Tuesday, April 28, 2009

Jobs! "Workers Walk The Plank"

If you haven't read this editorial, which showed up in the Times this morning, I think you should. It highlights a central focus addressed by our prior blogs and something that the administration in Washington should be emphasizing more than they are.

It also, in my opinion, properly lambastes Wall Street for the egregious bonuses that they are proposing for 2009 and beyond. Hell, the American public owns major chunks of these financial institutions; isn't it time that we started behaving like shareholders and put an end to this nonsense? I simply can't buy the argument that we need excessive compensation to keep "talent" (such as it really exists...let's get real, this isn't brain surgery) in place. For every Wall Street professional who gets balky about this, I guarantee you that I can find ten people who would gladly accept their position for 1/3rd (or less) of the compensation.

Here's the link:


And a more recent link (5/4/2009):


Sunday, April 26, 2009

In These "Interesting Times," I Want To Be As Optimistic As The Next Guy, BUT...

NOTHING THAT THIS GOVERNMENT IS DOING, IS WORKING. This applies to other countries in the G20 as well.

Let's be clear here. I don't begrudge Obama and his team the efforts that they have exerted, but it seems to me that enough time has passed to allow a realistic assessment, broken down by current initiatives.

Finance and Banking

TARP appropriated $700 billion of which, roughly, $600 billion has already been spent. What has this produced? Easier credit? A stabilized residential real estate environment? A diminution in the number of "toxic assets" in the market? Unless you are a very poor test taker, you will already have guessed that the answer is e.) None of the above.

What has been accomplished is to spend $600 billion with absolutely no transparency, in a system whose own special inspector, Neil Barofsky maintains is especially vulnerable to fraud (http://online.wsj.com/article/SB123549501648160845.html). There are a handful of banks that have recorded a small (relatively speaking) profit for the 1st quarter but there is no disputing that these profits are artificially assisted by some pretty fancy accounting adjustments. And even the unprofitable Wall Street firms are getting ready to return to business as usual by larding up the bonus plans for 2009. If you don't believe me, chase the following link from the New York Times:


and just this morning, Monday the 27th:


It seems inevitable that the President will ask for more bailout money for the banks and it remains to be seen what Congress will say about that. Maybe 1000 crooks catalyzed (but were not solely responsible for) the present mess and I hate to think that there are 1000 more thieves who are lurking (or operating) to line their pockets further. The bank scorecards that will be released next week are likely to be ambiguous and we really won't know the financial system's true state for months to come.


That $$$ flushing sound just won't stop. Fiat wants to buy Chrysler, put in no cash, and use billions in American taxpayer money to support this...give me a break!? The senior debt holders are right; they are better off selling the company in pieces. GM is in even worse shape...I think we may end up naming May and June, "National Bankruptcy Months." The reality is that people who lose their jobs or think they might do so just won't buy new cars. The IMF projects that all major economies except for India and China will, in absolute terms, contract in 2009 and probably in 2010. India and China will show nominal growth but you have to consider that they are both way off their prior torrid paces. I suspect that we have only begun to see the beginning of job losses worldwide, and this does not bode well for car companies, Fiat, GM, Honda or otherwise. Without further ado let's just wait to see what happens in the next 8 weeks.

World Issues

What could be worse than the Taliban taking over a country that possesses nuclear weapons? I wouldn't let their temporary retrenchment lull me to sleep and I believe that the President, senior military officials, Hillary Clinton, et al are scared stiff about this possibility, and well they should be. One potential solution here is to move troops stationed in Afghanistan to Pakistan since if we lose Pakistan, then we won't be able to support Afghanistan anyway. Those nukes really bother me. Here's a NY Times editorial on the subject from Monday the 27th:


Domestic Issues

I am in no position to judge what is torture and what isn't or whether this treatment is appropriate given the circumstances. When I first heard the term "waterboarding" I thought that the CIA had come up with an ingenious method to lash a terrorist to a surfboard and drive him around a lake or something. In other, calmer times we could perhaps afford to engage in the inquiries that certain congressional members are itching for. But right now we have too many simultaneous initiatives underway to deal with far too many problems. If there is any risk that these so-called torture inquiries will distract from the other work being done and/or could cause national/international furor, then I think we need to find another way to deal with it.

Other Efforts Underway

Health care, student loans, the Middle East wars...the list seems to grow each week. I won't go into all this here but I strongly believe that you have to prioritize activities and that the Pakistan situation is priority #1. After that, the economy and getting people back to work again is #2. The rest can wait. And the answer certainly isn't always to just run the $$$ printing presses in Washington.

What Other (shoes) Will Drop in the Near Future?

Commercial real estate is in turmoil and billions (to put it mildly) are at risk. Transportation and lodging (airlines, hotels, rental cars) are getting killed. The print media is in trouble. Unemployment is poised to continue to climb dangerously.

As a rule, Americans are resilient and optimistic, and today's favorable polls reflect that spirit. I fear that if we continue to let these problems pile up, without making substantial progress quickly on a few, things might turn very sour, very quickly.

Another Scoop!?

If you happened to catch today's New York Times "The Weekend in Review" section today you probably saw an article entitled, "No You Can't Get An Upgrade." Here's a link to that piece if you would like to peruse it.


What's interesting is that the author, Mr. David Segal addresses issues that are highly similar to those that we covered in this blog in a February 28, 2009 post. He even uses the word entitlement, albeit in a slightly different context...so our blog preceded his article by more than 2 months.

Now nobody over here (Chilleri, Ziegler, or me) is trying to be "Mr. Smarty Pants" but it seems pretty apparent that some politicians, elements in the media and others just aren't "getting it" in a timely manner. How hard is it to figure out that if, for example, new cars aren't selling, then the car companies worldwide are in deep trouble! After all, you can't save your way to growth...yet some institutions are behaving like ostriches and are doing a fine job finding plenty of sand with which to bury their heads.

In any event, if you haven't read the NY Times article linked to above, you might be interested to see what it says and if you want, compare it to the February 28 blog posting.

Friday, April 17, 2009

The G20 Meeting, Monetary Policy, China, et al by Team Member Tim Chilleri

I don't agree 100% with Tim here, but other than grammar, spelling, etc. I do not alter or otherwise interfere with an author's thoughts and opinions. Well, here goes.

John A.

The G20 Meeting, etc.
By: Timothy Chilleri

The Fed and Treasury believe they are doing an admirable job resurrecting our economy, when in actuality both are prolonging and amplifying the pain. They repeatedly show that they do not understand our problems and are now pursuing the wrong solution.

Last week at the G20 meetings in London, President Obama reiterated our loose monetary stance while begging the world to loan us the money to finance our massive spending plans. Our numero uno lender is China of course who just days before the event asked the world to consider replacing the USD as the world’s reserve currency. While some would say this is an insignificant remark, I disagree considering they hold roughly $1T of our debt and can begin diversifying out of the USD at anytime, without anyone’s approval but their own .

As some of you may know, I am against government bailouts as well as nations bailing out their neighbors. While Obama tells the world “we’re in this together” more or less, the United States is largely responsible for the crisis. What we need is for the rest of the world to cut us off. We’re money drunk and the world needs to send us to Money AA. It’s incredible to think about. If you’ve taken 10 shots of liquor at a bar in an hour, the last thing you need is more shots. But that’s what we’re soliciting. In fact, we’re asking the bar to wheel out cases of booze and we’re convinced we can consume it all safely. Instead, we’re going to end up passed out or dead at the bar. And the same can happen with our economy.

Very recently Obama stated that the auto companies might have to go bankrupt. Once again, it goes to show that you do not throw good money after bad. How many venture capital funds would have delivered sub par returns or losses if they continually did not set the proper risk controls in place? This policy of simply throwing money at problems has set a dangerous precedent. Will we see a bounce in the short term? Perhaps, I don’t know. But this will only serve to harm our economy in the long run.

And one last quick point. I follow the CPI numbers very closely every month and they have ticked back up in January and February. While this is a sample size bias, let me remind you that we are going through the worst economic contraction since the GD. In 2008, the CPI was .1% which is very worrisome since the government rigs the numbers . This means that Bernanke has been spending lots of time down in the basement with his printing presses and he’s seeing how long he can run them non-stop. 2008 CPI number should have been negative, even with oil prices in the summer. We watched trillions of dollars go up in smoke and we still saw inflation? Yikes. Thus, the dollar could be in for a bumpy ride over the next several years.

Thursday, April 16, 2009

In Case You Missed It, CBS's 60 Minutes Ran A Major Segment About Gun Shows On April 12th

What is striking here is they just began coverage which we initiated on December 27, 2008, followed up on January 4th, and had in-depth on-site coverage on February 16th. Frankly, the latter blog is far more detailed that what 60 Minutes provided.

So by my calculations, our team scooped 60 Minutes by not weeks but by MONTHS, and we did (and continue to do) a better job reporting things like this.

We are out there watching the trends, making predictions and putting things into a perspective that is difficult for more conventional media to match, either with substance or with timeliness.

A bunch of attaboys go out to Kurt and the whole team.


John A.

Wednesday, April 15, 2009

Sorry That I Have Been Off The Grid For So Long

A little bout of serious pneumonia can do that to a person. Actually, it landed me in the hospital for three weeks and if I hadn't had intervention from a loved one (he personally saved my life) and some total strangers, I wouldn't be writing this today. Ultimately, I ended up getting a nice 6+ inch scar from the lung operation and I learned some lessons about randomness.

#1 My survival was an utterly random event. If I had been in other circumstances, I would be dead right now. This comes down to the timing of a professional hockey game among other things.

#2 The random selection of the University Hospital (University Hospital/New Jersey Medical School in Newark, NJ, a teaching hospital which is part of UMDNJ) saved my life (Team A.) Forget about the so-called emergency-room triage or insurance forms and the like...within 30 minutes after the crash cart hit the ER, I was already diagnosed and getting turned upside down. I'll have more about this fabulous institution in a little bit.

#3 It's where you fall that matters. I happened to collapse at Newark Penn Station. If I had been waiting by the tracks I may well have been on the tracks. Luckily for me, I broke down in front of a transit policeman in the main lobby who courageously refused to stuff me onto the next train to NYC and instead called EMT.

I also came to a few personal conclusions about the medical establishment.

University Hospital is a first-rate health care facility. They did everything in their power (and then some) to keep me afloat. Even the food was very good, although after 3 weeks, you might eventually get bored with the fare at Le Bec Fin in Philly.

Unfortunately I need to omit names here, but candidly, I cannot express how deeply I appreciate the treatment I received at University Hospital. They were exquisitely competent, and the "doctors-in-training" always seemed to be more than up to the task their mentors set for them. They tried like hell to accomplish their objectives without invasive surgery and worked for days trying to clear my lungs with techniques so novel that they really don't have an official name yet. When it became clear that I needed to be cut, the surgeon was so skilled that I sit here today, weeks later, and I haven't ever needed to take a pain pill except for the knee cap that I injured a little more than a week ago. As much as can be expected, the support staff, including nurses and assistants were helpful and caring. Finally, they put up with me and if you know me, you will acknowledge that that alone is a meaningful task. I am recovering, and I am happy that I am still around and able to write this.

So now I come to some conclusions about the medical establishment. The problem we face in this country and others, from my perspective, certainly is not the practitioner's fault. Once it used to be prestigious and perhaps lucrative to be a doctor. Now it seems to me, it is an unending, thankless sentence. God knows why all these young people want to pursue it and thank God that they do.

Nor do I think that the problem is with the infrastructure providers (hospitals et al.) Yes, drugs cost a lot but so does drug research. I spent days getting medicine without which the doctors would be powerless. If there is a bad hospital, then so be it; it should be closed or merged with a wonderful operation like University Hospital. There certainly are ways to measure a good hospital from a bad one...don't let anyone kid you about that.

The problem I believe is there is fraud, bureaucracy, waste and corruption in the system. Yet even with these built-in faults, an institution like University Hospital manages to deliver exceptional service and they revel in the fact that I am somebody who actually left the place alive; which means that they have the even more dubious distinction of having to treat terminally ill people...I personally wouldn't be able to do this...it would disturb me greatly.

I had only one roommate when I was at University Hospital and in watching him I learned about myself...he was much sicker than me and even at best, he would not be as much alive. Having seen that I would love to tell you that I treasure life so much more, but that would not be true...I now see life as an opportunity and not as a condition. If I can't do something that makes life worthwhile beyond my own being, then why bother? The overhead simply, using my calculus, doesn't make it worthwhile.

In any event, I now owe Governor Corzine a letter (which I will send out directly) expressing these feelings because University Hospital and the entire NJ medical system is facing huge and undeserved budget cuts...one letter won't make a big difference but a thousand might so please climb on board if you can.

And please be careful what you wish for...if you were looking for my next post you just got it!