yell real loudly.

If you spot a terrorist arrow, pin it against the wall with your shoulder

If you are sprayed with an unknown substance, stand and think about it instead of seeing a doctor.

Use your tractor beam flashlight to lift the walls right off of you!

The proper way to eliminate smallpox is to wash with soap, water and at least one (1) armless hand.

Michael Jackson is a terrorist. If you spot this smooth criminal with dead,
dead eyes, run away.

Hurricanes, dead fish and the biohazard symbol have a lot in common. Think
about it.

Be on the lookout for terrorists with pinkeye and leprosy. Also, they tend
to rub their hands together manically.

If a door is closed, karate chop it open.

If your building collapses, give yourself a blowjob while waiting to be rescued.

Try to absorb as much of the radiation as possible with your groin region.
After 5 minutes and 12 seconds, however, you may become sterile

After exposure to radiation it is important to consider that you may have mutated to gigantic dimensions: watch your head.

If you've become a radiation mutant with a deformed hand, remember to close the window. No one wants to see you.

-- If you hear the Backstreet Boys, Michael Bolton or Yanni on the radio, cower in the corner or run like hell (remember to watch your head).

If your lungs and stomach start talking, stand with your arms akimbo until they stop.

If you are trapped under falling debris, conserve oxygen by not farting.

If you lose a contact lens during a chemical attack, do not stop to look for it.

Do not drive your station wagon into a power pole.

-- A one-inch thick piece of plywood should be sufficient protection against

Always remember to carry food with you during a terrorist attack. At least
you'll be able to enjoy a nice coke and apple before you die.