Wednesday, December 24, 2008
I guess it is ok to say Happy New Year and you won’t offend anyone.
But that is really not what I am going to comment on. It is the season where people get frustrated with all the holiday fuss and they get stressed out over many things. The rush to get ready for Christmas, find the right gifts, get them wrapped, mailed, get the cards out on time, cook, find time to go to parties and be happy, etcetera, etcetera.
It is also the time to think about those less fortunate than we are. Everyone has someone who is less fortunate than you are unless you are totally homeless and penniless and in ill health. Make sense?
Well, that has been on my mind recently. So, let me tell you about a recent occurrence.
To set the stage for you, I am in McDonalds, my favorite fast food place by the way, getting a cup of coffee one morning. I am standing at the counter, looking to the right at the big screen TV and the eating area. There is a door to the outside and the parking lot at that end of the store.
I just happen to notice an older woman coming in the door with a big McDonald’s cup in her hand. She was wearing a bright blue coat which is what I first noticed. I sort of felt sorry for her as she kind of looked a little down on her luck. Anyway, I turned away and paid for my coffee, got the cup and went to put cream and sugar in at the drink bar.
Lo and behold, the woman was next to me filling up her drink cup. It struck me as odd that I didn’t see her in line with me. And then it hit me, she had just brought in an old cup and was getting her drink “free” so to speak. Well, maybe that is ok if she is really down on her luck? What do you think?
So, I am now outside getting in my car, which happens to be parked next to a big car: Ford Crown Victoria or Mercury Grand Marquis. In it is the lady in the blue coat and another similar lady. They both have their McDonald’s cups and are “yukking it up” about something.
I pulled out of the space and notice the license plate: 4GVNESS Like maybe have pity on me, the driver, an old lady? Or forgiveness of our sins is good? Or what? That is when I started to boil a little bit.
In the beginning of this event I was somewhat feeling sorry for her and feeling that it was “ok “for her to rip off McDonalds for a drink. However, once I saw what was going on and the fact that she was motoring around in a Crown Vic or Grand Marq, any empathy or sympathy that I had went away pretty fast. It especially went away when I saw her license plate! Does she want “forgiveness” or is she giving it?
It is easy to get cynical when you see something like this. There are those who really need a break and then there are those who are little better off but just take advantage of things. So, which is it? Is she really destitute and “needs” a free drink? Or, is she just plain dishonest?
You be the judge. I have made up my mind on this one. I think she has cheated the system and needs 4GVNESS. She won’t get it from me however.
What do you think? Agree, or disagree, what are your thoughts?
Monday, December 8, 2008
This was not being sold in a gun show in which there are even less requirements.
A few days later, guess what? The ad for the gun show appeared which highlighted the “get ‘em while they are hot” mentality! No background checks since the sales are from person to person and no dealers are technically involved. If you believe that I have a bridge to sell you.
A direct quote from the ad: “New administration will attempt to make changes to firearms regulations! GET YOUR GUNS WHILE YOU STILL CAN!!!”
Do you or does anyone really believe that the “new administration” is going to eliminate the right to have a gun? Why would they even want to do this? Lets be realistic here people. The Second Amendment does exist and has been supported by the Supreme Court. However, I do believe that some changes need to be made in the purchase process and in what guns might be readily available.
Before I go on, let’s get some of the semantics and technicalities out of the way. Here is what the Second Amendment actually says:
The Second Amendment (Amendment II) to the United States Constitution is the part of the United States Bill of Rights protecting the pre-existing individual right to possess and carry weapons (i.e., "keep and bear arms") in case of confrontation. Codification of the right to keep and bear arms into the Bill of Rights was influenced by a fear that the federal government would disarm the people in order to impose rule through a standing army or select militia, since history had shown taking away the people's arms and making it an offense for people to keep them was the way tyrants eliminated resistance to suppression of political opponents. Self-defense is a central component of the right enumerated in the amendment.
Specifically: “A well regulated militia, being necessary to the security of a free State, the right of the People to keep and bear arms, shall not be infringed.”
As you cannot help but know, there is a lot of controversy about people carrying guns. What is a gun versus a rifle versus a handgun versus an automatic weapon versus an assault rifle?
What are concealed weapons and non concealed weapons?
No doubt, everyone has an opinion as to whether people should be carrying guns of any sort around or not. The recent publicity of Plaxico Burress, wide receiver for the New York Giants football team is an example of carrying guns gone bad!
You and I can have our opinions but what does the Supreme Court say about having guns?
The primary U.S. Supreme Court Second Amendment cases are United States v. Cruikshank (1875), Presser v. Illinois (1886), United States v. Miller (1939) and District of Columbia v. Heller (2008).
United States v. Cruikshank
Main article: United States v. Cruikshank
In United States v. Cruikshank, 92 U.S. 542 (1875), the Supreme Court ruled that because "[t]he Second Amendment…has no other effect than to restrict the powers of the national government…", the federal government may not punish individuals for depriving citizens of their right to bear arms. The courts did not recognize the doctrine of incorporation at this point in the 19th century. Significantly with respect to the meaning of the amendment, the court found that the Second Amendment prohibited the national government from infringing on the right of individuals "to bear arms for a lawful purpose". Though many of the federal rights delineated in the federal Bill of Rights have subsequently been incorporated by the Court as rights against the states, the Court has not done so for the Second Amendment.
Presser v. Illinois
Main article: Presser v. Illinois
In Presser v. Illinois, 116 U.S. 252 (1886), the Court reaffirmed Cruikshank, holding the Second Amendment to limit the authority only of the federal government.
United States v. Miller
Main article: United States v. Miller
In United States v. Miller, 307 U.S. 174 (1939), the Supreme Court rejected a Second Amendment challenge to the National Firearms Act prohibiting the interstate transportation of unregistered Title II weapons, ruling:
In the absence of any evidence tending to show that possession or use of a 'shotgun having a barrel of less than eighteen inches in length' at this time has some reasonable relationship to any preservation or efficiency of a well regulated militia, we cannot say that the Second Amendment guarantees the right to keep and bear such an instrument. Certainly it is not within judicial notice that this weapon is any part of the ordinary military equipment or that its use could contribute to the common defense.
Miller is often cited by gun-rights advocates, because the Supreme Court ruled that the Second Amendment protected the right to keep arms that are part of "ordinary military equipment".
District of Columbia v. Heller
Main article: District of Columbia v. Heller
In District of Columbia v. Heller, 554 U.S. ___, decided on June 26, 2008, the Supreme Court ruled that "The Second Amendment protects an individual right to possess a firearm unconnected with service in a militia, and to use that arm for traditionally lawful purposes, such as self-defense within the home," and "that the District’s ban on handgun possession in the home violates the Second Amendment, as does its prohibition against rendering any lawful firearm in the home operable for the purpose of immediate self-defense."
The Court held that the amendment's prefatory clause serves to clarify the operative clause, but neither limits nor expands the scope of the operative clause. Justice Stevens, in his dissent, called the majority reading "strained and unpersuasive," and says that the right to possess a firearm exists only in relation to the militia, and that the D.C. laws constitute permissible regulation. Justice Scalia, in the Opinion of the Court, called Justice Stevens' interpretation of the phrase "to keep and bear arms" incoherent and grotesque.
Further, The Brady Handgun Violence Prevention Act of 1993 initially provided a five-day waiting period for handgun purchases, which expired on November 30, 1998. It was replaced by a mandatory, computerized criminal background checking system to be conducted prior to any firearm purchase from a federally licensed firearms dealer.So, you have to have your background checked if the seller of a gun is a federally licensed firearms dealer. Well what about buying a gun in a gun show? Wallah! No background check, just get them while they are hot! (No pun intended!)
So, finally, what do I think? It is an easy decision for me. If any of us want to have a gun or two or three, I have no problem with that. What I do have a problem with is having all kinds of assault rifles that are only good for killing people. What other purpose do these guns have? Not for shooting deer; not for shooting turkeys, and not for shooting any other kind of animal!
The NRA likes to say that “guns don’t kill people; people kill people”. Well, guns do kill people; where do you think the bullets come from? From a gun that’s where.
The subject of a concealed weapon is less clear. If you pass a background check and testing, then maybe that is ok but I don’t think you should, in any circumstances, be able to walk around with any kind rifle on your body; concealed or otherwise.
So, in summary, let’s get the assault rifles off the streets. Let’s also clean up and tighten up the laws around registering and regulating the sale of firearms. There are too many loopholes, especially the gun show/flea market sale of guns.
Finally, in my humble opinion, the NRA needs to recognize that guns do kill people and help with better registration and regulation laws. At the present time, the NRA is more on the side of the criminals and less on the side of law abiding citizens.
What do you think?
Monday, December 1, 2008
We talked about the response I got from a friend to whom I had sent my last blog and the fact that it was a different opinion. This person is a retired executive from Ford Motor Company and he forwarded to me an opinion that is certainly worth reading and illustrates the other side of the coin from my thoughts.
My son volunteered that I should just include the differing opinion. Well, that makes doing this week’s blog that much easier! So, here it is:
November 23, 2008
If I had the floor at the auto rescue talks
BY MITCH ALBOM
FREE PRESS COLUMNIST
OK. It's a fantasy. But if I had five minutes in front of Congress last week, here's what I would've said:
Good morning. First of all, before you ask, I flew commercial. Northwest Airlines. Had a bag of peanuts for breakfast. Of course, that's Northwest, which just merged with Delta, a merger you, our government, approved -- and one which, inevitably, will lead to big bonuses for their executives and higher costs for us. You seem to be OK with that kind of business.
Which makes me wonder why you're so against our kind of business? The kind we do in Detroit. The kind that gets your fingernails dirty. The kind where people use hammers and drills, not keystrokes. The kind where you get paid for making something, not moving money around a board and skimming a percentage.
You've already given hundreds of billions to banking and finance companies -- and hardly demanded anything. Yet you balk at the very idea of giving $25 billion to the Detroit Three. Heck, you shoveled that exact amount to Citigroup -- $25 billion -- just weeks ago, and that place is about to crumble anyhow.
Does the word "hypocrisy" ring a bell?
Protecting the home turf?
Sen. Shelby. Yes. You. From Alabama. You've been awfully vocal. You called the Detroit Three's leaders "failures." You said loans to them would be "wasted money." You said they should go bankrupt and "let the market work."
Why weren't you equally vocal when your state handed out hundreds of millions in tax breaks to Mercedes-Benz, Hyundai, Honda and others to open plants there? Why not "let the market work"? Or is it better for Alabama if the Detroit Three fold so that the foreign companies -- in your state -- can produce more?
Way to think of the nation first, senator.
And you, Sen. Kyl of Arizona. You told reporters: "There's no reason to throw money at a problem that's not going to get solved."
That's funny, coming from such an avid supporter of the Iraq war. You've been gung ho on that for years. So how could you just sit there when, according to the New York Times, an Iraqi former chief investigator told Congress that $13 billion in U.S. reconstruction funds "had been lost to fraud, embezzlement, theft and waste" by the Iraqi government?
That's 13 billion, senator. More than half of what the auto industry is asking for. Thirteen billion? Gone? Wasted?
Where was your "throwing money at a problem that's not going to get solved" speech then?
Watching over the bankers?
And the rest of you lawmakers. The ones who insist the auto companies show you a plan before you help them. You've already handed over $150 billion of our tax money to AIG. How come you never demanded a plan from it? How come when AIG blew through its first $85 billion, you quickly gave it more? The car companies may be losing money, but they can explain it: They're paying workers too much and selling cars for too little.
AIG lost hundred of billions in credit default swaps -- which no one can explain and which make nothing, produce nothing, employ no one and are essentially bets on failure.
And you don't demand a paragraph from it?
Look. Nobody is saying the auto business is healthy. Its unions need to adjust more. Its models and dealerships need to shrink. Its top executives have to downsize their own importance.
But this is a business that has been around for more than a century. And some of its problems are because of that, because people get used to certain wages, manufacturers get used to certain business models. It's easy to point to foreign carmakers with tax breaks, no union costs and a cleaner slate -- not to mention help from their home countries -- and say "be more like them."
But if you let us die, you let our national spine collapse. America can't be a country of lawyers and financial analysts. We have to manufacture. We need that infrastructure. We need those jobs. We need that security. Have you forgotten who built equipment during the world wars?
Besides, let's be honest. When it comes to blowing budgets, being grossly inefficient and wallowing in debt, who's better than Congress?
So who are you to lecture anyone on how to run a business?
Ask fair questions. Demand accountability. But knock it off with the holier than thou crap, OK? You got us into this mess with greed, a bad Fed policy and too little regulation. Don't kick our tires to make yourselves look better.
Contact MITCH ALBOM at 313-223-4581 or email@example.com. Catch "The Mitch Albom Show" 5-7 p.m. weekdays on WJR-AM (760).
What do you think?
Friday, November 21, 2008
Ok, let’s assume for the moment that we are talking about GM, Chrysler and Ford. Further, let’s assume that they are the domestic Big Three. I am going to collectively refer to them as DBT (domestic Big Three).
At this time, the DBT are begging Congress for a bailout. The three CEOs flew into DC on their private jets. No, they didn’t “jetpool” to save gas but they each drove their own jet! That did not make a good impression on the Congressional do-gooders; who, of course, are above reproach and totally above board on everything they do! Just ask Ted Stephens (R-Alaska) about that.
Congress has deferred making a decision on giving them the money they request. Should the DBT get the money or not get the money?
The DBT says yes. They say they have cut costs, rationalized makes and models, trimmed dealer networks, developed more small cars than ever before and worked on alternative energy powered cars. They have a plan to offload to the union’s retiree pensions and health care benefits. Further, they say that if they don’t get the money they will have to file for bankruptcy and that this would further ruin the economy and put us into a depression (as opposed to the recession that we are now in). I am not sure I would buy a car from a company that is in bankruptcy, would you? What about warranties and parts availability?
But, if they get the money, would they make good use of it? Is the current management capable of making good use of it? Have they done so in the past? Maybe not!
Let’s look at the current situation. Take GM for example. If they really wanted to compete with the non DBT industry, here is what I do would for starters:
• Car lines would be Chevy and Cadillac only; goodbye to Pontiac and Buick;
• Truck line would be GMC; Chevy would not make trucks;
• SUV line would be Chevy; GMC and Cadillac would not make SUVs;
• Minivan line would be Chevy only;
• Cut the “suit” staff by at least 50%
As for Ford,
• Who really buys a Mercury? Get rid of it.
• Lincoln does not need an SUV.
• Ford should make cars and trucks and minivans.
• Maybe Ford should even get out of the minivan business; no one buys the models they have for sale.
• Lincoln should only make cars.
• Cut the “suit” staff by at least 50%
Chrysler has made some progress on this front. They only have Dodge and Chrysler and Jeep. However:
• Chrysler does not need a minivan or a SUV
• Jeep has too many models and overlaps with Dodge
• Cut the “suit” staff by at least 50%
They all need to continue the process of offloading their pension and healthcare benefits to the Unions per the current agreement. It is critical to get their costs down to the those of the non DBT. Unions were good for this country at one time (maybe 50 years ago) but all they do now is make us less competitive. Do you know that under current labor contracts union members get paid even if there is no work for them? What a deal! Wouldn’t all of us like something like this?
A good thing about the bankruptcy path is that the DBT could get out of leases, contracts, facilities and labor agreements that are not cost effective. Don’t overlook the benefits of this way out of the mess! BUT, if the benefits of bankruptcy are not combined with the steps listed above and others, the real problem is not solved. The only good news here is that the government would not have forked over 25 million bucks!
In summary: to give the money or not to give the money? That is the question.
I would lean toward bankruptcy if I had confidence that the DBT would really cut costs and streamline as described above. This path however would be disastrous for our economy in the short run but better in the long run. But, I don’t have that confidence; I think they would just perpetuate the same car lines and models that they have and the same cost duplicative processes.
Therefore I would give the money for a bailout only if there were strings attached.
Such strings would be making them take the actions listed above and other similar cost cutting moves. Management changes are needed as well. I think the government needs to have representatives on the Boards of Directors of the companies and have input on decisions.
Neither of the alternatives are good ones. This situation has been forced upon us by the inaction of the DBT in the past as they have ignored their real problems and been pompous about any outside input. Of course, the unions have contributed as well (the thought of people getting paid for not working drives me insane)!
So, in summary, give the money but attach a lot of conditions and oversight as well as ongoing government input until the so called bailout loans are repaid. As Ronald Reagan said: “trust but verify”.
Sunday, October 26, 2008
There have been many studies on this subject. There are also annual awards for the best customer service. For example, Wachovia Corp. has been recognized as giving the best customer service among financial institutions. Ritz Carleton Hotels has been held out as the standard for customer service in the hospitality industry. Likewise, Nordstroms has been recognized in the retailing industry.
Maybe we should get even more basic in order to answer the question? Let’s talk about your everyday events such as going to a fast food restaurant, the “big box” retailer or the convenience store or the movie theater.
I walked up to a fast food counter and started to give my order. The employee is asked a question by a co-worker and responds; ignoring me for the time being. The employee then walks away to help the co-worker. In about 30 seconds she comes back and takes my order, not saying she was sorry I had to wait. What is going on here? Should I have been ignored for 30 seconds, which is a lifetime in the world of fast food? Should the co-worker have interrupted my server while she had a customer? Could my server have said excuse me a moment while I help this other employee? Should I have a problem with this anyway? What is the big deal about 30 seconds?
Let’s take another example. I go to a “big box” electronics store to get service on my computer. The “techie” looks at the computer and says the problem is either 1 or 2. He asks if I have a service warranty with them. I don’t know so he sends me to the “customer service” counter (ten steps away from us) so the customer service person can look me up in their computer. While she is doing this, another employee comes to her and engages her in conversation. I have to wait while they finish their conversation. Then the phone rings and she answers it while the other customer service person just stands there!
I wait some more.
How about when I go to the convenience store to get a couple of items? I put them on the counter. The cashier rings it up; however I have to ask how much I owe as she just stood there. I give her the money; she takes it; all the while talking to another employee standing next to her. She doesn’t say thank you, she doesn’t make eye contact, and she doesn’t offer to put the items in a bag. I am basically left to fend for myself.
Finally, think about the movie theater. Think about standing in lines 8 and 10 people deep that move with a glacial pace. What is going on up there? The other night, the “customer service” person was talking to the person next to him. Thus, both lines suffered. You would think that the theaters could emphasize a little more speed to get people through the lines, especially when they make a big portion of their profit on refreshments.
Do I want to go back to any of these places? Not really. I didn’t feel appreciated at any of them.
Business owners, remember that your employees are the face of your business! Next, remember that you only get one chance to make a good first impression on the patron.
So, in addition to the technical training, shouldn’t you be sure to give them training in how to meet the customers? They need basic examples of everyday situations and how to react to these situations. When with a customer, that is where their complete attention should be directed. Other employees should not interrupt; but if necessary to interrupt, then permission should be asked of the customer. Phones should be answered by someone other than the front line person. Or, if it is necessary for the front line person to answer the phone, they should answer by saying they are with a customer, put the caller on hold or get a number and call them back.
So, what is the point of all this? I think we have a major problem on our hands in this country. We worry about becoming just a service economy but what if we can’t even give good service? What then? We have to get better at this. Can’t someone give our service people training in how to interact with the Customer?
I for one am going to go where the staff says hello, looks me in the eye, and takes care of my need as best they can. I am not going to go where I am ignored, not looked at and treated as an inconvenience. How about you?
Monday, October 6, 2008
The members of CRAC are the City of Richmond, the Counties of Chesterfield, Hanover and Henrico. These 4 entities and surrounding counties are known for their inter-entity (did I just make up that term?) bickering.
Anyway, I was getting around to telling you about a trip to the Richmond International Airport (RIC) the other day. We decided to take the Pocahontas Parkway route (I 895) to the airport.
First of all, that route is not very crowded once you get on the toll road part of it. However the toll road portion is very short and expensive, especially if all you are doing is going to the airport. Secondly, it empties you out onto Laburnam Avenue and you then have to make several turns and navigate several stop-lights to actually get to the airport.
The bottom line of these comments is that there is not a high speed connector to the airport from I 895. If CRAC and RIC want to be in the big leagues of airports, we need this high speed connector. We need an alternative way to get to the airport in addition to I 64. It also might get more people to travel on I 895 and make it more economically viable.
So, Richmond, RIC and CRAC, get with the program! Join the rest of the “International Airports” that you strive to emulate and build a high speed connector from I 895/Pocohontas Parkway to RIC!
Ps you may think I was scraping the bottom of the barrel in coming up with this posting. In fact, I may have but it is something that needs to be said; or at least I think it needs to be said.
So, I have gotten it off my chest.
Isn’t that what a blog really is? A way for people to say whatever they want to say and get things off their chest!
I should have found this a long time ago as I have opinions on almost everything; not necessarily correct or well founded opinions but just opinions!
And yes, I have added this little bit of verbage just to make this posting a little longer since it didn’t have enough length to it. Just like we all did in school to make our papers more impressive; right? Everyone did it!
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Tuesday, September 23, 2008
Of course, I am not, and was not, any good in any of these activities; just “ok” in all as opposed to really good at any one activity.
Through the years, all these activities have taken a toll on my body. I have been to the garage/doctor for many repairs and am now mostly limited to occasional tennis and very frequent golf.
I began playing golf in 2002 after retiring for the first time. I would now be called a golf addict. At this point, there is nothing that I would rather do than play golf; other than be with my family of course (I had to say this in case my family reads this posting!).
As for watching golf, if Tiger is not in the hunt, forget it.
However, this most recent Ryder Cup weekend was so exciting that I could not stop watching it. The recent history of America’s record is not good. Who wants to see Colin Montgomerie (Monte as they call him) or Sergio or Padraig whip up the crowd and whip up on our prim and proper players? Think of the crowd at the US Open Tennis tournament: loud and rowdy. Well that is what happens in Europe at the Ryder Cup.
But in the USA up to now; not much crowd noise and not much emotion from the players. Our players were mostly staid and reserved.
Not this time however. Paul Azinger, the captain (Zinger for short), selected the players and paired them such that we created a raucous atmosphere. Now, I have some golfer friends who think that this was unprofessional and not good for golf.
On the other hand, I think that this helped our players get off to a good start and keep the momentum going. The players that were selected were “the young and the restless” and the wily veterans. From Anthony Kim, JB Holmes, Hunter Mahan, and Boo Weekly to the older veterans such as Phil Mickelson and Kenny Perry; they embraced the atmosphere and perpetuated it. I think this is exactly what Zinger wanted to do.
I could not walk away from the tube on Sunday. The USA entered with a slim lead and ultimately was able to maintain it and extend it at the end of the day. However, during the day, victory was in doubt at times. The broadcast was so entertaining and compelling that I could not turn it off. Who can forget seeing Boo Weekly “ride” his driver down the first tee like a kid rides a broom? What about the crowd chanting “Boo” after he rolled in birdie after birdie? What about the new Boo’isms that were created? When told that his opponent was critical about Boo whipping up the crowed before the hole was over: Boo responded that the opponent was just sore because he was getting a good butt whipping. What about seeing Anthony Kim hit to the green over the water on the first par 5 and then watching Sergio hit two into the water trying to keep up (he did a Tin Cup-if you don’t know what this means then go rent the movie of the same name). Anthony Kim whipped up the crowd on his way up the fairway on that hole. Kim kept up the pressure and just destroyed Sergio. Later on Kenny Perry did the same thing on that hole to his opponent. What about Hunter Mahan’s long putt for a win on the 17th hole? What about JB Holmes hitting his wedge to 2 feet (after a 350 plus yard drive) to cinch his match? Jim Furyk kept making putts all day and finally got a concession from his opponent for the Cup clincher! This kind of stuff just kept going hole after hole and match after match.
The crowd noise was deafening and pro USA! Wasn’t it great?
Of course, none of this would have happened if we weren’t winning the matches, which we did. Bottom line is that you have to make good shots and make the putts, which we did.
USA, USA, USA, USA; I keep on hearing it! I am still pumped about this! I think this is the most compelling sports broadcast since the “Miracle on Ice” or maybe the recent summer Olympics watching Michael Phelps and his teammates! Was it even better? Who knows but certainly they are all up there together!
Four years from now when the Ryder Cup is back in the USA in Chicago, I am going to be there. Anyone want to go with me?
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Tuesday, September 16, 2008
Well, it is hard to miss what is going on in the financial markets. It is all over the TV and radio and internet. If you missed it one day or even one hour, you are out of date. These are momentous times and rival the previous financial meltdowns. This meltdown was brought on by the mortgage crisis.
Or should I say the discovery of the mortgage crisis. We discovered that as interest rates went up that people could not afford the new monthly payment brought on by the floating nature of their payments and interest rates. They then had to sell their homes. There were also those that bought homes or positions in new homes with the hope that they could be sold for a quick profit. Thus, there were too many homes for sale and not enough buyers. Maybe it was also brought on by the deficit financing of the War in Iraq (I just had to slip that one in) and resulting effect on our economy.
“What”, you say, “this time it is different”! I don’t think so. It is only the names that are different. "No" you say, "when you lose a Lehman Brothers firm to bankruptcy and Merrill Lynch is bought out by Bank of America, it is different." You say "it is different when JP Morgan is recruited to “buy” Bear Stearns." Breaking news: the government will extend a loan to AIG in order to give it time to unwind risky assets. Surely this is different!
Don’t you remember when Chrysler almost went bankrupt? It was bailed out by the government with loan guarantees. The government ultimately made money on the deal. How about when Kmart was going down the tubes and was merged into Sears? What about the huge stock market meltdown in 2001/2002 due to the technology bust? What about the real estate related crash in 1974? What about the inflation induced recession in 1981/1982?
My point is: it is not different. It is only the names and situations that are different but the game is the same. The name of the game and ultimate cause of the problem is Greed.
Let’s play Greed. You don’t know how? The objective is to make more money than anyone else. Here are the rules:
Find a product that you can sell.
Then pay people to sell your product instead of anyone else’s product.
You do this by incenting the sales people regardless of the quality of the product.
However, don’t let them sell too much more each quarter than in the previous quarter. You want each quarter to show an increase in sales.
It is ok and even preferred to sell on credit.
Don’t worry about the credit quality of the accounts receivable because you are going to sell off the receivables to someone else.
Then take the money from selling the receivables and make more product and push it on your sales people.
If it becomes too hard to sell more product, then make your financing terms better so that it is easier for the customer to buy it.
Repeat the process until you end up with more money than the other players. The losers end up in bankruptcy!
This game was played by all those companies mentioned above and many, many others. It is still being played as we speak. For example, why is Bank of America buying Merrill Lynch? Do you think they are doing this out of the goodness of their hearts and trying to save our financial system? Do you think they are the Good Samaritan of the financial world?
I don’t think so. They even admit this is the opportunity of a lifetime! Buying a brand name such as Merrill will catapult them to CitiCorp status. But it is not without risk. Risk to their stockholders and to their depositors and even to their debtors.
The game of Greed is still being played and will continue to be played forever.
So, then how do we as normal people operate and exist in this society without getting overly hurt?
Are you ready for Ray’s Rules of Financial Risk Remediation?
Never buy anything if you (not your broker but you) don’t understand how it works in good markets and bad markets.
Do not buy what everyone else is buying.
Do not put all your money in one stock or fund.
Certainly don’t hold just company stock in your 401k.
Likewise, if you get stock options in your company, sell them when you have some profit, pay the taxes and move on.
Do have multiple asset classes among your invested funds.
Always have emergency money on hand. What this means is you should have 6 months of expenses in savings accounts, CDs, money market accounts or short term bonds.
If you are getting a mortgage, get a 30 year fixed rate loan and pay it back early or at least on time.
Don’t have credit card debt or get rid of it if you have it.
Have enough life insurance, disability and hazard insurance.
Be sure you saving 10% to 15% of your income for retirement and other future needs.
Just like you have a doctor for your medical needs, find a financial adviser or financial planner for financial consulting. Just like a doctor has his or her MD certification, be sure the financial person has his or her CFP (Certified Financial Planner) designation. Don’t pay them based on product sales but pay by the hour or project or based assets under management. The CFP can be consulted on all these financial topics mentioned and more.
Well, I could go on and on but you get the picture. There is no free lunch and there is no sure thing. If it seems to be too good to be true, it probably is not true. If everyone is making money on something, they are either lying or it is too late for you to get in. The music will stop and you will be left without a chair!
This crisis will end at some point. Things will get better and we will back to “normal”. However, the game of Greed is ongoing and the players will be playing. At some point, we will have another financial crisis. You and I are just the game pieces but we do have some control over where we move. So, remember my rules and good luck!
Tuesday, September 9, 2008
The flight was the red-eye, leaving Anchorage at 8:00pm so we knew we were in for a long night. The plane was packed, thus a tight fit for everyone.
We were in a six across row, with me on the aisle, my wife in the middle and by the window was a guy from the army. He was very young looking. I wondered if he was old enough to have a beer.
When the beverage cart came by, I offered to buy him a drink but the flight attendant gave it to him. Later when the cart came by again, I offered again to buy him a drink and a different flight attendant let me pay, which I was glad to do. I also bought him the little snack pack that they offer for sale. He was very appreciative and polite; calling me sir and my wife ma’am. Guess how old that made us feel.
We began to talk and learn about him and what he was doing. This young man had just finished his basic training in Fort Benning, Georgia and had been in his small home town in Alaska for a break before going on permanent assignment in New York and then on to Iraq or Afghanistan. He was telling us that he hated to leave his two small kids and wife. Well, he couldn’t have been more than 20 or 21 years old and to have a family this size already. You had to wonder what he was doing in the service.
In talking to him, he had joined up to do his duty and then get out and go to College on the GI Bill. My first point here is that this program has been around forever and has benefited many of our young men and women. Any talk of taking this away, in my opinion, should stop forever. To go and put your life on the line for the rest of the country should have some reward beyond just getting a meager pay! He wanted to go on to law enforcement and he knew he had to graduate from college. His thoughts were, where else is better to get the basics of law enforcement than in the service of your country and then where else can I get help in paying for college? He had a strategic plan for his life and really stated it that way. The guy was on the ball and thinking long term, unlike many of his contemporaries!
We asked about his basic training in Fort Benning. Here is where the comments get a little unbelievable for me. Not that we doubted what he was saying but that things like this really happen is what is amazing. This is the second point of this blog.
Josh, the young man, said that the citizens of the town around Fort Benning didn’t treat the soldiers very well. The soldiers felt unappreciated and unwanted. It was like, “it is fine for you to be here and you can buy our goods and services but you don’t need to socialize with us or be involved with us!”
Well, this reminded me of the reception that our Vietnam returnees got in this country back in the late 60’s and early 70’s. What is wrong with us when we don’t appreciate what our servicemen are doing for us? Forget about the politics for the moment and whether or not we agree with them.
You don’t agree with George Bush or Lyndon Johnson? Fine, but don’t take your political views out on the loyal armed forces men and women! They are not running for office; they are not making policy; they are “only” protecting each and every one of us and our way of life.
As far as I am concerned, if you don’t appreciate these young men and women and what they do for you, why don’t you just leave the country and be protected in a place like South Ossetia, Iran, or North Korea!
The moral of this story is that when you run across a service man or woman, buy them a drink or meal or cookie etc and think about what life would be like if they weren’t around! Their life is on the line for each and every one of us; show your appreciation in any little way that you can! Further, don’t take away the GI Bill.
PS as always, you can subscribe to this weblog by clicking on the link at the very bottom of all the postings
Tuesday, September 2, 2008
My wife and I decided to attend the next to last game of the Richmond Braves on August 31, 2008. We have attended games in the past but wanted to be part of the swansong goodbye to Richmond by the Braves.
As local readers know, they have decided to relocate to Gwinnett County and get a better stadium and maybe better attendance. Both reasons seem to be readily achievable.
However, this begs the question for Richmond: why are we letting them go? Well, here goes my seat of the pants analysis of the issue! Never one to mince words, I will lay it out like I see it.
First of all, a little background. All the municipalities around here, the city of Richmond, counties of Chesterfield and Henrico have a part in funding the stadium authority. They quibble over many issues and things including this. There is not any regionalism but instead the attitude is “what is in it for me”? Kind of like, there is no I in team; and in their case, team is spelled “tiiim!
The City and then several private entities have discussed the need to have a new stadium built in the downtown area, more specifically in the Shockoe Bottom area or the Fulton Gas Works site. There is no parking available and direct access from the interstates is debatable. Naturally, Chesterfield County was not in favor of that; instead they wanted to consider a site in their county. All say the stadium is hopelessly outdated in all respects.
After one recent attendance, here is my analysis from a fan’s point of view. Let’s rank things by pro and con:
-The seats are good. Each seat is separate and has an armrest. You can’t get squeezed out by others due to the separating armrests.
-The view from each seat is good; not only of the field but you get a great view of the Richmond skyline.
-The overall capacity of the stadium seems to match the size of the community.
-The rest rooms were clean and available.
-The concession stands were available and efficient.
-The food was good; for ballpark food.
-The general location is good and available to all areas via the Interstate.
-The value of entertainment for the dollar is good.
-The cost of the refreshments was in line with other forms of entertainment.
-The cost of parking was low.
-The field is symmetrical with major league dimensions: 308 down the lines and 402 to center field.
-Parking lot management is a definite minus. There was only one way into the major parking lot. This is in spite of other gates that could be opened to accommodate incoming traffic. There were not any police directing traffic except for one policeman at the specific entry into the lot. In other words, traffic was jammed up at the intersections leading up to the lot and many people were late to the game. Further, there was only the same way out of the lot. This is in spite of the many closed gates around the perimeter of the lot. You would think that these gates could be opened to facilitate the exit of traffic.
-The scoreboard and other electronic displays are clearly sub par with other entertainment sites. For example; there was not any instant replay; there were no other baseball scores displayed; you really had to strain to see the scores and the pitch count, etc. Most stadiums have the pitcher’s ball speed displayed along with many other statistics.
My humble conclusion: Richmond and surrounding entities, you screwed up!
The entertainment offered could be very good at this stadium. The only things that are needed from a fan’s perspective are much better traffic control and parking lot management and a much improved electronic display medium! So before you go about spending tens of million dollars, why not just fix what is broken?
Get with it!
Monday, September 1, 2008
One of the answers is that I have a lot of thoughts on different things and (in my distorted opinion) some of those thoughts might be worth sharing with the world; or more probably, some few souls who somehow find these thoughts and don’t have anything better to do other than read them!
So, I have committed to myself to publish my thoughts about once a week. I am told that the way to do this is via a Blog.
Why in the world is this called a Blog and how did it get its name? I have no idea. I am sure that somewhere I could look it up but does it really matter? It is like calling a dog a horse. How did the smaller animal get named a dog and the larger animal get named a horse? It doesn’t really matter to us as long as we know which is which. So, a dog is a dog and a horse is a horse and a Blog is a Blog!
Not to deviate but how did a Podcast get named? What is a pod? The cast part I understand but Pod? Anyway, enough of that.
So, here I am and I have already written a Blog and published it on www.wordpress.com. The process of doing this was very easy on the surface. You just click on publish and cut and paste a document into the website. Of course I registered my account with a user name and password. I was lead to believe that people reading the Blog could subscribe to my Blogsite and all future Blogs would automatically come to them. Further, they could comment on my writings.
However, when I looked at the published site, many questions arose. What are all these terms like RSS, permalink, feeds, tags, and etc? There was nothing that said subscribe. Well, I decided to try clicking on these other things and when I did there was still not anything that was clear. I would have a lot of work to do on this to make it apparent to readers as to how to subscribe and how to make comments.
When I went on the hosting site for help, I got answers back that want me to use programming language and that assume I know what rss, permalink, feeds and tags are. Well, I don’t. It was a very frustrating process but I would somehow figure it out even if I have to get help from my daughter and son-in-law, who are fluent in this language and who reside in the blogger universe.
My conclusion is that bloggers and readers of blogs are a separate universe of people who have their own language. Here I am an outsider trying to break into their world; well, I will do it but it is going to take a while.
In the meantime, if you wanted to subscribe to my Blogs, click on every link you can find on this page to see if something comes up that you can understand and will do the job!
Urgent Update: I have switched sites and am now using www.Blogger.com. This site seems to have been designed for people like me who don’t know any of the technicalities (and don’t want to know any of the technicalities) but just want to Blog! So, if you want to subscribe, just click where it says subscribe and then in the next dialogue box click it again and that is it!
Friday, August 29, 2008
The re-setting of interest rates is having a huge negative effect on our country. This is not news to anyone. All this is brought on by a combination of the mortgage companies wanting to make more loans and finding ways to make the loan less expensive to the consumer i.e. have a lower payment. The consumer of course jumps at the chance to get more house for the money!
Techniques have been used such as the adjustable rate mortgages; interest only mortgages; and even loans where the consumer sets their own payment amount (even if the amount they decide to pay does not cover interest!). Now that interest rates have risen and the early low rate years have burnt off, payments have gone up and many consumers are having trouble paying for their home.
All this is evidenced by the rising delinquency and foreclosure rates.
Let’s also not forget about the many advertisements for furniture and other hard goods that encourage the consumer to “buy now and pay later, no payment due for two years!” Are you kidding me? How does this make any sense?
So what is new? Well, I think that the basic problem is that we have forgotten the definition of “a loan”. We have confused it with the definition of “a gift”. Webster defines loan as “a: money lent at interest b: something lent usually for the borrower's temporary use”. Webster defines gift as “something voluntarily transferred by one person to another without compensation”.
Wow! What a revelation! All of my bank training as a credit person has been such that loans are made to be repaid and if you aren’t able to repay the loan then you don’t need or deserve the item you want to purchase. This is true for people as well as businesses. The flip side of this is that the lender should make loans that start getting the principle back with the first payment so that the borrower begins to build equity.
I have financial planning clients who argue that an interest only mortgage is the way to go since they will be just “using the home for 10 years” and sometime before the 10th year they will be in another house. Sounds good? Have they bought the house or are they really just renting it? What about actually paying for the house and owning it or it’s successor by the time they retire? Are these foreign concepts to today’s younger consumers?
I think we need to get back to living within our means. A loan is a loan and a gift is a gift and never the twain shall meet! So, the next time you are faced with a desire for an item, be it a car, a home, furniture, etc., be sure you can pay it back, starting immediately. And be sure you can pay for it in less than its useful life. Businesses, you can start the ball rolling by not “giving” the money away!