As the end of this year approaches, it is a good time for me to reflect upon the events of the past year.
A lot of good things happened.
Our oldest daughter and her family moved back to Utah, close to family, after having lived in Athens, Georgia for the past 7 years. It is great to have them close.
Our youngest son married a beautiful young lady this past year. We love and admire her, and we are glad to welcome her into the family.
Our youngest daughter graduated from Weber State University with a Bachelors of Science degree in musical theater. We are so proud of her and of her many accomplishments.
Our oldest grandson turned 8 this year. He became a cub scout, got baptized and is doing well in school.
All of the family is healthy and doing well. Challenges exist, but we are working to make those challenges be a benefit to us.
We are so grateful for family and for the associations that we have with them.
I started teaching math, science and chemistry at a private High School. The experience has been wonderful. I love watching these young people work and learn. The glow on their faces when they accomplish good things is priceless.
A lot has changed this past year. A new administration is preparing to take office in the United States. Many corporations have gone into bankruptcy. A lot of people have lost their jobs, their life's savings and their retirement prospects.
I believe that there is a silver lining to the economic turmoil that we have all experienced. It is humility. With humility comes meekness. With righteous leadership, that humility and meekness should translate into greater prosperity.
The economic crisis has created a moment of retrospection, where each of us can take an accounting of our current state of being, and ask the questions: What did I do right? What could I have done better? And what will I do to build upon this experience to improve the future for myself and for others?
My hope and prayer is that the world will capitalize on this humility and be better off for the experience.
Wednesday, December 24, 2008
Monday, December 15, 2008
The Paradox of Job Losses
Business Week begs the question, "Job losses: Is the panic Justified?"
Like with the chicken and the egg, the answer is yes and no. In other words, what comes first: the panic or the job loss?
It's a paradox.
The panic results from job losses. Job losses create the panic.
But what is really happening?
In our modern world, prosperity occurs because of synergy. Teamwork, comparative advantage, trade, specialization, competition, etc. have all contributed to the greatest prosperity that the world has ever known.
As a result, the world is now supporting nearly 7 Billion inhabitants; by far the most inhabitants at any point in time in the history of our world.
So what is the problem?
It is entitlements!!!
More and more individuals are demanding entitlements; IE, protection for their particular interests, such as inheritances, health care, social security, vacations, leisure, retirement, property, education, jobs, etc.
The problem is further complicated by the fact that our entitlements are dependent upon the work of each other. We cannot survive in the current world of prosperity without each of us doing our part to help each other.
What an interesting paradox. We either help each other and prosper, or we protect our individual interests and suffer.
For this to work, however, there needs to be a level of trust in each other, which is completely reliable; where complete honesty is exercised. Greed needs to be eliminated. Kindness need to be elevated. And competition needs to be mitigated.
We live in a world of plenty. We can produce more than we need. We need leaders who will promote that prosperity in a modern world environment. The result will end the Job Loss Paradox, as there will be jobs for all who want them. And those who want to work will maximize their efforts to benefit everyone.
When the world population works in concert for the benefit of all, excesses are produced. Those excesses can be used as a storehouse of value for needed entitlements. As we age, we need some entitlements, such as social security, retirement, health care and love.
So is the job loss panic justified?
Only if we insist on maintaining our selfish interests.
Like with the chicken and the egg, the answer is yes and no. In other words, what comes first: the panic or the job loss?
It's a paradox.
The panic results from job losses. Job losses create the panic.
But what is really happening?
In our modern world, prosperity occurs because of synergy. Teamwork, comparative advantage, trade, specialization, competition, etc. have all contributed to the greatest prosperity that the world has ever known.
As a result, the world is now supporting nearly 7 Billion inhabitants; by far the most inhabitants at any point in time in the history of our world.
So what is the problem?
It is entitlements!!!
More and more individuals are demanding entitlements; IE, protection for their particular interests, such as inheritances, health care, social security, vacations, leisure, retirement, property, education, jobs, etc.
The problem is further complicated by the fact that our entitlements are dependent upon the work of each other. We cannot survive in the current world of prosperity without each of us doing our part to help each other.
What an interesting paradox. We either help each other and prosper, or we protect our individual interests and suffer.
For this to work, however, there needs to be a level of trust in each other, which is completely reliable; where complete honesty is exercised. Greed needs to be eliminated. Kindness need to be elevated. And competition needs to be mitigated.
We live in a world of plenty. We can produce more than we need. We need leaders who will promote that prosperity in a modern world environment. The result will end the Job Loss Paradox, as there will be jobs for all who want them. And those who want to work will maximize their efforts to benefit everyone.
When the world population works in concert for the benefit of all, excesses are produced. Those excesses can be used as a storehouse of value for needed entitlements. As we age, we need some entitlements, such as social security, retirement, health care and love.
So is the job loss panic justified?
Only if we insist on maintaining our selfish interests.
Thursday, December 11, 2008
The Nationalization of America
If we are going to nationalize America, how should we do it?
Case study: If America is going to own the majority of the stock in AIG, America should manage AIG to maximize the wealth of taxpayers as well as the shareholders.
How should that happen?
First, focus on work. In other words, hire workers. The taxes on the earnings of these workers would support hiring more workers. The productivity of these new workers will provide goods and services, which when taxed, will increase the dollars available to support government as well as AIG.
Second, incentivize those workers to own their own company. In other words, give the equity in AIG back to the workers.
Third, identify what should be free. In other words, life, liberty and the pursuit of happiness should be free. Entitlements should not be free. Eliminate all entitlements. For example, health care should be incentivized. How? Workers should pay for their own health insurance. How? HSA accounts is one idea to support the concept of workers being responsible to pay for their own health care. An HSA kind of plan builds a savings type of retirement account that would build up a capital base to support consumer driven health care. Preventative health care benefits should be provided for by AIG only when monies are available from investments by the HSA plan, or from investments resulting from increased profits and productivity at AIG, as funds become available.
In summary, the plan of the nationalization of America should:
First - Hire workers.
Second - Give the equity in the companies back to the workers.
Third - Provide entitlements only from excesses.
Something is way off kilter, when I see those corporations who are being given money (being nationalized) laying off workers. The reverse should be happening. If we are going to be giving money away to companies like AIG, BAC, Merrill, Citicorp, GM, etc., etc., etc., that money should be going first and foremost to workers. Instead, these companies are laying off workers, protecting their own self-interests; or preparing to support entitlements; or they are trying to maximize their own shareholder wealth. This makes no sense. That money should be going to hire workers; those workers should be given equity in their respective companies; and all entitlements should be eliminated until there are excesses in production. The word excesses meaning that something has been set aside for a rainy day.
It feels like a lot of the taxpayer money that is being used in this economic recovery, which is essentially nationalizing America, is being wasted.
Case study: If America is going to own the majority of the stock in AIG, America should manage AIG to maximize the wealth of taxpayers as well as the shareholders.
How should that happen?
First, focus on work. In other words, hire workers. The taxes on the earnings of these workers would support hiring more workers. The productivity of these new workers will provide goods and services, which when taxed, will increase the dollars available to support government as well as AIG.
Second, incentivize those workers to own their own company. In other words, give the equity in AIG back to the workers.
Third, identify what should be free. In other words, life, liberty and the pursuit of happiness should be free. Entitlements should not be free. Eliminate all entitlements. For example, health care should be incentivized. How? Workers should pay for their own health insurance. How? HSA accounts is one idea to support the concept of workers being responsible to pay for their own health care. An HSA kind of plan builds a savings type of retirement account that would build up a capital base to support consumer driven health care. Preventative health care benefits should be provided for by AIG only when monies are available from investments by the HSA plan, or from investments resulting from increased profits and productivity at AIG, as funds become available.
In summary, the plan of the nationalization of America should:
First - Hire workers.
Second - Give the equity in the companies back to the workers.
Third - Provide entitlements only from excesses.
Something is way off kilter, when I see those corporations who are being given money (being nationalized) laying off workers. The reverse should be happening. If we are going to be giving money away to companies like AIG, BAC, Merrill, Citicorp, GM, etc., etc., etc., that money should be going first and foremost to workers. Instead, these companies are laying off workers, protecting their own self-interests; or preparing to support entitlements; or they are trying to maximize their own shareholder wealth. This makes no sense. That money should be going to hire workers; those workers should be given equity in their respective companies; and all entitlements should be eliminated until there are excesses in production. The word excesses meaning that something has been set aside for a rainy day.
It feels like a lot of the taxpayer money that is being used in this economic recovery, which is essentially nationalizing America, is being wasted.
Friday, December 5, 2008
The Great Money Giveaway
The Governments of the world are pulling out all stops to make sure that economic growth comes back.
To accomplish this goal, the world is experiencing one of the most aggressive money giveaways of all time.
1. What is the point behind this giveaway?
2. Is it going to work?
3. Who is going to benefit from this giveaway? Who is going to get wealthy from this giveaway?
4. What is the best way to give all of this money away?
5. Sean Hannity asked the question recently, "What caused this mess anyway?"
One of my neighbors, who has been very successful financially, told me how to make a lot of money. He said in part, "If you want to make a lot of money, you have to stand in front of it."
Well, there is a lot of money being given away by the government. How will you and I benefit from the giveaway?
Here is my perspective on the answers to these questions:
1. What is the point behind this giveaway?
Answer: It means that you and I are safe, secure and happy. For that to occur in this world, it means that labor and capital need to work harmoniously for the benefit of all. It means that governments, corporations and individuals need to synergistically work in concert with each other. It means that everyone will be better off if we work well together.
2. Is it going to work?
Answer: Probably, but it is a function of labor having the confidence to work productively.
3. Who is going to benefit and get wealthy from this giveaway?
Answer: Whoever is in front of the money flow. I hope that the money gets down to the workers and consumers. That is the whole point of this exercise. Unfortunately, the reverse is happening to begin with. That is why the money giveaway is essential and important. The question now is whether or not those that are managing the giveaway will act responsibly, such that this money gets into the hands of laborers first, which will spend and consume that which they have worked to produce.
4. What is the best way to give all of this money away?
Answer: It should go to capital first and labor second. It should not go directly to consumers. Laborers should have a vested interest in the capital. They should be owners. There should be accountability by labor of management as this capital is put to work. Since public works projects are important to modernize the infrastructure of the country, all taxpayers should have a vested interest in the upkeep and welfare of the country's capital.
5. What caused this mess anyway?
Answer: There are a lot of reasons behind this question. Everyone has a share in the blame, since it is a macro problem and we are all a part of the macro equation. Here are my thoughts as to what caused this mess and what we can now do to mitigate it.
First, the current tax policy caused too much money to flow towards capital and not enough to flow towards labor and consumers.
Second, the tax policy, lax lending practices, a weak dollar and an easy monetary and fiscal policy following the terrorist attacks contributed to the inflation of hard assets; oil and real estate in particular. This caused asset inflation to escalate much quicker than wages, causing a huge imbalance with respect to earnings being able to support the asset inflation.
The current efforts by governments to stimulate the economies of the world should work. It may work very quickly. Hopefully everyone will go back to work and stand in front of the huge money flow, so that everyone will be better off.
And then we better follow Ronald Reagan's favorite scripture from the Bible:
2 Chronicles 7:14 If my people, which are called by my name, shall humble themselves, and pray, and seek my face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sin, and will heal their land.
To accomplish this goal, the world is experiencing one of the most aggressive money giveaways of all time.
1. What is the point behind this giveaway?
2. Is it going to work?
3. Who is going to benefit from this giveaway? Who is going to get wealthy from this giveaway?
4. What is the best way to give all of this money away?
5. Sean Hannity asked the question recently, "What caused this mess anyway?"
One of my neighbors, who has been very successful financially, told me how to make a lot of money. He said in part, "If you want to make a lot of money, you have to stand in front of it."
Well, there is a lot of money being given away by the government. How will you and I benefit from the giveaway?
Here is my perspective on the answers to these questions:
1. What is the point behind this giveaway?
Answer: It means that you and I are safe, secure and happy. For that to occur in this world, it means that labor and capital need to work harmoniously for the benefit of all. It means that governments, corporations and individuals need to synergistically work in concert with each other. It means that everyone will be better off if we work well together.
2. Is it going to work?
Answer: Probably, but it is a function of labor having the confidence to work productively.
3. Who is going to benefit and get wealthy from this giveaway?
Answer: Whoever is in front of the money flow. I hope that the money gets down to the workers and consumers. That is the whole point of this exercise. Unfortunately, the reverse is happening to begin with. That is why the money giveaway is essential and important. The question now is whether or not those that are managing the giveaway will act responsibly, such that this money gets into the hands of laborers first, which will spend and consume that which they have worked to produce.
4. What is the best way to give all of this money away?
Answer: It should go to capital first and labor second. It should not go directly to consumers. Laborers should have a vested interest in the capital. They should be owners. There should be accountability by labor of management as this capital is put to work. Since public works projects are important to modernize the infrastructure of the country, all taxpayers should have a vested interest in the upkeep and welfare of the country's capital.
5. What caused this mess anyway?
Answer: There are a lot of reasons behind this question. Everyone has a share in the blame, since it is a macro problem and we are all a part of the macro equation. Here are my thoughts as to what caused this mess and what we can now do to mitigate it.
First, the current tax policy caused too much money to flow towards capital and not enough to flow towards labor and consumers.
Second, the tax policy, lax lending practices, a weak dollar and an easy monetary and fiscal policy following the terrorist attacks contributed to the inflation of hard assets; oil and real estate in particular. This caused asset inflation to escalate much quicker than wages, causing a huge imbalance with respect to earnings being able to support the asset inflation.
The current efforts by governments to stimulate the economies of the world should work. It may work very quickly. Hopefully everyone will go back to work and stand in front of the huge money flow, so that everyone will be better off.
And then we better follow Ronald Reagan's favorite scripture from the Bible:
2 Chronicles 7:14 If my people, which are called by my name, shall humble themselves, and pray, and seek my face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sin, and will heal their land.
Monday, November 24, 2008
Citigroup - Too large to fail?
Is Citigroup too large to fail?
Lehman Brothers was obviously not too large to fail.
Bear Stearns was not too large to fail.
AIG was too large to fail.
If Citigroup is too large to fail, how should the nationalization of Citigroup take place?
Socialism doesn't work very well.
Allowing pure capitalism hasn't worked perfectly.
Could a synergistic nationalization of Citigroup work better than the simple profit model? How would it be structured?
Along with letting the President, the FED, the Treasury, the Congress, etc., determine who the winners and losers will be when runs on capitalism take place, why not create a fund of last resort, owned by taxpayers, to be benefited by taxpayers, whereby nationalized assets act like an endowment to support health care, education, energy development, scientific progress, retirement, and those who really do need help; like the poor, the oppressed, the sick, the wounded, the unemployed, etc. This fund would provide work for those that are out of work. Competition would still play an important part in determining income levels, opportunities for advancement, and most importantly, accountability. This fund would help those employed to help themselves. It would give them nationalized assets to provide the capital base that caused their jobs to be lost. It would provide education and accountability to help them improve.
Synergism still feels like a better approach to the nationalization of capitalism, than simply choosing winners and losers and letting competition, fear and greed determine the next batch of winners and losers.
Lehman Brothers was obviously not too large to fail.
Bear Stearns was not too large to fail.
AIG was too large to fail.
If Citigroup is too large to fail, how should the nationalization of Citigroup take place?
Socialism doesn't work very well.
Allowing pure capitalism hasn't worked perfectly.
Could a synergistic nationalization of Citigroup work better than the simple profit model? How would it be structured?
Along with letting the President, the FED, the Treasury, the Congress, etc., determine who the winners and losers will be when runs on capitalism take place, why not create a fund of last resort, owned by taxpayers, to be benefited by taxpayers, whereby nationalized assets act like an endowment to support health care, education, energy development, scientific progress, retirement, and those who really do need help; like the poor, the oppressed, the sick, the wounded, the unemployed, etc. This fund would provide work for those that are out of work. Competition would still play an important part in determining income levels, opportunities for advancement, and most importantly, accountability. This fund would help those employed to help themselves. It would give them nationalized assets to provide the capital base that caused their jobs to be lost. It would provide education and accountability to help them improve.
Synergism still feels like a better approach to the nationalization of capitalism, than simply choosing winners and losers and letting competition, fear and greed determine the next batch of winners and losers.
Sunday, November 23, 2008
Fishing and Presents
Two thoughts from today:
1. Give a man a fish, and you feed him for a day. Teach a man to fish and you feed him for a lifetime.
This should be a basic truth with respect to our economic bailout plans.
2. Yesterday is a memory; tomorrow is a mystery; today is a gift. That is why they call today the present.
1. Give a man a fish, and you feed him for a day. Teach a man to fish and you feed him for a lifetime.
This should be a basic truth with respect to our economic bailout plans.
2. Yesterday is a memory; tomorrow is a mystery; today is a gift. That is why they call today the present.
Saturday, November 22, 2008
Wahoo Moments
Three wahoo moments in two days. It just doesn't get better than that.
Yesterday I had a student come up to me and say "Thank you." After a lot of work and effort, this student had done very well on a test.
Another student, after struggling with a difficult math concept, suddenly "got it" and said, "wow, that is cool. I get it."
And finally, another student said "God really is there, isn't He!"
I couldn't help but reflect on the many wonderful teachers that I have had over the years. Thank you to each and every one of you. Your wonderful influences are greater than you'll ever know.
Yesterday I had a student come up to me and say "Thank you." After a lot of work and effort, this student had done very well on a test.
Another student, after struggling with a difficult math concept, suddenly "got it" and said, "wow, that is cool. I get it."
And finally, another student said "God really is there, isn't He!"
I couldn't help but reflect on the many wonderful teachers that I have had over the years. Thank you to each and every one of you. Your wonderful influences are greater than you'll ever know.
Wednesday, November 19, 2008
General Motors and Ford
Should the automakers be bailed out?
Whether we like it or not, changes need to take place with respect to the US auto industry. General Motors and Ford are struggling with their competitiveness as well as with their finances.
For example, my personal experience with General Motors and Ford is not favorable as compared to Toyota. My expectation when I purchase a vehicle from General Motors or from Ford is that something major will break down at the 36,000 mile mark. On the other hand, my expectation for a vehicle that I might buy from Toyota is that it will last me 250,000 miles before anything major breaks down. Competitively speaking, today I have more confidence in buying something from Toyota than I do from General Motors or Ford. I still have loyalties to buy American, but that must be balanced with results, finances and needs; IE, competitiveness.
So my thoughts to General Motors and Ford is that if you want some of the bailout money, what will you do to improve my confidence and expectations in your products, convincing me that an investment in your future with my tax dollars is a good investment?
Whether we like it or not, changes need to take place with respect to the US auto industry. General Motors and Ford are struggling with their competitiveness as well as with their finances.
For example, my personal experience with General Motors and Ford is not favorable as compared to Toyota. My expectation when I purchase a vehicle from General Motors or from Ford is that something major will break down at the 36,000 mile mark. On the other hand, my expectation for a vehicle that I might buy from Toyota is that it will last me 250,000 miles before anything major breaks down. Competitively speaking, today I have more confidence in buying something from Toyota than I do from General Motors or Ford. I still have loyalties to buy American, but that must be balanced with results, finances and needs; IE, competitiveness.
So my thoughts to General Motors and Ford is that if you want some of the bailout money, what will you do to improve my confidence and expectations in your products, convincing me that an investment in your future with my tax dollars is a good investment?
Monday, November 17, 2008
The Federal Reserve
So how smart are these guys?
Why did they wait so long to start stimulating the economy?
How secure is their balance sheet?
Who is going to prosper as the economy recovers?
The San Francisco Federal Reserve just released their revised forecast for the next year. They are projecting that this recession will be deeper than the one in 2001, with unemployment peaking at about 7.5% in late 2009.
They are showing negative GDP growth over the next 3 quarters, and then a rebound to 4% positive real GDP growth by the 4Th quarter of 2010. They are showing 4 quarters of negative growth, with the most severe being the 4Th quarter of 2008 at a drop of about 3.5%.
They are showing an increase of debt on the Fed's balance sheet as of today's date at about $1.1 Trillion.
With monetary policy at near-zero on interest rates, they suggest that they have three strategies to stimulate the economy. The strategies are:
1. Keep funds rates low for enough time to stabilize financial conditions.
2. Continue to alter the Fed's balance sheet by selling Treasuries, and by buying commercial paper, agencies, etc.
3. Continue to increase the size of the Fed's balance sheet.
It seems to me that the whole point of this exercise is to get more money and confidence into the hands of consumers, so that there is an outlet for the goods and services of businesses.
Commodity prices have finally come down. But lending costs on mortgages and corporations have not. In fact the lending costs to most businesses has gone up tremendously.
Dear Dr. Bernanke:
It seems reasonable that the next target of reducing costs so that consumers can afford housing and other goods and services is to reduce the borrowing costs of individuals and businesses.
The San Francisco FED in their report showed investment grade corporate bonds at near 10% and high yield bonds at near 20%.
This sounds like a good recipe for more bankruptcies, higher unemployment and more trouble for consumers and businesses.
Thanks for the efforts you are making and best wishes to you as you navigate through these treacherous waters.
My neighbor, Dave Free, gave this advice yesterday. He said that his father always told him to:
Accentuate the positive.
Eliminate the negative.
Latch on to the affirmative.
And avoid what's in between.
Why did they wait so long to start stimulating the economy?
How secure is their balance sheet?
Who is going to prosper as the economy recovers?
The San Francisco Federal Reserve just released their revised forecast for the next year. They are projecting that this recession will be deeper than the one in 2001, with unemployment peaking at about 7.5% in late 2009.
They are showing negative GDP growth over the next 3 quarters, and then a rebound to 4% positive real GDP growth by the 4Th quarter of 2010. They are showing 4 quarters of negative growth, with the most severe being the 4Th quarter of 2008 at a drop of about 3.5%.
They are showing an increase of debt on the Fed's balance sheet as of today's date at about $1.1 Trillion.
With monetary policy at near-zero on interest rates, they suggest that they have three strategies to stimulate the economy. The strategies are:
1. Keep funds rates low for enough time to stabilize financial conditions.
2. Continue to alter the Fed's balance sheet by selling Treasuries, and by buying commercial paper, agencies, etc.
3. Continue to increase the size of the Fed's balance sheet.
It seems to me that the whole point of this exercise is to get more money and confidence into the hands of consumers, so that there is an outlet for the goods and services of businesses.
Commodity prices have finally come down. But lending costs on mortgages and corporations have not. In fact the lending costs to most businesses has gone up tremendously.
Dear Dr. Bernanke:
It seems reasonable that the next target of reducing costs so that consumers can afford housing and other goods and services is to reduce the borrowing costs of individuals and businesses.
The San Francisco FED in their report showed investment grade corporate bonds at near 10% and high yield bonds at near 20%.
This sounds like a good recipe for more bankruptcies, higher unemployment and more trouble for consumers and businesses.
Thanks for the efforts you are making and best wishes to you as you navigate through these treacherous waters.
My neighbor, Dave Free, gave this advice yesterday. He said that his father always told him to:
Accentuate the positive.
Eliminate the negative.
Latch on to the affirmative.
And avoid what's in between.
Sunday, November 16, 2008
United We Stand Divided We Fall
In Aesop's Fables about the Bulls, when the four Bulls, who were friends, stood together with their horns facing out and with their backs together, the lion could not harm them. But when they would argue and quarrel, and go off alone sulking, the lion could take them down, one by one.
In Aesop's Fables about the counsel of a dying father to his four sons, the father counseled his sons that if they were united, they were much stronger than if they tried to do things alone. He illustrated this counsel by giving the sons a bundle of sticks, wrapped tightly with twine. The sons could not break the bundle of sticks, but as the father would pull one stick out and give it to each of the sons to break, the sons found that it was easy to break just one stick.
Abraham Lincoln's utilization of the Savior's counsel in the New Testament was inspirational in saving the Nation. Matthew 12:25 "And Jesus knew their thoughts, and said unto them, Every kingdom divided against itself is brought to desolation; and every city or house divided against itself shall not stand:"
As I talk with people today about the economy, and the stock market in particular, there is a lot of angst (concern) and anger. A lot of this anger is focused on those whose greed has contributed to the problems we are now facing.
What if everyone did the right thing for the right reason? Would we as a people be as productive as we are without a profit motive?
The older I get, the less need I have to compete. In fact, I enjoy less and less those games where there are winners and losers. I prefer to compete where there are winners and winners.
I love to work. I love to play. I love to be productive. I love to be prosperous and happy. I would rather do these things in a spirit of synergism, where everyone is better off, than in a spirit of competition where there are winners and losers.
The stock market today has a lot of losers. These losers in many cases are determined never to play the game again. The greed of some players stacks the cards against fairness. In many cases, winning and losing, competition, power, greed, and money destroy the benefits of unity.
How can we develop of system, where we are still productive, and where synergism trumps the success of competition.
In Mitt Romney's book "Turnaround", his conclusion is that he and his family are much better off from their public service than they ever would have been by producing more and more money. The benefits (currency) of an efficient and successful commitment to public service far outweighed the monetary success of creating more and more money.
This sounds like an interesting recipe for our future economy, where united we stand and divided we fall.
In Aesop's Fables about the counsel of a dying father to his four sons, the father counseled his sons that if they were united, they were much stronger than if they tried to do things alone. He illustrated this counsel by giving the sons a bundle of sticks, wrapped tightly with twine. The sons could not break the bundle of sticks, but as the father would pull one stick out and give it to each of the sons to break, the sons found that it was easy to break just one stick.
Abraham Lincoln's utilization of the Savior's counsel in the New Testament was inspirational in saving the Nation. Matthew 12:25 "And Jesus knew their thoughts, and said unto them, Every kingdom divided against itself is brought to desolation; and every city or house divided against itself shall not stand:"
As I talk with people today about the economy, and the stock market in particular, there is a lot of angst (concern) and anger. A lot of this anger is focused on those whose greed has contributed to the problems we are now facing.
What if everyone did the right thing for the right reason? Would we as a people be as productive as we are without a profit motive?
The older I get, the less need I have to compete. In fact, I enjoy less and less those games where there are winners and losers. I prefer to compete where there are winners and winners.
I love to work. I love to play. I love to be productive. I love to be prosperous and happy. I would rather do these things in a spirit of synergism, where everyone is better off, than in a spirit of competition where there are winners and losers.
The stock market today has a lot of losers. These losers in many cases are determined never to play the game again. The greed of some players stacks the cards against fairness. In many cases, winning and losing, competition, power, greed, and money destroy the benefits of unity.
How can we develop of system, where we are still productive, and where synergism trumps the success of competition.
In Mitt Romney's book "Turnaround", his conclusion is that he and his family are much better off from their public service than they ever would have been by producing more and more money. The benefits (currency) of an efficient and successful commitment to public service far outweighed the monetary success of creating more and more money.
This sounds like an interesting recipe for our future economy, where united we stand and divided we fall.
Thursday, November 13, 2008
Why I Love Slovakia!!!
In September 1994, I had the opportunity to spend a week in Slovakia, encouraging the people of Slovakia to embrace capitalism. This encouragement included the invitation to have faith in the uncertainty that capitalism breeds.
Why?
Because even with all of the problems of capitalism, the alternatives have been worse throughout world history.
In Slovakia I found a fear of uncertainty. Under the previous socialistic type of government the people had been guaranteed a car, a flat (apartment), an education and a job. The profit incentive did not exist. The incentives allowing the freedom to maximize potential weren't there.
I was concerned that the lack of these incentives had weakened the potential of the people and of the country. It had allowed a climate of decay to invade the country.
I love Slovakia because the people are friendly, ambitious, pretty, smart and patriotic.
I love Slovakia because of it's tremendous heritage, and because of it's beautiful scenery. I love the mountains of Slovakia.
I love Slovakia because it is embracing freedom. It is embracing the prosperity that comes with freedom.
In September of 1994, 18 different political groups were vying for power.
Somewhat thereafter, former communist leaders were elected to power.
Those leaders discouraged competition, and embraced protectionism and favoritism.
The results were disastrous.
But mighty changes have taken place, and Slovakia is well on it's way to enjoying greater peace and prosperity.
Best Wishes to you, Slovakia, and to all those who join with you in your success.
In 1994 I was saddened to see the decay that had taken place in many cities and historical landmarks. Decades of neglect had wiped out much of the beauty of the country's heritage. But I was excited to see the high energy level of a beautiful people, embracing the opportunities of a new independent country.
As I was reflecting on the changes that were taking place, the different consequences of political philosophies came to mind. The following definitions of these philosophies are worth considering. They utilize the example of cows in an interesting way to reflect on the differences of socialism, communism, fascism, nazism, anarchism, capitalism and synergism.
Socialism: If you have two cows, then the socialist will give you one cow and he'll give one to your neighbor.
Communism: If you have two cows, then the communist will give both cows to the government and the government will give you back some milk.
Fascism: If you have two cows, then the fascist takes all of the milk to the government; the government sells it and distributes the wealth as it will.
Nazism: If you have two cows, then the nazi will shoot you and take the two cows.
Anarchism: If you have two cows, then the anarchist will take both cows; shoot the government agent, and find more cows to take.
Capitalism: If you have two cows, then the capitalist will sell one cow and buy a bull.
Synergism: If you are a synergist, it becomes a group effort. If a synergist has two cows, he may keep them or trade them depending upon his comparative advantages. The synergism from two cows has to include every other commodity and service as well. Synergism is the team, community, nation or world, maximizing it's potential through comparative advantages, to the benefit of all. And that maximazation of prosperity can only be achieved and enjoyed if all parties choose righteously. It embraces the good habits that capitalism forces upon us, but it also requires that every individual freely chooses to do what's right for the group.
Until the day comes that the world population freely embraces synergism, peace, joy and prosperity will elude us.
Why?
Because even with all of the problems of capitalism, the alternatives have been worse throughout world history.
In Slovakia I found a fear of uncertainty. Under the previous socialistic type of government the people had been guaranteed a car, a flat (apartment), an education and a job. The profit incentive did not exist. The incentives allowing the freedom to maximize potential weren't there.
I was concerned that the lack of these incentives had weakened the potential of the people and of the country. It had allowed a climate of decay to invade the country.
I love Slovakia because the people are friendly, ambitious, pretty, smart and patriotic.
I love Slovakia because of it's tremendous heritage, and because of it's beautiful scenery. I love the mountains of Slovakia.
I love Slovakia because it is embracing freedom. It is embracing the prosperity that comes with freedom.
In September of 1994, 18 different political groups were vying for power.
Somewhat thereafter, former communist leaders were elected to power.
Those leaders discouraged competition, and embraced protectionism and favoritism.
The results were disastrous.
But mighty changes have taken place, and Slovakia is well on it's way to enjoying greater peace and prosperity.
Best Wishes to you, Slovakia, and to all those who join with you in your success.
In 1994 I was saddened to see the decay that had taken place in many cities and historical landmarks. Decades of neglect had wiped out much of the beauty of the country's heritage. But I was excited to see the high energy level of a beautiful people, embracing the opportunities of a new independent country.
As I was reflecting on the changes that were taking place, the different consequences of political philosophies came to mind. The following definitions of these philosophies are worth considering. They utilize the example of cows in an interesting way to reflect on the differences of socialism, communism, fascism, nazism, anarchism, capitalism and synergism.
Socialism: If you have two cows, then the socialist will give you one cow and he'll give one to your neighbor.
Communism: If you have two cows, then the communist will give both cows to the government and the government will give you back some milk.
Fascism: If you have two cows, then the fascist takes all of the milk to the government; the government sells it and distributes the wealth as it will.
Nazism: If you have two cows, then the nazi will shoot you and take the two cows.
Anarchism: If you have two cows, then the anarchist will take both cows; shoot the government agent, and find more cows to take.
Capitalism: If you have two cows, then the capitalist will sell one cow and buy a bull.
Synergism: If you are a synergist, it becomes a group effort. If a synergist has two cows, he may keep them or trade them depending upon his comparative advantages. The synergism from two cows has to include every other commodity and service as well. Synergism is the team, community, nation or world, maximizing it's potential through comparative advantages, to the benefit of all. And that maximazation of prosperity can only be achieved and enjoyed if all parties choose righteously. It embraces the good habits that capitalism forces upon us, but it also requires that every individual freely chooses to do what's right for the group.
Until the day comes that the world population freely embraces synergism, peace, joy and prosperity will elude us.
Wednesday, November 12, 2008
Stocks - Should anyone own them?
Business Week recently ran an article that begged the question: Should anyone own stocks anymore and why? The devastation in the stock market has taken a nasty toll on corporations, government revenues, retirement plans, workers, retirees, etc.
To me the answer is a definite yes. We want to reward those that are willing to take risks and that go to work. The stock market is a liquid way to do that.
It's simply time for a heavy dose of optimism to void the self-fulfilling aggregate weakness that results from protectionism, fear and pessimissim.
To me the answer is a definite yes. We want to reward those that are willing to take risks and that go to work. The stock market is a liquid way to do that.
It's simply time for a heavy dose of optimism to void the self-fulfilling aggregate weakness that results from protectionism, fear and pessimissim.
Monday, November 10, 2008
Dear Congress: Re: Economic Change
Dear Congress:
To go along with the needed stimulus package, here are a few additional suggestions:
I. Stabilize prices and lower asset inflation. (I guess this year's deflation has taken care of a lot of the asset inflation. Hopefully, it's not too late to stabilize.)
1. Lower borrowing costs across the board.
2. Lower energy costs across the board.
3. Simplify the tax code and make it permanent.
4. Promote the fact that it is an honor and a priviledge to pay taxes. We as Americans are richly blessed. Taxes spent wisely benefit all of us.
5. Eliminate the negative connotations of such things as: taxes, adjustable rate mortgages, corporations, capitalism, derivatives, investment banking, hedge funds, etc. All of these items play a crucial roll in promoting, creating and sustaining economic growth and well-being.
6. Reign in the abuses and greed that have caused our problems, namely:
a. A weak and volatile dollar (substitute any currency). The inflation of oil prices, real estate, gold, grains, etc. have contributed as much as anything to the dire plight that we are in. We need stable and predictable prices.
b. High interest rates.
1. 30 year mortgages should be more stable and targeted near 6%.
2. The interest rates and fees on credit cards, credit advances, etc. should be capped at 10% per annum. There is an incredible amount of abuse by finance companies with their fees and interest rate charges.
c. High oil prices.
1. Tax levies should be used to offset the volatility in oil prices and to provide a revenue source for alternative energy sources.
d. Government might need to become a competitor in all capital markets to help bring accountablility to the abuses of individuals, governments and corporate america.
Greed seems to always be a problem with some individuals, corporate america and governments. The inflationary pressures of the past several years has aggravated this problem, as corporations, individuals and governments have reached for more and more revenues to offset the inflationary impacts.
It is time, first and foremost, for stable prices.
To go along with the needed stimulus package, here are a few additional suggestions:
I. Stabilize prices and lower asset inflation. (I guess this year's deflation has taken care of a lot of the asset inflation. Hopefully, it's not too late to stabilize.)
1. Lower borrowing costs across the board.
2. Lower energy costs across the board.
3. Simplify the tax code and make it permanent.
4. Promote the fact that it is an honor and a priviledge to pay taxes. We as Americans are richly blessed. Taxes spent wisely benefit all of us.
5. Eliminate the negative connotations of such things as: taxes, adjustable rate mortgages, corporations, capitalism, derivatives, investment banking, hedge funds, etc. All of these items play a crucial roll in promoting, creating and sustaining economic growth and well-being.
6. Reign in the abuses and greed that have caused our problems, namely:
a. A weak and volatile dollar (substitute any currency). The inflation of oil prices, real estate, gold, grains, etc. have contributed as much as anything to the dire plight that we are in. We need stable and predictable prices.
b. High interest rates.
1. 30 year mortgages should be more stable and targeted near 6%.
2. The interest rates and fees on credit cards, credit advances, etc. should be capped at 10% per annum. There is an incredible amount of abuse by finance companies with their fees and interest rate charges.
c. High oil prices.
1. Tax levies should be used to offset the volatility in oil prices and to provide a revenue source for alternative energy sources.
d. Government might need to become a competitor in all capital markets to help bring accountablility to the abuses of individuals, governments and corporate america.
Greed seems to always be a problem with some individuals, corporate america and governments. The inflationary pressures of the past several years has aggravated this problem, as corporations, individuals and governments have reached for more and more revenues to offset the inflationary impacts.
It is time, first and foremost, for stable prices.
"Turnaround" by Mitt Romney
I am currently reading "Turnaround" by Mitt Romney. It is fun to read about the success of such a great leader. I am impressed by my interpretation of his management strategy. It includes these principles:
1. Conduct a Strategic Audit.
2. What is the organization's Mission?
3. Build a strong Team.
4. People, People, People; They are the most important.
5. Focus, Focus, Focus.
6. Details are important.
7. Covenant to be United; meaning top quality people, pulling together.
8. Commitment. Go through walls to get the job done. Do the job well.
9. Pull together.
10. Accountability - Keep the team motivated and working together.
It's a great look back at the success and turnaround of the 2002 Winter Olympic Games.
1. Conduct a Strategic Audit.
2. What is the organization's Mission?
3. Build a strong Team.
4. People, People, People; They are the most important.
5. Focus, Focus, Focus.
6. Details are important.
7. Covenant to be United; meaning top quality people, pulling together.
8. Commitment. Go through walls to get the job done. Do the job well.
9. Pull together.
10. Accountability - Keep the team motivated and working together.
It's a great look back at the success and turnaround of the 2002 Winter Olympic Games.
Thursday, November 6, 2008
Optimistic Financial Musings
Wow!!!
What a mess our financial markets are still in.
The negativity in the media is almost overwhelming.
Looking on the optimistic side though, the Obama administration may have an opportunity to pull off a surprise in global prosperity.
Here is a possible scenario:
Trade relations improve with our foreign trading partners.
War payments subside.
Tax cuts incentivize the middle class to increase their purchases of goods and services, and the increase in equity valuations offsets the increased taxes on the wealthy.
Interest rates stay low. Say in 8 years they are averaging 3% on one year TBills and 5.5% on 10 year Treasuries.
Say that the S&P 500 compounds earnings at 10% and the P/E ratio averages 18 times earnings.
In other words, what if S&P 500 earnings in 8 years are at $170; then at 18 times earnings, the S&P 500 will be at 3060, compared to 900 today. That's an increase of 240%.
With even better numbers for productivity and inflation, the P/E ratio could be higher, and so could the averages. Let's see. If the value of equities in the next 8 years increases by 240%, that means that the wealth in equities alone of Americans will increase by maybe $40 Trillion.
What if this happens with the Federal Debt doubling? A $10 Trillion increase in debt with a $40 Trillion increase in wealth in equities alone, sounds like a good investment to me. And what if we are really profitable and the budget deficits are much less?
There is still the question of labor and capital to deal with. Which comes first; labor or capital?
Abraham Lincoln said that labor creates capital. But we need capital to incentivize labor.
The $800 Billion bailout package should be a good first step to provide that capital.
I am a little surprised though, that the government is charging the banks 5% for this capital. They should be charging less. Banks need to make money too. The government should be charging less and adding a greater equity kicker.
As a taxpayer and citizen of America, I would like to see part of my investment in the bailout package have the potential to increase 240% to help balance the budget.
What a mess our financial markets are still in.
The negativity in the media is almost overwhelming.
Looking on the optimistic side though, the Obama administration may have an opportunity to pull off a surprise in global prosperity.
Here is a possible scenario:
Trade relations improve with our foreign trading partners.
War payments subside.
Tax cuts incentivize the middle class to increase their purchases of goods and services, and the increase in equity valuations offsets the increased taxes on the wealthy.
Interest rates stay low. Say in 8 years they are averaging 3% on one year TBills and 5.5% on 10 year Treasuries.
Say that the S&P 500 compounds earnings at 10% and the P/E ratio averages 18 times earnings.
In other words, what if S&P 500 earnings in 8 years are at $170; then at 18 times earnings, the S&P 500 will be at 3060, compared to 900 today. That's an increase of 240%.
With even better numbers for productivity and inflation, the P/E ratio could be higher, and so could the averages. Let's see. If the value of equities in the next 8 years increases by 240%, that means that the wealth in equities alone of Americans will increase by maybe $40 Trillion.
What if this happens with the Federal Debt doubling? A $10 Trillion increase in debt with a $40 Trillion increase in wealth in equities alone, sounds like a good investment to me. And what if we are really profitable and the budget deficits are much less?
There is still the question of labor and capital to deal with. Which comes first; labor or capital?
Abraham Lincoln said that labor creates capital. But we need capital to incentivize labor.
The $800 Billion bailout package should be a good first step to provide that capital.
I am a little surprised though, that the government is charging the banks 5% for this capital. They should be charging less. Banks need to make money too. The government should be charging less and adding a greater equity kicker.
As a taxpayer and citizen of America, I would like to see part of my investment in the bailout package have the potential to increase 240% to help balance the budget.
Wednesday, November 5, 2008
Ramblings about American Competitiveness
How can we help our kids get good paying jobs after college?
With the average cost of a home approaching $300,000, how much earning power does a graduate need to own a home, support a family, provide for retirement and healthcare, and enjoy life?
Does the average starting salary out of college support an average life-style?
The answers are uncertain.
That uncertainty causes fear and anxiety.
But I'm excited to see what our new President Elect, Vice President Elect and all those who have won elections can do.
To President Elect Barack Obama: Congratulations!!! Even though I didn't vote for you, you have my support. The challenge to prepare our children for a competitive world is almost overwhelming. I've been inspired by your work ethic and by your dreams for our future. You have my full support in uniting this nation, so that we can meet the challenges of a competitive world, and help our children enjoy the freedoms of life, liberty and the pursuit of happiness. I applaud the international support, which also appears to be yours.
Michael E. Porter, a competitive guru from Harvard Business School, offered several ideas in a recent Business Week article titled "Why America Needs An Economic Strategy".
It is an interesting paradox to me that the deep fears and anxiety, identified by Mr. Porter, over the competition for wages and jobs from international sources like China and India, has led to the greatest prosperity that the world has ever known.
Someone once said that if you're going to have a competitor, you might as well have a good one. A competitor that keeps you from improving, or that doesn't help you improve does no good.
Mr. Porter identified seven comparative competitive advantages that we enjoy in America:
1. Entrepreneurship.
2. Science, Technology and Innovation.
3. Institutions of Higher Learning.
4. Free and competitive markets.
5. Decentralization across States and regions.
6. Efficient Capital Markets.
7. Dynamism and Resilience.
Mr. Porter also identified two weaknesses that undermine our potential:
1. Protectionism.
2. Favoritism.
The cool thing about comparative competitive advantage, is that we don't have to be better than someone else to be prosperous and successful. We just have to do our best, specialize, and then trade and share with each other.
It seems to me that we should embrace competition that makes us better.
By so doing, the potential prosperity for us, for our children and for the world is breath-taking.
It is my hope and prayer that the blessings of Heaven will be with all of us as we embark on this new leg of the journey to help our children and the world prosper in a competitive world.
With the average cost of a home approaching $300,000, how much earning power does a graduate need to own a home, support a family, provide for retirement and healthcare, and enjoy life?
Does the average starting salary out of college support an average life-style?
The answers are uncertain.
That uncertainty causes fear and anxiety.
But I'm excited to see what our new President Elect, Vice President Elect and all those who have won elections can do.
To President Elect Barack Obama: Congratulations!!! Even though I didn't vote for you, you have my support. The challenge to prepare our children for a competitive world is almost overwhelming. I've been inspired by your work ethic and by your dreams for our future. You have my full support in uniting this nation, so that we can meet the challenges of a competitive world, and help our children enjoy the freedoms of life, liberty and the pursuit of happiness. I applaud the international support, which also appears to be yours.
Michael E. Porter, a competitive guru from Harvard Business School, offered several ideas in a recent Business Week article titled "Why America Needs An Economic Strategy".
It is an interesting paradox to me that the deep fears and anxiety, identified by Mr. Porter, over the competition for wages and jobs from international sources like China and India, has led to the greatest prosperity that the world has ever known.
Someone once said that if you're going to have a competitor, you might as well have a good one. A competitor that keeps you from improving, or that doesn't help you improve does no good.
Mr. Porter identified seven comparative competitive advantages that we enjoy in America:
1. Entrepreneurship.
2. Science, Technology and Innovation.
3. Institutions of Higher Learning.
4. Free and competitive markets.
5. Decentralization across States and regions.
6. Efficient Capital Markets.
7. Dynamism and Resilience.
Mr. Porter also identified two weaknesses that undermine our potential:
1. Protectionism.
2. Favoritism.
The cool thing about comparative competitive advantage, is that we don't have to be better than someone else to be prosperous and successful. We just have to do our best, specialize, and then trade and share with each other.
It seems to me that we should embrace competition that makes us better.
By so doing, the potential prosperity for us, for our children and for the world is breath-taking.
It is my hope and prayer that the blessings of Heaven will be with all of us as we embark on this new leg of the journey to help our children and the world prosper in a competitive world.
Tuesday, November 4, 2008
Wells Fargo Bank and Debit Cards
Dear Wells Fargo Bank Debit Card Customers:
If you have a Wells Fargo Debit Card, BEWARE!!!
Wells Fargo Bank, like at least 13 other major banks in America who service debit card accounts, according to Business Week Magazine dated November 10, 2008, approves transactions when your purchases exceed the balances in your account, and then hit you with enormous fees.
Wells Fargo Bank will charge $35 per overdraft, and even though they will notify you by mail of the problem, they will continue to allow these fees to accumulate.
It is easy for a customer to quickly run up Hundreds of Dollars worth of fees.
The technology exists, and the type of debit cards exist, to disallow such transactions from taking place. But to "maximize shareholder wealth", Wells Fargo has chosen to allow these fees to accumulate. This problem takes advantage, in particular, of those struggling financially.
It is like throwing a block of concrete to a drowning victim.
Why would Wells Fargo prey upon such customers?
Do they need the money that bad?
The Federal Reserve has identified this service as potentially abusive, according to Business Week Magazine.
I would hope that our elected representatives would jump on the bandwagon to reign in such abuses.
If you have a Wells Fargo Debit Card, BEWARE!!!
Wells Fargo Bank, like at least 13 other major banks in America who service debit card accounts, according to Business Week Magazine dated November 10, 2008, approves transactions when your purchases exceed the balances in your account, and then hit you with enormous fees.
Wells Fargo Bank will charge $35 per overdraft, and even though they will notify you by mail of the problem, they will continue to allow these fees to accumulate.
It is easy for a customer to quickly run up Hundreds of Dollars worth of fees.
The technology exists, and the type of debit cards exist, to disallow such transactions from taking place. But to "maximize shareholder wealth", Wells Fargo has chosen to allow these fees to accumulate. This problem takes advantage, in particular, of those struggling financially.
It is like throwing a block of concrete to a drowning victim.
Why would Wells Fargo prey upon such customers?
Do they need the money that bad?
The Federal Reserve has identified this service as potentially abusive, according to Business Week Magazine.
I would hope that our elected representatives would jump on the bandwagon to reign in such abuses.
Monday, October 27, 2008
Martin Luther and Halloween
On All Saints Day, October 31, 1517, Martin Luther posted his 95 Theses to discuss the abuses of indulgences.
Indulgences took money from the people to finance the wars, wants, and desires of Popes, Priests, Bankers, Brokers, Princes, Kings and Emperors.
Some of these individuals were righteous. Unfortunately, many of these individuals were wicked and immoral.
Martin Luther focused his beliefs on Romans 1:17, "The righteous will live by faith."
Martin Luther believed that faith was a free gift to all men from God, and that the christian man was free to choose, and did choose, to be dutiful to God and man.
Unfortunately, there are groups today, who again have access to a lot of money through modern day indulgences, who choose power, selfishness, immorality and greed, instead of their duty to God and man.
Martin Luther believed that Rome was weakening under the morass of moral decay. Rome was later sacked by Charles V.
Is America weakening under a wave of moral decay today? What is the state of morality in the world today?
Luther asked himself the question, "How does anyone know if his sins are really washed away?"
He found his answer in the scriptures. This love for the scriptures supported Luther in his translation of scripture into the tongue of the people; into German.
Today, all people everywhere have access to the scriptures.
As we approach the eve of All Saints Day (Halloween), where does the world stand today before God and man?
I believe that Ronald Reagan's favorite scripture is still the key to our success in America and in the world today. It is 2 Chronicles 7:14 "If my people, which are called by my name, shall humble themselves, and pray, and seek my face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sin, and will heal their land."
Indulgences took money from the people to finance the wars, wants, and desires of Popes, Priests, Bankers, Brokers, Princes, Kings and Emperors.
Some of these individuals were righteous. Unfortunately, many of these individuals were wicked and immoral.
Martin Luther focused his beliefs on Romans 1:17, "The righteous will live by faith."
Martin Luther believed that faith was a free gift to all men from God, and that the christian man was free to choose, and did choose, to be dutiful to God and man.
Unfortunately, there are groups today, who again have access to a lot of money through modern day indulgences, who choose power, selfishness, immorality and greed, instead of their duty to God and man.
Martin Luther believed that Rome was weakening under the morass of moral decay. Rome was later sacked by Charles V.
Is America weakening under a wave of moral decay today? What is the state of morality in the world today?
Luther asked himself the question, "How does anyone know if his sins are really washed away?"
He found his answer in the scriptures. This love for the scriptures supported Luther in his translation of scripture into the tongue of the people; into German.
Today, all people everywhere have access to the scriptures.
As we approach the eve of All Saints Day (Halloween), where does the world stand today before God and man?
I believe that Ronald Reagan's favorite scripture is still the key to our success in America and in the world today. It is 2 Chronicles 7:14 "If my people, which are called by my name, shall humble themselves, and pray, and seek my face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sin, and will heal their land."
Sunday, October 26, 2008
"Wiping Out"
Years ago I had the opportunity to attend a seminar featuring the motivational speaker Art Mortell, then President of Systematic Achievement Corp. Part of his presentation revolved around the blessings that come from wiping out.
He said, "Failure is only an experience that is less than what you expected in which you must demand to know: what have I gained; what is the benefit."
He suggested that failure and success are synonymous.
For example, he said that Thomas Edison needed to fail 10,000 times before he found the right filament for the lightbulb.
As another example, he cited the fact that Babe Ruth struck out 1330 times getting to 714 home runs.
Life is an adventure. As my Grandmother Wilson said, "Just enjoy it." Failure and wiping out are just part of the adventure; they renew our humility.
God said that "Blessed are the meek, for they shall inherit the earth." Matt. 5:5
With the turmoil in the world today, wiping out seems to be commonplace. Look at all of the individuals and financial institutions that have wiped out.
The great thing about the American Experiment is that we can wipe out and gain strength from the experience.
Art Mortell said further that the only way to truly fail is to either quit or not try.
Americans are resilient because they keep trying, and they don't quit.
In World War II, Winston Churchill's famous lines, "Never, never, never give up" are applicable again to us today.
We have some incredible challenges ahead of us with regards to the economy, healthcare, social securtiy, national security, retirement, etc.
Some words of wisdom that I have always remembered were these, "Don't take yourself too 'dang' seriously."
President Thomas S. Monson, President of The Church of Jesus Christ of Latter Saints gave a challenge to the priesthood that I think applies to solving many of our problems today. He said, "Many areas of the world have experienced difficult economic times. Businesses have failed, jobs have been lost, and investments have been jeopardized. We must make certain that those for whom we share responsibility do not go hungry or unclothed or unsheltered." He said further that we should make our homes "...sanctuaries of rigteousness, places of prayer, and abodes of love..." and that we need God's guidance in our lives today.
To make "wiping out" a blessing in our lives, Art Mortell offered these suggestions:
1. Avoid negative addictions like smoking, alcohol, caffeine, food, TV, oversleeping, drugs, gambling, depression and hostility.
2. Implement positive habits like exercise, work, relationships and meditation (God).
3. Be more like a 3 year old, relentless, a proficient role player relating to everyone, able to shift gears at high speed changing tactics, cute, warm and a professional hustler.
He said that total happiness comes from good health, financial independence, love and peace of mind.
"Then shall thy light break forth as the morning, and thine health shall spring forth speedily: and thy righteousness shall go before thee; the glory of the Lord shall be thy rereward." Isaiah 58:8
He said, "Failure is only an experience that is less than what you expected in which you must demand to know: what have I gained; what is the benefit."
He suggested that failure and success are synonymous.
For example, he said that Thomas Edison needed to fail 10,000 times before he found the right filament for the lightbulb.
As another example, he cited the fact that Babe Ruth struck out 1330 times getting to 714 home runs.
Life is an adventure. As my Grandmother Wilson said, "Just enjoy it." Failure and wiping out are just part of the adventure; they renew our humility.
God said that "Blessed are the meek, for they shall inherit the earth." Matt. 5:5
With the turmoil in the world today, wiping out seems to be commonplace. Look at all of the individuals and financial institutions that have wiped out.
The great thing about the American Experiment is that we can wipe out and gain strength from the experience.
Art Mortell said further that the only way to truly fail is to either quit or not try.
Americans are resilient because they keep trying, and they don't quit.
In World War II, Winston Churchill's famous lines, "Never, never, never give up" are applicable again to us today.
We have some incredible challenges ahead of us with regards to the economy, healthcare, social securtiy, national security, retirement, etc.
Some words of wisdom that I have always remembered were these, "Don't take yourself too 'dang' seriously."
President Thomas S. Monson, President of The Church of Jesus Christ of Latter Saints gave a challenge to the priesthood that I think applies to solving many of our problems today. He said, "Many areas of the world have experienced difficult economic times. Businesses have failed, jobs have been lost, and investments have been jeopardized. We must make certain that those for whom we share responsibility do not go hungry or unclothed or unsheltered." He said further that we should make our homes "...sanctuaries of rigteousness, places of prayer, and abodes of love..." and that we need God's guidance in our lives today.
To make "wiping out" a blessing in our lives, Art Mortell offered these suggestions:
1. Avoid negative addictions like smoking, alcohol, caffeine, food, TV, oversleeping, drugs, gambling, depression and hostility.
2. Implement positive habits like exercise, work, relationships and meditation (God).
3. Be more like a 3 year old, relentless, a proficient role player relating to everyone, able to shift gears at high speed changing tactics, cute, warm and a professional hustler.
He said that total happiness comes from good health, financial independence, love and peace of mind.
"Then shall thy light break forth as the morning, and thine health shall spring forth speedily: and thy righteousness shall go before thee; the glory of the Lord shall be thy rereward." Isaiah 58:8
Thursday, October 23, 2008
Our own worst enemy - Our own best friend - self-fulfilling prophecies
When it comes to the economy, we are our own worst enemy - our own best friend - and self-fulfilling prophecies can solve our economic crisis.
With the S&P 500 trading at about 900, and 10 year treasuries trading at about 3.8%, and with earnings on the S&P 500 likely to hit about $80 in the next 12 months, the market is probably undervalued by a huge amount. Depending upon what assumptions one wants to make about future earnings, growth and inflation, the market could be fairly valued as high as 2100. That is an increase of 133% over the current valuation.
Now if everyone will jump on the bandwagon, with proper action, we will become our own best friend, instead of our own worst enemy, and the self-fullfillment of that action will take the S&P 500 to new highs.
It should happen.
It will solve our economic crisis.
It will balance the budget.
It can happen.
We just need to be our own best friend and great things will happen.
With the S&P 500 trading at about 900, and 10 year treasuries trading at about 3.8%, and with earnings on the S&P 500 likely to hit about $80 in the next 12 months, the market is probably undervalued by a huge amount. Depending upon what assumptions one wants to make about future earnings, growth and inflation, the market could be fairly valued as high as 2100. That is an increase of 133% over the current valuation.
Now if everyone will jump on the bandwagon, with proper action, we will become our own best friend, instead of our own worst enemy, and the self-fullfillment of that action will take the S&P 500 to new highs.
It should happen.
It will solve our economic crisis.
It will balance the budget.
It can happen.
We just need to be our own best friend and great things will happen.
Monday, October 20, 2008
Musings about Isaiah
Sunday I was musing about Isaiah. With the turmoil in the world today, I wanted to see what thoughts Isaiah, from the Old Testament, had about our world. Here are a few of his thoughts that stood out to me:
From Chapter 6:
8 Also I heard the voice of the Lord, saying, Whom shall I send, and who will go for us? Then said I, Here am I; send me.
From Chapter 9:
12 "...For all this his anger is not turned away, but his hand is stretched out still."
From Chapter 28:
10 For precept must be upon precept, precept upon precept; line upon line, line upon line; here a little, and there a little:
From Chapter 40:
26 Lift up your eyes on high, and behold who hath created these things, that bringeth out their host by number: he calleth them all by names..."
31 But they that await upon the Lord shall renew their strength; they shall mount up with wings as eagles; they shall run, and not be weary; and they shall walk, and not faint.
From Chapter 48:
10 Behold, I have refined thee, but not with silver; I have chosen thee in the furnace of affliction.
18 O that thou hadst hearkened to my commandments! then had thy peace been as a river,..."
22 There is no peace, saith the Lord, unto the wicked.
From Chapter 54:
8 In a little wrath I hid my face from thee for a moment; but with everlasting kindness will I have mercy on thee, saith the Lord thy Redeemer.
From Chapter 55:
1 Ho, every one that thirsteth, come ye to the waters, and he that hath no money; come ye, buy, and eat; yea, come, buy wine and milk without money and without price.
From Chapter 57:
20 But the wicked are like the troubled sea, when it cannot rest, whose waters cast up mire and dirt.
21 There is no peace, saith my God, to the wicked.
What do these scriptures say to me? They tell me that God is kind and merciful; that God knows each of us by name; that he is patient with us and that "his hand is stretched out still". They tell me that He created all things, including the heavens and the earth and that we learn by doing; "line upon line" and by the "furnace of affliction". They tell me to be bold and to be righteous; to do good. They tell me that God is patient and wants to bless us with strength, knowledge, and "peace like a river". They tell me that wickedness leads to turmoil and unhappiness.
From Chapter 6:
8 Also I heard the voice of the Lord, saying, Whom shall I send, and who will go for us? Then said I, Here am I; send me.
From Chapter 9:
12 "...For all this his anger is not turned away, but his hand is stretched out still."
From Chapter 28:
10 For precept must be upon precept, precept upon precept; line upon line, line upon line; here a little, and there a little:
From Chapter 40:
26 Lift up your eyes on high, and behold who hath created these things, that bringeth out their host by number: he calleth them all by names..."
31 But they that await upon the Lord shall renew their strength; they shall mount up with wings as eagles; they shall run, and not be weary; and they shall walk, and not faint.
From Chapter 48:
10 Behold, I have refined thee, but not with silver; I have chosen thee in the furnace of affliction.
18 O that thou hadst hearkened to my commandments! then had thy peace been as a river,..."
22 There is no peace, saith the Lord, unto the wicked.
From Chapter 54:
8 In a little wrath I hid my face from thee for a moment; but with everlasting kindness will I have mercy on thee, saith the Lord thy Redeemer.
From Chapter 55:
1 Ho, every one that thirsteth, come ye to the waters, and he that hath no money; come ye, buy, and eat; yea, come, buy wine and milk without money and without price.
From Chapter 57:
20 But the wicked are like the troubled sea, when it cannot rest, whose waters cast up mire and dirt.
21 There is no peace, saith my God, to the wicked.
What do these scriptures say to me? They tell me that God is kind and merciful; that God knows each of us by name; that he is patient with us and that "his hand is stretched out still". They tell me that He created all things, including the heavens and the earth and that we learn by doing; "line upon line" and by the "furnace of affliction". They tell me to be bold and to be righteous; to do good. They tell me that God is patient and wants to bless us with strength, knowledge, and "peace like a river". They tell me that wickedness leads to turmoil and unhappiness.
Upper Stillwater Reservoir in Utah
Here is another fall picture of the trail around Upper Stillwater Reservoir in the High Uinta Mountains of Utah. On top of the ridges west of the reservoir we watched about 25 deer and 5 white long-haired mountain goats wander about, feeding and enjoying the beautiful fall weather.
First Snow 2008 Utah
Two weeks ago the first snow fell in northern Utah. Here is a picture of the pines above Upper Stillwater Reservoir. The aspen trees were still beautiful, with lots of color.
Saturday, October 11, 2008
Economic Solutions
As I see it, there are four basic issues that we need to confront in order to solve the economic crisis of our day:
1. Fear.
2. Greed.
3. Protectionism.
4. Pessimisim.
Here are 4 simple suggestions, one each for the above issues, to immediately reverse the capital destruction that is taking place in productive assets:
1. Provide security. Guarantee all bank deposits. I believe that America has already done this.
2. Eliminate all golden parachutes. Make them illegal. They seem immoral anyway.
3. Deregulate. For example, eliminate the mark to market requirement of illiquid assets.
4. Promote optimism. Eliminate short-selling for a time. This could be a similar move as to preventing the Hunt Brothers from cornering the silver market.
As I consider the loss of capital in dollars this year, I believe that it must be on the order of $20 Trillion dollars world-wide. If we were to mark to the market all of the real estate and other assets world-wide, the additional loss of capital in dollars is probably at least another $20 Trillion.
I believe that President Bush said that we would be stronger for going through this experience. He is right. Adversity makes us stronger.
Hopefully we will make good choices as we learn from this experience. Hopefully we will find ways to be kinder and gentler to one another.
We live in an extraordinary time in the history of the world. We are better off today than at any time in the history of our world.
But the challenges of today are immense. With a world population approaching 7 billion, the need to be productive is greater than ever.
Looking optimistically, does this mean, considering the synergistic potential of all of us working well together, that we can all be better off? It's worth a try.
1. Fear.
2. Greed.
3. Protectionism.
4. Pessimisim.
Here are 4 simple suggestions, one each for the above issues, to immediately reverse the capital destruction that is taking place in productive assets:
1. Provide security. Guarantee all bank deposits. I believe that America has already done this.
2. Eliminate all golden parachutes. Make them illegal. They seem immoral anyway.
3. Deregulate. For example, eliminate the mark to market requirement of illiquid assets.
4. Promote optimism. Eliminate short-selling for a time. This could be a similar move as to preventing the Hunt Brothers from cornering the silver market.
As I consider the loss of capital in dollars this year, I believe that it must be on the order of $20 Trillion dollars world-wide. If we were to mark to the market all of the real estate and other assets world-wide, the additional loss of capital in dollars is probably at least another $20 Trillion.
I believe that President Bush said that we would be stronger for going through this experience. He is right. Adversity makes us stronger.
Hopefully we will make good choices as we learn from this experience. Hopefully we will find ways to be kinder and gentler to one another.
We live in an extraordinary time in the history of the world. We are better off today than at any time in the history of our world.
But the challenges of today are immense. With a world population approaching 7 billion, the need to be productive is greater than ever.
Looking optimistically, does this mean, considering the synergistic potential of all of us working well together, that we can all be better off? It's worth a try.
Wednesday, October 8, 2008
Autumn in the Rocky Mountains
Here is a picture of the magnificent scenery near the Upper Stillwater Reservoir in the High Uinta wilderness area of northern Utah. For a spectacular drive, take the paved roads from Mountain Home, about 20 miles north of Duchesne, Utah, and follow the signs west to Upper Stillwater Reservoir. Spend some time walking around the reservoir and then continue on the dirt road west, up and over the tops of the mountains at an elevation of about 11,000 feet. Then continue about 17 miles south to Hannah, Utah. The dirt road is passable by car in good weather, although it has one spot where you'll need to be careful because of rocks. The views are breathtaking and there are many side-roads and trails to explore. My round-trip drive time from Highway 40 near Duschene, including an hour of exploration, was 3 hours.
Thursday, October 2, 2008
Why Congress should vote Yes on the Bailout.
Dear Congress:
Here is why Congress should vote yes on the proposed bailout plan for our financial markets, and why Congress should strongly support this legislation and it's revisions going forward.
This legislation has the potential to make a generational change, favorable to all, in the way government manages our finances.
Since we still have to deal with social security, healthcare and energy reforms in the future, the need for proper fiscal and financial management is critical.
Since there are trillions of dollars sitting in money market types of accounts in our country, the key is to get that money moving.
Since fear and the need of self-preservation will keep individuals from borrowing this money until the fiancial markets stabilize, the government needs to be the borrower of last resort.
Since the taxpayer is the government, the taxpayer is the borrower of last resort.
I believe that this may be a golden opportunity to better equalize the wealth of taxpayers. Borrowers who invest wisely become wealthy.
This legislation could be a first step in allowing taxpayers the opportunity to share in the wealth creation of America.
We should be following the example of Warren Buffett and we should be investing in GE and Goldman Sachs, and all of the other great things in America. We should help each other help ourselves. Let experts take on the troubled assets in America and let us as taxpayers benefit from their success; or suffer with them if they fail. Let's partner together as a people, and go forward with faith.
When we all work together for a common cause, rather than our own selfish interests, good things will happen.
Capitalism has its limits, as demonstrated by this financial meltdown; a meltdown that may not stop until the government intervenes as the borrower of last resort.
Fear has to be overcome. Fear cripples and destablizes everything it touches. Faith on the other hand; faith in each other; faith in the government; faith in America; will create wealth, prosperity and success beyond our wildest dreams.
Taxpayers unite. Let's invest in what is great about America.
Thank you for your consideration.
Sincerely,
Dennis Wilson
Here is why Congress should vote yes on the proposed bailout plan for our financial markets, and why Congress should strongly support this legislation and it's revisions going forward.
This legislation has the potential to make a generational change, favorable to all, in the way government manages our finances.
Since we still have to deal with social security, healthcare and energy reforms in the future, the need for proper fiscal and financial management is critical.
Since there are trillions of dollars sitting in money market types of accounts in our country, the key is to get that money moving.
Since fear and the need of self-preservation will keep individuals from borrowing this money until the fiancial markets stabilize, the government needs to be the borrower of last resort.
Since the taxpayer is the government, the taxpayer is the borrower of last resort.
I believe that this may be a golden opportunity to better equalize the wealth of taxpayers. Borrowers who invest wisely become wealthy.
This legislation could be a first step in allowing taxpayers the opportunity to share in the wealth creation of America.
We should be following the example of Warren Buffett and we should be investing in GE and Goldman Sachs, and all of the other great things in America. We should help each other help ourselves. Let experts take on the troubled assets in America and let us as taxpayers benefit from their success; or suffer with them if they fail. Let's partner together as a people, and go forward with faith.
When we all work together for a common cause, rather than our own selfish interests, good things will happen.
Capitalism has its limits, as demonstrated by this financial meltdown; a meltdown that may not stop until the government intervenes as the borrower of last resort.
Fear has to be overcome. Fear cripples and destablizes everything it touches. Faith on the other hand; faith in each other; faith in the government; faith in America; will create wealth, prosperity and success beyond our wildest dreams.
Taxpayers unite. Let's invest in what is great about America.
Thank you for your consideration.
Sincerely,
Dennis Wilson
Economic Bailout - 2008
Warren Buffett said it well. He said in part that the key to overcoming the current crisis is for all of us to just go to work and to work together. The problem today is fear. The problem with capitalism is the fear and greed cycle.
Who said, "Be bold and mighty forces will come to your aid...Love life. Be grateful for it always. And show that gratitude by not shying away from life's challenges. Live each day a little beyond your capacities and you'll find that your capacities are greater than you ever dreamed."? Answer: Arthur Gordon - Readers Digest May, 1988, pages 33-36.
In the parable of the talents Jesus said in Matthew 25 that those who were given talents all went to work and did well except for one. One of the servants buried his talent. He didn't even put it in the bank just to get some interest because he was afraid. He buried it in the earth. The Lord was only upset with the servant who buried his talent out of fear.
The servant who buried his talent is a microcosm of the problems in our economy today. If we collectively bury our talents; if we don't go to work, if we don't act because of fear, then all that we have will naturally be taken away from us.
So the message to Congress, and to the people of America is: don't be afraid. Go forward with faith; trade; work; and great blessings will result. The $700 Billion bailout package is an act of faith; it is going to work; it is an investment in America; it is a good idea. It is faith in America.
To the members of Congress: Vote yes. Have faith in America. And then let's all go to work, with faith, without fear, and together we'll make it work.
Who said, "Be bold and mighty forces will come to your aid...Love life. Be grateful for it always. And show that gratitude by not shying away from life's challenges. Live each day a little beyond your capacities and you'll find that your capacities are greater than you ever dreamed."? Answer: Arthur Gordon - Readers Digest May, 1988, pages 33-36.
In the parable of the talents Jesus said in Matthew 25 that those who were given talents all went to work and did well except for one. One of the servants buried his talent. He didn't even put it in the bank just to get some interest because he was afraid. He buried it in the earth. The Lord was only upset with the servant who buried his talent out of fear.
The servant who buried his talent is a microcosm of the problems in our economy today. If we collectively bury our talents; if we don't go to work, if we don't act because of fear, then all that we have will naturally be taken away from us.
So the message to Congress, and to the people of America is: don't be afraid. Go forward with faith; trade; work; and great blessings will result. The $700 Billion bailout package is an act of faith; it is going to work; it is an investment in America; it is a good idea. It is faith in America.
To the members of Congress: Vote yes. Have faith in America. And then let's all go to work, with faith, without fear, and together we'll make it work.
Thursday, July 17, 2008
The Ethics of Short Selling
Is short selling ethical?
How much price discovery really occurs because of short selling?
Short selling occurs in margin accounts. What happens to credit expansion and credit contraction as short selling occurs?
Is short selling at the margin a run on the bank at the expense of legitimate shareholders to the enrichment of the short sellers?
Will the markets appropriately readjust to the emotional movements caused by runs on the bank?
Well, here is my opinion.
The benefit of short selling is the motivation that occurs on companies whose business models or ethics are questionable.
Most short selling is speculation.
Speculation is good when it enhances, or has a chance of enhancing, economic well-being.
Otherwise, speculation is bad. It has no economic benefit. Where speculation occurs in a credit based economy, the chances for credit expansion or contraction result from the gamesmanship of the combatants. Most of us don't play the game, so our livelihoods are left in the hands of the speculators. Most of us should not be speculating. We live in a world of specialization. It is not realistic that a majority of us can be good at speculating. The great thing about specialization, is that as we all work, produce and trade with each other, we are all better off. The so-called market economy. But when the actions of a few, impact the majority, like they do with speculation, intervention needs to take place.
In our current economy, where our economic well-being is built on a mountain of debt and inflated capital, short selling has the potential to collapse wealth as runs on the bank take place.
Short selling will allow so-called strong hands to buy equity at bargain prices after the collapses take place. Stronger companies will pick up business and capital. The strong will get stronger and the weak will get weaker. The inherent risk is the same one that is strangling our current economy. Too much money and wealth is being concentrated in too few hands, resulting in a propensity of that money to be hoarded in savings types of accounts. More money and wealth needs to end up in the hands of those that have a higher propensity to spend.
I guess I would support the following:
Naked short selling should not be allowed.
The manipulation of shares of stock, such that they are not available to be borrowed for short selling, should not restrict derivatives of those shares from being available for legitimate short selling.
When short selling causes a run on the bank, so to speak, a government equity or sovereign fund should be available to mitigate the action, so that the people in general have a competitive opportunity with those short sellers that are trying to monopolize equity positions.
At times of inappropriate economic stress, like with the Hunt Brothers trying to corner silver, or with a run on the bank, so to speak, the rules should be changed to protect the public against monopolistic activity.
With monopolistic price tendencies, such as in the oil markets, government activities should be available to mitigate the economic stress.
I guess that I am still favoring a sovereign US fund to compete with the Hedge Funds of the world. This fund would be owned by the people, managed by the best advisers in the world, for the benefit of the people. This fund would help fund the entitlements that will be increasing as time goes on. This fund would act as an endowment to fund America's needs, so as to mitigate the amount of funding that comes from taxes. Taxes tend to be a disincentive to work, whereas, wealth creation tends to incentivize us to work.
How much price discovery really occurs because of short selling?
Short selling occurs in margin accounts. What happens to credit expansion and credit contraction as short selling occurs?
Is short selling at the margin a run on the bank at the expense of legitimate shareholders to the enrichment of the short sellers?
Will the markets appropriately readjust to the emotional movements caused by runs on the bank?
Well, here is my opinion.
The benefit of short selling is the motivation that occurs on companies whose business models or ethics are questionable.
Most short selling is speculation.
Speculation is good when it enhances, or has a chance of enhancing, economic well-being.
Otherwise, speculation is bad. It has no economic benefit. Where speculation occurs in a credit based economy, the chances for credit expansion or contraction result from the gamesmanship of the combatants. Most of us don't play the game, so our livelihoods are left in the hands of the speculators. Most of us should not be speculating. We live in a world of specialization. It is not realistic that a majority of us can be good at speculating. The great thing about specialization, is that as we all work, produce and trade with each other, we are all better off. The so-called market economy. But when the actions of a few, impact the majority, like they do with speculation, intervention needs to take place.
In our current economy, where our economic well-being is built on a mountain of debt and inflated capital, short selling has the potential to collapse wealth as runs on the bank take place.
Short selling will allow so-called strong hands to buy equity at bargain prices after the collapses take place. Stronger companies will pick up business and capital. The strong will get stronger and the weak will get weaker. The inherent risk is the same one that is strangling our current economy. Too much money and wealth is being concentrated in too few hands, resulting in a propensity of that money to be hoarded in savings types of accounts. More money and wealth needs to end up in the hands of those that have a higher propensity to spend.
I guess I would support the following:
Naked short selling should not be allowed.
The manipulation of shares of stock, such that they are not available to be borrowed for short selling, should not restrict derivatives of those shares from being available for legitimate short selling.
When short selling causes a run on the bank, so to speak, a government equity or sovereign fund should be available to mitigate the action, so that the people in general have a competitive opportunity with those short sellers that are trying to monopolize equity positions.
At times of inappropriate economic stress, like with the Hunt Brothers trying to corner silver, or with a run on the bank, so to speak, the rules should be changed to protect the public against monopolistic activity.
With monopolistic price tendencies, such as in the oil markets, government activities should be available to mitigate the economic stress.
I guess that I am still favoring a sovereign US fund to compete with the Hedge Funds of the world. This fund would be owned by the people, managed by the best advisers in the world, for the benefit of the people. This fund would help fund the entitlements that will be increasing as time goes on. This fund would act as an endowment to fund America's needs, so as to mitigate the amount of funding that comes from taxes. Taxes tend to be a disincentive to work, whereas, wealth creation tends to incentivize us to work.
Monday, July 14, 2008
The bailout of Fannie and Freddie
The capital asset inflation of the past several years, particularly in real estate and commodities, resulted in part from a very weak US dollar. This inflation caused unrealistic expectations by individuals and government with respect to real estate and commodity appreciation. Debt borrowings and speculation created additional credit expansion and inflation. Now about 20% of all subprime mortgages are behind in their payments. Wages to pay mortgage obligations have not kept up with this inflation. The government reach to increase taxes on property appreciation has created additional unrealistic expectations, now by government, to fund public projects.
Was the thinking incorrect that increased asset inflation could finance these expectations?
The paradox of labor versus capital returns again. Which comes first, the chicken or the egg; or in this case, capital or labor?
It's time for government to master the paradox of capital and labor.
They are both important.
The proposed bailout of Fannie and Freddie has a chance to master this paradox. Part of the paradox is to enable individuals to make their mortage payments.
Since government needs to have sufficient revenue to meet their entitlements, national security and the freedoms of our people, that revenue is important also.
I would argue that a more balanced strategy employing both capital and labor can accomplish this goal.
I applaud the proposal by the government to make both equity and debt investments in Fannie and Freddie to solve this paradox. I'd propose starting a US sovereign fund, designed to own these kinds of equity and debt instruments, owned and managed by the people, with benefits going to the people, to fund entitlements, national security and freedom. Let the people have a vested interest in the long-term character and integrity of these investments. Instead of working for self-centered interests, if we work to help and support each other, good things will happen.
Was the thinking incorrect that increased asset inflation could finance these expectations?
The paradox of labor versus capital returns again. Which comes first, the chicken or the egg; or in this case, capital or labor?
It's time for government to master the paradox of capital and labor.
They are both important.
The proposed bailout of Fannie and Freddie has a chance to master this paradox. Part of the paradox is to enable individuals to make their mortage payments.
Since government needs to have sufficient revenue to meet their entitlements, national security and the freedoms of our people, that revenue is important also.
I would argue that a more balanced strategy employing both capital and labor can accomplish this goal.
I applaud the proposal by the government to make both equity and debt investments in Fannie and Freddie to solve this paradox. I'd propose starting a US sovereign fund, designed to own these kinds of equity and debt instruments, owned and managed by the people, with benefits going to the people, to fund entitlements, national security and freedom. Let the people have a vested interest in the long-term character and integrity of these investments. Instead of working for self-centered interests, if we work to help and support each other, good things will happen.
Wednesday, July 9, 2008
Tetons In the Evening
Here's a beautiful shot of the moon coming over the Tetons on a June evening. This picture was taken from a spot just south of the Mesa falls between Island Park and Ashton.
Commodity Speculators and Inflation
Let's think this through.
Why is gold worth $900 today when it was only worth $300 just 7 years ago.
Was gold really worth $850 in 1979 and then only $300 in 1982?
Is crude oil really worth $140 per barrel today when it was trading for $20 per barrel less than 10 years ago?
Why were the analysts incorrect a year ago when they predicted that oil would average about $70 per barrel this year?
Real estate prices changed dramatically over the past several years. Should the exact same piece of real estate, with no improvements, be worth 2 times or 3 or even more than it was several years ago?
Well, the answers are pretty simple.
As a people, we waste a lot of time and energy speculating, gambling, etc. We call it price discovery and entertainment, respectively.
First of all the dollar has depreciated by 100% (depending upon the currency in question and how you define percentages) over the past 8 years.
Second, the self-fulfilling prophecies of mass psychology contribute to the extraordinary movements in prices and production.
When self interests motivate price discovery, energy and production, volatility in price, energy and production are magnified in the directions of those movements.
It doesn't seem too unusual to expect what has befallen us.
The question now is where the next movements of self-interest, energy and production will take place?
Well, with interest rates low, borrowers will be able to reignite the acceleration of credit creation, thus causing prices to increase in about everything again, causing an increase in energy and production. It should be good for the economy. It should initially bring prices down.
Hopefully the central bankers will be able to successfully manipulate our psychology, so that we will mitigate the inflationary consequences of speculation and self-interest.
If we as a world population will put our focus, energy and production on things like education, healthcare, work and wellness, good things will happen, and speculation and inflation will moderate.
Why is gold worth $900 today when it was only worth $300 just 7 years ago.
Was gold really worth $850 in 1979 and then only $300 in 1982?
Is crude oil really worth $140 per barrel today when it was trading for $20 per barrel less than 10 years ago?
Why were the analysts incorrect a year ago when they predicted that oil would average about $70 per barrel this year?
Real estate prices changed dramatically over the past several years. Should the exact same piece of real estate, with no improvements, be worth 2 times or 3 or even more than it was several years ago?
Well, the answers are pretty simple.
As a people, we waste a lot of time and energy speculating, gambling, etc. We call it price discovery and entertainment, respectively.
First of all the dollar has depreciated by 100% (depending upon the currency in question and how you define percentages) over the past 8 years.
Second, the self-fulfilling prophecies of mass psychology contribute to the extraordinary movements in prices and production.
When self interests motivate price discovery, energy and production, volatility in price, energy and production are magnified in the directions of those movements.
It doesn't seem too unusual to expect what has befallen us.
The question now is where the next movements of self-interest, energy and production will take place?
Well, with interest rates low, borrowers will be able to reignite the acceleration of credit creation, thus causing prices to increase in about everything again, causing an increase in energy and production. It should be good for the economy. It should initially bring prices down.
Hopefully the central bankers will be able to successfully manipulate our psychology, so that we will mitigate the inflationary consequences of speculation and self-interest.
If we as a world population will put our focus, energy and production on things like education, healthcare, work and wellness, good things will happen, and speculation and inflation will moderate.
Thursday, July 3, 2008
The ECB hikes interest rates
So, let's think this through. The ECB hiked interest rates today to curb inflation. This will shrink demand, but it will also shrink supply. Unemployment should go up. Productivity should stagnate because fewer people are being incentivized to work.
When Ronald Reagan was President, his philosophy was "supply-side" economics. In other words, President Ronald Reagan would have decreased interest rates to stimulate excess supply, thus decreasing inflation.
I guess that I am disagreeing with the move by the ECB. The good thing about the ECB or the FED raising interest rates at this point in time, is that we will all be less well off and more miserable. Theoretically, anxiety, fear and misery will motivate us to go back to work more effectively, thus keeping inflation low. Then we will all be better off.
Is there a better way? Anxiety, fear and misery motivate me, but it also makes me mad. It definitely makes others mad. Anger is definitely a motivating force. Some exibit their rage on the roads by driving recklessly; in the factory they throw wrenches into the systems; some take drugs, gamble, overeat and cheat to overcome these circumstances. At some point we will all go back to work to overcome our problems, but at what price?
Fear, anxiety, anger and misery are definitely motivating forces. So is greed. So is military force.
Why not try a new world experiment; the experiment that began with the Declaration of Independence. The motivating forces of life, liberty, the pursuit of happiness, freedom, kindness, love, hope, faith and charity are potentially the greatest motivating forces in the Universe.
Consequences still need to follow societal goals, but why not make those goals positive and good, instead of miserable and anxious.
I don't know who the author is, but the story is told of an old Cheorkee Indian Chief who was teaching his children about life. He gathered his children around him, at the campfire one night, and said, "There is a terrible fight raging within each one of us; a fight between two wolves."
"One wolf is evil," said the Chief. "He is fear, anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, idleness, competition, superiority, selfishness and ego."
"The other wolf," said the Chief, "is good." "He is joy, peace, love, hope, sharing, serenity, synergy, teamwork, humility, kindness, benevolence, friendship, empathy, generosity, truth, work, compassion and faith."
The children listened carefully and thought about what the old Chief had said. One of the children raised his hand and asked, "Which wolf will win?"
"The one you feed," the old Chief replied.
As a world economy, let's try a new experiment: Let's feed hope, faith, love, charity, sharing, peace, joy, kindness, generosity, empathy, truth, work, humility, benevolence, serenity, synergy, teamwork and compassion.
Providing veterans with an education meets all of those criteria.
Lotteries to raise dollars for municipalities does not.
Veterans were more motivated to fight for their "comrad in arms" than for any other reason. "Naechstenliebe" is one of the most powerful forces in the Universe.
What about the Olympics. I love watching the best athletes in the world compete. The Olympics in China will highlight the best that the world has to offer. It provides a measuring stick for each of each to compare our efforts to others. Competition is good when it takes place in a spirit of hope, sharing and betterment for all of us. It is an opportunity for the world to be good to each other. It is bad when it causes evil.
Dear Chairman Bernanke:
I think that you are doing a wonderful job. It is my opinion that you should not be persuaded by the world stage to raise interest rates yet. Inflation can be evil. But, as you have eloquently explained, some inflation can be good. It can cover a multitude of sins, but it can also cause horrible disruptions to the well-being of people, as the world economy is currently experiencing. The inflation of the past several years has created a lot of evil; a lot of greed, fear, anxiety, and anger. By holding interest rates steady today, with a goal of keeping inflation at 1-2%, and by targeting the 10 year treasury rates at a level that will strengthen the dollar, hopefully the world economy will work together to provide good for everyone.
Thanks for your good work. Best wishes to you always.
Thanks to all of those who have gone before us as we again celebrate the Independence of this wonderful country.
When Ronald Reagan was President, his philosophy was "supply-side" economics. In other words, President Ronald Reagan would have decreased interest rates to stimulate excess supply, thus decreasing inflation.
I guess that I am disagreeing with the move by the ECB. The good thing about the ECB or the FED raising interest rates at this point in time, is that we will all be less well off and more miserable. Theoretically, anxiety, fear and misery will motivate us to go back to work more effectively, thus keeping inflation low. Then we will all be better off.
Is there a better way? Anxiety, fear and misery motivate me, but it also makes me mad. It definitely makes others mad. Anger is definitely a motivating force. Some exibit their rage on the roads by driving recklessly; in the factory they throw wrenches into the systems; some take drugs, gamble, overeat and cheat to overcome these circumstances. At some point we will all go back to work to overcome our problems, but at what price?
Fear, anxiety, anger and misery are definitely motivating forces. So is greed. So is military force.
Why not try a new world experiment; the experiment that began with the Declaration of Independence. The motivating forces of life, liberty, the pursuit of happiness, freedom, kindness, love, hope, faith and charity are potentially the greatest motivating forces in the Universe.
Consequences still need to follow societal goals, but why not make those goals positive and good, instead of miserable and anxious.
I don't know who the author is, but the story is told of an old Cheorkee Indian Chief who was teaching his children about life. He gathered his children around him, at the campfire one night, and said, "There is a terrible fight raging within each one of us; a fight between two wolves."
"One wolf is evil," said the Chief. "He is fear, anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, idleness, competition, superiority, selfishness and ego."
"The other wolf," said the Chief, "is good." "He is joy, peace, love, hope, sharing, serenity, synergy, teamwork, humility, kindness, benevolence, friendship, empathy, generosity, truth, work, compassion and faith."
The children listened carefully and thought about what the old Chief had said. One of the children raised his hand and asked, "Which wolf will win?"
"The one you feed," the old Chief replied.
As a world economy, let's try a new experiment: Let's feed hope, faith, love, charity, sharing, peace, joy, kindness, generosity, empathy, truth, work, humility, benevolence, serenity, synergy, teamwork and compassion.
Providing veterans with an education meets all of those criteria.
Lotteries to raise dollars for municipalities does not.
Veterans were more motivated to fight for their "comrad in arms" than for any other reason. "Naechstenliebe" is one of the most powerful forces in the Universe.
What about the Olympics. I love watching the best athletes in the world compete. The Olympics in China will highlight the best that the world has to offer. It provides a measuring stick for each of each to compare our efforts to others. Competition is good when it takes place in a spirit of hope, sharing and betterment for all of us. It is an opportunity for the world to be good to each other. It is bad when it causes evil.
Dear Chairman Bernanke:
I think that you are doing a wonderful job. It is my opinion that you should not be persuaded by the world stage to raise interest rates yet. Inflation can be evil. But, as you have eloquently explained, some inflation can be good. It can cover a multitude of sins, but it can also cause horrible disruptions to the well-being of people, as the world economy is currently experiencing. The inflation of the past several years has created a lot of evil; a lot of greed, fear, anxiety, and anger. By holding interest rates steady today, with a goal of keeping inflation at 1-2%, and by targeting the 10 year treasury rates at a level that will strengthen the dollar, hopefully the world economy will work together to provide good for everyone.
Thanks for your good work. Best wishes to you always.
Thanks to all of those who have gone before us as we again celebrate the Independence of this wonderful country.
Wednesday, April 30, 2008
The Economy today
This week, President Bush solicited Congress to accept his economic plan.
I have listened with interest as the many economists and politicians around the country have offered their solutions to our economic ills.
What is great about America is the resiliency of the American people.
The issues that impact our prosperity are rather complicated and interrelated. Whether Congress accepts President Bush's Plan or not is probably not the most important issue. What is important is the way that the American people continue to be resilient and whether or not the morality of the American people will keep us strong and prosperous.
It seems to me that the debate needs to focus on the age old argument of capital versus labor.
President Lincoln focused on this issue as did President Theodore Roosevelt.
The concept is simply one of the propensity to consume, to save, to invest and to make wise economic decisions.
A lot of economic decisions are not wise. But they are made as a result of current economic policies, conditions and expectations. These three items change as a basis of the choices that individuals, corporations, and government make under the existing conditions.
I applaud those in government who work hard for us, hopefully to create the propensity for us to make the best decisions possible.
I would recommend that we first and foremost focus on a strong and stable dollar; secondly, a proactive energy policy; thirdly, a more equitable and less costly healthcare policy; and fourthly, a strong American balance sheet.
If we will then wrap this with honesty and morality, we are going to be fine and good things will happen.
I have listened with interest as the many economists and politicians around the country have offered their solutions to our economic ills.
What is great about America is the resiliency of the American people.
The issues that impact our prosperity are rather complicated and interrelated. Whether Congress accepts President Bush's Plan or not is probably not the most important issue. What is important is the way that the American people continue to be resilient and whether or not the morality of the American people will keep us strong and prosperous.
It seems to me that the debate needs to focus on the age old argument of capital versus labor.
President Lincoln focused on this issue as did President Theodore Roosevelt.
The concept is simply one of the propensity to consume, to save, to invest and to make wise economic decisions.
A lot of economic decisions are not wise. But they are made as a result of current economic policies, conditions and expectations. These three items change as a basis of the choices that individuals, corporations, and government make under the existing conditions.
I applaud those in government who work hard for us, hopefully to create the propensity for us to make the best decisions possible.
I would recommend that we first and foremost focus on a strong and stable dollar; secondly, a proactive energy policy; thirdly, a more equitable and less costly healthcare policy; and fourthly, a strong American balance sheet.
If we will then wrap this with honesty and morality, we are going to be fine and good things will happen.
Allergies
What do you do to alleviate allergies?
From April to June, my allergies are terrible. The complications resulting from these allergies can become quite severe. They often lead to colds and infections. I avoid antihistamines because the side-affects seem to be as bad as the cure.
Here are some things that help me. What helps you?
1. A humidifier. It filters the air and alleviates sinus irritations.
2. Shower. It washes off the pollens, dirt, etc., adds humidity to the air and helps drainage in the head.
3. Taking Excedrin, Anacin, Aspirin. These seem to help open the air passages in the head without drying them up too much. The antihistamines create too much dryness in the naval passages for me. The combination of aspirin and caffeine seems to work the best for me.
4. Adrenalin. Being active seems to help. Exercise is a natural source of adrenalin. I've had adrenalin shots when my asthma has been too severe, and that helped.
5. Drinking fluids. Water seems to be the best. The mist from a hot drink seems to help (I believe it acts like a very small humidifier), and drinks with caffeine seem to help. It soothes the throat and creates a natural drainage of the nasal passages.
6. Cough drops. I like the ones with vitamin C only. I'll use the others only if I have a cold and I need a little extra help. But the dryness they create in the naval passages seems to delay the recovery.
7. Wearing a mask when I'm outside mowing the lawns or working in the yard. It creates a little humidity and acts as a filter.
8. I've been blessed to work in nice air-conditioned offices. Staying indoors is not my first choice, but working indoors definitely helps.
The air passages to my ears get blocked easily during the allergy season. I have not found a consistent solution to this problem. This blockage often leads to colds and infections. It has also created a problem for me when I scuba dive. It is nearly impossible for me to dive without taking an antihistamine, anacin or excedrin. These three medications seem to work well for me. But I'd like to find a better and more consistent solution.
I would like your suggestions. What works for you to mitigate allergic reactions to pollens, dust, etc?
From April to June, my allergies are terrible. The complications resulting from these allergies can become quite severe. They often lead to colds and infections. I avoid antihistamines because the side-affects seem to be as bad as the cure.
Here are some things that help me. What helps you?
1. A humidifier. It filters the air and alleviates sinus irritations.
2. Shower. It washes off the pollens, dirt, etc., adds humidity to the air and helps drainage in the head.
3. Taking Excedrin, Anacin, Aspirin. These seem to help open the air passages in the head without drying them up too much. The antihistamines create too much dryness in the naval passages for me. The combination of aspirin and caffeine seems to work the best for me.
4. Adrenalin. Being active seems to help. Exercise is a natural source of adrenalin. I've had adrenalin shots when my asthma has been too severe, and that helped.
5. Drinking fluids. Water seems to be the best. The mist from a hot drink seems to help (I believe it acts like a very small humidifier), and drinks with caffeine seem to help. It soothes the throat and creates a natural drainage of the nasal passages.
6. Cough drops. I like the ones with vitamin C only. I'll use the others only if I have a cold and I need a little extra help. But the dryness they create in the naval passages seems to delay the recovery.
7. Wearing a mask when I'm outside mowing the lawns or working in the yard. It creates a little humidity and acts as a filter.
8. I've been blessed to work in nice air-conditioned offices. Staying indoors is not my first choice, but working indoors definitely helps.
The air passages to my ears get blocked easily during the allergy season. I have not found a consistent solution to this problem. This blockage often leads to colds and infections. It has also created a problem for me when I scuba dive. It is nearly impossible for me to dive without taking an antihistamine, anacin or excedrin. These three medications seem to work well for me. But I'd like to find a better and more consistent solution.
I would like your suggestions. What works for you to mitigate allergic reactions to pollens, dust, etc?
Friday, March 28, 2008
And Good Things Happen
Have you ever had a time when it seemed that the forces of the Universe were lined up in your favor?
With all of the challenges around us, it is nice sometimes to have the forces of the Universe line up just right.
Well, it is time for me to take a moment to reflect on the good things that are happening and thank God for my wonderful blessings.
Here are some of the great blessings that have blessed our family of late.
My youngest son, Jeff, proposed to a wonderful young lady. Her name is Sarah. We like her a lot, and they are planning a July wedding.
Two days before the proposal, Sarah got a new job, Jeff got an EMT job interview and later a new job, and a group of workers knocked on my door to help me remove some trees that needed to be cut down. This all happened simultaneously.
A son-in-law received a teaching position at BYU. Their family has been in Georgia for the past seven years. We'll now have them close to home for a while. It'll be nice to have the grandchildren within 50 miles of our home.
My youngest daughter performed in a musical recital last night at Weber State University. She sang "Defying Gravity" from the play Wicked by Schwartz. I know that I am biased, because she is my daughter, but she was spectacular. The entire show was wonderful and we were blessed to have been there.
Several other little miracles have taken place of late and it is a continuing testimony to me that God is involved in the details of our lives.
With all of the challenges around us, it is nice sometimes to have the forces of the Universe line up just right.
Well, it is time for me to take a moment to reflect on the good things that are happening and thank God for my wonderful blessings.
Here are some of the great blessings that have blessed our family of late.
My youngest son, Jeff, proposed to a wonderful young lady. Her name is Sarah. We like her a lot, and they are planning a July wedding.
Two days before the proposal, Sarah got a new job, Jeff got an EMT job interview and later a new job, and a group of workers knocked on my door to help me remove some trees that needed to be cut down. This all happened simultaneously.
A son-in-law received a teaching position at BYU. Their family has been in Georgia for the past seven years. We'll now have them close to home for a while. It'll be nice to have the grandchildren within 50 miles of our home.
My youngest daughter performed in a musical recital last night at Weber State University. She sang "Defying Gravity" from the play Wicked by Schwartz. I know that I am biased, because she is my daughter, but she was spectacular. The entire show was wonderful and we were blessed to have been there.
Several other little miracles have taken place of late and it is a continuing testimony to me that God is involved in the details of our lives.
Monday, March 10, 2008
Oil pricing
As I watch crude oil prices move above $107 per barrel, I can't help but wonder if the government shouldn't intervene. What if the US had a Sovereign Wealth Fund, that competed with the major oil producers of the world, and benefited every American as the price of oil skyrocketed? This could be a US financed Sovereign Wealth Fund, with a motive of minimizing costs and maximizing benefits to all Americans. It would have the best interests of all Americans at heart. This Sovereign Wealth Fund would be a resource to support universal health care, medicare, medicaid, education and all other hoped for rights.
This could improve competition towards alternative energy sources and help promote increased productivity and improvement in all aspects of the economy. It could eliminate some of the greed and speculation that may be driving asset pricing higher than it should be. It could help mitigate the bubbles and the volatility that we see around us in asset pricing and in currency trading.
It seems to me that the concentration of wealth in the world needs to be mitigated. Since I believe that there is a tendency by everyone to protect their wealth, there is an inherent conflict of interest between those that have the wealth and those that need the wealth. The natural tendency of people is to hoard and protect their wealth and their security.
By placing the assets of a Sovereign Wealth Fund in the hands of the best managers in the world, would this increased competition benefit all? Would it help mitigate the pricing bubbles and speculation that seems to be inherent in our current system?
This could improve competition towards alternative energy sources and help promote increased productivity and improvement in all aspects of the economy. It could eliminate some of the greed and speculation that may be driving asset pricing higher than it should be. It could help mitigate the bubbles and the volatility that we see around us in asset pricing and in currency trading.
It seems to me that the concentration of wealth in the world needs to be mitigated. Since I believe that there is a tendency by everyone to protect their wealth, there is an inherent conflict of interest between those that have the wealth and those that need the wealth. The natural tendency of people is to hoard and protect their wealth and their security.
By placing the assets of a Sovereign Wealth Fund in the hands of the best managers in the world, would this increased competition benefit all? Would it help mitigate the pricing bubbles and speculation that seems to be inherent in our current system?
Friday, February 22, 2008
Wildlife Watching in Utah
This morning I went for a 3.5 mile hike, from where Currant Creek and Red Creek meet, to Highway 40. It was fun to watch at least 49 deer scamper about. There is still about 2 feet of snow at this location (6000 feet above sea level). Last night we watched 6 bald eagles soar over the rock ledges above us. They seemed to be enjoying the beautiful sunshine and the gentle canyon breezes, as they would soar high into the sky, and then come back towards us. At the bottom of Daniels Canyon, on our way up to Red Creek, there was a young cougar lying along the side of the road. It must have been hit by a car. Unfortunately, there were a lot of deer, elk and even a couple of moose, that had been hit by vehicles as well. We also watched a beaver eat the bark off some willows. It must be time for the animals to start coming out of hibernation. Also at the bottom of Daniels Canyon was a herd of elk. They appeared to be having a good time as well, as it seemed that they were teasing each other. Hopefully, spring is not too far away.
Tuesday, February 12, 2008
Sovereign Wealth Funds
It seems to me that the concept of a Sovereign Wealth Fund might be worth considering for Social Security. Why not establish a fund, managed by the best advisors in the world, to grow the Social Security assets. It seems to me that the Sovereign Wealth Funds of Saudi Arabia, Russia, China, Norway, etc. will eventually have a competitive advantage over our entitlement based obligations. With the economies of scale that Sovereign Wealth Funds will enjoy, these funds will be able to grow their assets by incentivising the best advisors in the world and have an advantage over a system that is trying to find tax dollars to pay for social security entitlements. It seems to me that Sovereign Wealth Funds will be having a lot more fun funding their obligations than will be the entitlement programs who fund their obligations through taxes. Should'nt we be planning for such an advantageous position?
Granted that our trade deficit will be huge again this year; probably on the order of $700 billion; and granted that foreign interests will need to invest their dollars in dollar based assets; but it seems to me that a position of equity, even if we have to start it by debt, is stronger than a position of entitlements based on tax receipts.
As part of the American Experiment, it seems to me that it is time to consider starting a Sovereign Wealth Fund, owned by the people, whereby everyone has an interest.
Granted that our trade deficit will be huge again this year; probably on the order of $700 billion; and granted that foreign interests will need to invest their dollars in dollar based assets; but it seems to me that a position of equity, even if we have to start it by debt, is stronger than a position of entitlements based on tax receipts.
As part of the American Experiment, it seems to me that it is time to consider starting a Sovereign Wealth Fund, owned by the people, whereby everyone has an interest.
Monday, February 11, 2008
Healthcare Reform
Friday afternoon at the State Capitol in Salt Lake City, the State Legislature heard arguments supporting an update to the State's healthcare program. Bascially, what I heard was that additional tax credits or incentives would be made available to those who are self-employed, or to those who need to buy their own health insurance. This was to help make the cost of insurance more equal with those who get some of their insurance costs covered by the groups or corporations that they work for. Secondly, the bill provided funding to cover additional studies and ideas to find health insurance alternatives for the many individuals, especially children, that are not insured.
The bill passed with zero no votes.
The bill was consumer incentivized. That means to me that the consumer would be able to choose the cost and the amount of services that would be covered by those costs.
The bill still begged the question, however, about those individuals who are trying to minimzize their healthcare insurance costs and about those individuals that are not insurable; those who may have pre-existing conditions. Since the risk of good or bad health is still uncertain, and since the need and the goal of the consumer is to minimize costs, then many consumers may still underinsure themselves, or health insurance companies may not be willing to insure them.
It was also interesting to read in one editorial about Hillary Clinton's healthcare proposal. I believe that I read that Hillary is proposing a mandated healthcare cost, whereby, if the consumer does not pay it, it will be enforced by such methods as garnishing wages. It was also indicated that Hillary would provide preventative medications for promiscuous behaviors, paid by the taxpayer if the consumer could not afford them.
It looks to me like there is still a lot of work to do. I applaud the Utah State Legislature for a step in the right direction.
The bill passed with zero no votes.
The bill was consumer incentivized. That means to me that the consumer would be able to choose the cost and the amount of services that would be covered by those costs.
The bill still begged the question, however, about those individuals who are trying to minimzize their healthcare insurance costs and about those individuals that are not insurable; those who may have pre-existing conditions. Since the risk of good or bad health is still uncertain, and since the need and the goal of the consumer is to minimize costs, then many consumers may still underinsure themselves, or health insurance companies may not be willing to insure them.
It was also interesting to read in one editorial about Hillary Clinton's healthcare proposal. I believe that I read that Hillary is proposing a mandated healthcare cost, whereby, if the consumer does not pay it, it will be enforced by such methods as garnishing wages. It was also indicated that Hillary would provide preventative medications for promiscuous behaviors, paid by the taxpayer if the consumer could not afford them.
It looks to me like there is still a lot of work to do. I applaud the Utah State Legislature for a step in the right direction.
Winterfest
Last Friday, Pam and I went to the BYU's International Folk Dancer's presentation of Winterfest. It was spectacular. It was held in the Little Theater of the Conference Center in Salt Lake City. The place looked full, which held about 500 people. Several cultural dances were presented, including tap dancing from Ireland and Canada, a swing from Slovakia, street dancing from America, and several others. The highlight of the program for me was the small orchestra, including fiddling, guitars, box drums, viloins, banjos, and singing. It reminded me a little of the Celtic presentations that I've seen over the years. This group is planning perfromances on a trip to several eastern european countries this spring. If anyone gets a chance to see them, we highly recommend it.
Sunday, February 10, 2008
Eagles, Deer, Elk, Beaver, Rabbits
Yesterday afternoon I drove to Red Creek Road, just north of Strawberry Reservoir in Northeastern Utah. The temperature was about 40 F and it was beautiful. There were a lot of people out and about on snowmobiles, and out on the ice fishing. It was a day to see a lot of wildlife. Right at the junction where Currant Creek meets Red Creek, there were about 30 deer. One of the 30 was a very nice 3 or 4 point buck. It's antlers had not yet dropped. In the sky overhead were 3 bald eagles, diving at each other, and just having a good time. Darting across the county road was a little cottontail rabbit. No wonder the eagles were nearby. Farther west on Highway 40, about where the Currant Creek Road meets Highway 40, there many more deer, including two small bucks. Sitting on the ice, next to one of the few openings in Red Creek, just below the junction with Currant Creek, was a rather large beaver, knawing on some willows. Farther west, going down Parley's Canyon, just before Salt Lake City was a herd of elk, enjoying the scrub oak. It looked like everyone and everything was out enjoying the beautiful weather.
Thursday, February 7, 2008
Musings about Positive Energy
As I caught a glimpse of the Oprah Winfrey show yesterday, I was impressed with the message that positive energy overcomes fear and leads to success. It was uplifting and inspirational to listen to the account of one couple, where the husband had lost his job, and instead of worrying about the fear of the unknown, the couple, under the leadership of the spouse, celebrated the new opportunities that lay before them with a glass of wine. They continued their celebration by going to work and finding another job that was more enjoyable and that paid more.
Several years ago, as I was giving a seminar in Slovakia about the positives that could occur from embracing capitalism, it was surprising to me, that the fear of the unknown kept most of the people from voting for capitalism. The results were very slow economic growth.
As I have reflected on that experience, I remember one individual telling me how nice it was that they didn't have to worry about the future, because they had been guaranteed a flat (apartment), a skoda (small car), an education and a job under the previous communist leadership.
This guarantee, however, had sapped drive and energy from the country. This was evident in the decay of many structures and of the loss of much of the country's historical heritage. Thankfully, they have slowing embraced capitalism, and the positive energy that accompanies more personal freedom, and it is benefiting their country and their economy.
Today, as a world economy, we get to worry about global warming, energy costs, healthcare, terrorism, poverty and immorality. When God looks down on us from heaven, what does He think? What would properly motivate us to be better stewards of Earth and to do it with positive energy?
That positive energy, I think, is still Work, Faith, Hope and Charity. Larry H. Miller, a local business leader in Salt Lake City, at one time offered this advise: He said, "I get up early, I go to work, and good things happen."
As we continue our preparation to elect a new President in the US this fall, and with Hillary Clinton, Barack Obama and John McCain leading as potential candidates, which one of these candidates will contribute the best stewardship of our country and of the world? Which one has the most positive energy? Which one can channel that positive energy into successful resolutions of the great issues that confront us? I guess I have'nt come to a conclusion yet, but my hope is, as Abraham Lincoln suggested, that the people will choose wisely.
Several years ago, as I was giving a seminar in Slovakia about the positives that could occur from embracing capitalism, it was surprising to me, that the fear of the unknown kept most of the people from voting for capitalism. The results were very slow economic growth.
As I have reflected on that experience, I remember one individual telling me how nice it was that they didn't have to worry about the future, because they had been guaranteed a flat (apartment), a skoda (small car), an education and a job under the previous communist leadership.
This guarantee, however, had sapped drive and energy from the country. This was evident in the decay of many structures and of the loss of much of the country's historical heritage. Thankfully, they have slowing embraced capitalism, and the positive energy that accompanies more personal freedom, and it is benefiting their country and their economy.
Today, as a world economy, we get to worry about global warming, energy costs, healthcare, terrorism, poverty and immorality. When God looks down on us from heaven, what does He think? What would properly motivate us to be better stewards of Earth and to do it with positive energy?
That positive energy, I think, is still Work, Faith, Hope and Charity. Larry H. Miller, a local business leader in Salt Lake City, at one time offered this advise: He said, "I get up early, I go to work, and good things happen."
As we continue our preparation to elect a new President in the US this fall, and with Hillary Clinton, Barack Obama and John McCain leading as potential candidates, which one of these candidates will contribute the best stewardship of our country and of the world? Which one has the most positive energy? Which one can channel that positive energy into successful resolutions of the great issues that confront us? I guess I have'nt come to a conclusion yet, but my hope is, as Abraham Lincoln suggested, that the people will choose wisely.
Tuesday, February 5, 2008
World History
I find the history of our world humbling to reflect on.
Beginning with Adam and Eve at about 4000 BC, I believe that it is worthwhile to ponder about the various events and individuals that have shaped our history. What were the personalities of these individuals like, and how did their environment influence their actions? It is so interesting to examine the learning and development of man.
For example, taking a very simplistic view of world history (these dates are very approximate in many cases), there have been many individuals that have had dramatic impacts on our world's history. It will be fun to see who impacts world history as we proceed through the next 1000 years. For example:
4000 BC Adam and Eve began the human family, according to Biblical accounts.
3300 BC Enoch was born, and at about 3100 BC, his city of Zion, being righteous, was taken up to God.
3000 BC Noah was born, and the flood occured about 2300 BC. Writings of the Summerians is believed to have begun about this time.
2000 BC Abraham was born. Mathematical tables and the names of heavenly bodies (stars and constellations) started showing up at this time among the Chaldeans and the Babylonians.
1500 BC Moses freed Israel at about this time. The city of Troy was founded at about this time.
1000 BC David and his son Solomon established a strong Israelitish Nation.
600 BC Nebuchadnezzar destroyed Jerusalem.
500 BC Buddism was founded in India. Confuscious was expounding wisdom.
400 BC Socrates, Hippocrates, Plato and Aristotle were expanding knowledge.
300 BC Alexander the Great was conquering kingdoms, and Euclid was establishing mathematics.
200 BC The Great Wall of China was built, and the Roman Empire began.
The Meridian of Time - Christ was born; was crucified; and was resurrected.
300 AD Constantine accepted Christianity, and the Nicene Creed was established.
500 AD Attila the Hun ravaged Europe. Clovis I conquered the Gauls (France). Rome fell to the Germanic tribes.
600 AD Muhammed founded the Islam religion, and the Muslim empire began.
800 AD Charlemagne united Europe and was crowned King of the Holy Roman Empire.
1500 AD Joan of Arc drove the English from France. Johann Gutenberg invented moveable type. Martin Luther started the Reformation. William Tyndale translated the Bible into English. Columbus sailed to America. Copernicus put the Sun at the center of the Universe.
1800 AD America gained it's independence from England. Worldwide, experiments in freedom and liberty began.
2000 AD The greatest level of technological advance and prosperity that the world has ever known has been established.
So, what will the next 1000 years look like? I hope that we the people of the world will continue to embrace the values of history that have created peace and prosperity; namely: preparation, work, freedom, liberty, faith, hope and charity.
Beginning with Adam and Eve at about 4000 BC, I believe that it is worthwhile to ponder about the various events and individuals that have shaped our history. What were the personalities of these individuals like, and how did their environment influence their actions? It is so interesting to examine the learning and development of man.
For example, taking a very simplistic view of world history (these dates are very approximate in many cases), there have been many individuals that have had dramatic impacts on our world's history. It will be fun to see who impacts world history as we proceed through the next 1000 years. For example:
4000 BC Adam and Eve began the human family, according to Biblical accounts.
3300 BC Enoch was born, and at about 3100 BC, his city of Zion, being righteous, was taken up to God.
3000 BC Noah was born, and the flood occured about 2300 BC. Writings of the Summerians is believed to have begun about this time.
2000 BC Abraham was born. Mathematical tables and the names of heavenly bodies (stars and constellations) started showing up at this time among the Chaldeans and the Babylonians.
1500 BC Moses freed Israel at about this time. The city of Troy was founded at about this time.
1000 BC David and his son Solomon established a strong Israelitish Nation.
600 BC Nebuchadnezzar destroyed Jerusalem.
500 BC Buddism was founded in India. Confuscious was expounding wisdom.
400 BC Socrates, Hippocrates, Plato and Aristotle were expanding knowledge.
300 BC Alexander the Great was conquering kingdoms, and Euclid was establishing mathematics.
200 BC The Great Wall of China was built, and the Roman Empire began.
The Meridian of Time - Christ was born; was crucified; and was resurrected.
300 AD Constantine accepted Christianity, and the Nicene Creed was established.
500 AD Attila the Hun ravaged Europe. Clovis I conquered the Gauls (France). Rome fell to the Germanic tribes.
600 AD Muhammed founded the Islam religion, and the Muslim empire began.
800 AD Charlemagne united Europe and was crowned King of the Holy Roman Empire.
1500 AD Joan of Arc drove the English from France. Johann Gutenberg invented moveable type. Martin Luther started the Reformation. William Tyndale translated the Bible into English. Columbus sailed to America. Copernicus put the Sun at the center of the Universe.
1800 AD America gained it's independence from England. Worldwide, experiments in freedom and liberty began.
2000 AD The greatest level of technological advance and prosperity that the world has ever known has been established.
So, what will the next 1000 years look like? I hope that we the people of the world will continue to embrace the values of history that have created peace and prosperity; namely: preparation, work, freedom, liberty, faith, hope and charity.
Monday, February 4, 2008
Globalization, Competition and $6.2 Trillion
What is to be done? The February 11th issue of Business Week Magazine has several interesting articles concerning globalization and competition, and how that is impacting Americans.
Over the past 200+ years of the American Experiment, fear of the unknown, angst in all of it's forms, has driven both good and bad decisions regarding our country.
One of the articles in Business Week that caught my eye was the number $6.2 Trillion. This number, by the McKinsey Global Institute, based on their assumptions, is the suggested amount of petrodollars that a group of OPEC members will have available to invest in US based assets over the next 14 years. That is about half of this year's GDP. It is also about 10% of the wealth of Americans today.
This begs the question as to who will really own this $6.2 Trillion of Capital and will they administer it appropriately?
A second article worried about globalization and whether that was contributing to the loss of income and purchasing power among middle-class Americans.
Globalization and competition are interesting paradoxes. They can be both good or bad, depending upon the actions of all of us, and depending upon the actions of our leaders.
My own experience is that competition is good when it help us to become better. It is bad when it takes advantage of someone less able or less informed.
Globalization, or the concept of comparative advantage, is good. We can all be better off when we specialize and then trade with each other. It is bad when fear and angst prevents civility among nations.
I can't help but wonder about the big industries of capital, energy and healthcare. There seems to be so much waste within these industries. How often does capital take advantage of those least able to afford debt? How often does big oil enjoy excess profits in the name of finding new reserves? How often is healthcare denied to those that have pre-existing conditions?
Paradoxically, how do we encourage competition and globalization to benefit all mankind?
I think that the answer lies within the verses of chapter 25, in the Book of Matthew of the New Testament. If we prepare; if we go to work; and if we will serve each other, we will be blessed; we will find peace and joy; and we will maximize our prosperity.
To me that means that Globalization is still an important solution to world prosperity.
Over the past 200+ years of the American Experiment, fear of the unknown, angst in all of it's forms, has driven both good and bad decisions regarding our country.
One of the articles in Business Week that caught my eye was the number $6.2 Trillion. This number, by the McKinsey Global Institute, based on their assumptions, is the suggested amount of petrodollars that a group of OPEC members will have available to invest in US based assets over the next 14 years. That is about half of this year's GDP. It is also about 10% of the wealth of Americans today.
This begs the question as to who will really own this $6.2 Trillion of Capital and will they administer it appropriately?
A second article worried about globalization and whether that was contributing to the loss of income and purchasing power among middle-class Americans.
Globalization and competition are interesting paradoxes. They can be both good or bad, depending upon the actions of all of us, and depending upon the actions of our leaders.
My own experience is that competition is good when it help us to become better. It is bad when it takes advantage of someone less able or less informed.
Globalization, or the concept of comparative advantage, is good. We can all be better off when we specialize and then trade with each other. It is bad when fear and angst prevents civility among nations.
I can't help but wonder about the big industries of capital, energy and healthcare. There seems to be so much waste within these industries. How often does capital take advantage of those least able to afford debt? How often does big oil enjoy excess profits in the name of finding new reserves? How often is healthcare denied to those that have pre-existing conditions?
Paradoxically, how do we encourage competition and globalization to benefit all mankind?
I think that the answer lies within the verses of chapter 25, in the Book of Matthew of the New Testament. If we prepare; if we go to work; and if we will serve each other, we will be blessed; we will find peace and joy; and we will maximize our prosperity.
To me that means that Globalization is still an important solution to world prosperity.
Saturday, February 2, 2008
President Gordon B. Hinckley
As I reflect today on the life of President Gordon B. Hinckley, 15th President of the Church of Jesus Christ of Latter Day Saints, whose funeral will be this morning, my heart warms to the thoughts of the wonderful work that he accomplished.
As a young missionary for this church in Stuttgart, Germany during the fall of 1973, I recorded some of the thoughts of Elder Gordon B. Hinckley, who was then a special witness of Jesus Christ, and who came to visit us. He told the missionaries to be humble and prayerful. He told us to preach Jesus Christ to the people of the world. He wanted us to know that the Lord had sent us to succeed, and that if we would pray and be faithful, the Lord would help us.
I love the book that President Hinckley wrote called "Standing for Something". I have listened to it on CD over and over again. It has such a wonderful message of virtue within it's work.
The ten virtues as espoused by President Gordon B. Hinckley are:
1. LOVE
2. CIVILITY
3. LEARNING
4. MERCY
5. FORGIVENESS
6. THRIFT
7. INDUSTRY
8. GRATITUDE
9. OPTIMISM
10. FAITH
The guardians of virtue as espoused by President Hinckley are:
1. MARRIAGE
2. THE FAMILY
A quote attributed to Aristotle about virtue goes something like this: “VIRTUOUS BEHAVIOR FOSTERS GOOD RELATIONSHIPS, INCLUDING COURAGE, GOOD TEMPER, FRIENDLINESS, TRUTHFULNESS, WIT, JUSTICE AND MAGNIFICANCE. IT IS THE ABILITY TO DO THE RIGHT THING IN A BOLD WAY.”
As I think about President Hinckley, I can't help but marvel at his ability to do great and good things in a bold way. He seemed to have the skills and the ability, somewhat inherent, but I believe also learned, to coach, guide, and counsel others, partly by his example, in a bold and kind way. He was simply marvelous.
He truly lived by the example of our Lord and Saviour Jesus Christ as recorded in 1st John of the New Testament:
“We love Him, because He first loved us.” 1 John 4:19
As a young missionary for this church in Stuttgart, Germany during the fall of 1973, I recorded some of the thoughts of Elder Gordon B. Hinckley, who was then a special witness of Jesus Christ, and who came to visit us. He told the missionaries to be humble and prayerful. He told us to preach Jesus Christ to the people of the world. He wanted us to know that the Lord had sent us to succeed, and that if we would pray and be faithful, the Lord would help us.
I love the book that President Hinckley wrote called "Standing for Something". I have listened to it on CD over and over again. It has such a wonderful message of virtue within it's work.
The ten virtues as espoused by President Gordon B. Hinckley are:
1. LOVE
2. CIVILITY
3. LEARNING
4. MERCY
5. FORGIVENESS
6. THRIFT
7. INDUSTRY
8. GRATITUDE
9. OPTIMISM
10. FAITH
The guardians of virtue as espoused by President Hinckley are:
1. MARRIAGE
2. THE FAMILY
A quote attributed to Aristotle about virtue goes something like this: “VIRTUOUS BEHAVIOR FOSTERS GOOD RELATIONSHIPS, INCLUDING COURAGE, GOOD TEMPER, FRIENDLINESS, TRUTHFULNESS, WIT, JUSTICE AND MAGNIFICANCE. IT IS THE ABILITY TO DO THE RIGHT THING IN A BOLD WAY.”
As I think about President Hinckley, I can't help but marvel at his ability to do great and good things in a bold way. He seemed to have the skills and the ability, somewhat inherent, but I believe also learned, to coach, guide, and counsel others, partly by his example, in a bold and kind way. He was simply marvelous.
He truly lived by the example of our Lord and Saviour Jesus Christ as recorded in 1st John of the New Testament:
“We love Him, because He first loved us.” 1 John 4:19
Thursday, January 31, 2008
Utah Wildlife
For those who may have been on their way to Park City from Salt Lake City today, there were a lot of wildlife to view. Near the bottom of Parley's Canyon, on either side of the freeway, many elk were lazily browsing about. Along the way up Parley's Canyon were many mule deer lying under the scrub oaks. And near the top of Parley's Canyon were 4 moose, eating the tops of the oak shrubs. With all of the new fallen snow, it was easy to see the wildlife. What a remarkable place.
Wednesday, January 30, 2008
Ben Bernanke and the FED
Today the FED has the responsibility to decide if interest rates should be lowered or not. The good news is that whether they drop interest rates or not, we live in an incredible country; a country where the people work hard, play hard and are quite resilient.
In my mind, the FED should have dropped interest rates last fall, anticipating that the economy was slowing because of an inverse interest rate curve. The mortgage problems resulted from that reality.
The FED has an extremely difficult job. Their responsibility includes trying to out-guess our fears, hopes and dreams, as we struggle with our own capabilities and challenges.
Well, I'm an optimist. I believe that the FED should cut interest rates 50 basis points today to ensure an economic recovery. That should allow people to better manage their mortgages and stabilize the crisis at hand. My hope then would be that economic growth would move back up to a 3% real GDP rate. The challenge then will be to stabilize energy costs at lower levels. If the US dollar will stabilize and maybe improve some, with longer term interest rates moving up from better economic growth, which should help stabilize energy pricing, then maybe world economic prosperity can continue to improve.
This scenario looks like a good recipe for wealth generation to me. The challenge later on will be to see if the people of the world can sustain peace and prosperity in the face of the pride and prejudice that results from wealth generation.
In my mind, the FED should have dropped interest rates last fall, anticipating that the economy was slowing because of an inverse interest rate curve. The mortgage problems resulted from that reality.
The FED has an extremely difficult job. Their responsibility includes trying to out-guess our fears, hopes and dreams, as we struggle with our own capabilities and challenges.
Well, I'm an optimist. I believe that the FED should cut interest rates 50 basis points today to ensure an economic recovery. That should allow people to better manage their mortgages and stabilize the crisis at hand. My hope then would be that economic growth would move back up to a 3% real GDP rate. The challenge then will be to stabilize energy costs at lower levels. If the US dollar will stabilize and maybe improve some, with longer term interest rates moving up from better economic growth, which should help stabilize energy pricing, then maybe world economic prosperity can continue to improve.
This scenario looks like a good recipe for wealth generation to me. The challenge later on will be to see if the people of the world can sustain peace and prosperity in the face of the pride and prejudice that results from wealth generation.
Monday, January 28, 2008
The World our Children are Inheriting
I heard an interesting thought yesterday. It went something like this: Consider all of the incredible inventions of the past hundred years. Our children won't have to reinvent all of the amazing technologies that we take for granted today. They won't have to reinvent the computer, TV, semiconductor chips, nanotechnology, etc., they can simply add on to the the great inventions that now exist. That means to me that the next generation of technological advancement could be even greater than the one that we just experienced. Does that mean that as a world population, the ability or availability to enjoy life by all the people of the world can take place? Who will do the work and how do we keep from becoming idle? Is a world Utopia within our grasp, and how should it be administered? Will pride, greed, jealousy, and/or laziness derail a world of peace and prosperity? Can world peace and prosperity happen? I think it can.
Friday, January 25, 2008
James LeVoy Sorenson
This afternoon was the funeral service for one of the great men among us, James LeVoy Sorenson (Jim). He died of cancer at age 86. He accomplished many wonderful things, but his greatest joy was his family. It was so good to share in this tribute and celebration of his life.
One of my favorite sayings, which has been attributed to him, goes like this:
Gratitude determines attitude, and attitude determines altitude.
Each of his, and his wife Beverly's, eight children paid their father a wonderful tribute. The underlying thought was that Jim's children knew that he loved them, and that he loved them unconditionally. Each of them shared stories of how this love was demonstrated.
Elder Thomas S. Monson, of the First Presidency of the LDS Church, also spoke. He reminded us that the "home quickens the fondest memories of the heart" as he reflected on the comments of the children, and on the many good things that Jim did for others.
It was a wonderful service, and it was a great tribute to a man, and a family, that have touched the lives of so many for good.
One of my favorite sayings, which has been attributed to him, goes like this:
Gratitude determines attitude, and attitude determines altitude.
Each of his, and his wife Beverly's, eight children paid their father a wonderful tribute. The underlying thought was that Jim's children knew that he loved them, and that he loved them unconditionally. Each of them shared stories of how this love was demonstrated.
Elder Thomas S. Monson, of the First Presidency of the LDS Church, also spoke. He reminded us that the "home quickens the fondest memories of the heart" as he reflected on the comments of the children, and on the many good things that Jim did for others.
It was a wonderful service, and it was a great tribute to a man, and a family, that have touched the lives of so many for good.
Thursday, January 24, 2008
The Stock Market
That was sure an interesting ride in the Stock Market yesterday; up and down about 600 points on the DJIA, and a possible reversal day to the upside. It looks like the move by the FED to drop interest rates by 75 basis points has added the positive element of confidence to consumers that the markets needed in the short-run. Technically speaking, a moving average analysis of 5 days, 9 days and 20 days would suggest that this rally could last a while in the short term. Just looking at the charts, it looks like there will be resistance at about 1400 on the S&P, and then again at about 1500 and finally at about 1576. Can we break through to new highs before the end of the year? That all depends on the many variables that must come into play, but it is sure possible under the right circumstances. What are some of the potential problems that will prevent this from happening? They include terrorism, unstable commodity prices, inflation, unstable currencies, and a lack of confidence by consumers, businesses and governments, world-wide, to efficiently work, consume and invest. I'm sure that the volatile ride in the Stock Market will continue, but the trend in the short-term appears to be up.
Wednesday, January 23, 2008
Vasey's Paradise, Grand Canyon
I was just reminiscing about the many trips that we have taken this time of year to Vasey's Paradise in Marble Canyon of the Grand Canyon. Here is a picture from one of those trips, looking down into the Canyon towards Vasey's Paradise. What a beautiful place. I'm in the back with my good neighbor Todd and my son Jeff.
More What-if Analysis
Now that the FED has cut short-term interest rates by 75 basis points, what needs to happen to avoid a market collapse?
We just need to have the confidence to continue to work, spend and invest.
What-if we are all guaranteed healthcare? Who pays for it and how do we avoid abusing it?
What-if we are all guaranteed a certain retirment package? Again, who pays for it and how do we insure it's long-term viability?
What-if a lot of us want to continue to be productive past age 65?
What-if the world economy can produce more than we need? What-if we save and/or invest that excess in additional productive assets? What-if the compounding mechanism multiplies that excess to prosperity beyond our wildest dreams, such that those assets can support the world population? What would we do then with our time and energy?
Then we could focus our time and energy on helping each other and on preserving the resources of our planet.
We just need to have the confidence to continue to work, spend and invest.
What-if we are all guaranteed healthcare? Who pays for it and how do we avoid abusing it?
What-if we are all guaranteed a certain retirment package? Again, who pays for it and how do we insure it's long-term viability?
What-if a lot of us want to continue to be productive past age 65?
What-if the world economy can produce more than we need? What-if we save and/or invest that excess in additional productive assets? What-if the compounding mechanism multiplies that excess to prosperity beyond our wildest dreams, such that those assets can support the world population? What would we do then with our time and energy?
Then we could focus our time and energy on helping each other and on preserving the resources of our planet.
Tuesday, January 22, 2008
Trade Deficit and Economic Growth
It was a bit surprising to me this morning to read that EU Economic and Monetary Affairs Commissioner Joaquin Almunia was blaming the potential world-wide recession on our trade deficit. I believe that the trade deficit, a reflection of the American consumer's support of the world's goods and services, has been a key driver, and maybe the key driver, in producing the current state of world prosperity.
I applaud FED Chairman Ben Bernanke for his leadership in moving the FED Funds rate down to 3.5%. Hopefully, this will establish enough confidence in the world markets by consumers, businesses and governments to produce price stability and consistent economic growth.
My next hope is that the American people will choose wise leaders in the next election that will forge unified solutions to many of our key problems, including health-care, energy and social security.
I applaud FED Chairman Ben Bernanke for his leadership in moving the FED Funds rate down to 3.5%. Hopefully, this will establish enough confidence in the world markets by consumers, businesses and governments to produce price stability and consistent economic growth.
My next hope is that the American people will choose wise leaders in the next election that will forge unified solutions to many of our key problems, including health-care, energy and social security.
Monday, January 21, 2008
Tax Cuts
Dear President Bush:
For a long-term effective tax cut, why not focus on reducing the price of oil, one of the great taxes on individuals and businesses?
I noticed on CNN's business website today that a commentator is asking FED Chairman Ben Bernanke to not drop interest rates. I couldn't disagree more. Another one of the greatest taxes on the American Consumer are high interest rates. Why continue to penalize those consumers with the highest propensity to consume with relatively high interest rates.
President Bush, it appears to me that the two best tax cuts that you could promote would be to reduce the taxing consequences on consumers from high oil prices and to reduce similar consequences on consumers from relatively high interest rates.
For a long-term effective tax cut, why not focus on reducing the price of oil, one of the great taxes on individuals and businesses?
I noticed on CNN's business website today that a commentator is asking FED Chairman Ben Bernanke to not drop interest rates. I couldn't disagree more. Another one of the greatest taxes on the American Consumer are high interest rates. Why continue to penalize those consumers with the highest propensity to consume with relatively high interest rates.
President Bush, it appears to me that the two best tax cuts that you could promote would be to reduce the taxing consequences on consumers from high oil prices and to reduce similar consequences on consumers from relatively high interest rates.
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