Saturday, August 30, 2008
Saturday Is For Art
This holiday weekend I will post some of my flag paintings. Hope everyone has a safe and happy Labor Day holiday. I am in California for a few days that is why I am late with the art for Saturday.
Wednesday, August 27, 2008
Another Left Handed President
Did you know that we are going to have another left-hander for president? In the recent past, we have had four left-handers for president. Bill Clinton, George H.W. Bush, Ronald Reagan and Gerald Ford were/are left handed. There were three more left-handers from earlier times too, Harry Truman, Herbert Hoover and James Garfield. Seven left-handers out of 43 presidents and we are about to have our 8th left handed president because both McCain and Obama are both left handed.
Those of you who are members of the right handed world maybe unfamiliar with the way left handers must operate in a right handed world. I was born left handed and have remained left handed my whole life. My father was left handed, but was forced to learn to write with his right hand. My father would write with his right hand and draw and paint with his left hand. Years ago they believed that it was bad to be left handed. In fact, in many cultures left handed people got names like “southpaw” and other nick names.
Many famous people have been left handed including a few famous artists. When I was playing baseball the only positions they would let a left hander play was pitcher or first base in the infield. All three outfield positions were open to left handers as being left handed in the outfield made no difference. When I played fast pitch softball, I got to catch. I loved being able to play in the infield and being close to the action. All the years I played hard ball I was stuck out in right field. It was no fun standing out there in the sun waiting with my hands on my knees for the next pitch. If you were lucky you might see a fly ball come out to you once or twice in a game.
As an artist, I know my stuff is different. Few people care for what I paint. But, it is what I paint and it is what comes out of me. Oh, I paint other subjects from time to time especially if I get someone asking for a specific subject matter like the three goldfish I recently painted. Otherwise, I keep coming back to my political satire and the icons I have created. Perhaps some day I may get away from the political satire and move on to other subjects more suitable for the purpose of selling art, but for now, it is what I do.
I am going to take off for a few days. I am taking a little trip so I may or may not put up new postings. To my millions of fans, go back and read a few of my older postings or look at my art work. If I do not post anything between now and Labor Day weekend, have a happy and safe holiday.
Those of you who are members of the right handed world maybe unfamiliar with the way left handers must operate in a right handed world. I was born left handed and have remained left handed my whole life. My father was left handed, but was forced to learn to write with his right hand. My father would write with his right hand and draw and paint with his left hand. Years ago they believed that it was bad to be left handed. In fact, in many cultures left handed people got names like “southpaw” and other nick names.
Many famous people have been left handed including a few famous artists. When I was playing baseball the only positions they would let a left hander play was pitcher or first base in the infield. All three outfield positions were open to left handers as being left handed in the outfield made no difference. When I played fast pitch softball, I got to catch. I loved being able to play in the infield and being close to the action. All the years I played hard ball I was stuck out in right field. It was no fun standing out there in the sun waiting with my hands on my knees for the next pitch. If you were lucky you might see a fly ball come out to you once or twice in a game.
As an artist, I know my stuff is different. Few people care for what I paint. But, it is what I paint and it is what comes out of me. Oh, I paint other subjects from time to time especially if I get someone asking for a specific subject matter like the three goldfish I recently painted. Otherwise, I keep coming back to my political satire and the icons I have created. Perhaps some day I may get away from the political satire and move on to other subjects more suitable for the purpose of selling art, but for now, it is what I do.
I am going to take off for a few days. I am taking a little trip so I may or may not put up new postings. To my millions of fans, go back and read a few of my older postings or look at my art work. If I do not post anything between now and Labor Day weekend, have a happy and safe holiday.
Tuesday, August 26, 2008
Why The Price of Oil has Fallen
There is a lot of debate among economists about what causes what and what does it mean, but at my pay grade, I am retired, economics is not all that complicated.
For example, the relationship between the price of a barrel of oil and the value of the U.S. dollar in relationship to the other major world currencies that are traded in the currency markets is not that complicated. If you have been paying any attention to either the price of gasoline at the pump or the price at which a barrel of crude oil is trading in the commodity markets lately, you know that the price of a barrel of oil has been coming down over the last several weeks. The price today in some markets is below $113 a barrel.
At the same time that the price of oil has been coming down, the value of the U.S. dollar has been going up in relationship to other major world currencies. What is this all about?
Some writers attribute this simply to the fact that investors are no longer seeking to hedge themselves in the commodity oil. But why are investors not continuing to hedge themselves in the commodity of oil? My opinion, and let me remind you that I am not an economist nor have I a Ph.D. in economics, is that we, these United States, are importing less goods and less of the commodity oil. The price of gasoline has sucked a vast quantity of money out of our domestic economy. T. Boone Pickens in his commercials says that it is the greatest transfer of wealth in the history of the world, and places the amount at around $700 billion dollars a year. Where is this money going? The money is going to oil companies that refine the oil into gasoline, but the bulk of the money is going to oil producing countries around the world. When U.S. dollars are removed from our domestic economy, there is less buying power because there are fewer U.S. dollars in circulation. Add to this that the Federal Government is running a budget deficit and has to borrow money and issue I.O.U.s, known as U.S. Government Notes and Bonds, and you have a situation that makes investors around the world less eager to hold U.S. dollars.
When investors think that a government is monetizing their debt by printing more paper money, investors fear losing the purchasing power of their money and look to trade U.S. dollars for other major world currencies, or invest (hedge) their money by buying commodity futures of oil. Monetizing the debt also leads to inflating the economy which leads to a loss of purchasing power of the dollar also known as inflation.
As a result of all of the above, the United State’s domestic economy has slowed down. Since people have less money to spend, economists refer to this as less disposable income, because they are spending more money to fill their car’s tank with gas, other goods and services that would normally be purchased are not purchased or the amounts of them are reduced. Gasoline’s price at the pump finally got to a level where the demand for an additional gallon of gas became elastic. When gas was selling for under $2 per gallon and its price bounced around during the week like a rubber ball, most of us could deal with that and continue to afford the products and services we were used to buying. But, once the price of gasoline reached $3 a gallon and then continued to climb to $4 a gallon, more people began to feel the pinch that the price of gas was having on their budget and thus their disposable income.
So, here we are at the end of August, 2008, and the price of oil and gas have had their run and now like any product or service that gets out of the reach of most people, the price starts to come down because the demand for the product or service has come down. As a result of Americans buying less foreign made products and gas, the amount of imports is less and as the imports are less, the number of dollars leaving the United States is less and therefore investors become less concerned with hedging themselves against the U.S. dollar and more interested in holding U.S. dollars rather than oil futures in the commodity markets.
Now I will tell you one more thing that gets little play in the media. The president of the United States could have taken action to have prevented this from happening, or, at the very least from hitting the American consumer as hard as it did. Had the president even hinted that he would have sold oil on the open market from the government’s oil reserves, those teeing off on the bet that the president would not sell oil from the government’s oil reserves would have been more cautious in their hedging activities. But knowing that President Bush and Cheney would do nothing to help the American family with the price of gas, the speculators drove up the price of oil in the commodity markets with no fear. Bottom line, the president could have taken action to thwart the greed of speculators and he did not do it. Look at it this way, if you are a base runner and you know that the catcher will not even try to throw you out at second or third base, there is then no reason why you should not run and steal a few bases. Those playing the commodity markets in oil had the sign that they could steal all the bases they wanted to steal because this “catcher” was not going to throw them out. Eventually, when the domestic economy slowed down as a result of $4 a gallon gas, the price of oil came down.
The Federal government can make a difference as a player in the commodity markets as a buyer or as a seller, but, this administration saw fit to do neither. This November Americans have an opportunity to elect a new president. I plan to vote and I plan to vote for a ticket that cares about the American family by their actions. I am voting for Obama-Biden for president and vice-president. I ask you to join me and vote.
Monday, August 25, 2008
Vote For Your President
Every four years we elect our president, and we have been doing this for over 200 years. Some might say that is not a very long time, while others, who have known how difficult it is for their country to have a decent presidential election process, will disagree. We Americans have been fortunate to have had our traditions and laws passed down through many generations.
Tonight starts the Democrats convention in Denver. Take the time if you can to listen to the speeches. There is a ton of disinformation and just plain false statements being manufactured right here in the USA about Senator Obama. I am voting for the Obama-Biden ticket, and naturally I would like everyone else to do so too. But regardless who you are going to vote for, take the time and listen to the issues. You might discover that you agree with Obama-Biden on the issues that concern you the most. Don't let smut and untrue statements, that have no basis in fact, substitute for your sound judgement. There are enough differences between the Republicans and the Democrats in this presidential election that they do not have to fabricate issues. We, the electorate, should hold both parties to a campaign that does not insult our intelligence or our patriotism as Americans. As I said earlier, I am voting for the Obama-Biden ticket, and I ask you to join me.
Tonight starts the Democrats convention in Denver. Take the time if you can to listen to the speeches. There is a ton of disinformation and just plain false statements being manufactured right here in the USA about Senator Obama. I am voting for the Obama-Biden ticket, and naturally I would like everyone else to do so too. But regardless who you are going to vote for, take the time and listen to the issues. You might discover that you agree with Obama-Biden on the issues that concern you the most. Don't let smut and untrue statements, that have no basis in fact, substitute for your sound judgement. There are enough differences between the Republicans and the Democrats in this presidential election that they do not have to fabricate issues. We, the electorate, should hold both parties to a campaign that does not insult our intelligence or our patriotism as Americans. As I said earlier, I am voting for the Obama-Biden ticket, and I ask you to join me.
Saturday, August 23, 2008
Saturday Is For Art
Today's piece is finally finished. I may add another coat or two of high gloss acrylic varnish to the center piece. I started this little project last October and worked on it off and on for the last 8 months. The core is Styrofoam and it is covered with cardboard, cereal boxes, some paper mache, gesso and acrylic paint. Like other artists, I have icons that I use repeatedly in my work. Mother and Child, Level Playing Field, the Butterfly Flag are just three of the more common ones. I will post a pencil drawing, titled My Icons and the first Mother and Child I painted in the late 1980's early 1990's. That piece with the wood frame that I made measures 72 inches by 48 inches. Today, I was at the museum and took a few pictures for my next project. This new project might take me another 8 months to complete, but that is the nice thing about being retired, there is no hurry. I plan to photograph the top piece and even offer signed prints later. The market for my political satire is very thin. It consists of a few friends and family members. But, this is what I do, and I enjoy it. There are some contemporary artists that only think up the idea and have other artists execute the idea. For them, I guess that works. But for me, the fun is the whole process. Taking the idea and then working out the challenges to bring the idea to life.
Wednesday, August 20, 2008
Your Money Perpetually At Risk
The other day I heard on TV that the oil industry spends about $80 million on lobbying a year in Washington, D.C. $80 million should buy you a lot of access. If you listen to the comments on TV these days, we are to believe that the $80 million is spent so they, the oil industry, can enlighten the members of congress as to the difficulties the oil industry faces without the necessary helpful legislation provided to them by the congress in the form of tax incentives. This may be all true, but will we ever get away from importing foreign oil if the Federal Government continues to subsidize the oil industry? As I have said before, money talks and bullshit walks.
Now let us take a look at the securities industry. The financial geniuses on Wall Street are always thinking up new products to sell to investors. There are products sold that are aimed at the retail or smaller investor and there are products created that are strictly for the very wealthy and the institutional investors. With new products being turned out all the time, the investing public needs to keep up on just what they are investing in. I told a story in a previous posting about a fixed income product that was sold to the retail investor in units like shares at an offering price of $10 per unit. One round lot or a 100 shares was a $1,000. But, the underwriting commission for each broker that sold this product was 50 cents a share. This may not sound like a lot of money, but when you know that out of that $1,000 dollar investment $50 dollars is coming right off the top, you are now paying $1,000 dollars for an investment that is going to be worth at its best at $950 dollars. In bond language, you have just paid 5 points for this bond product. No mutual fund that I know of charges 5 points in commission to buy into a fixed income mutual fund. This kind of crap went on in the brokerage business 20 years ago. Whether the New York Stock Exchange has tightened up its rules on listing such crap, this I do not know. In the worst example of this kind of product, investors saw their investment go to zero in a period of six months. This kind of thing should not happen if proper oversight is exercised. In my opinion, without the NYSE listing this product would have never sold as well as it did. Where does the buck stop? We know the investors' buck stopped at zero.
What is the point? It does not make any difference which industry we are talking about, money that buys that industry access plays a role in the kind of legislation that comes out of congress. Every industry is pushing their agenda, and the industries that are well financed usually get their point across. Money talks.
In the case of the securities industry, I think the congress better do the right thing and use their own common sense. Without regulation, oversight and auditing, we are going to continue to have financial crisis all the time. Greed is like a weed that just keeps on coming back. Regardless of whether you pull your weeds or spray them with Roundup, they just keep coming back. The securities industry for the most part does the job it is suppose to do, but there are those members of the industry that do not care to play by the rules. As a result, if they are located in key positions, they can bring ruin to a whole sector of the securities industry. As I have said many time before, the mortgage bond market meltdown could have been avoided had there been proper oversight and auditing. Without the securitization of the mortgage industry, the sub prime mortgage bond business and the subsequent meltdown never gets off the ground.
When you realize that there are trillions of dollars invested in mutual funds as well as public and private pension funds on the line every day, the importance of regulation in the securities industry should become quite obvious. Yet, because money talks to congress and they listen, this vast number of dollars representing America’s savings, remains perpetually at risk.
Stay tuned.
Now let us take a look at the securities industry. The financial geniuses on Wall Street are always thinking up new products to sell to investors. There are products sold that are aimed at the retail or smaller investor and there are products created that are strictly for the very wealthy and the institutional investors. With new products being turned out all the time, the investing public needs to keep up on just what they are investing in. I told a story in a previous posting about a fixed income product that was sold to the retail investor in units like shares at an offering price of $10 per unit. One round lot or a 100 shares was a $1,000. But, the underwriting commission for each broker that sold this product was 50 cents a share. This may not sound like a lot of money, but when you know that out of that $1,000 dollar investment $50 dollars is coming right off the top, you are now paying $1,000 dollars for an investment that is going to be worth at its best at $950 dollars. In bond language, you have just paid 5 points for this bond product. No mutual fund that I know of charges 5 points in commission to buy into a fixed income mutual fund. This kind of crap went on in the brokerage business 20 years ago. Whether the New York Stock Exchange has tightened up its rules on listing such crap, this I do not know. In the worst example of this kind of product, investors saw their investment go to zero in a period of six months. This kind of thing should not happen if proper oversight is exercised. In my opinion, without the NYSE listing this product would have never sold as well as it did. Where does the buck stop? We know the investors' buck stopped at zero.
What is the point? It does not make any difference which industry we are talking about, money that buys that industry access plays a role in the kind of legislation that comes out of congress. Every industry is pushing their agenda, and the industries that are well financed usually get their point across. Money talks.
In the case of the securities industry, I think the congress better do the right thing and use their own common sense. Without regulation, oversight and auditing, we are going to continue to have financial crisis all the time. Greed is like a weed that just keeps on coming back. Regardless of whether you pull your weeds or spray them with Roundup, they just keep coming back. The securities industry for the most part does the job it is suppose to do, but there are those members of the industry that do not care to play by the rules. As a result, if they are located in key positions, they can bring ruin to a whole sector of the securities industry. As I have said many time before, the mortgage bond market meltdown could have been avoided had there been proper oversight and auditing. Without the securitization of the mortgage industry, the sub prime mortgage bond business and the subsequent meltdown never gets off the ground.
When you realize that there are trillions of dollars invested in mutual funds as well as public and private pension funds on the line every day, the importance of regulation in the securities industry should become quite obvious. Yet, because money talks to congress and they listen, this vast number of dollars representing America’s savings, remains perpetually at risk.
Stay tuned.
Tuesday, August 19, 2008
Read The Post From April 10, 2008, Again
Today I am not writing anything new. If you want to read one of my most visited postings, read the one from April 10, 2008 about the inverse relationship bond prices have to bond yields. This single posting has received hits since I wrote it from all over the world, and I mean all over the world, not just the USA. Seems that there are people out there interested in the relationship a bond price has to its yield. At the end of the post, I mention talking about regulation in the securities industry, and since that post, I have talked about the need for better regulation, oversight and auditing by the SEC and now the Federal Reserve Bank. Many of the problems that we are now dealing with in the bond business are a result of greed and the lack of proper enforcement of the rules governing the securities business. The politicians are lobbied by the moneyed interests of the securities industry to keep the enforcement lax. As a result of this, the greed principle is given the opportunity to create the meltdown and crisis that follows. This is not like finding a cure for cancer, the respected minds in the field know what needs to be done, but the power of money keeps the proper enforcement away. Some shit happens, but a lot of this shit can be avoided. I wish I knew what it would take to draw people's attention to the fact that the mortgage bond meltdown could have been prevented by the proper use of the tools that are available. It just takes the resolve of enough people in the right places to make it happen.
Monday, August 18, 2008
Clean Up The Securities Industry
Sunday I read a well written article in The New York Times about the municipal bond business. It seems a large issuer of something like $750 million in municipal debt was not making their current financial statements available to the rating agencies and thus to the public that holds their bonds. The issuer, a hospital authority, received a BB rating for their debt after a reorganization and a name change, but not keeping the market current on their financials was causing investors and market makers a problem. As a result, where no information is available, the market makers have these bonds priced at a significant discount, like 83 cents on the dollar.
Over the last several months, I have called for better and more comprehensive regulations, oversight and auditing of the securities industry. Perhaps what is needed is just for the existing regulations to be enforced as this alone would prevent the losses that are occurring. The whole mortgage meltdown could never have gotten off the ground without the rating companies giving their AAA rating to mortgage debt that should never have seen such a high rating in the first place. If an investor wants to buy high yield debt and take the added risk, then that is their choice. But, placing a AAA rating on a piece of debt, a bond, that does not deserve that rating should be met with a serious response.
So much pain and suffering in the mortgage market and even the municipal bond market can be avoided if the people involved would do their job correctly. Perhaps it is time for the administration of justice to take a closer look at the efforts of some to mislead and in some cases simply defraud the investor because of their own greed.
Going back to the role that pension fund trustees could play to clean up some of the abuses in the securities industry strikes me as a good idea. But, as I said before, few pension fund trustees are knowledgeable enough to organize and bring pressure to the issues of proper enforcement of the securities industry’s regulations.
When information is with held from the public on an issue of municipal bonds that have been underwritten and sold, someone should be held accountable. If that means someone goes to jail, then perhaps that is what it takes to get those individuals responsible for the timely disclosure of financial information to take their responsibility seriously.
What the public should demand is that financial information as well as due diligence be carried out in a timely manner. There is unfortunately too much greed and attempts to defraud the investing public of the trillions of dollars of debt and equity investments in the public domain for timely financial disclosure to be dealt with so lightly.
The securities industry benefits from the ignorance of the investing public and the lack of organization among the public and private pension funds and other large fund trustees. What is needed is for someone to organize this group and use its financial muscle to bring about the kind of responsiveness and reform that would clean up much of the abuses that go on in the securities industry.
Additional reading for those interested in hearing it from a PhD in economics. The Sunday New York Times Magazine, August 17, 2008, "Dr. Doom" pages 26 to 29, is a nice read about an economist by the name of Nouriel Roubini and his thinking about the current economic crisis. Many economists have the academic training, but few have actually worked in the securities industry to understand the specific areas where better and more comprehensive regulation should be enforced. Those individuals that fight against better regulation permit the abuses to continue and the greed and fraud to go unchecked. Even with all the borrowing that we as a nation do, it is not the borrowing that has brought on the meltdowns, but the abusive practices associated with the borrowing that have brought about the crisis. A hammer or any other tool can be misused. In the case of the hammer, it is for hitting nails, not your thumb. Until we stop hitting our thumbs, we are going to continue to suffer a lot of pain.
Stay tuned.
Over the last several months, I have called for better and more comprehensive regulations, oversight and auditing of the securities industry. Perhaps what is needed is just for the existing regulations to be enforced as this alone would prevent the losses that are occurring. The whole mortgage meltdown could never have gotten off the ground without the rating companies giving their AAA rating to mortgage debt that should never have seen such a high rating in the first place. If an investor wants to buy high yield debt and take the added risk, then that is their choice. But, placing a AAA rating on a piece of debt, a bond, that does not deserve that rating should be met with a serious response.
So much pain and suffering in the mortgage market and even the municipal bond market can be avoided if the people involved would do their job correctly. Perhaps it is time for the administration of justice to take a closer look at the efforts of some to mislead and in some cases simply defraud the investor because of their own greed.
Going back to the role that pension fund trustees could play to clean up some of the abuses in the securities industry strikes me as a good idea. But, as I said before, few pension fund trustees are knowledgeable enough to organize and bring pressure to the issues of proper enforcement of the securities industry’s regulations.
When information is with held from the public on an issue of municipal bonds that have been underwritten and sold, someone should be held accountable. If that means someone goes to jail, then perhaps that is what it takes to get those individuals responsible for the timely disclosure of financial information to take their responsibility seriously.
What the public should demand is that financial information as well as due diligence be carried out in a timely manner. There is unfortunately too much greed and attempts to defraud the investing public of the trillions of dollars of debt and equity investments in the public domain for timely financial disclosure to be dealt with so lightly.
The securities industry benefits from the ignorance of the investing public and the lack of organization among the public and private pension funds and other large fund trustees. What is needed is for someone to organize this group and use its financial muscle to bring about the kind of responsiveness and reform that would clean up much of the abuses that go on in the securities industry.
Additional reading for those interested in hearing it from a PhD in economics. The Sunday New York Times Magazine, August 17, 2008, "Dr. Doom" pages 26 to 29, is a nice read about an economist by the name of Nouriel Roubini and his thinking about the current economic crisis. Many economists have the academic training, but few have actually worked in the securities industry to understand the specific areas where better and more comprehensive regulation should be enforced. Those individuals that fight against better regulation permit the abuses to continue and the greed and fraud to go unchecked. Even with all the borrowing that we as a nation do, it is not the borrowing that has brought on the meltdowns, but the abusive practices associated with the borrowing that have brought about the crisis. A hammer or any other tool can be misused. In the case of the hammer, it is for hitting nails, not your thumb. Until we stop hitting our thumbs, we are going to continue to suffer a lot of pain.
Stay tuned.
Saturday, August 16, 2008
Friday, August 15, 2008
Truth, Lending & The American Way
Truth in lending? Why bother?
This week I have been watching a political campaign commercial about lending and borrowing money. It seems that here in Ohio, the forces of intelligent design, if I can use those words, would like to rope in some of the lending practices of these cash advance stores. The commercial starts out with the alert that 6,000 good paying jobs are at stake. And, if legislation goes through to prevent people from using these kind of lenders, then these 6,000 good paying jobs will be lost. In the commercial, we have this middle aged white guy wearing a baseball cap and standing next to a pick up truck telling us that if he needs to borrow $100 to fix his truck and then pays back the following week $115, that should be his choice. You know, at this point I agree. And furthermore, if he wants to borrow at that interest rate for a whole year, that should be his choice too. Let us see, $15 in interest charges a week times 52 weeks, gets this Einstein with the baseball cap and the scowl on his face up to at least $782 in interest charges for one year on borrowing $100. Why would anyone want to keep this financial wizard from doing this. This is America. People should be free to let themselves be taken to the cleaners if they want to be. Hell, why bother to help people?
Well, for one thing, this guy in the baseball cap and the pick up truck is an actor, and if he is not an actor, he should be. If this idiot wants to pays 15% interest per week, why should we stop him? How about people suckered into mortgages that they did not understand or could not afford? What do we do about all those people losing their homes? Perhaps the compassionate conservative thing to do would be to put them all against the wall and remove them permanently from the gene pool. Oh, that is not what is meant by compassionate conservative, I am sorry. You see, I am an old 1960’s style Liberal that thought we had a responsibility to help those with less gray matter, old age or some other disability.
The big difference between the Liberals and the Conservatives, is the Liberals have this idea that they can save people from themselves. You know, after all these years, I am beginning to question that. Why bother to have an SEC? Why bother to have rules governing financial transactions at all? If people can not ferret out the truth for themselves, then perhaps they should be taken to the cleaners by stock brokers, loan officers, mortgage originators and cash advance store clerks. Then, after we get rid of the SEC, perhaps we can start on the FDA. In time, perhaps only the sharks would be left, but that is not true because some how nature always makes sure that there will be enough marks for the sharks to feed on.
But, if we do this, can we take these people off the TV news when they lose their homes, their pick up trucks or the clothes off their backs. I do not want to see stupid naked people on the 11pm news just before I am going to sleep.
But, for all of you out there that believe in legislation to protect the consumer from being defrauded, then please disregard the above and vote for OBAMA in November.
Stay tuned.
This week I have been watching a political campaign commercial about lending and borrowing money. It seems that here in Ohio, the forces of intelligent design, if I can use those words, would like to rope in some of the lending practices of these cash advance stores. The commercial starts out with the alert that 6,000 good paying jobs are at stake. And, if legislation goes through to prevent people from using these kind of lenders, then these 6,000 good paying jobs will be lost. In the commercial, we have this middle aged white guy wearing a baseball cap and standing next to a pick up truck telling us that if he needs to borrow $100 to fix his truck and then pays back the following week $115, that should be his choice. You know, at this point I agree. And furthermore, if he wants to borrow at that interest rate for a whole year, that should be his choice too. Let us see, $15 in interest charges a week times 52 weeks, gets this Einstein with the baseball cap and the scowl on his face up to at least $782 in interest charges for one year on borrowing $100. Why would anyone want to keep this financial wizard from doing this. This is America. People should be free to let themselves be taken to the cleaners if they want to be. Hell, why bother to help people?
Well, for one thing, this guy in the baseball cap and the pick up truck is an actor, and if he is not an actor, he should be. If this idiot wants to pays 15% interest per week, why should we stop him? How about people suckered into mortgages that they did not understand or could not afford? What do we do about all those people losing their homes? Perhaps the compassionate conservative thing to do would be to put them all against the wall and remove them permanently from the gene pool. Oh, that is not what is meant by compassionate conservative, I am sorry. You see, I am an old 1960’s style Liberal that thought we had a responsibility to help those with less gray matter, old age or some other disability.
The big difference between the Liberals and the Conservatives, is the Liberals have this idea that they can save people from themselves. You know, after all these years, I am beginning to question that. Why bother to have an SEC? Why bother to have rules governing financial transactions at all? If people can not ferret out the truth for themselves, then perhaps they should be taken to the cleaners by stock brokers, loan officers, mortgage originators and cash advance store clerks. Then, after we get rid of the SEC, perhaps we can start on the FDA. In time, perhaps only the sharks would be left, but that is not true because some how nature always makes sure that there will be enough marks for the sharks to feed on.
But, if we do this, can we take these people off the TV news when they lose their homes, their pick up trucks or the clothes off their backs. I do not want to see stupid naked people on the 11pm news just before I am going to sleep.
But, for all of you out there that believe in legislation to protect the consumer from being defrauded, then please disregard the above and vote for OBAMA in November.
Stay tuned.
Monday, August 11, 2008
Oil, My Mind And Paranoia
There were several factors coming together from around the world to push the price of oil to almost $150 a barrel just a few short weeks ago. But, even though I know that a single factor can not explain an event that has so many players involved, as the price of the commodity oil has, my Jewish-Russian ancestral paranoia nevertheless crepes into my thoughts about the movement of the price of oil and in turn the price of gasoline and diesel over the last several months.
Now that I have gotten that out on the table, I can feel better about where I am about to go with this. Gas and diesel over many years have been the best examples of inelastic demand when talking about inelastic demand in the classroom. At one time cigarettes were also used as an example of an almost inelastic demand, but that was before the Federal Government decided that cigarettes were bad for your health. Oil, on the other hand, is not only good for your health, but I can not begin to list all the things that we eat, wear and live with that have something to do with oil. If we were going to pray to a commodity, I think it would have to be oil. And yet, this indispensable commodity that we Americans depend on for so much of our life style and quality of life, do not forget the role oil plays in health care, that our leaders would drop the ball regarding its importance to our way of life is hard to believe. This is were my paranoia crepes in.
Was it really the coming together of several economic events including the fall in the value of the U.S. dollar that drove up the price of oil and in turn the price of gas, or was it simply political pay back time for the present administration? You have to have real paranoia credentials to put this one on the oil industry, but after this administration’s track record, I think it is entirely possible. Especially when you have former chairman and CEO Cheney running the administration. It will make for interesting reading some day after a few historians start digging into the documents about the present administration and the oil companies. Unfortunately, many of these documents will be sealed because of national security reasons, but eventually the truth will come out.
In the mean time, the price of oil and gas are coming back down. Could this have anything to do with the presidential elections and the Republican Party? At this point, I don’t care, I am just happy the price is coming down. Go Obama.
Stay tuned.
Now that I have gotten that out on the table, I can feel better about where I am about to go with this. Gas and diesel over many years have been the best examples of inelastic demand when talking about inelastic demand in the classroom. At one time cigarettes were also used as an example of an almost inelastic demand, but that was before the Federal Government decided that cigarettes were bad for your health. Oil, on the other hand, is not only good for your health, but I can not begin to list all the things that we eat, wear and live with that have something to do with oil. If we were going to pray to a commodity, I think it would have to be oil. And yet, this indispensable commodity that we Americans depend on for so much of our life style and quality of life, do not forget the role oil plays in health care, that our leaders would drop the ball regarding its importance to our way of life is hard to believe. This is were my paranoia crepes in.
Was it really the coming together of several economic events including the fall in the value of the U.S. dollar that drove up the price of oil and in turn the price of gas, or was it simply political pay back time for the present administration? You have to have real paranoia credentials to put this one on the oil industry, but after this administration’s track record, I think it is entirely possible. Especially when you have former chairman and CEO Cheney running the administration. It will make for interesting reading some day after a few historians start digging into the documents about the present administration and the oil companies. Unfortunately, many of these documents will be sealed because of national security reasons, but eventually the truth will come out.
In the mean time, the price of oil and gas are coming back down. Could this have anything to do with the presidential elections and the Republican Party? At this point, I don’t care, I am just happy the price is coming down. Go Obama.
Stay tuned.
Saturday, August 9, 2008
Friday, August 8, 2008
Give Me A Break
The other day I listened to a man on CNBC say that if regulation and oversight got tougher that Wall Street might just pick up and go to another country. HORSE SHIT!!!
I could not believe my ears. Can you believe someone would try and scare the American public into believing that if regulation and oversight of the securities industry was done right that the big investment banking houses in the United States would leave New York City. Yes, and on the same train will be the New York Yankees too. As Bill Clinton would say, “give me a break.”
Just how stupid do these people they put on TV think the American public is? First, the big investment houses have offices around the world already. Their money does not sleep, someone is trading for the big brokerage firms 24 hours a day. They wire the funds around the world as easy as pushing a button on a keyboard. Second, with the trillions of dollars in pension fund assets both public and private, 401-k’s, foundations and endowments, does anyone really think that the sharks are going to feed where there are fewer fish to eat.
Most reasonable people that are familiar with the securities industry just want the enforcement of the laws and rules that are on the books. That alone would go a long way to deter futures abuses of the system. But, with the computer, new and creative tools of finance have been used and some of these, like mortgage-backed bonds, need to be monitored that the quality is there before the rating goes on. This one thing, the proper rating of debt in the United States, would go a long way to prevent future mortgage bond meltdowns. Is that asking too much? The billions of dollars that were invested in mortgage-backed bonds should have the ability to pay that the rating companies say the bonds have. Again, Is that too much to ask? We expect a drug to have the efficacy that the drug company and the tests done for the FDA say the drug will have. And, if there is a problem, we expect them to pull the drug before it kills or injures a few million people. How many millions were affected by the sub prime mortgage meltdown?
Today is August 8, 2008. What I wanted to do today is review where I was and what I was doing starting with 4/04/44 and bring it to the present 8/08/08. Since just a very few people read my blog, I figured why not. How many people would care? 3, 4 maybe on a good day 10, but I doubt I ever had 10 people read my blog in one day. Well, here goes.
4/04/44 I was 18 months old and I lived on the third floor of an apartment building on the corner of Reading Road and Prospect Avenue in Avondale with my mother and father who owned a fish & poultry store around the corner on Prospect Avenue. My only memory is of my father making me count the wood steps as we walked up the back steps to our third floor apartment. At 18 months, I thought counting all those steps was a lot of work. I was born lazy.
5/05/55 I was sitting in 7th grade math class at Woodward High School, when my math teacher, and later my track coach, I ran the half mile or 880 yard run, mentioned the fact that today is 5/5/55. He then said something about the next time something like this would occur would be 6/6/66. I was probably busy drawing cars and not paying a lot of attention. I went to summer school for 7th grade math because I spent my time drawing instead of learning math.
6/06/66 June 6, 1966, I was in the U.S. Army and stationed in Korea. I worked at 8th U.S. Army Headquarters as an assistant to the Staff Historian of 8th U.S. Army, Herman Katz. The job suited me just perfect. I worked for a civilian and I read newspapers and books all day unless I was doing some research for a speech writer or someone else.
7/07/77 I was a Bond Investment Officer at the Central Trust Company Bank trust department. My office was in the bond department at the back of the building on the first floor where they stuck me in a room the size of a closet. It was a fun time working with Tom and Al, who ran the bond department and the bank’s investment portfolio.
8/08/88 I was a broker at Legg Mason and working in the same building I had worked in in 1978, 79, 80 and part of 81. I did not like being a broker. Being a portfolio manager in a trust department was more to my temperament.
9/09/99 I was working in Columbus, Ohio for the Ohio Bureau of Workers’ Compensation as a Senior Investment Officer. That was a nice place to work because of the people. My immediate boss, Bob Cowman the CIO, was one of the nicest and most decent people I ever had the pleasure to work with or know.
8/08/08 Today I am retired. I write a blog, MONEYTHOUGHTS and I draw and paint pictures. I don’t count steps, but I can still run up them. I am still drawing, something I hope to do for many more years. Oh, I also like riding my bike and driving my BMW.
How’s that for my life in 30 seconds? All of my many readers out there on the Internet have a safe and happy weekend, and a happy 8/08/08!
Stay tuned.
I could not believe my ears. Can you believe someone would try and scare the American public into believing that if regulation and oversight of the securities industry was done right that the big investment banking houses in the United States would leave New York City. Yes, and on the same train will be the New York Yankees too. As Bill Clinton would say, “give me a break.”
Just how stupid do these people they put on TV think the American public is? First, the big investment houses have offices around the world already. Their money does not sleep, someone is trading for the big brokerage firms 24 hours a day. They wire the funds around the world as easy as pushing a button on a keyboard. Second, with the trillions of dollars in pension fund assets both public and private, 401-k’s, foundations and endowments, does anyone really think that the sharks are going to feed where there are fewer fish to eat.
Most reasonable people that are familiar with the securities industry just want the enforcement of the laws and rules that are on the books. That alone would go a long way to deter futures abuses of the system. But, with the computer, new and creative tools of finance have been used and some of these, like mortgage-backed bonds, need to be monitored that the quality is there before the rating goes on. This one thing, the proper rating of debt in the United States, would go a long way to prevent future mortgage bond meltdowns. Is that asking too much? The billions of dollars that were invested in mortgage-backed bonds should have the ability to pay that the rating companies say the bonds have. Again, Is that too much to ask? We expect a drug to have the efficacy that the drug company and the tests done for the FDA say the drug will have. And, if there is a problem, we expect them to pull the drug before it kills or injures a few million people. How many millions were affected by the sub prime mortgage meltdown?
Today is August 8, 2008. What I wanted to do today is review where I was and what I was doing starting with 4/04/44 and bring it to the present 8/08/08. Since just a very few people read my blog, I figured why not. How many people would care? 3, 4 maybe on a good day 10, but I doubt I ever had 10 people read my blog in one day. Well, here goes.
4/04/44 I was 18 months old and I lived on the third floor of an apartment building on the corner of Reading Road and Prospect Avenue in Avondale with my mother and father who owned a fish & poultry store around the corner on Prospect Avenue. My only memory is of my father making me count the wood steps as we walked up the back steps to our third floor apartment. At 18 months, I thought counting all those steps was a lot of work. I was born lazy.
5/05/55 I was sitting in 7th grade math class at Woodward High School, when my math teacher, and later my track coach, I ran the half mile or 880 yard run, mentioned the fact that today is 5/5/55. He then said something about the next time something like this would occur would be 6/6/66. I was probably busy drawing cars and not paying a lot of attention. I went to summer school for 7th grade math because I spent my time drawing instead of learning math.
6/06/66 June 6, 1966, I was in the U.S. Army and stationed in Korea. I worked at 8th U.S. Army Headquarters as an assistant to the Staff Historian of 8th U.S. Army, Herman Katz. The job suited me just perfect. I worked for a civilian and I read newspapers and books all day unless I was doing some research for a speech writer or someone else.
7/07/77 I was a Bond Investment Officer at the Central Trust Company Bank trust department. My office was in the bond department at the back of the building on the first floor where they stuck me in a room the size of a closet. It was a fun time working with Tom and Al, who ran the bond department and the bank’s investment portfolio.
8/08/88 I was a broker at Legg Mason and working in the same building I had worked in in 1978, 79, 80 and part of 81. I did not like being a broker. Being a portfolio manager in a trust department was more to my temperament.
9/09/99 I was working in Columbus, Ohio for the Ohio Bureau of Workers’ Compensation as a Senior Investment Officer. That was a nice place to work because of the people. My immediate boss, Bob Cowman the CIO, was one of the nicest and most decent people I ever had the pleasure to work with or know.
8/08/08 Today I am retired. I write a blog, MONEYTHOUGHTS and I draw and paint pictures. I don’t count steps, but I can still run up them. I am still drawing, something I hope to do for many more years. Oh, I also like riding my bike and driving my BMW.
How’s that for my life in 30 seconds? All of my many readers out there on the Internet have a safe and happy weekend, and a happy 8/08/08!
Stay tuned.
Thursday, August 7, 2008
A Better Steel Cage, Part II
There is a group of marks out there that is big enough, and if organized, could be strong enough to level the playing field for the investing public. State pension fund trustees in aggregate control trillions of dollars in investments. If they were organized along with trustees from foundations and endowments across the country, they could influence legislation that would directly affect the investment community. The only thing standing in their way is their own ignorance.
Of all the state pension fund trustees, probably less than ten percent have any background or knowledge or experience at the institutional level of investing. As a result, this group, that speaks for millions of pensioners and state workers, does not even realize the power and force they could represent for change in the regulation and oversight of the investment community and how business is done on Wall Street.
Perhaps when a few big states, starting with California, realize that their pension funds are being put at unnecessary risk because the greedy want the opportunity to have a feeding frenzy every few years or so, then perhaps their political/economic power will be directed towards better regulation and oversight. When you assemble 50 state pension funds to include state workers, teachers, school employees, police and fire workers, plus all the city pension funds, you now are talking about the financial well being of millions of people. Who have I left out?
The poster child of this last crisis, for me at least, is the sub prime mortgage mess. If ever there was a crisis that could have had the plug pulled on it at the beginning, it is the sub prime mortgage bonds that were packaged (securitized), rated by the rating companies, underwritten by the investment bankers and sold by the institutional brokers to pension funds and other institutional portfolios. At every step of the process that turned these mortgages into the disastrous sub prime mortgage bonds that they became, a red flag should have gone up. Why didn’t it? The answer is simple, greed. Everyone associated with the manufacturer of the sub prime mortgage bonds was too greedy to pull the plug or raise the red flag. Concern for the investing public is not their problem, let the buyer beware.
Time for a personal story. Back in the late 1980’s when I was working as a broker between portfolio manager jobs, I had the opportunity to witness an underwriting of a fixed income product that was listed on the New York Stock Exchange and went belly up within six months after its initial sale at $10 a unit. The name of the product is not important, but how the brokerage firm that I was with behaved when I asked a question about the product is. We were assembled for a luncheon meeting in the conference room and sandwiches were brought in. The guy from the home office involved with the underwriting came out to make the presentation while we were wolfing down our sandwiches. In that the product was essentially a fixed income product, and in that I had cut my teeth on the fixed income markets, I thought I should understand this product pretty well. After the presentation, I raised my hand and asked a question. My question was not answered, but I was told that this product was so good I could sell it to my grandmother. Fortunately for me both my grandmothers were already dead as the loss they would have suffered in less than six months would have probably killed them. This is the kind of greedy shit that went on and does go on on Wall Street.
Unfortunately, the politicians do not have the background or knowledge or political motivation to put a stop to this shit. But, if the state pension trustees and foundation and endowment trustees would organize, they could represent a force that could put in place the kind of regulation and oversight that is needed to protect the pension assets, that run into the trillions of dollars, from unnecessary risk resulting from pure greed.
I am talking about the elimination of fraud, plain and simple. One of these days the right people may wake up and realize that they have a responsibility to millions of working people, and then take the necessary action to deliver the kind of regulation and oversight the working people of America deserve.
Stay tuned.
Wednesday, August 6, 2008
Building A Better Steel Cage
Whenever there is a financial crisis, there soon follows an attempt by the media and the general public to asses blame. But the thing we must realize is that assessing blame does not necessarily mean that a future crisis will be averted. What is needed and what we get quite often are two different things.
The field of finance and financial instruments such as stocks and bonds fill an important need in our dynamic economy, but without suitable regulation and the proper oversight, the service the field provides becomes a nightmare. I know that analogies have their limitations, but let me make a few basic ones here at the beginning. Wall Street, the business of underwriting and selling investment securities is an urban jungle. Survival and making lots of money is everything.
The field attracts a wide assortment of bright and talented people from many different backgrounds, but the one thing that those that make it, or those that do well, is the strong desire to make lots of money. Money is the yardstick by which everything is measured. If you think I am wrong, that is all right with me, but then do not go looking through the 400 wealthiest people in America when that Forbes issue hits the newsstand. Money and the speed of making money is what moves Wall Street. This is the way it is, just accept it. On the other hand, government regulation is necessary to keep the feeding frenzy from getting out of hand. When regulation does not do its job, the feeding frenzy gets out of hand and we have a crisis.
Those involved in the business of providing the service of raising capital and then placing investment securities with investors, needs to be regulated and monitored in today’s economy more than ever before. The amounts of money, the speed with which the money changes hands and the giant pension funds that are invested in these securities makes better regulation more than just essential. Without proper oversight there is nothing standing between the predators and the prey. Many people, far more experienced and educated than me, could construct a financial system that would keep an abuse from becoming a crisis. But, what is at stake is more than just politics and egos, it is money, lots of money. Even the Great White Shark will rattle your protective cage when it is being kept from its prey, and Wall Street is no different.
It is my opinion that little will be done to correct the deficiencies in the financial system of investment securities and markets. There is just too much money at stake, and lifestyles and lives are on the line. Those with money will use it to bring about their desired results. There is no such thing as an endangered species on Wall Street. Fresh marks are born everyday.
I worked my whole career in Ohio in three cities, Cincinnati, Dayton and Columbus, and yet I have enough first hand stories of greed to fill a book. Those that shoot fish in a barrel do not want to work any harder than they have to. Even with regulations where they are, the competition is fierce. The marks do not have the political muscle to change the rules, and as a result, they will remain vulnerable now and in the future.
Some day, the marks may become educated enough to push back with enough force to cause positive changes in regulation and oversight to be made, but I do not look for that to happen anytime soon.
Stay tuned.
The field of finance and financial instruments such as stocks and bonds fill an important need in our dynamic economy, but without suitable regulation and the proper oversight, the service the field provides becomes a nightmare. I know that analogies have their limitations, but let me make a few basic ones here at the beginning. Wall Street, the business of underwriting and selling investment securities is an urban jungle. Survival and making lots of money is everything.
The field attracts a wide assortment of bright and talented people from many different backgrounds, but the one thing that those that make it, or those that do well, is the strong desire to make lots of money. Money is the yardstick by which everything is measured. If you think I am wrong, that is all right with me, but then do not go looking through the 400 wealthiest people in America when that Forbes issue hits the newsstand. Money and the speed of making money is what moves Wall Street. This is the way it is, just accept it. On the other hand, government regulation is necessary to keep the feeding frenzy from getting out of hand. When regulation does not do its job, the feeding frenzy gets out of hand and we have a crisis.
Those involved in the business of providing the service of raising capital and then placing investment securities with investors, needs to be regulated and monitored in today’s economy more than ever before. The amounts of money, the speed with which the money changes hands and the giant pension funds that are invested in these securities makes better regulation more than just essential. Without proper oversight there is nothing standing between the predators and the prey. Many people, far more experienced and educated than me, could construct a financial system that would keep an abuse from becoming a crisis. But, what is at stake is more than just politics and egos, it is money, lots of money. Even the Great White Shark will rattle your protective cage when it is being kept from its prey, and Wall Street is no different.
It is my opinion that little will be done to correct the deficiencies in the financial system of investment securities and markets. There is just too much money at stake, and lifestyles and lives are on the line. Those with money will use it to bring about their desired results. There is no such thing as an endangered species on Wall Street. Fresh marks are born everyday.
I worked my whole career in Ohio in three cities, Cincinnati, Dayton and Columbus, and yet I have enough first hand stories of greed to fill a book. Those that shoot fish in a barrel do not want to work any harder than they have to. Even with regulations where they are, the competition is fierce. The marks do not have the political muscle to change the rules, and as a result, they will remain vulnerable now and in the future.
Some day, the marks may become educated enough to push back with enough force to cause positive changes in regulation and oversight to be made, but I do not look for that to happen anytime soon.
Stay tuned.
Tuesday, August 5, 2008
Private Equity Firms Smell Blood
Private equity is back in the news. It seems that several private equity firms see the banks as an opportunity to make some fast money, but they want the Securities & Exchange Commission and the Federal Reserve Bank to suspend the regulations as they apply to bank ownership. What does that mean?
When a company buys into a bank that is publicly traded as all of the large banks in the United States are, there are certain rules that must be followed as they relate to the percent of ownership that an outside investor can maintain. These rules are designed to prevent conflict of interest and to insure some semblance of competition. The break points are 10% and 25%. Let me try and explain. If a company, such as a private equity firm, invests in more than 25% of the bank’s common stock, the private equity firm is then considered a bank holding company and is then governed by the rules and regulations of a bank. If a private equity firm would own between 10% and 25% of a bank, they can not control the bank’s management. And, to put a director on the board of the bank, the investment firm (private equity firm) must own less than 10% of the common stock. These rules exist to promote fairness and protect consumers and businesses that deal with banks.
But now the private equity firms smell blood in the water, and looking to maximize their profits would like the rules and regulations put aside for a while, while they fed on the bleeding (cash) banks. It is just that simple. We do not have to use big words to explain a simple point. The point being that banks are hurting from the loan losses and other investments they may have gotten themselves into. The investing public and several funds have taken a bath as a result of the decline in market valuation of many many of the banks’ common stocks. The banks need an infusion of fresh cash and the private equity firms have the cash to invest. The question is whether the government will hold the line on regulation or whether they will cave in. In that you and I are the ultimate guarantors, as we provide the government with the cash to back up the banks, should the government allow a suspension of the rules and regulations so the feeding frenzy can begin?
Private equity firms are not nonprofit organizations. They are the great white sharks of Wall Street. They do not bother with the little fish as it is not worth their effort in time or money. But, the large commercial banks, especially the ones that need fresh cash, are a meal. My opinion and two bucks will maybe buy you a cup of coffee, depending on where you live, is this. My view of the situation and knowing what private equity firms are like, I think the government better stick with the rules and regulations as they are and not get creative at this point in time. Private equity firms have one objective and that is to make as much profit in as short an amount of time as possible. They are measured against a time weighted return on capital. That is the last kind of measure we need for our commercial banks to labor under at this point in time. Our commercial banks, at this point in time, need a protective environment, not to be thrown to the sharks.
Stay tuned.
When a company buys into a bank that is publicly traded as all of the large banks in the United States are, there are certain rules that must be followed as they relate to the percent of ownership that an outside investor can maintain. These rules are designed to prevent conflict of interest and to insure some semblance of competition. The break points are 10% and 25%. Let me try and explain. If a company, such as a private equity firm, invests in more than 25% of the bank’s common stock, the private equity firm is then considered a bank holding company and is then governed by the rules and regulations of a bank. If a private equity firm would own between 10% and 25% of a bank, they can not control the bank’s management. And, to put a director on the board of the bank, the investment firm (private equity firm) must own less than 10% of the common stock. These rules exist to promote fairness and protect consumers and businesses that deal with banks.
But now the private equity firms smell blood in the water, and looking to maximize their profits would like the rules and regulations put aside for a while, while they fed on the bleeding (cash) banks. It is just that simple. We do not have to use big words to explain a simple point. The point being that banks are hurting from the loan losses and other investments they may have gotten themselves into. The investing public and several funds have taken a bath as a result of the decline in market valuation of many many of the banks’ common stocks. The banks need an infusion of fresh cash and the private equity firms have the cash to invest. The question is whether the government will hold the line on regulation or whether they will cave in. In that you and I are the ultimate guarantors, as we provide the government with the cash to back up the banks, should the government allow a suspension of the rules and regulations so the feeding frenzy can begin?
Private equity firms are not nonprofit organizations. They are the great white sharks of Wall Street. They do not bother with the little fish as it is not worth their effort in time or money. But, the large commercial banks, especially the ones that need fresh cash, are a meal. My opinion and two bucks will maybe buy you a cup of coffee, depending on where you live, is this. My view of the situation and knowing what private equity firms are like, I think the government better stick with the rules and regulations as they are and not get creative at this point in time. Private equity firms have one objective and that is to make as much profit in as short an amount of time as possible. They are measured against a time weighted return on capital. That is the last kind of measure we need for our commercial banks to labor under at this point in time. Our commercial banks, at this point in time, need a protective environment, not to be thrown to the sharks.
Stay tuned.
Monday, August 4, 2008
The Catholic Card?
In 1960, John F. Kennedy went to Texas to give a speech that dealt with the fact that he was a Catholic American running for president of these United States. The last Catholic to make a run for the presidency at that time was Al Smith, in 1928. Herbert Hoover defeated Al Smith in that election that my father witnessed. He told me how it was filled with anti-Catholic propaganda and that the campaign got very ugly. So, 48 years ago JFK made a trip to Texas to try and answer, and at the same time confront people’s unspoken fear of having a Catholic president in the White House. JFK gave his speech and went on to win a very close presidential election in November, 1960. The myth that we could not have a Catholic American as president was put to rest. No one, that I can remember, said that John F. Kennedy was playing the “Catholic card” for going to Texas and giving a speech dealing with the issue of a Catholic president. In 1960, this issue was as yet to be put to rest.
Now 48 years later, an African American is running for president. And, like JFK in 1960, Barak Obama is not in the mold of previous American presidents. That he speaks about this fact openly and is then criticized by the Republican party is no accident. And, that it is said that he is playing the “race card”, is part of the Republican strategy to divert the electorate’s attention from the political/economic issues that this election should be about. Senator Obama is not playing the “race card”, in my opinion, any more than JFK was playing the “Catholic card” in 1960. Any attempt by Obama to make the electorate more comfortable with the idea of the United States having a black man as president is going to meet with opposition from the Republican party. Whether this opposition is considered racist, I will not venture to comment because I can not read what is in their minds. The Republicans will do everything in their powers to make John McCain the next president. The Republican party’s bottom line is to win, and they will do whatever it takes to win. As they say in sports, a win is a win, regardless of how ugly the win is. You can bet that the Republican party will pursue that game plan through the election.
The problem that I have with this strategy is that it is built on fear. The party of business, the party that understands marketing and thus understands what motivates people to buy products and services every day of the year, understands the role fear plays in motivating people to act. The TV journalists, being the talking heads that they are, can not think through this simple yet effective strategy and explain it to the American people. I guess I expect too much from TV journalists. In 1928, the Republican party appealed to the fear of the majority of non-Catholic Americans that if a Catholic was elected president then the Pope in Roman would ultimately be running the country. This kind of fear was enough to defeat Al Smith the Democratic candidate and the former Governor of the State of New York.
Today, it is a new fear. There is no question any more as to whether a black man can play quarterback or win a Super Bowl. Those myths have been put to rest. Today, America is faced with a new challenge, the challenge to put another myth and fear to rest. Can America have a black man as president? My answer is “why not?” The history of this country is a history of putting myths and fears to rest. That is how we built a country that almost everyone in the world wants to live in. But, the job or the process is never over. Our history is predicated on opening new frontiers. Electing a black man as president is just another frontier for us as Americans to cross.
This presidential election has a number of issues for the electorate to decide on. The challenge for the Democratic party is to get the electorate to vote on the issues and their economic self interest. If the Democrats can get the electorate to vote their pocket books, they will win. If the Republicans can get the electorate to vote their fear of a black man as our president, they will win. The last president, George W. Bush, has not set the bar very high for our next president. Coming from Texas and a former governor, President Bush hit the ground running and fell flat on his face. Ask yourself, are you better off now than you were 7 years ago? Few people can answer that in the affirmative. This nation faces some very serious economic challenges and it is going to take one outstanding quarterback to get the job done. I think our best shot in 2008 is a black man named Barak Obama.
Stay tuned.
Now 48 years later, an African American is running for president. And, like JFK in 1960, Barak Obama is not in the mold of previous American presidents. That he speaks about this fact openly and is then criticized by the Republican party is no accident. And, that it is said that he is playing the “race card”, is part of the Republican strategy to divert the electorate’s attention from the political/economic issues that this election should be about. Senator Obama is not playing the “race card”, in my opinion, any more than JFK was playing the “Catholic card” in 1960. Any attempt by Obama to make the electorate more comfortable with the idea of the United States having a black man as president is going to meet with opposition from the Republican party. Whether this opposition is considered racist, I will not venture to comment because I can not read what is in their minds. The Republicans will do everything in their powers to make John McCain the next president. The Republican party’s bottom line is to win, and they will do whatever it takes to win. As they say in sports, a win is a win, regardless of how ugly the win is. You can bet that the Republican party will pursue that game plan through the election.
The problem that I have with this strategy is that it is built on fear. The party of business, the party that understands marketing and thus understands what motivates people to buy products and services every day of the year, understands the role fear plays in motivating people to act. The TV journalists, being the talking heads that they are, can not think through this simple yet effective strategy and explain it to the American people. I guess I expect too much from TV journalists. In 1928, the Republican party appealed to the fear of the majority of non-Catholic Americans that if a Catholic was elected president then the Pope in Roman would ultimately be running the country. This kind of fear was enough to defeat Al Smith the Democratic candidate and the former Governor of the State of New York.
Today, it is a new fear. There is no question any more as to whether a black man can play quarterback or win a Super Bowl. Those myths have been put to rest. Today, America is faced with a new challenge, the challenge to put another myth and fear to rest. Can America have a black man as president? My answer is “why not?” The history of this country is a history of putting myths and fears to rest. That is how we built a country that almost everyone in the world wants to live in. But, the job or the process is never over. Our history is predicated on opening new frontiers. Electing a black man as president is just another frontier for us as Americans to cross.
This presidential election has a number of issues for the electorate to decide on. The challenge for the Democratic party is to get the electorate to vote on the issues and their economic self interest. If the Democrats can get the electorate to vote their pocket books, they will win. If the Republicans can get the electorate to vote their fear of a black man as our president, they will win. The last president, George W. Bush, has not set the bar very high for our next president. Coming from Texas and a former governor, President Bush hit the ground running and fell flat on his face. Ask yourself, are you better off now than you were 7 years ago? Few people can answer that in the affirmative. This nation faces some very serious economic challenges and it is going to take one outstanding quarterback to get the job done. I think our best shot in 2008 is a black man named Barak Obama.
Stay tuned.
Saturday, August 2, 2008
Subscribe to:
Posts (Atom)