Wednesday, November 5, 2008

Maybe it all really did boil down to this...

With two new projects underway I have been snowed under by work. That isn't unusual for me. My business has always been non-linear in terms of time demand. As election eve approached I was on a plane to Singapore, the start of an eight city trip that will take me home in the first week of December. Fortunately Veronica will join me for much of it and it won't be all business. I need to be in Nuremberg for a few days as a result of one of my business projects. Veronica will join me in Bangkok and we will first go to Munich for two days then take the train to Nuremberg on the 17th. I will work a few days with my client while Veron sight-sees. At the end of that week we will take a train to Prague and Vienna and afterwards return to Munich by way of train through Salzberg. We've booked first class seats so we should have plenty to view in the way of scenery. Of course it isn't exactly tourist season in that part of the world, but both of us are exhilarated at the thought of feeling cold air and seeing snow. Veronica has a new pair of Timberland boots, and I have a new overcoat (oops...are we spending?...tsk tsk)
My work and the trip were on my mind as I flew to Singapore. My schedule didn't allow much election watching, so it was shortly after 12 noon our time that I received an SMS from Veronica saying "Congratulations, your man won". The fate of America approached a defining hour, and passed through while I taxi'd from one appointment to another.

Still, the moment itself, as played back on our evening news, did not disappoint. In my lifetime I have not witnessed such a spontaneous outburst of joy in the entire world (except Russia) on an election result. When I ask myself how this has come about I would answer that a simple contrast led to Obama's white house victory. The encumbent party led by McCain seemed mired in the negative message of fear, nebulous accusations, and for Palin, highly repetitive sound bites. I think Obama's campaign stayed on a message of hope, with rhetoric that gave us a brief respite from the realities of our time. I think this message is what won the day.

All of us share a basic need for hope. When it is missing we are miserable. When it is restored we are ebullient. I think it is our hope that we won back. From the news reports we learned this celebration of hope was acknowledged and celebrated all over the world. We lost it I think. Our hope had gone, which led to loss of confidence, and perhaps even some loss of dignity. We behaved in ways never seen so publicly in our history. The speed of the global internet, blogging, digital photos, having become what they are; and there was almost zero control of what went in and out of war zones. The cameras were even able to probe Abu Grahib, Guantanamo, and showed us things that took a little more out of us then I can recall. We learned about "water boarding". If you were like me, you were sickened by it all. Certainly the period from 1968 through Watergate gave us all an edgy cynicism that seemed to stick. In the last eight years we also began to fall into apathy. It was a remarkable time, and I suspect it will draw many analysis in time to come. I can't help but wonder if we were driven to spend to compensate for our growing uneasiness.

The big question before us is how we are going to use this new found hope (assuming you share a sense of hope with me). There is a lot to overcome. I note in the news the return of tribal warfare in the Congo. Russia used the U.S. election to announce the deployment of missles on the Polish border. The stock market plunged 500 points the day after the election as it turned its collective attention back to the real issues of falling business activity and dramatically falling unemployment. Reports Friday tell us there are ten million Americans out of work tonight, the most in twenty-five years. There are likely many more coming into that demographic if the Fed doesn't bail the auto industry. They say they need $50B to survive, but no guarantees they won't need more. Retailers felt the floor fall away in October, harbingers of one of the worse commercial Christmases in our memory. Then there are the state governments themselves, coming under enormous pressure as their tax bases decline rapidly. Investment advise columns tell us we should worry about munis' defaulting. They are going to need some of that fed money also according to talking heads. We shouldn't forget that the Fed has already injected more dollars into the financial system than the annual GDP of Australia. We will have to wait to see the long term impact of such a huge injection of funds, but we can expect that number to grow rather then diminish s the needs line up. Don't forget that Obama is going to raise taxes for some, and is going to need to spend. Hopefully his spending will be wiser then that of the last eight years.


It's a good thing to have a ray of hope now. It is apparent that we face a period of much sacrifice and probably more decline. We need more then ever to nurture that precious commodity, even more then gold, more then oil, maybe even more then wheat. I hope our hope lasts but I think hope is as infectuous as the loss of it. Be sure to share whatever hope you have. You don't actually lose it when you do that. You actually multiply it.
There will many any need of it. It is one thing to stand in a crowd and cheer on election night. It is quite another to watch your bills collect on the side table while you change the dial between daytime TV shows. Be charitable this Christmas, perhaps foregoing personal gifts and giving to others if you can. Be charitable at home too. Plan a warm quiet Christmas and count the blessings you have. You have your family. You live in what is still by far the most free country in the world. There are others reasons to be hopeful beyond Obama's inspiring oratory. For example we have never had such sophisticated, nor readily available technology in our history. Gains in productivity are being realized on every front. Our security is better now then ever, some would say too much better but I do not agree. We could also point to the flip side of one our economic problems; the country is leaning out both corporate and consumer debt. Corporates are selling assets and paying down debt as fast as they can. Cash is king again they say. I would say there sure is plenty of it being poured into the tank but it isn't getting burnt yet. The domestic oil and alternative energy field is going to get a huge stimulus if Obama keeps his campaign pledge. He won't give up on that one. He sees it as a cornerstone of what will be his legacy. We will cause more distress to OPEC over the next 15 years then they have ever felt. We will need som articulate and adept diplomacy at hand. We could expect our trade balance to improve if the dollar holds a bit longer and as most of our overseas partners become enmeshed in similar problems. Don't count on the dollar holding up for long, not at the rate we are making news ones. Dollars are notes, a fiat currency. They devalue or grow just like stocks. This is an excellent time to consider silver and gold in my opinion. Natural gas looks very good now. It would be the time to consider gas, before the harder part of winter sets in. Commodities in general have become more affordable as the world deflates. Whether the largesse of the government is simply putting gasoline on the fire as some would contend, or the sheer weight of the inflationary steps they have taken truly does balance the deflationary forces, we have yet to see. I believe it stands a chance. However, we will need all the hope we can muster and we will need to spread it around.

Thursday, October 16, 2008

Guest Blogger #1


The following concise comments come from friend Jim Menges, fellow ex-patriate, accomplished international businessman, and skilled artist. Within a few phrases he captures the rant of rants regarding the econo-mess we are in the midst of. His short piece comes complete with profane yet suitable adjectives for greedy AIG execs and the naked short sellers cum Lehman Brothers' killers. He also touches on the extraordinary deflation of confidence (which is the true root of our problem and an unwelcome gift of Bush's regulatory breakdown, the incessant free market mantra. Finally, the reader of the following should not regard his closing sentence as a case of being glib. For certain he has not been any more glib then Paulson has been with his mid-stream switch of horses in the construction of the so-called recovery program. I have little doubt that the treasury, the fed, and all the other King's horses are a necessary evil. However, if we are to regain any level of sustainable confidence, we are going to need systemic changes in our antiquated financial system. In other words, we better learn how to use necessary tools (like "laws") to practice what we preach.

We have arguably redirected the course of the good ship America in a way that is irreversible. To what extent the rush to government succor in this crisis sets us in the direction of our European cousins we cannot yet know. We can only know that the more we see unfolding, the more we lose confidence. We can also know that much of Europe lives with extraordinarily high taxes, suppressed creativity, lost entrepreneurialism, a nearly non-existent meritocracy, and a severely declining lifestyle. I hope we survive the onslaught and emerge whole again. Somewhere in between opening the doors to the Gordon Gecko-ish (greed is good) bastards via unchecked financial "innovation", a complete breakdown in the regulatory system, and now a newly socialized banking industry, there must emerge a balance somewhere that preserves what was...as Mr. Menges writes it..."once the only remaining superpower". Then again, maybe there is not a mid ground. Maybe its all too little and too late. If so we may as well all learn how to call a grilled cheese sandwich a "croque monsieur" and wear jackets draped over our shoulders. - Simplifried

Nota Bene:


Market volatility will still be the action du jour for a while - possibly until the end of the year. First and last hour of trading is going to be excessive and dramatic - up or down. Right now there is a lot of forced selling from hedge fund redemption's as billions of dollars are pulled out of the market - which could continue for another 2 months. Since mutual find redemption's are done at the end of trading, I believe it is what is making the last hour move so much. Possibly some good bargains to get if you can stomach the volatility - oil dropping down below $70 per barrel projects a doomed economy, while giving a bigger tax cut to Americans than all of Obama's and McCain's proposals put together. Mixed blessings for an already confused market. Next week I think AIG is suppose to pay off the cock sucking scum-bag naked short seller's Credit Default Swaps that were used in part to destroy Lehman Brothers - those crooks who destroyed the bank will get their hefty insurance payoff, which may be as much as $100B...(add that to the already ridiculous amout the gov paid to bail out AIG and pay for thier crooked management's bonus and spa hot tub holidays.) Not sure how it will impact the market, but when the story gets out, it will cause sentiment anxiety and more frustration to an already pissed off public. Public sentiment seems to be crashing lower and lower each day, as people grasp what has happened to their 401K accounts, see mortgage interest rates continue to go up as the banks get their capital base rebuilt, and foreclosures continue to out pace any other housing statistic...the worst Xmas expected in 20 years (unless "Face Lift" Pelosi rallies the Dem Congress for a year end stimulus package of more welfare checks for America - Merry Socialist Christmas) as the sun sets on what was once the only remaining super power. Have a nice day. - Jim Menges, Oct 16, 2008


Saturday, October 11, 2008

Wednesday, October 8, 2008

At last, some common sense

I know I have been silent for quite a long time and much has happened since previous posts. I'll be frank, I lost my way a bit. I was indecisive about the bail-out program. While I had deep misgivings about it, especially the moral hazard (a phrase that is fast becoming cliche) of appearing to bail out miscreant bankers, and the burden it seemed to pose on tax payers. However, I also began to understand the sheer weight of the breakdown in the credit market and what that would pose in the way of consequences to all of us. Insofar as the anecdotes arising out of the maelstrom...such as AIG executives on a boondoggle running up largest bills for spa services, a full two weeks after their bailout....well, any of you would know what I think of that. I am glad the FBI is involved and I hope that those responsible will see the inside of a prison cell. Still, anger is much akin to fear. I was feeling both.

The N.Y. Times has broken a story today that I think may hold some potential for a great step in the right direction. To quote the story:

"Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials."
It goes on to note that the plan is in a preliminary form and it wasn't clear how it would work at this stage, but that it would likely be voluntary for those banks that avail themselves of it. This will bear watching. This is basically a recapitalization program on a huge scale. It also would have an immediate effect of a re approach to regulations in which the absence of has been a major element of enabling the massive credit crisis too begin with. Stephen Roach, the renowned Morgan Stanley economist and today the Chairman of Morgan Stanley Asia, was recently quoted as saying that failure to re-cpitalize the banks would mean that we wasted the bail out money. He has several other ideas too, including a much larger rate cut then the one announced today and coordinated throughout several nations. He states in a recent Financial Times article that
"In the end, this is not just a crisis of markets, financial institutions, risk management and regulators. It is a crisis of leadership. The authorities who gather in Washington this weekend should be locked in a room until they come up with a true global fix for this mother of all global crises. Incrementalism and failure are not an option."
Frankly, the idea that all those rows of regulations and laws on the law school book shelves have not existed for decades, and that "free markets" should be equal to an unfettered financial industry is a myth, and one that is particularly disingenuous. Regulations and controls are a cornerstone of civilization. The simple fact is that wholesale deregulation does not work, any more then does, say...ethnic cleansing.
We can throw money ineffectively at the problems in the name of defending free enterprise or we can use our brains, admit no perfect system ever existed or exists today, and the universe was no more ideally conceived by Adam Smith than Mao. American mores must shed the isolation and hubris that has crept into it's bloodstream via the twin catalysts of antipathy and eogism so carefully cultured by the new right policies of Reaganomics and it's hybridized spin off of the Bush era (just add large doses of fear mongering and greed).

If this crisis has awakened us from our slumber and given this thinking a sharp slap in the face, then we may be experiencing a cleansing, or at least a catharsis, that future historians may call a moment of salvation.

The plan roughly described in the NY Times article is a good step in the right direction. It is fascinating in the sense that I find it to be totally at odds with the Bush doctrine (if there is such a thing). It suggests to me that in these final days, government is no longer following, in all cases, Dubya's lead.
It is about time that we address the present and more importantly, our precious future.

Thursday, September 25, 2008

When it gets bleak that is when I want to laugh

For as long as I can remember, humor has been my tool of choice, when faced with bad news or tough challenges. It isn't that I am a misanthrope, laughing at all the wrong moments. Instead, I mean to say that humor is often a tool for me to counter the effects on my brain of bad news, or a brewing storm of worry. Admittedlly, this has led to some observing that I have an inappropriate sense of humor. Still, I can state from experience, that I have managed to joke my way out of more then one sticky wicket, and I have been able to clear my head with humor in order to be more effective in dealing with problems that are weighty. Often these devices are silent and internal, simply humerous toughts. This can be a problem if I am particularly amused by my own humorous thought, and utter a giggle in the midst of a group consternation (aka cluster f**k). That usually leads me to utter a muffled sorry, and take a deep sigh to clear the amusement from my brain, which inevitably leads to uncontrollable laughter...the kind where if you're drinking something it comes out your nose, and forces you to retreat from the group that is standing around playing the "ain't it awful" game and looking at me like I am a shopping cart driving homeless person in the midst of a cocktail party at a Sotheby's auction review yelling "Hey, take my picture" at the Tattler photographer.

I am taking too long to introduce you to one of the funniest op-ed columns I've read in a long while. Considering that I read it after reading about all the political posturing going on in Washington while our "leaders" are supposed to be finding solutions, I would have to say it is one of the more valuable comic relief moments I have had in a long time. It came via NY Times columnist, Maureen Dowd. I like her acerbic style and her "anyone-is-fair-game" polemics. However, this time she recruited Aaron Sorkin (creative brain behind The West Wing) to "conjure" up a consultation between Obama and a respected former president. Check it out, it is well worth the read.

P.S. If you are unable to access the feature drop me a note and I'll email it to you.

P.P.S. Write to me and tell me about the last time you laughed so hard whatever you were drinking came out through your nose.

P.P.P.S. The part of the dialogue attributed to the distinguished ex - prez reminded me distinctly of a well known cartoon character. Anyone want to take a guess.

Tuesday, September 23, 2008

At last the outrage? Goodie, lets get it on!


Don's recent message of outrage over the proposed $700 billion bailout of financial institutions hatched up by Paulson, Bernanke, and our administration was fairly typical of most that I have read from many diverse opinion makers. In fact, we are in the midst of a major bull market on "Outrage". No surprise here. If fed enough bullshit I assume you are going to start behaving like one...an angry one.
While it is currently being debated in congress, there has been much written in complaint about the plan and those seem to resonate amongst the letters to the editors as well.

Paulson's scheme is deceptively simple, buy up all of the crap derivatives that are constipating the system so that the credit pinch will be loosened up again. As always, the devil is in the details. The argument against the plan is that it bails out the very institutions that got us into this mess. (Along with many naive or willfully larcenous borrowers). These banks and investment houses are the creators, buyers, and sellers of what is known in financial parlance as derivatives. In addition, if this plan is set in montion, it isn't entirely clear how a repeat of the greed and avarice wouldn't simply repeat. There wil always be greed and avarice of course, but what have we learned that we might put in place to prevent these specific mistakes from being repeated?

Derivatives are financial instruments whose value changes in response to the changes in underlying variables. In the case of our mess, mortgages were pooled in large tranches which were used to issue Mortgage Backed Securities (MBS). The derivative nature of these securities is that their value is derived from the value of the underlying mortgages. There are various types of MBSs. The most common are Interest Only/Principal Only (IO/PO), Collateralized Mortgage Obligations (CMOs), and Commerical Mortgage Backed Securities (CMBSs). But there isn't a need to delve into these details here. An important point is that changes in interest rates can effect these derivatives in two distinct and contradictory ways. A reduction in interest rate will devalue the security (such as a CMO). An increase in rates will cause an extension of risk in the CMO. The value also drops because the cash flows must be discounted at a higher rate for a longer time to reflect that risk. These distinctions are even more pronounced between IOs and POs. In the case of POs, they are guaranteed the principal payments and offered a value at a discount (the spread). If the loan is paid in advance, the holders of POs receive their guaranteed payout just the same. Therefore they made their gains much quicker. IOs on the other hand, are clobbered by prepayments that occur when interest rates drop and refinance of the underlying mortgage, thus the prepayment, takes place. As a holder of the IO, you bear the risk of that happening, and are compensated for it in the discount structure. A side note to this is that IOs and POs are specifically intended to narrow the nature of an investor's bet. By breaking down a package of mortgages into two bets, the investor is able to choose which side of the interest rate forecast he believes in. This is the arguable value of constructing such derivatives. They allow the investment community a way to manage risk. Obviously it didn't work that way. That is mostly because all the way up the food chain, home buyers, mortgage brokers, consolidating banks, Wall Street Bankers, none of these are truly incentivized to care very much about the true valuation of the underlying mortgage, especially if the assumption is that property values are always rising.

The above is basically how sub-prime mortgages were packaged and sold to investors around the world. For eight years up to the Summer of 2007, we gorged on easy credit, (either as borrower, agent, loan packager, investor, or creditor) and excesses were rife. Mortgages written to non credit worthy individuals, with some written at 100% (and more) of the house value, were common. The rationale was the the lending institution was protected by the rapidly rising house values. The loan, it was thought, would never "turn over", meaning reach a value point where it no longer made sense to pay the mortgage. But as we all know now, it did. Now extend this to corporate borrowing. Over the past decade, the exponential growth of credit derivatives has created unprecedented amounts of financial leverage on corporate credit. Similar to the growth of subprime mortgages, the rapid rise of credit products required ideal economic conditions and disconnected the assessors of risk from those bearing the risk. (Imagine that..a cardinal rule in investing was broken by some of the top and most savvy investors in the world. The Lehman Bros. company and their ilk of Wall Street investment banks, The AIG insurance company, the Fannie Mae and Freddy Mac loan guarantee corps. all broke this cardinal rule.) Not only that, the deals were so complex, that no one can say for sure what the underlying values of these derivatives were, then, or now. (Which is why we should ve very dubious of the $ 700 billion figure.) So when liquidity dried up, and there was no market for these unknown derivatives, causing even more credit strictures all over the world, and extending into other areas of credit including student loans, and the meltdown is on. It is so severe that banks do not even want to loan to each other, unsure what the borrower's actual value should be. Enter the Fed and their money printing machine. Enter higher commodity prices (which are valued in dollars). Enter slowing of business, fewer jobs, etc etc.
So do these banks deserve to be bailed out, with the latest plan from the Bush government to buy up $700B of this crap with taxpayer money we don't have yet?
To me, this sounds like adding gasoline to the fire. But we are once again being led by fear. The fear vision coming from the Bush administration is basically the risk of an all out depression. Loss of jobs, dramatically reduced spending power, (all of these things are happening anyway). In other words, if we don't pay it forward, we will suffer the consequences of further precipitating a crisis beyond anyones control. I am getting sick and tired of this negative incentives (scred if you do, screwed if you don't). I am sick and tired of the Bin Laden images, and the excuses as to why we can't get him. I am sick and tired ...full stop.
So now the question becomes one of whether we believe this threat and believe in the solution. I have to be honest and say I do not know for sure, but obviously I smell old fish. It isn't within my capacity to perceive the threat anymore then I can perceive the solution. It sounds to me like being between the proverbial rock and hard place, which is exactly the kind of leverage Bush likes to have to get his way. I want to say "fuck you" to the whole deal and ask them to vacate the White House early. Good Riddance to bad rubbish. The thing that I know for sure is that it pisses me off that Bush will still get his pension, along with the rest of his gang. I think he owes us. I think he owes some jail time too.
It is also likely that the senior people at the banks, who perceived of this travesty, and ignored common sense at the very thing they are supposed to do best, will still walk away with pockets full of obscene pay and bonus packages, even as their workers are laid off in droves and Manhattan starts to look empty.

For a far better read on this topic I urge you to visit today's Paul Farrell column on Marketwatch. He has been on a steady diet of gall for some time now, and it hasn't affected his astute observational or writing skills. In the meantime, keep your powder dry. It is far to risky, in my opinion, to be in the market today, with perhaps the exception of tucking away some gold. And remember, the best way to express your outrage is to drive Bush, and anyone who even remotely sounds, looks, or smells like him, out of office in November.

Saturday, September 20, 2008

Did I say Sleaze?

The following linked story was released in "The Nation" on their web site. (I think they should change their name to "The Nation...Tarnation") The article may lead to a considerable chink bitten out of Mr. McCain's armor if shown to be true. It could even draw blood. Pulitzer prize winning author & reporter Sydney Schanberg's ("The Killing Fields") story is entitled "McCain and the POW Cover-up" It goes quite a bit beyond that part of the spectrum that would be occupied by "sleaze" and challenges McCain's integrity and honor in a way that I think cannot be ignored. I'll mention also that there is already a debate in blog land over the accuracy of the story. I'll let you be the judge, but I recommend reading follow-up to the story before whistling your tune on this one. I am not sure why, as I admire Schanberg, and I am not especially a fan of McCain's as you know, but this story doesn't quite resonate for me. Perhaps it raises some embedded defense in me that comes from a barely tolerable loss. The loss of innocence, and the declining shine of what was once our country. I wish for some spit & polish, and not another layer of the onion to peel, drawing ever more close to the stench of it's core. So I almost hope that it isn't true. Between this and a $700 billion bail-out proposal ($2,304.00 for each man, woman, and child in the USA per July, 08 estimates) by the Bush gang and the state of the union just seems to continue to slide.

As I said, I'll let you be the judge as the debate unveils and I would very much like some other opinions here.

Wednesday, September 17, 2008

Solutions amidst the chaos

This week's feverish activity within the global financial community and the continued vanishing of equity world wide, including the breaking of the dollar by one of the leading money market fund managers, has underscored how dire the credit crisis is. Amidst all the chaos, hand wringing, and worry, we need to remember that all this is coming to a head as the election approaches. We also need to remember that we are still a globe at war with combative and polarized interests on every populated continent. Our votes, if this is possible, are even more important then any in or lifetimes.
What are the candidates saying about the credit crisis? Sadly, not very much other then the usual blame game (greedy bankers, etc. etc.) As has often been the case I find more to chew on from the fourth estate then from the sound bites and carefully worded releases from campaign headquarters. No particular feat of thinking and planning has been demonstrated by either candidate in my opinion, but McCain wins the prize for the banal comments he has made: he wants to form a "commission" and oh, by the way, he has faith in the resilience of Americans.
Admittedly, from the press there is usually as much to toss out with the used coffee grounds then there is to digest, so any such food for thought must be selectively added to our plates. But then, none of us want to think of ourselves as the TV mesmerized Joe six-pack, or the bedazzled and fanatic religous zealot, or the simply undernourished third-worlder, that all together make up the vast majority of fellow passengers on this planet.
So forgetting for the moment that the headlines today include the fact that Yemen isn't up to the task of securing foregin assets on their land (surprise surprise), and that U.S. diplomatic missions are in Pakistan and Afghanistan in an attempt to reconcile recent unilateral initiatives taken on these same sovereign lands, I want to highlight a column that to me makes sense. With one exception from the list of the following financial columnist, I felt that there was a great deal of common sense amongst the ideas of how to go forward. I'll leave it to you to guess which idea I wasn't keen on.
Does McCain or Obama get it?

Thursday, September 11, 2008

Don't let McCain's Sleazeball Tactics Confuse You

We are in the midst, of course, of the final sprint in the white house race. Various claims are flying around like notes in an orchestral warm up. Discordant and confusing...to be sure. But the McCain campaign is far ahead in the title for the most egregiously misleading contentions. The bent towards dis-information and fear mongering have disturbing implications.

Mr. McCain has found himself under particularly heavy fire for a pair of headline-grabbing attacks. First the McCain campaign twisted Mr. Obama’s words to suggest that he had compared Gov. Sarah Palin, the Republican vice-presidential nominee, to a pig after Mr. Obama said, in questioning Mr. McCain’s claim to be the change agent in the race, “You can put lipstick on a pig; it’s still a pig.” (Mr. McCain once used the same expression to describe Senator Hillary Rodham Clinton’s health plan.)
Then he falsely claimed that Mr. Obama supported “comprehensive sex education” for kindergartners (he supported teaching them to be alert for inappropriate advances from adults).

Those attacks followed weeks in which Mr. McCain repeatedly, and incorrectly, asserted that Mr. Obama would raise taxes on the middle class, even though analysts say he would cut taxes on the middle class more than Mr. McCain would, and misrepresented Mr. Obama’s positions on energy and health care. He incessantly bleats the tired Republican argument that under a Democrat administration we will see taxes raised and un-checked spending on social entitlement programs, all of which will lead to losses in jobs. (Of course he omits the fact that we have just recorded the sixth consecutive uptick in the unemployment rate which stood at 6.1% in August). But back to the record on spending. We must remember, the so-called conservatives elected George W. Bush president because he promised to spend less than the liberals who opposed him. Bush promised a humble and restrained federal government. He said he would refrain from foreign adventures and "nation building." What a tragic joke. According to the latest figures, the Bush administration spent more money (as a percentage of GDP) than any U.S. government since World War II. (For an excellent explanation of the Republican supply side economics read this article. As for being restrained and humble, well, he wiretapped Americans without warrants, built secret CIA prisons around the world, suspended habeas corpus, and tortured prisoners – not to mention he repeatedly denied all of these activities.

In keeping with Bush's legacy of misleading the American people Senator McCain and the GOP has run a particularly viscious and distoring campaign. In other words, it is definitely more of the same.

What are the implications? Our society seems to be in the midst of a political free-for-all, where each interest group demands more and more from a pie that's getting smaller. Sadly, I suspect this leads us to become easy prey for the spin-mongers at the GOP. After all, they have been masters at waggin the dog for eight years. From the Nixon years they learned how not to do it. They have mastered the art of pursuasion by fear and negative pschology. By the time the fighting is over, there won't be much left for truly patriotic citizens who see through this woven veil of fabrications. Welcome to Amerika, comrades.

update: See Krugman's "Blizzard Of Lies" at the N.Y. Times

Sunday, September 7, 2008

spending - harder to kick then drugs/ A $75T Fright Fest

One of my favorite financial writers is a guy named Paul Farrell. He writes a column for Marketwatch, the popular web site owned by the Wall Street Journal. He is a no-holds-barred observer, and uses his experience from many years in the business. In his September 8th column he comments on I.O.U.S.A. which several of you saw recently. His comments are well worth the read. Check it out: "A $75 Trillion Fright Fest"

Many of you can recall how America transitioned over our lifetime into a mall culture. While as children us older folks may have spent some time at the local dime store or Woolsworth, our kids spent much more of their time in the nearest mall, splendiferously mantled as a sort of cathedral to our material lifestyle that grew and grew. A perfect place, in their eyes, to see and be seen. After all, the stores were stocked with all that matters.

A theme of the current economic landscape is that the spending we have done has led us to the point where we can no longer pay the piper. It's over. While I tend to be very critical of the financial community and the goverment for this predicament I am not so delusional that I cannot recognize that all of us bear some reponsibility. We are, as a whole, infatuated with "our stuff". We like "our stuff" so much, that we recycle it so we can turn over our stuff and become infatuated again and again (garage sales, flea markets, etc.) It isn't that we usually do stuff with our stuff. We just like it. We are happy when we see it sitting there taking up space. Our thoughts glow with "that's my stuff". Well, sure such thinking has resulted in our getting stuffed. Whther we've been led to this state of affairs or whther we, again as a whole, created this "altar of stuff" is a long discussion or debate. But it is what it is and it is going to have to come to as stop. Are we ready for a nice healthy cathartic dose of spiritualism and idealism? Materialism is a philosophical system which regards matter as the only reality in the world, and which undertakes to explain every event in the universe as resulting from the conditions and activity of matter. In this sense materialism denies the existence of God and the soul. It is diametrically opposed to Spiritualism and Idealism. In any case, not to get sidetracked, the extent to which the world is materialistic is somehwat charted by statistics which are quite revealing.

I found this feature at the New York Times as especially interesting. It is an interactive chart that illustrates per capita spending and gross spending on various discretionary categories and compares this spending among several countries.

Looking over the chart I couldn't help but wonder if Finland, Norway, Switzerland, and Ireland were among the most happy of the bunch.

Post Script: Brother Don has posted some comments from Gloria Steinham regarding Palin. It is well worth the read. His blog link is listed in the left hand column but here is link to the Steinham comments.

P.P.S. Thinking twice about Obama? Think again: You owe it to yourself to see what Palin's Christianity and her church are all about. Go Here

Saturday, September 6, 2008

A two rant weekend

Washington bureaucrats are fond, it seems, of wagging their finger at corruption, usually towards external countries. We Americans tend to take it for granted that our higher institutions are above the practice of tawdry, illegal behavior driven by greed. We tend to think that "corruption only happens in Banana republics and other third world countries. That is, until we are slapped in the face with an Enron, or a Worldcom, or Wall Street et. al. and the "credit crisis" that has evolved into a full blown global recession.

Speaking of Wall Street we all now know that crooked, deceptive practices there frequently gum up the works, but none of us were prepared for the scale of the heist involving the packaging of crap mortgage loans. However, to me the following emerging story takes the cake.

Citigroup, one of the biggest perpetrators/losers in the credit crisis, recently paid $18 million in refunds and settlement charges for stealing $14 million from customers' credit-card accounts. The bank had an "account sweeping program" that automatically removed positive balances from customers' credit-card accounts. If a customer double paid a bill by mistake or refunded a purchase, Citigroup took the positive balance without notification, in other words, outright stole it. In defense, Citi said it voluntarily stopped the program in 2003. In a statement, it added, "We take issue with the state's characterization of our conduct and the parties' voluntary settlement." More info


I have been trying really hard to learn to not get upset. I have been pelted with advise from my loving wife about "letting go" and "not sweating the small stuff". I can see a certain brilliance in this strategy. I really can. The result of my efforts at "anger management" have been pretty successful frankly. But the above story has my blood boiling. I am not just angry about yet another institution being caught with their hand in the till stealing from consumers too old or too debt sodden to figure out what is going on. I am also angry with California's AG (Jerry Brown) for letting them off the hook with a slap on the wrist fine plus restitution. I want the bastards at the top level of Citibank to do time. They are scumbags and deserve a jail sentence. If you or I were to reach into the till of a 7-11 store while a confused clerk wasn't looking, and were caught undeniably, we would do time, or at least end up with a conviction for a felony. (If you happened to be in Texas and were black, chances are that your time would be at least several months and you would do it.) As it is, about the only thing I can do is tear up my Citibank VISA and send it in. I will never, ever, do any amount of business with this bank again. That organization is definitely one of the evil ones. I urge you to consider the same if you have an account there.

When it comes to rants about congress...as Jimmy Durante used to say...I got a million of em, a million of em". But this one sticks in my craw more then most:

Recent projections by the Office of Management and Budget and the Congressional Budget Office reveal that the highway trust fund will run out of money during FY 2009. Unless the fund is replenished soon, federal spending on highways could decline significantly as the fund reverts to a spend-as-you-earn basis until a permanent remedy is enacted. Until then, one solution is to re-concentrate the fund's focus on highway investment and safety by abandoning the many low priority and non-transportation diversions that now encumber the federal program. The soon-to-be-empty trust fund is a direct consequence of recent congressional overspending in excess of the fuel tax revenues that replenish the fund as well as decades of congressional mandates allowing non-highway interests access to the highway trust fund. In FY 2008, these mandates are estimated to have diverted approximately 38 percent of trust fund spending to projects and programs of little value to the motorist's mobility needs.


Not surprisingly the leaders of the House Committee on Transportation and Infrastructure want total spending raised from the current $286 billion to nearly a half a trillion dollars. The siphoning off of funds for "pork" to pass around is just too good for them to miss the chance to increase the take. To achieve this rate of funding (which always equals spending) would likely require a doubling of the federal fuel tax from its current level of 18.3 cents per gallon. Ain't that a pretty sight? In the midst of the highest fuel costs Americans have ever paid, our "leaders" want to increase the funding to a level that will doubles the tax on fuel.
The Chairman of the house committee on Transportation & Infrastructure is James L. Oberstar. You can't write to him though because he uses a web site that only allows residents of his congressional district to send him email. WTF is that!!?? This guy oversees one of the most critical congressional committees in existence, affecting all Americans, and he only takes email from people living in his district? This guy sounds like a piece of work. He funds zero of his own campaign expenses, 56% of which comes from PACs. At $1.48M he raised approximately 40% more in campaign funds then the average congressman in the 2007-2008 campaign period.[source: Federal Election Commission]. By the way, it turns out that most members of congress restrict email reception to those from residents of their congressional districts. However, you can write snail mail. Here is a list of the committee members. A quick google on any name will yield an office address. Write to them and tell them to stick it. You'll feel better.. a little.

Special Note to my always supportive Veronica: I am going to have a big rum drink and get lost in a movie. I will relax. In fact, I've forgotten the above referenced rotten, dirtbag, sunzabeaches already...kinda.

Saturday, August 16, 2008

Sunday Morning Meandering

I usually wake up early on Sunday morning. This habit doesn't seem to be affected by the time I went to bed the night before, or the level of sleep deprivation I've accumulated through the week, or any normal influence that would keep another person lingering in bed. It has been my habit to awaken early on Sundays for as long as I can remember. Sunday mornings are mine, I own them. I didn't set out to own them in any conscious way. But in thinking carefully about it I realize that this is the reason for my habit. It is the one time in the week that is mine, entirely and I relish it.
I like having a chance, should I go out, of seeing a neighborhood, or a city, or a countryside awaken and stretch. If I do not wander out, I simply enjoy the act of making coffee and settling down to catch up on reading at a relaxed pace. I read differently on Sunday mornings. I am less concerned about covering ground then I am with finding something interesting that I can read more about or research. I visit Wikipedia a lot on Sunday mornings. Mornings are, of course, the most promising time of the day on any day, redolent with the expectations of the various acts of living we engage in, either planned or not. Our solar rythms are nearly perfect, inasmuch as evenings are the perfect counterbalance to morning, providing circumspection, satisfaction, wound licking, and rest from work or play.
There are, of course, exceptions to my practice on Sundays and I occasionally have committed to something or other. Today I was safe for a while, because my first commitment involved meeting a friend who was visiting from Hong Kong for a late brunch. I generally expected it to be midday before I heard from him as I know it is normally his practice to sleep in and catch up on email on weekends. So I was a little surprised when I received a message on my mobile at 8:30 this morning that stated simply: "I am awake". My first thought was to write back one of those barbs that we tend to share with old chums. Something like: "So you want me to come change your diaper or what?". Instead I wrote back "Bravo...next report: you've dressed". Then my phone rang and I learned what I knew already, he was hungry and ready to roll. Still, I begged for another hour or so, to which he readily agreed.
We met at a pub on my street here in Bangkok that has decent food and big screen sports TV all around. But the TVs went unnoticed. We quickly became deeply engaged in a discussion about cooking including the nuances of hominy grits (to which he, as a native New Yorker knew little), the value or lack of it of the "bitter" taste spectrum, and crock pot cooking. His interest in the latter is due to his wish to introduce his lovely Chinese wife to the great comfort foods of Western Civilization such as beef stew, corned beef and cabbage, vegetable soups, chicken & dumplings, and the wonders of that slow cooking method real chefs call "braising".
We then moved outside to a sidewalk seat for coffee al fresca and our conversation turned to the complexities of the logistics and accounting in a large technology distribution business. We talked about the merits of using Oracle, the big data base software company, and the multiple types and configurations of his company's product line comprising many different brands, technologies, and products.
While we sat outside we were approached by the whole menagerie of street vendors and hustlers selling everything from fake rolex watches to a hand puppet duck (wanna buy a duck?). To most of them a quick "mai ow khap", which means simply "don't want, sir, or maam" is enough to get them to move on. If you use the Thai phrase, they assume you aren't a tourist and have already become inured and resistant to the pitch. One of the interuptions we had this morning was from one of the teenagers that roam this street with shoe shine kits. They can be more persistant for some reason. They almost never go away easily. Interstingly, they don't differentiate between someone wearing leather shoes versus someone wearing sandals or tennis shoes. I had been a little appalled at that before, thinking they simply were hoping to wear me into giving them money. However, my buddy decided to let this particular shoe shiner, a girl of about 12 - 13 years old, his tennis shoes to clean up. I half way expected the worse, thinking they were going to have some cheap liquid shoe black lathered all over them. Instead, the girl cleaned them up nicely and returned them politely. She awarded us a big smile when he paid her an added 20 baht tip.
Both of us had an hour or two of things to do, so we parted company for a while, agreeing to meet up later to shoot some pool. As I walked back to the the apartment I thought about my buddy, and how I enjoy chatting with him. I like the way our conversations can range widely, and I like those resonant tones we hit when the talk turns to living and working abroad. We share anecdotes from our common experience of being married to "barbarians" and laugh when we acknowledge that they must feel the same way even more frequently then we do. We each secretly hope they are as happy as we are that we did. I began to notice that all along my route home the sidewalk cafes and benches had several small groups of people chatting. One group of four older guys were within earshot and I heard enough to realize their conversation wasn't very different then the one I had just engaged in. This scene was repeated several times over the three blocks or so that I walked back. It certainly felt like Sunday morning.

Other Stuff: With regard to my post below, he did it again this morning, along with team members in the 4X400 meter swim. Our hero Phelps swam the 100 meter butterfly leg of the relay and the team set a world record and struck gold. It is his eighth for this Olympics and officially passes Mark Spitz record of seven in one Olympic game. And it was Spitz who came up with one of the better superlatives for his youthful counterpart. In an interview jointly held with Spitz in the USA and Phelps still poolside after the event, Spitz referred to his performance as "epic". And so it is.

Wednesday, August 13, 2008

Notes on the Olympic Summer Games

I can almost imagine that the web site synonym.com is experiencing a high rate of traffic today, as sports writers, bloggers, and email writers search for superlatives that accomplish the task of describing the performance of Michael Phelps. It is now official that he has set his place in sports history with the two gold medals he added this morning to his total of 5 in the Beijing games and a career total of 11, the highest number of gold medals ever won by a single individual, since stats have been kept.

(I visited synonym.com, but I wasn't there to look up athletic superlatives. I was there to explore alternatives to the word "sham". The web site gave me "simulate", "assume", "feign", "dissemble", "pretend", and "act" in response to my query.

Though I could watch the Olympics in real time (Beijing is an hour ahead of Bangkok) I seldom get a chance during the daytime and even during the evenings I only take occasional glances at the television as email, conference calls with the U.S., and practical demands like preparing a meal, or pressing a shirt, uses up my time. Still, I watched news clips of Phelps accomplishments this morning when he added two more golds (and two more records) to his weighty pouch. What he has done so far adds up an incredible feat but we need to be reminded perhaps, that Phelps has already announced his decision to compete in the next staging of the global pageant and he has a few more cracks at gold in the current affair in Beijing. His moment of truth arrived this morning. As usual the pace of the swimming events was brutally rapid, as schedulers worked hard to clear the water and get the next race underway in rapid time. I assume it all had to do with the televising schedules and prime time. One news report stated that this morning there were ten events in 76 minutes counting the commercials. Athletes in the water at the end of each race were whistled out of the water. Imagine...if you were Phelps...and had no time to even contemplate what you had just accomplished. No victory laps, no waves at the crowd except as you exited the venue. The key word here, in case you haven't guessed, is "commercial".

We can easily predict that the athletic greatness debate will be brisk following this morning. There is a distinguishing characteristic of such useless arguments that there are all kinds of equivocations used, and numbingly detailed statistics and contentions at the heart of them.

Within the context of Phelp's incredible performance, there will be discussions about the suits, and the pool design (it was wider and deeper, and had been designed to minimize adjacent competitor turbulence). Perhaps someone may bring up the "top secret" experimental flow measurement techniques used by the U.S. swim coaches to help their competitors shave micro seconds of their times. Someone may even observe that the Rensselaer researcher that pioneered this work is a Chinese American. Is Phelps already the greatest athlete, or Olympic competitor of all time? Does anyone with one iota of wisdom care to venture an answer? I hope not...as this is really the stuff of bars, locker rooms, and stuffy gentlemen's clubs, where, unless you engage in arguments as a form of sport itself, which many do. In my humble opinion there are far greater issues then this one, but then, everyone needs a diversion now and then, and all of us need our heroes. I think Phelps suits just fine in that role. I hope he can live up to it and I wish him well.However, the ideation of heroe, in our heads, is one of a self made, disciplined, person whose peserverence, with an ability for strong individual performance. We normally do not consider the institutionalization of the Olympics, and how each country fosters a network of athletic research and modern coaching techniques. Sports performance has become a science of immense complexity. It is really that organized effort that we witness when we watch our heroes swim, or shoot seemingly impossible scores in basketball, or overcome odds against higher rated competitors. If past Olympics are any evidence, we may even be witnessing the edge that some athletes gain through chemicals they take.

In this regard we may want to consider how we view the results of any sport event these days. I mean events that can command bags full of corporate money, dedicated research staff, and soon. I sometimes ask myself, what does it all mean?

P.S. Incidentally, since I wrote my opening line above Fox Sports just released a N.Y. Post commentary entitled "Running out of words to describe Phelps' feats" in which the writer opines about his exhausted Thesaurus. I do not mention this as some sort of evidence of literary secondment. I mention it for the contrary purpose of providing fair warning. What you read here is not necessarily useful,nor well written. It is the N.Y. Post and Fox Sports after all.

Monday, August 11, 2008

Soujourn in Northern Thailand

In my recollection, there had been only one time in my life that I took a vacation by myself, a "sojourn" as it were. On that occasion I was the ex director of marketing for a company that failed. I had a last meeting with the primary investor who quietly told me he was "pulling the plug". As quietly and sensitively as he delivered the news it still took the wind out of me. There must have been a large sucking sound in that office, as if someone had been gut punched. He asked me to oversee the take down and then move on to another technology company he had staked. It was a major let down for me. We had done, with all humility, a good job of positioning our product and had demonstrated some capability at making it to our customers. We had put hard orders into backlog that far exceeded our plan, and had executed a steep ramp into volumes. The earliest indications were solid, and we had embarked on a new product line. It was a highly technical precision technology product aimed at volume "OEM" users, who would integrate our product into their products aimed at the fast expanding PC industry. Forecasts were up and too the right. In the midst of all this F.L.B.A. (FLuBbA = Future Looks Bright Ahead) we were overcome by a growing horror that our product had a fatal flaw, one that only showed up after extensive use or, occasionally, in an unperfected test designed to emulate long term use. We were shipping to 100% of the OEM companies that used a product like ours, and slowly, one by one, we began to be disqualified as a vendor. A flurry of lab work, testing, searches for new materials, consultants crawling all over the place, an increased cash burn and a rapidly depleting free cash flow, was puncuated by the almost daily angst-driven phone calls and visits with impatient customers,. Six months later we determined that only a major overhaul of our process, which would require another major tranch of financing, would save us (or so we thought). We laid it all out, as candidly and as objectively as we could. Our owner listened carefully, asked questions, and then took a pass. By that time we had burned several million dollars over the original business plan, and he had lost confidence. Another two months of frantically looking for a buyer, and we reached the end of the line. With a bank account depleted and my peers already bailing out for other jobs, I flew to San Francisco to receive my last set of orders from the investor (by this time our CEO had left and I was the highest ranking employee left - the thought of which gave me utter terrors - but I couldn't let go). I flew back with a directive, and just enough money, to take it all down, piece by piece, with another job offer at another tech startup under the investor's wings, held out as an incentive. Those two or three months were hell for me. Instead of promoting my company's products, creating sparky overhead slides, negotiating prices, watching the competition, I was performing a caretaker's job. I laid off remaining employees, something I had never done on that scale before. I retained a handful of former maintenance and ops guys to decommision large process systems and prepare them for shipping. I arranged for an auctioneer to sell that equipment, and focused on an inventory catalogue. I refereed the occasional fight that broke out between the remaining crew, who like me were bummed out and stressed. In the end, a beer and pizza party was all we could muster to mark the end of an effort that had endured a three year run of demanding days strung together in a blur. It was a muted party.
After literally locking up the facility and sending the keys to the landlord I decided I needed a getaway. A quick call to the management of my next employer to arrange a new report date and I was free to do what I wanted for a week. My family was supportive, and off I went to Loreto, Mexico to spend a few days on the Sea of Cortez, hunting dolphin fish with light tackle. I was right. Those few days alone, with the surrounding beauty and tranquility of the rugged landscape was all I needed to reseat my head in it's proper fitting. I went home with a small cooler of fish filets and a whole new attitude.
Early in July this year, I could feel the need rising in me again, some twenty years later.
That earlier experience taught me that there is such a thing as lonliness and being alone and that they are different. I travel a lot so I have felt lonliness, content to endure it because I always knew it was short term and that I had someplace to go to. More importantly, someone to go to. But being alone offers incredible opportunities for reassessment, and recharging. Without any interference for your attention, you can focus on something you are interested in, examine new ways to view things that bother you, or indulge yourself in your favorite music or food without concern. A sojourn is a very selfish thing.
In early July I felt similar urgings. For me, the first half of this year was all about about responding to outside (and often unwanted)forces. All I could do was try to keep my head above water it seemed. I had been burning long hours. A worrisome health setback with the person I love most in this world had added an element of worry that weighed heavily on me. I ate irregularly. I slept less than I usually do. I fell into all the traps one is supposed to avoid when wrestling with a sudden proliferation of challenges. As these forces began to ease up, I began to experience an increasing number of the deep and utterly painful cluster headaches I've been frquently cursed with since my late twenties. It was time for a break. My first thoughts imagined a getaway with Veronica. However, she was wary of travel and didn't really want to go anywhere. Her escapade with a brain hemorrhage in January had been a source of concern for all of us. However, her prognosis was deep into very favorable territory and she had little in the way of side affects. Still, she is never one who thinks of travel as a pastime, and she was more wary then usual with the hospitalization and all the testing and worry still fresh in her mind. With her loving and reassurance that I should go, I decided to fly from Bangkok to Chiang Rai for five days over the 4th of July holiday. I had an incredible time. I roamed all around, by boat, by car, and by foot, in one of the most beautiful mountainous regions in the world, with a history that is still evident for even the most casual observer. I felt the tinge of excitement of being in the Golden Triangle, made famous by nefarious opium and heroin warlords, who themselves were stragglers of various people who had wandered into the region from hundreds of years of conflict in China, Tibet, and other troubled regions. It is a diaspora of legendary stories and incredible hardships. Further, it all fueled my imagination from my devoted reading in my younger years of Somerset Maugham, Rudyard Kipling, Melville, and Conrad. I visited villages of people who were third generation Kuomintang, who didn't go to Taiwan, but instead took what is arguably a rougher avenue of escape into Burmese jungles to avoid the growing hordes of Mao's vengeful army. I met and spoke with Karen people, of Tibetan origins, whose villages dot the mountainous region and who, in Burma (Myanmar), are still engaged in a revolutionary war that is almost as old as I am. I took a long boat down and up the river Kok which bissects Chiang Rai and is a major tributary to the infamous Meh Kong (Mekong) River. I made my way by car to the Mekong itself, and saw ancient temples next to new river ports bustling with commerce. And each day, weary from the heat of the season and exerting my bulk in ways not practiced in a long time, I would return to my boutique hotel and spa where practiced hands rubbed exotic oils into tired old muscles, imparting a new vitality to expend the next day. I sat outside in a tropical garden as lovely as you could imagine, and drank rum, while making notes on the day's events and reviewing the digital photos I inexpertly caught on my small tourist camera. A few yards away was the table I normally sat at each night to dine on fresh seasonal Thai food, expertly prepared, while watching the cafe' latte colored river moving in lazy meter nearby, masking its underlying power. As I packed to return to Bangkok and the duties of work, I had that moment of regret to be leaving such a wonderful experience. But I was also eager to get back, and more eager to get back to Kuala Lumpur and my family. I was anxious to share what I saw and had felt on this unusual sojourn of mine. I was even more anxious to fall into that cushion-like surrounding we call our homes and our family. There is no sweeter succor then that, and a sojourn, regardless of how wonderful it lingers in the mind, will never blunt the sweetness of coming home. In the end, that is the greatest prize of all.

I've posted several photos from my sojourn at the left. I've used lengthy subtitles to provide a narrative of sorts.

Friday, August 8, 2008

Maybe the question should be "Is McCain fit to lead this country"

In the following commentary by Rex Nutting, the Washington bureau chief of Marketwatch points out how the question of the fitness of Obama to lead our country has preoccupied the press and the electorate. Those commenting point out his youth and lack of experience as a primary cause for concern. However, Nutting goes on the offense and asks the same question about McCain. His answers give pause to anyone who would automatically discount Obama in favor of McCain's carefully coiffed image of senority:

Why McCain would be a mediocre president
By Rex Nutting, MarketWatch

"In his frivolous Paris and Britney ad, Sen. John McCain has asked the right question: Is Barack Obama ready to lead this country?
Since last January, Sen. Obama's fitness for the presidency has been the only question that matters in American politics. The pollsters and pundits agree that if Obama can show the voters that he's up to the job, he'll win. If not, he won't.
But that begs another question: Is McCain fit to lead America?
That question hasn't been asked, nor has it been answered.
The assumption seems to be that McCain's years of experience in the military and in Congress of course give him the background and tools he'd need in the White House. As Britney might say, "Duh! For sure he's qualified!!! He's Mac!!!"
But is that true? Does McCain have the right stuff?
A careful look at McCain's biography shows that he isn't prepared for the job. His resume is much thinner than most people think.
Here are some reasons why McCain would be a mediocre president.
Lack of accomplishments
Like the current occupant of the White House, McCain got his first career breaks from the connections and money of his family, not from hard work.
The son and grandson of Navy admirals, he attended Annapolis where he did poorly. Nevertheless, he was commissioned as a pilot, where he performed poorly, crashing three planes before he failed to evade a North Vietnamese missile that destroyed his plane. McCain spent more than five years in a prison camp.
After his release, McCain knew his weak military record meant he'd never make admiral, so he turned his sights to a career in politics. With the help of his new wife's wealth, his new father-in-law's business connections and some powerful friends had made as a lobbyist for the Navy, he was elected in 1982 to a Congress in a district that he didn't reside in until the day the seat opened up. A few years later, he succeeded Barry Goldwater as a senator.
McCain hasn't accomplished much in the Senate. Even his own campaign doesn't trumpet his successes, probably because the few victories he's had still rankle Republicans.
His campaign finance law failed to significantly reduce the role of money in politics. He failed to get a big tobacco bill through the Senate. He's failed to change the way Congress spends money; his bill to give the president a line-item veto was declared unconstitutional, and the system of pork and earmarks continues unabated. He failed to reform the immigration system.
Every senator who runs for president misses votes back in Washington, so it's no surprise that McCain and all the others who ran in the primaries have missed a lot of votes in the past year. But between the beginning of 2005 and mid-2007, no senator missed more roll-call votes than McCain did, except Tim Johnson, who was recovering from a near-fatal brain aneurysm.
Shallow
McCain says he doesn't understand the economy. He's demonstrated that he doesn't understand the workings of Social Security, or the political history of the Middle East. He doesn't know who our enemies are. He says he wants to reduce global warming, but then proposes ideas that would stimulate -- not reduce -- demand for fossil fuels.
McCain has done one thing well -- self promotion. Instead of working on legislation or boning up on the issues, he's been on "The Daily Show with Jon Stewart" more than any other guest. He's been on the Sunday talk shows more than any other guest in the past 10 years. He's hosted "Saturday Night Live" and even announced his candidacy in 2007 on "The Late Show with David Letterman."
McCain has not articulated any lofty goals. So far, his campaign theme has mostly been "McCain: He's None of the Above."
In the primaries, he campaigned on "I'm not that robotic businessman, I'm not that sanctimonious hick, I'm not that crazy libertarian, I'm not that washed-up actor, I'm not that delusional 9/11 guy." In the general election, he's emphasized that he's not that treasonous dreamer.
No leadership
McCain has frequently taken on near-impossible missions that go against the grain of his party. It's the basis of his reputation as a maverick. But McCain has never been able to bring more than a handful of Republicans along with him on issues such as campaign finance reform or immigration. Democrats on the Hill have accepted McCain's help on some issues, but except for a few exceptions (John Kerry and Joe Lieberman), they've never warmed to him.
To achieve anything as president, McCain would have to win over two hostile parties: The Democrats and the Republicans.
Living in the Sixties
McCain is still fighting the Vietnam War. But he's not fighting the real historic war, which taught us the folly of injecting ourselves into a civil war that was none of our business. We learned that, in a world where even peasants have guns, explosives and radios, a determined and popular guerrilla force can defeat a modern army equipped with the mightiest technology if that army has no vital national interest to protect.
Instead, McCain is fighting an imaginary Vietnam War, where a sure victory could have been achieved with just a little more bombing, just a little more "pacification," just a little more will to win at home. This fantasy clouds McCain's judgment on foreign policy.
Most of the other high-profile politicians who fought in Vietnam -- Colin Powell, Chuck Hegel, John Kerry, and Jim Webb -- aren't stuck in the past, and they don't view the Iraq War as a chance to get Vietnam right.
No principles
After years of honing a reputation as a guy who'll say the truth regardless of the political consequences, McCain has crashed the Straight Talk Express. On almost every issue where he took a principled stand against the Republican line -- taxes, immigration, oil drilling, the Religious Right -- he's changed his views.
We ought to like politicians who change their mind when the facts change; it shows maturity, judgment and flexibility. But politicians who change their mind to suit the prevailing winds show the opposite.
The bottom line
Successful presidents come from two molds: visionaries, or mechanics. The visionaries -- think Reagan or FDR -- see what others can't and say 'Why not?" to inspire the country. The mechanics -- think LBJ or Eisenhower -- know the ins and outs of government and are able to harness the power of millions of humans to accomplish great things, or at least keep the wheels from coming off.
McCain fits neither style. He's neither a dreamer, nor a detail guy. His major accomplishment, in Vietnam and in the Senate, has been merely to survive.
Just surviving doesn't make you a hero, or a decent president. America needs to do more than survive the next four years."

Thursday, August 7, 2008

Another reason to dislike George W. Bush

I am in our Bangkok apartment this week and next, with much to accomplish while I am here. This week alone I have had outside meetings every day. Today was an easier schedule however. My only meeting was to be a dinner meeting with a client whom I especially enjoy visiting. We had arranged to meet at a hotel where he would be completing a full day seminar he was attending. As the time to go hail a taxi approached, I thought it was a good thing that I was leaving just before 5 pm. That is usually a good time to dart out of the city as it precedes the main rush which gets underway by 6 pm. There was a taxi just outside and with my broken Thai I managed to get him to understand where I was going. On our street the traffic was light, and I thought my plan was confirmed. However, as soon as we hit the nearby primary road we engaged in a snarl that was relentless. Now I should mention that Bangkok traffic is notoriously snarled almost all of the time, so keep in mind that all things are relative. This was a major snarl. It took about 20 minutes to travel a single block. I knew pretty quickly that I wasn't going to make it to by the appointed time. I decided to give it a few minutes to see if it was a localized problem that we might break out of, but it simply got worse. So I called my friend to advise that we should either re-schedule, or he would be in for a wait. As soon as he heard my voice he said "I was just going to call you to tell you that the police and military types have cordoned off the hotel I'm in and some member of the Royal family has just arrived. You can't get in and I can't get out." Further, we had no idea how long this was going to last. Then I remembered that "Dubya" was in town.
We quickly resigned ourselves to the obvious and discussed a re-schedule of our meeting. I instructed the taxi driver to head back to the apartment. In Bangkok, this isn't as easy as it sounds. Traffic flow is poorly organized in most Asian cities but Bangkok is renowned for the inability to navigate based on the allowable turns, and dominant traffic flow (if you can call it that). It took another hour and a quarter to get back to the apartment. All in all, I spent just under two hours in a taxi. Mind you, I am the kind of guy that resents the time it takes to get a haircut. Overhead time is anathema to me.
After returning I went to my laptop to check email and browse news. There I found Mr. Bush's speech, which I felt somehow already invested in, so spending the time to read it seemed inevitable. It only multiplied my irritation, but then, you've heard this one before.

Sunday, August 3, 2008

Border guards clarify: They don't need a reason for search and seizure

A few months ago I opined about the new policies practiced by U.S. Customs and Immigration officials, observing that this was yet more evidence that our once vaulted constitution has been sullied by the U.S. Government, and the very institutions that we depend on to protect the principles we have long revered. Fellow blogger "Winter Patriot" has just updated his blog with clarification as to the policy and it's practice.
On July 24, 2006, the United States Court of Appeals for the Ninth Circuit decided that US Customs and Border Patrol Officers had the right to search and seize a person’s laptop computer, computer discs and other electronic media. Nowhere has this information been broadcast. Millions of travelers know nothing about this ruling. Yet the word has begun to find its way out into public view. If you travel in and out of the United States I strongly recommend that you visit this blog
If you are an American, and you love your country, the information will sadden you. However, as the blogger points out:
"And I gave my heart to know wisdom, and to know madness and folly: I perceived that this also is vexation of spirit. For in much wisdom is much grief: and he that increaseth knowledge increaseth sorrow."-- Solomon (Ecclesiastes 1:17-18)

Wednesday, July 23, 2008

Once again our government is rolling shit downhill

Once again our government has decided to roll shit downhill to the generations that follow. Congress has passed the housing bill, and inexplicably Bush has dropped his threat of vetoing it, and the cost to taxpayers is immeasurable. However, it is not so immeasurable that we cannot easily calculate that the burden will fall to several generations of taxpayers to follow. The whole rationale for the sudden bi-partisan collusion seems to center on salvaging Fannie Mae and Freddie mac. The current housing bill gives U.S. Treasury Secretary Henry Paulson the authority to spend as much money as needed to support Fannie and Freddie. Paulson says he will provide "unlimited" government financing. But there's no government surplus. Thus, these debts will either be paid for by our children and grandchildren... if not through direct taxation which a big part of it certainly will be...through inflation, that growth inhibiting malaise that will effectively alter our lifestyles. Milton Friedman (who must be turning over in his grave) once said that if you put the government in charge of the Sahara Desert, you will soon run out of sand. Case in point, the government will bail out a bunch of crony capitalists – Fannie and Freddie spend more money on lobbying than any other two companies in the United States – by either robbing its citizens of their savings (via inflation) or by taxing several future generations of Americans. This is the greatest financial crime in the history of our country. Ken Lay of Enron? Michael Milken the junk bond king? Bernie Ebbers of Worldcom? Fugedaboudit! They were penny ante pikers. The fact is, is that no one knows what the bailout is going to cost tax payers. A government estimate of $25B is laughable. But even if it were true, we don't have $25B to spend. The only way that we will is if we print more money (more inflatio). At the moment, stock markets are buoyed (by comparison to recent months) and both oil and gold are down. It is a Bear trap. We must all prepare for the end of the denial phase. The reality of the new Amerika will be all too real in spite of it's nightmarish feel. We must all begin to realize that "retirement" is going to take on new meanings. Of course, this isn't my rant alone. And in my view, the following columnist nailed it, so I am passing it through here. The truth is that Bush-new right policies have imploded on us. The result is that the United States is rapidly becoming the largest socialist enterprise ever known. Free markets, a cornerstone of democracy, is now the sacrificaial altar to which generations of Americans will be required to pay obeisance.

11 reasons America's a new socialist economy

How free market ideology backfired, sabotaging capitalistic democracy

By Paul B. Farrell, MarketWatch
Last Update: 11:47 AM ET Jul 22, 2008

ARROYO GRANDE, Calif. (MarketWatch) -- Welcome to the conservative's worst nightmare: The law of unintended consequences. Why? Nobody wants to admit it, folks, but the conservatives' grand ideology is backfiring, actually turning the world's greatest capitalistic democracy into the world's newest socialist economy.

A little history: The core principles of conservative economic ideology are grounded in Nobel economist Milton Friedman's 1962 classic "Capitalism and Freedom." Too late to stop President Lyndon Johnson's Great Society, those principles became the battle cries energizing conservatives since Reagan: Unrestricted free markets, free enterprise and free trade; deregulation, privatization and globalization; trickle-down economics and trickle-up wealth to an elite plutocracy destined to rule the new American capitalist utopia.

So what happened? Are you guys nuts? Hey, I'm talking to all you blind Beltway politicians (in both parties) ... plus the Old Boys Club running Wall Street (into the ground) ... plus all you fat-cat CEOs (with megamillion parachutes) ... and all your buddies scamming everybody else to get on the Forbes 400. You are proof of Lord Acton's warning: "Power corrupts and absolute power corrupts absolutely."

It's backfiring! You folks turned our America from a great capitalistic democracy into a meddling socialist economy. Still you don't get it. You're acting like teen addicts tripping on an overdose of "greed-is-good" testosterone while your caricature of conservative economics would at best make a one-line joke on Jay Leno.

Here are 11 reasons your manipulations are sabotaging the great principles of leaders like Friedman and Reagan:

1. Dumber than a fifth grader with cognitive dissonance
Kids know what it means. They know most adults today can't see past the end of their noses. Liberals tune out candidate McBush for being lost in the past. Conservatives can't hear Obama without seeing that turban.

Cognitive dissonance simply means most brains cannot see past their own narrow ideologies. They dismiss any data that contradicts their old ideologies. Whether you're a conservative Republican or liberal Democrat, you only hear what you already know is "true." All else is tuned out.

2. Where did all the leaders go with their moral character?
Friedman's economics requires leaders of moral character. Did it run into Lord Acton's warning: "Power corrupts, absolute power corrupts absolutely?" Former Ford and Chrysler CEO Lee Iacocca said yes in "Where Have All the Leaders Gone?"

Friedman's great conservative principles have been commandeered by myopic ideologues whose idea of leadership is balancing the demands of self-interest lobbyists with the need for campaign donations. Unfortunately, a new "change" president won't be enough; there are 537 elected officials in Washington controlled by 42,000 special interest lobbyists.

3. Fed and U.S. Treasury adopted Enron accounting tricks
Bad news: Enron failed several years ago because of its off-balance-sheet accounting scam. The Fed's doing the same thing: Dumping Bear's $30 billion liabilities onto the taxpayer's "balance sheet." Next Treasury proposes adding $5.3 trillion more from Fannie Mae and Freddie Mac.

Unfortunately clever accounting tricks by Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke aren't going to fool foreign lenders analyzing America's creditworthiness. Worse-case scenario: U.S. Treasury bills with less than a triple-A rating.

With 90 banks on the brink and already too many bail-outs, our so-called leaders are running out of magic bullets. So now the taxpayer's "balance sheet" has become the all-purpose "dumping ground" and it's overcrowding fast as our leaders raise the white flag of socialism.

4. Deregulation creating new socialist housing system
Back in 1999 a Democratic president and Republican Congress were in love with a fantasy called the "new economics." Enthusiastic lobbyists invented the brilliant idea of dismantling the wall between commercial and investment banking: They killed the Glass-Steagall Act that was keeping the sleazy hands of short-term hustlers out of the pockets of long-term lenders.

Flash forward: We lost 85-year-old Bear Sterns and $32 billion IndyMac. Lehman's iffy. And 90 banks. With the virtual takeover of Freddie and Fanny, Wall Street's grand experiment with free-market ideology is backfiring, having socialized the housing market. They have nobody to blame but their self-centered greed.

5. Trade deficits outsourced more of America's wealth than jobs
One look at Forbes lists of fat cats and you know the 21st Century doesn't just belong to Asia, it belongs to everyone but America. Why? Once again, remember Warren Buffett's famous "Farmer's Story" in Fortune: "We were taught in Economics 101 that countries could not for long sustain large, ever-growing trade deficits ... our country has been behaving like an extraordinarily rich family that possesses an immense farm. In order to consume 4% more than they produce -- that's the trade deficit -- we have, day by day, been both selling pieces of the farm and increasing the mortgage on what we still own."

Friedman was right: Congressional spending is the biggest cause of inflation, and, wow, those conservatives sure did love blank-check deficit spending the past eight years!

6. Banking system in meltdown, minting penny stocks
The Friedman conservatives apparently understand Joseph Schumpeter's "creative destruction." Yet, our free-market ideologues can't seem to accept that America is now on the "destructive" downside leg of the cycle, in the economy, markets, trade, politics and, yes, sadly, even with their conservative ideology.

You don't have to be smarter than a fifth grader to figure out that our leaders are clueless about the reality of our crumbling banking system, with many banks trading as penny stocks, while the Fed still panders to conservative pre-election politics rather than getting serious about inflation.

7. Ideologues preach savings, but still push spending
A core principle of conservatism is frugality, saving for the future. Grandparents raised me, struggled during the Depression, passed on strong ideals.

Somewhere over the past generation conservatives forget frugality. This distortion peaked in 2003 when consumers were told to spend, not sacrifice, and fuel the economy even as government spent excessively on war. That was a clear breach of every conservative leader's position in earlier wars.

As a result, in one brief generation, as the power of conservative ideologues grew, America's savings rate dropped precipitously from 11% in 1980 to less than zero today.

8. Warning, the market's under 2000 peak, losing money
Imagine you're on Jeff Foxworthy's fabulous show competing to see if you really are smarter than a fifth grader. Question: "If you put $10,000 in the market in March of 2000 when the Dow peaked at 11,722, how much money would you have today if the market's 10% under 11,722?" So you guess $9,000.

But then two fifth graders raise their hands: One asks if the CPI inflation rate should be considered? If so, maybe $5,000 is closer to the right answer. The other kid wants to know if you're buying stuff in Chicago or Singapore.

The truth is, the best answer for most adults is: "You've lost a hell of a lot of money in the market under the grand conservative ideology the past eight years."

9. Inflation and dollars: Is Zimbabwe the new model for the U.S.?
The Los Angeles Times ran a photo of a Zimbabwe $500 million bank note, worth $20 at noon, less at dinner. Why? Inflation's there is running 32 million (yes million!) percent annually. The German company printing their banknotes finally cut them off.

Things may be worse in America, psychologically. Our ideological obsession with "growth" is not working because there is too much collateral damage, namely inflation. Our dollar has lost substantial value to the euro because our dysfunctional leaders are convinced that a trade policy funded by debt makes sense.

Now we owe China $1.3 trillion, sovereign funds want equity not cheap dollar IOUs, and still our clueless Treasury and the Fed continue debasing our currency, printing money like Zimbabwe.

10. Free-market health care failing 47,000,000 Americans
Big Pharma loves free-market conservatism and no-compete Medicare drug programs. Nobody else is happy. Taxpayers get stuck with the bill.

"The Coming Generational Storm" tells us that without massive reforms and big lifestyle changes for taxpayers (especially retirees), within a couple short decades America's entitlement programs will eat up the entire federal budget. Medicare is the biggest cost item in your future, over $50 trillion in unfunded liabilities.

Conservative ideologues naively believe the answer is more pay-out-of-pocket insurance plans, even with 47 million already uninsured because they can't pay. Here as in so many areas of our economy, free-market junkies really are suffering a severe case of cognitive dissonance, as blind to the facts about the uninsured as they are to their outdated free-market fantasies.

11. Conservative free-market policies inflated oil 300%!
Yep, oil inflated 300% in eight short years under the "leadership of two oil men." But, you can't blame them. We put the foxes in the henhouse, knowing full well "real" oil men love digging holes on the supply side, supporting ethanol subsidies and blaming speculators -- it's in their genes! Talk about cognitive dissonance; real oil men thrive on cowboy images of Marlboro Men in Hummers, Navigators and F-150 trucks.

Net result? Another perfect example of "creative destruction" in action as conservative ideology meets "law of unintended consequences," driving GM, the symbol of America capitalism, closer to bankruptcy ... while turning America into a socialist economy.

Saturday, July 12, 2008

Sunday Morning Meandering

It's been two weeks since I made an entry here. Looking back over the blogs I've posted so far I realize that my style of writing isn't particularly suitable for a blog. Most of the blogs I read are short entries that revolve around a single subject. Cooking seems to be a favorite, or neighborhood life in a big city. There are dozens of expats recounting their experiences in foreign lands (a general theme that I had set out to do). The one thing that stands out is that there are surely a lot of great writers out there.

I spent a good part of yesterday adding an editorial to my news aggregation service that I do for clients. Those of you that read here would be familiar with the theme. As you know, I've been ranting about the economic state we are finding ourselves in. In the case of my "editorial" I express a concern about a commonly held sense in my industry that we are somehow above the macro economic forces around us. That is overstaement, but several of the market prognosticators continue to adhere to a notion that emerging markets, where the greatest growth has been for PCs and I,T, gear,is somehow decoupled from the setbacks we are seeing in America/ To a degree that has been true but I cannot believe it will last.If you are interested here is a link to that issue.

Last night was my last in Bangkok and this morning I am catching a flight back to Kuala Lumpur. I didn't want to go out to eat so I rummaged in the refriderator in the apartment. I found a couple of eggs that were still good and decided I wanted to hard boil them to put with some fresh lettuce I still had. Then it suddenly occured to me that I wasn't sure about the timing of a hard boiled egg. I can't remember having made one before, though I must have one time or another. So, feeling somewhat sheepish, (I am a great home chef after all) I turned to the net and started to google. On the google tool bar there is a feature that starts listing choices as soon as you start typing. Sometimes getting a few letters into typing your search term, and google will list ten suggestions on a scroll bar. If one of them is your query you simply have to scroll down and click on it. I decided I would simply enter "How long to hard boil and egg". As soon as I typed "How long" five of the ten suggestions had to do with boiling eggs. (Google simply lists the top searches that start with the same terms you have entered and lists those.) So I didn't feel so sheepish upon learning that timing eggs was a more popular search on Google. At least my ignorance was shared. (Funny how ignorance, along with misery, loves company.) The other thing I discovered is that properly cooking an egg in it's shell involves a great deal more than I expected. I laughed out loud when I saw how much information was presented about such a mundane subject. Check this "egg" site out to see what I mean.

I took a sojourn last week. I found myself in Thailand during the 4th of July weekend with nothing really going on except some work I was eager to procrastinate. Veronica still doesn't feel like traveling so any idea I came up with would be a solo run. I first thought of going to Angkor Wat but that is something I really want to share with someone. Nick and I have had on and off plans about going there I would like to keep that in my pocket for now. I enbded up spending four days
on the side of the Kok River in Chiang Rai in the middle of the Golden Triangle where Laos, Burma, and Thailand meet in a fascinating and historical place. I spared no expense and stayed in an upscale botique spa. My days were for exploring the history of the place and evenings were spent in the spa, and on my private balcony overlooking the river. I had many adventures and snapped many shots. I've included a couple of favorites here to whet your appetite. More on this subject later.


Just enough time to sip another cup of coffee, read a bit of news, throw the last bit of kit into my suitcase and start the dreary process of going to the airport and flying home. Lord I dislike flying these days. But the prize at the end of my journey is more then enough to overcome my repugnance for it.