Friday, October 31, 2008

Happy Halloween

Boo !





Wednesday, October 29, 2008

He had me at "This is not a liberal America. This is not a conservative America. This is the United States of America."

There will be a lot of rhetoric and bantering over the next few days about Obama's 30 minute pre presidential state of the union, which aired 6 days before the election. Perfect ! Brilliant ! And by the way, eloquent.

If you are a staunch, even smart Republican you've got to admit that Obama's narration of the American story, the human depiction of our challenges, the importance of understanding and the promise of change - landed a tough punch, in the final round - with exquisite gentle, profound strength.

In my view this is what is so appealing about Barack Obama. He is a man who has the gift of humility, the conviction of his ideals, trust in his intellect and dependence on his character. He "connects" to individuals because he craves perspective. He seems to live outside himself. He listens.. he actively listens.

At a time when anxiety rules the day, at every level, and almost every hour, we need a sense of calm, a reason to hope, and a willingness to believe that the fight is worthy. I am drawn to Obama, not because I think he can do things for me, but because he has made me confident again, that I can do things for myself...even in a country that feels broken.

That is the power of Barack Obama.






Take our money and run ...


I apologize for returning to this theme ....but this is not a time to sit back silently. As of today I will not be paying any interest on my credit. My house payment will be strictly principal. And when the bank asks me why I have not paid in full this month, I will boisterously explain that until they start fulfilling the terms of their agreement, which is to "Lend" with the bail out funds I just deposited, I will ignore my agreement terms as well - to pay interest on my home loan.

JP Morgan Chase stated on a call to shareholders that they will "save" their $25 billion in bail out funds to shore up cash reserves, or buy other institutions. They enthusiastically acknowledged the new opportunities this cash infusion represents ! They have no intention of lending with it. they have no intention of using these funds to ignite consumer financial activity, or help small businesses with loans. JP Morgan is acting with the majority. The $250 billion just released to the financial institutions in the US is being hoarded. These institutions are standing at the steps of congress, with their hands out, taking the tax payers money and running....
I am done !

I have no credit card debt. I don't have a car loan....so this is the only place I can make an impact....I would strongly suggest you do the same. It is time that we take this into our own hands. Act aggressively, decisively and quickly. Paulson has no one's interest in mind but his own and those of the financial institutions. Congress is not acting quickly enough, and the banks are reaping...again..We need banks...but it is time that they serve their customer base honestly and fairly. Let market economics take over, and soon the banks will realize that if consumers are not willing to shop and buy at their place of business, they will have no business.



Tuesday, October 28, 2008

Democracy. Do you remember it ?

I hold a debt of gratitude to my history teachers who gave me a profound appreciation for democracy. I was not especially enthusiastic about history, while I was actively learning it. In fact I felt somewhat put out to have to look back, as I was always frantically looking forward. But my teachers - all of them - were able to break through my irrelevant surface and self absorbed concerns about my future, to embed an understanding of the profound fortune we have as Americans, in democracy. As kids, most of us are not worldly, so there is a danger to take democracy for granted. My teachers guided me to a less selfish and more comprehensive realization in the promise of life as an American. So for that, I am grateful..

What infuriates me most about the Bush Administration is its complete lack of respect for democracy, and its repeated actions to thwart it. It is not unfair or incorrect to say that Bush has undermined America and our ideals, by pushing through a self rewarding, narrow and dangerous agenda. Demonstrating, at least a partial, but conscious, disregard for the fair representation and welfare of the American people. The Bush Administration has been as unethical as any dictatorship. We are not killing our own citizens for political gain, but Bush and his party are manipulating financial markets to benefit the wealthiest and 'governizing' moral ideals to his way of thinking - the far right. How did this happen? How and where did our system of check and balance falter? How did the power of one administration overtake and discard the basic principle of democracy - to protect and represent the majority? How is it that those in power were able to distract us from upholding one of the most basic principles of democracy - the definitive and unambiguous separation between church and state as put forth in our Constitution? How did we allow this solid line to be diminished to a wiggly, faint dotted line between government, religion and morality ?

I don't have the answers to these questions, but they are relevant to think about, as we consider what will bring about change, and how we can facilitate it, with our vote for the next president. More importantly, I fear we will perpetuate a vagueness to democratic values if we do not actively and aggressively address these "non democratic" but prevailing conditions. Now.

To say that the challenges facing the next president are daunting is of course a massive understatement. To expect that we will function well, quickly as a democracy with a new administration is delusional. It will take broad thinking, aggressive actions, unwavering commitment, and time - to gain ground toward becoming, again, a democratic world power that others want to emulate.

Largely due to Bush, his policies and his decisions, the global viewpoint has come to the conclusion that "democratic principles and human rights need not be components of a stable, prosperous future. At recent meetings of the United Nations, Mahmoud Ahmadinejad of Iran and other leaders of illiberal countries came to the great hall of global humanitarianism sneering at our predicament and hailing the 'end of the American era'." (The New Yorker).

This is as frightening as it gets. Can you imagine living without the power of your voice. Can you imagine living and working in an environment in which you have little control over your livelihood. Where you feel unnoticed. You are so convinced that you will not be heard that you stop speaking out. You might think this is too dramatic. OK. But wouldn't you agree that over the last 8 years, we have been inching closer to apathy or a sense of powerlessness - than ever before, in our life time.

President Bush’s successor will inherit two wars, $10 trillion in debt, global financial instability, the realities of limited resources, decreasing popular will, increasing popular distrust, record low financial prowess of the American family, and the perceived dwindling possibilities of what can be achieved by American power. As we move forward, we should often glance back, so as not to repeat our mistakes. More than anything else we need a leader who can identify pillars of cautious optimism, lead with a sense of calm calculated confidence, act with perspective and demonstrate an unrelenting energy to succeed.

Obama will draw people in. Through collaboration and connection he will create a broad and deep strength that will transform our battered morale into a will to change and a belief that we can, once again, prosper. He will be required to re-ignite the democratic process, enforce its outcome, and stand by it and for it, no matter how gritty it becomes. This is a high bar. It will not be easy, or comfortable.

Its time to live the slogan, join the team, suck it up and "Just Do It".

Monday, October 27, 2008

A look inside..to the ugly

This is hard to read...but it points to something worth seeing...

WASHINGTON (Oct. 27) - Two white supremacists allegedly plotted to go on a national killing spree, shooting and decapitating black people and ultimately targeting Democratic presidential candidate Barack Obama, federal authorities said Monday.
"Both individuals stated they would dress in all-white tuxedos and wear top hats during the assassination attempt," the court complaint states. "Both individuals further stated they knew they would and were willing to die during this attempt."
The court documents say the two men met about a month ago on the Internet and found common ground in their shared "white power" and "skinhead" philosophy.
The numbers 14 and 88 are symbols in skinhead culture, referring to a 14-word phrase attributed to an imprisoned white supremacist: "We must secure the existence of our people and a future for white children" and to the eighth letter of the alphabet, H. Two "8''s or "H''s stand for "Heil Hitler."

Sheriffs' deputies in Crockett County, Tenn., arrested the two suspects — Daniel Cowart, 20, of Bells, Tenn., and Paul Schlesselman 18, of Helena-West Helena, Ark.

Are these two individuals any different from the terrorist organizations in other parts of the world with whom we are waging war? They are individuals acting out alone, but they harbor a terrorist state of mind. They cling to a false and diabolical sense of supremacy that insanely justifies their right to kill while preserving voluntary ignorance that drives a willingness to sacrifice their own life, to preserve an unworthy ideal. They know nothing more than to gravitate to brutal violence to feed their desperation and euphoric need for power and control. These two people want to be Hitler. They worship Hitler ! How, after 60 years have we not been able to eliminate this evil connection? What have we done as a nation to address or at least recognize the root cause of terrorism ? Has the bloodshed, death and destruction inflicted through war, eradicated the terrorist state of mind? Hardly.

These two men are crazy. They are undereducated, poor and suffering. Certainly no excuse for their madness, but useful to consider as a direct point of comparison to America's characterization of terrorists in other parts of the world with whom we are fighting and killing. Osama Bin Laden is rich, his collaborators are rich but his army is poor and suffering.

My point is this.

Through covert intelligence and law enforcement, we recognized a threat, found the source of violence, identified individuals orchestrating the attack, followed their actions, arrested them and thwarted their plan to violently destruct and brutally kill innocent people. We did not send troops to Tennessee and Arkansas, to set up military installations, occupy neighborhoods, and kill the "largely unidentifed" enemy to defend our country from dangerous ideals that are only manifested through violence and killing. We did not classify Tennessee and Arkansas as "terrorist regions" jeopardizing the safety of the innocent citizens of these two states for the sake of eradicating evil there. We found the source of evil within the community, sniffed it out and took it out.

Isn't that the way to fortify the safety of an individual or a country? Obviously Al Qaeda is a massive entity, but shouldn't we be surgically dissecting that organization, sniffing it out and taking it out. Person by person, leader by leader - instead of region by region. Like Tennessee and Arkansas, can't we assume that there are people in Afghanistan who are non-violent, who hope for peace and want desperately to live in an area that is not war torn or occupied by a foreign power. Are there not families in Afghanistan, like those in Tennessee and Arkansas that just want to survive, and give their children a safe environment in which to go to school, play and live out their life.

There are a lot of similarities to examine here, in terms of how we stop violence, protect our people and our country. We can be diligent and surgical in our approach. We can even be proactive. But we should not be broad in our assumptions on sources of evil. In this we need to pinpoint precisely, and eradicate carefully. You might say that this approach is too slow, and will never bring and end to the problem of terrorism.

I say, that terrorism is a desperate state of mind, with violent consequences. And if we can't end the desperation, we won't end the terrorism.

Sunday, October 26, 2008

In your face, until you vote...

Although I feel confident that the election will go my way on 11/4, I will not jinx it by re-stating what the media is incessantly giving us relative to poll standings... This is not all bad, as there are those that want to be aligned with a "winner" and will possibly vote with no more depth of thought than to safely switch to the winning team ..so as the final tally comes in, they feel like a winner too!




I will say, that I see one small risk as we head to election day. If it impacts, we will face it on election day. Obama has a 47% lead among first time voters, and a 3% lead among the rest of voters (ABC News Poll, Election 2008). We have clearly won the support of America's youth, but it has to translate to a vote. If I were directing the ad campaigns for Obama in the final week, I would create one, targeting this first time voter, to prepare them for the process of voting. I would use :60 to pump them up about the privilege to vote...remind them how exciting it is to be young adults embarking on the best years of their lives, and enthusiastically acknowledge how "sick" it is to participate in democracy. I would prepare them for long lines, hours of waiting, and discourage them from stepping out of the line and leaving the gift of freedom of speech on the curb, just because they are bored, tired and in dire need of a latte...

Kids today - well ok, young adults, are used to and in fact expect a level of instant gratification. They are independent thinkers and a generation of doers, but act mostly on their own terms...They are not majority viewers of news programs nor do they read newspapers with regularity. They watch TV, spend time on the Internet, and text each other. So an emotionally charged TV/Internet spot and a SMS campaign to reinforce patience, and an appreciation of a system larger than themselves, may be a good investment.

Obama needs these votes, and I would hate to see apathy, impatience or restlessness change the momentum at the 11th hour.

Tuesday, October 21, 2008

Obvious, but possibly worth stating...again and again and again

Am I the only person who does not understand what constitutes a "win" in Iraq or Afghanistan. Am I alone in my confusion of the meaning of "War on Terrorism"? Isn't terrorism a state of mind ? Haven't wars typically been fought over physical boundaries and/or to reinstate basic human rights and freedom to an oppressed people. Both war and terrorism are despicable. Each is evil, cruel and pointless. Human beings die for this misguided, insanity. But at its very basic level.. how do we eradicate a state of mind through blood shed. Can we ever really kill it?

The Bush Administration has defined 21 objectives in the War on Terrorism: [19] The most disturbing to me:

Win the war of ideals. Whose ideals...human rights should be upheld everywhere but what country has a right to force an ideal on a person, a people, or a nation? Shouldn't ideals be self proclaimed and left alone as long as they are non violent?

Do troops, tanks, guns, bombs and torture change ideals of human beings? Can a deeply rooted, desperate state of mind be positively altered through physical force, brutality or tragic human loss? I think not. War spreads desperation. Then, it kills. Period.

When we are attacked, we will defend our country and our people. Why can't we find the leaders of Al Qaeda? Why can't we take out the bad guys? Go in and get out ! Grossly over simplified, I know, but win the war on ideals...when exactly will that be accomplished? What exactly does that mean? If I am going to send my son into war, I better first know what he is dying for, and I better damn well believe it is more valuable than his life. Personally, I could never reach that belief, and would leave the country before sending him to war - but it should at least be clearly identified for all those families who are willing to sacrifice.

It is severely understated to say that our conflict with "terrorists" is complicated, but I just wonder if we keep fighting and sending human beings into battle fields because we really don't know what else to do. Is that a good enough reason? Today we are engaged in "anti terrorist warfare" in 19 countries. 58,000 - 60,000 kids (over 50% American) are stashed away in hills, deserts, jungles of Africa, Iraq, Afghanistan, Lebanon, Saudi Arabia, Gaza Strip/West Bank, India, Pakistan, Waziristan, Indonesia, Philippines, Columbia. . They are defending "freedom", but in actuality, they shoot to keep the "terrorist" from getting close to their fort. Over 4000 Americans have lost their lives in Iraq. Did we really change the state of mind of Iraqi's over the last 4 years? Have their ideals been transformed? Over 1,000,000 people have died in this conflict...we took out one really bad guy and some of his organization, and that is good, even worth some level of painful sacrifice, but the jury is out as to whether Iraqi's want democracy enough to fight to preserve it once we withdraw. The jury is out on whether our ideals are in fact their ideals. Afghanistan seems completely uninterested in "American ideals" and the more we fight them , the more they hate us. We take citizens out of the safe environment of their native sovereign nation and drop them into the middle of a destructive state of mind, forcing violence. What the hell does this accomplish. It is sickening. We should be trying to alter this evil state of mind by demonstrating the power of freedom from afar, within our own boundaries. What about spending the $10 billion per month in fortifying the safety of our country, in our country....surely we are smart enough to intercept the enemy intellectually..before they enter our air space... We haven't and won't always succeed, there will be casualties, but actively placing people in the midst of brutality and death to solve a problem we cannot solve is incomprehensible. Worse, to sacrifice human beings for financial gain and lucrative trade agreements is gut wrenchingly disgusting.

We better get our heads out of the blood stained sand and start tending to our own humanitarian ideals - and work to save the world by compassionately showing people, through our example, how to save themselves...

Monday, October 20, 2008

Soros, you game?

Andrew Lahde, manager of a small California hedge fund, Lahde Capital, burst into the spotlight last year after his one-year-old fund returned 866 percent betting against the subprime collapse.
Last month, he did the unthinkable -- he shut things down. Publicly, Lahde claimed that dealing with his bank counterparties had become too risky. I think they were that and, well distasteful. 10.17.08, Lahde passed along his "goodbye" letter, a passionate, erratic rollercoaster account of the life of a hedge fund manager with a conscience.. kind of like Tony of The Soprano's. You don't have to like him after you read this, but you will likely agree with him. (Except about the part on leaving your mark. We should all try to make a positive, lasting contribution to something. When you die, you should deserve to be missed, otherwise you have wasted your life, in a self absorbed cave.)

Andrew's view on everything from greed to economic philosophy.
_______________________________

Today I write not to gloat. Given the pain that nearly everyone is experiencing, that would be entirely inappropriate. Nor am I writing to make further predictions, as most of my forecasts in previous letters have unfolded or are in the process of unfolding.

Instead, I am writing to say goodbye.


Recently, on the front page of Section C of the Wall Street Journal, a hedge fund manager who was also closing up shop (a $300 million fund), was quoted as saying, "What I have learned about the hedge fund business is that I hate it." I could not agree more with that statement. I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.
There are far too many people for me to sincerely thank for my success. However, I do not want to sound like a Hollywood actor accepting an award. The money was reward enough. Furthermore, the endless list of those deserving thanks know who they are.


I will no longer manage money for other people or institutions. I have enough of my own wealth to manage. Some people, who think they have arrived at a reasonable estimate of my net worth, might be surprised that I would call it quits with such a small war chest. That is fine; I am content with my rewards. Moreover, I will let others try to amass nine, ten or eleven figure net worths. Meanwhile, their lives suck. Appointments back to back, booked solid for the next three months, they look forward to their two week vacation in January during which they will likely be glued to their Blackberries or other such devices. What is the point? They will all be forgotten in fifty years anyway. Steve Balmer, Steven Cohen, and Larry Ellison will all be forgotten. I do not understand the legacy thing. Nearly everyone will be forgotten. Give up on leaving your mark. Throw the Blackberry away and enjoy life.


So this is it. With all due respect, I am dropping out. Please do not expect any type of reply to emails or voicemails within normal time frames or at all. Andy Springer and his company will be handling the dissolution of the fund. And don't worry about my employees, they were always employed by Mr. Springer's company and only one (who has been well-rewarded) will lose his job.


I have no interest in any deals in which anyone would like me to participate. I truly do not have a strong opinion about any market right now, other than to say that things will continue to get worse for some time, probably years. I am content sitting on the sidelines and waiting. After all, sitting and waiting is how we made money from the subprime debacle. I now have time to repair my health, which was destroyed by the stress I layered onto myself over the past two years, as well as my entire life -- where I had to compete for spaces in universities and graduate schools, jobs and assets under management -- with those who had all the advantages (rich parents) that I did not. May meritocracy be part of a new form of government, which needs to be established.


On the issue of the U.S. Government, I would like to make a modest proposal. First, I point out the obvious flaws, whereby legislation was repeatedly brought forth to Congress over the past eight years, which would have reigned in the predatory lending practices of now mostly defunct institutions. These institutions regularly filled the coffers of both parties in return for voting down all of this legislation designed to protect the common citizen. This is an outrage, yet no one seems to know or care about it. Since Thomas Jefferson and Adam Smith passed, I would argue that there has been a dearth of worthy philosophers in this country, at least ones focused on improving government. Capitalism worked for two hundred years, but times change, and systems become corrupt. George Soros, a man of staggering wealth, has stated that he would like to be remembered as a philosopher. My suggestion is that this great man start and sponsor a forum for great minds to come together to create a new system of government that truly represents the common man's interest, while at the same time creating rewards great enough to attract the best and brightest minds to serve in government roles without having to rely on corruption to further their interests or lifestyles. This forum could be similar to the one used to create the operating system, Linux, which competes with Microsoft's near monopoly. I believe there is an answer, but for now the system is clearly broken.


Lastly, while I still have an audience, I would like to bring attention to an alternative food and energy source. You won't see it included in BP's, "Feel good. We are working on sustainable solutions," television commercials, nor is it mentioned in ADM's similar commercials. But hemp has been used for at least 5,000 years for cloth and food, as well as just about everything that is produced from petroleum products. Hemp is not marijuana and vice versa. Hemp is the male plant and it grows like a weed, hence the slang term. The original American flag was made of hemp fiber and our Constitution was printed on paper made of hemp. It was used as recently as World War II by the U.S. Government, and then promptly made illegal after the war was won. At a time when rhetoric is flying about becoming more self-sufficient in terms of energy, why is it illegal to grow this plant in this country? Ah, the female. The evil female plant -- marijuana. It gets you high, it makes you laugh, it does not produce a hangover. Unlike alcohol, it does not result in bar fights or wife beating. So, why is this innocuous plant illegal? Is it a gateway drug? No, that would be alcohol, which is so heavily advertised in this country. My only conclusion as to why it is illegal, is that Corporate America, which owns Congress, would rather sell you Paxil, Zoloft, Xanax and other additive drugs, than allow you to grow a plant in your home without some of the profits going into their coffers. This policy is ludicrous. It has surely contributed to our dependency on foreign energy sources. Our policies have other countries literally laughing at our stupidity, most notably Canada, as well as several European nations (both Eastern and Western). You would not know this by paying attention to U.S. media sources though, as they tend not to elaborate on who is laughing at the United States this week. Please people, let's stop the rhetoric and start thinking about how we can truly become self-sufficient.


With that I say good-bye and good luck.


All the best,


Andrew Lahde
_______________________________________________

Capisce ?

Sunday, October 19, 2008

Dig Deeper

The US Hockey Team. 1980 Olympics. Winning the gold...against all odds...

In professional sports, there is very little separation among elite athletes relative to their skill level. What seems to separate the best from the very best, top in their field, record holders, is mental toughness. An inner strength and unrelenting drive that elevates a few to victory. Ben Hogan, Eric Heiden, Lance Armstrong, Wayne Gretszky, Tiger Woods, Babe Ruth, Jackie Robinson, Muhamed Ali, Rod Laver, Gayle Sayers, Michael Jordan, the US Hockey Team of the 1980 Olympics.... This represents a small sample of elite athletes. These are individuals that have a god given physical ability which sets them apart from their piers...but they have something else .. something more.. that delivers a victory in the toughest of circumstances.

Mental toughness...the ability to focus, evaluate and perform at the highest level, in a pressured situation, is rare and extremely valuable.

Don't you think that we put ourselves in the best position to win and prosper, as a nation, if our president is an elite thinker and a compassionate activist? Shouldn't the leader of the most powerful democracy in the world be at his peak of mental toughness vs. a leader that has only memories of mental toughness, whose best years may very well be behind him? Don't we put ourselves at risk if we allow mediocrity to enter this office?

To be fair, both Obama and McCain are mentally tough. McCain lived in a hole for 5 years. And went on to achieve notable accomplishments in his life as a civil servant. Regardless of your opinion on his governing policies, he clearly has mental toughness, perseverance and drive...but McCain is wounded and fatigued.

Obama is at the height of his physical and mental training. He is performing on all cylinders. His body is fit and his mind is sharp. He has stamina, clarity, energy and passion. He is confident in his ability, driven to succeed, sincere in his desire to serve his country and focused. Isn't this what we deserve in a leader? Aren't these the most important characteristics of an effective leader? Effective change and material progress require perspective, unwavering desire, commitment and bravery. It is easy to stay the same. It is much harder to venture into uncharted territory to deliver unprecedented victories...We are at a point in our history, again...where we need to change in order to survive. If we want to prosper at unprecedented levels, we need to be smart, strong and proud. We need mental toughness...

Consider how you align on policy with your presidential candidates, but don't let strict policy agreement cast your vote. You owe it to yourself and the well being of your family to consider the character of each of your candidates. Make a judgment on who has the mental dexterity to recognize your needs and the physical dexterity to fight for them. You will never agree with every policy decision your candidate makes once in office. But you deserve to have a president that has the mental toughness to protect our country, demand the highest level of performance, and fight for the greater good of our families. So use your heart and your mind when you vote. The combination is powerful. One without the other is powerless...



Thursday, October 16, 2008

Thank you John

McCain gave us something last night. A better, more exciting drinking game...certainly one that will get us giddy...faster....

"Drink when you hear ... "Maverick"
"Drink when you hear ... "Joe the Plumber"

Hickup ... uhhh excuse me....Geeze this is fun...

Wednesday, October 15, 2008

Even before the drop in stocks today...

My smile attached to the progress we made relative to our financial crisis, has flattened, and my eyebrows are curving…. As the details of the "bail out" plan (at least those that have been leaked to the media) are being released, I am becoming – I hate to say – a little more enraged.

Policy in bank lending is “expected” to change .. in return for these bail out funds. Yes there are some significant requirements relative to dividends, executive compensation, preferred/common stock issues - but in the words of John Kanas (former CEO of North Fork Bancorp – sold to Capital One Financial Corp.) “It seems quite explicit that there are no strings attached to this money…It seems like a gift” .

That is a big problem.

Where are the regulations and reform, written into law, that should accompany these funds? It is undeniable, that deregulation over the last 30 years has led to this crisis. We have been in the bottom of the hole before this. After the Depression in the 1930’s and again in the early 1980’s, to address the Savings & Loan Crisis - the government infused cash into the financial systems to shore them up. Our current infusion is unprecedented in terms of its size – which is logical given the size of our economy and its “real” growth. Today's infusion is also unprecedented in terms of its structure – it’s lack of structure. That, is not logical. After the depression, the preferred stock that taxpayers purchased had voting rights and dividends were restricted until the government’s (i.e. taxpayers) stake had been bought out or paid back. The risk to the taxpayers was mitigated and regulation on lending practices was reasonable, prudent and aggressive. This time – the taxpayer stock is nonvoting, dividend restrictions are less onerous, and the infusion’s primary purpose is to re-ignite lending and “encourage” banks to stop engaging in "some" of their risky behavior.

“Encourage”. “Expect”. “Voluntary”. These are Paulson’s words not mine. They scare me. A Lot.

If you don’t see specific regulations relative to risk management including a defined weighted distribution of that risk, required at banks, consider yourself very,very generous. Because without this and a series of other regulations that I am not smart enough to outline - you will indeed have written the banks a really big check…“Confidence” will improve, and it will keep the banks in business in the short run, but do nothing to fix the long term, deeply rooted problem. This, if left in its current form, could - hold on to your wallet - perpetuate the problem. Somewhat cynical, I know, but think about the time it will take for the financial big wigs, to figure out how to use your cash to retire debt that pays a higher yield than what they owe us (5%). This will pad profits, in the short run, but will likely deflate right about the time they are “encouraged” to start paying their debt to taxpayers. Current lack of regulation allows obvious manipulation to lawfully avoid paying the taxpayers one cent. Further, activity like this will not address the overall, systemic, deep problem in our economy. Additionally, it will render us “duped”.

Although materially important, to our personal financial welfare, this conversation is getting boring. When it comes to money..your money, you are an army of one. Protect your family, and your interests. Do what you can to help you feel “less stress” and show up for work. Get comfortable with being on your own, and be proud of what you do everyday.

I am feeling somewhat powerless to affect change, and bring about a solution. What I do know is that my character is defined by what I do today…that is the only thing that guides me. On most days, it is enough. I expect not to stray from this principle – regardless of my financial situation. Rich or poor. Can we say the same about those that have control over our recent $ donation to spare them the consequences of their bad behavior ...

Monday, October 13, 2008

Thank you London

Gordon Brown advocated a cash infusion ( hundreds of billions) into London banks, guaranteeing their debts, in exchange for partial ownership. "Part Nationalization" of the the financial system ! Major European economies will follow Britain's lead. And the U.S. ? We will follow it too !

Amazing !

Bernanke is believed to have been a long time advocate of this. Paul Krugman is one of "few" real geniuses silently behind it. And today, was a great day for PK, as he was awarded the Nobel Memorial Prize in Economic Science ! Heartening and reassuring to see good things happening to good people !

Paulson .. was holding us up.

So we have made significant progress as of today. Stocks have climbed at least on this day. Perhaps what is most note worthy is that America, as a world leader, actually sought and listened to "other" expert opinion. On a very public stage we fell, fumbled and failed. Painful. Our government officials could have dug their heels in to the proverbial political sand and said swallow...we know what we are doing...and we will tell you as soon as we know... but surprisingly they made an about face, sought help, changed direction and made significant progress.

Hear hear...collaboration sometimes works...Ahh coming to the table to discuss and negotiate...that sometimes works too....even with few "pre-conditions" in place.

Do you think McCain will recognize this style of progress ? Do you think he will acknowledge what worked today ? I think not...not unless his coaches are clever enough to thank him for thinking of it first, and then explain to him what he did ... so he can share it with the world.

Sunday, October 12, 2008

Knock it off - Treat Me with Respect

Conservative author Frank Schaeffer laid a heavy burden on McCain in his "Letter to McCain" as published in The Huffington Post. An excerpt follows:

"John McCain and Sarah Palin, you are playing with fire, and you know it. You are unleashing the monster of American hatred and prejudice, to the peril of all of us. You are doing this in wartime. You are doing this as our economy collapses. You are doing this in a country with a history of assassinations. Change the atmosphere of your campaign. Talk about the issues at hand. Make your case. But stop stirring up the lunatic fringe of haters, or risk suffering the judgment of history and the loathing of the American people - forever. We will hold you responsible."

I agree.

The tone at the McCain rallies, this week - has been frightening. Campaign and debate experts suggest, that this man appears to be "uncoachable".

University of Kansas debate coach Scott Harris agrees with his colleagues, saying that “the whole maverick renegade image 'McCain' portrays makes him hard if not impossible to coach because he wants to be his own man and do what he wants to do.”

McCain is not acting alone...

Governor Palin does not even think about or anticipate the consequences of her rhetoric, as she points and winks and casually suggests that Barack Obama associates with terrorists. Is she not receiving advice? Or does she ignore the advice as well, because she cannot separate her ignorance from her ego. Palin accepted the candidacy of the Vice Presidency of the United States. Does she actually believe that, in this role, she has no responsibility to prepare for it, or to respect the safety, well being and intellect of her constituency. She is an embarrassment to herself and to the U.S. Worse her ignorance and complete lack of effort to appropriately serve this role is bordering on dangerous.

Regarding seeking and considering advice..

Do we really need 4 more years of an elected official who dictates? McCain like Bush appears to be the only expert in the room. And although he has invited experts to advise and guide, he has and will consistently discount the advice his experts offer, on countless, important, game changing issues. If elected, he will make domestic and global decisions that are self serving, narrow and possibly with complete disregard for the greater good of the American people, our country and our friendly global neighbors. McCain is erratic, driven, stubborn, angry and wounded. He is unfit to lead civilly. He gravitates toward, and is comfortable with conflict.

We have one more debate. Election Day is 24 days away. If the voters are to have their final say, America, McCain and Obama need to get there safely. The McCain campaign has crossed the line between unproductive negative campaigning and inciting rage. Or at the very least not taking effective proactive steps to diffuse the hatred. Each day the mob is louder and grows more animated. This is not trivial. The onus is on the man who says he puts his country first to control the room and calm his crowd.

If I were Obama, I would open the debate, by stepping out and in front of my podium, look the people in the eye and do that for McCain....I would take this message to the people. I would recognize the anger, understand the fear and re-focus the emotion on productive collaboration. I would raise the playing field to where we as American voters want it to be. Where we deserve it to be. I would encourage each person to listen with their hearts and with their minds. Work to grasp the challenges and vote for the person they can trust to stand beside them, and to stand for them. That is what the office of the presidency is about. No single human being has all of the answers but our leader should be devoted to seeking perspective and making decisions for the greater good and in representation of the fair majority. .. Then, I would suggest that the debate begin and move toward a civil discourse in an environment where the candidates can earn our vote. A tool to help us decide on who is the better person to rebuild the strength of our country, protect it, and best "serve" the hard working and passionate people of America.

Friday, October 10, 2008

Just in case you are still undecided...


Thursday, October 9, 2008

Something new to scare you ...

Time to change the subject. Well slightly. Still politics, still dysfunction. But no bail out.

I learned today (NYT) that, the Bush administration has cut off birth control aid to Africa. This is preposterous. What reasoning could possibly be given to support this action? Don't even think about using the argument that the US is in a financial crisis and can't afford to send aid to third world countries. I don't know what this costs our country annually, but relative to what we are spending in real cash to buy worthless paper - this international aid - probably equates to $1.50.

What is stunning to me is how you make that decision. Yes clearly our government officials have to make all kinds of difficult choices. We can't come close to accomplishing what is needed. But even in these uninspiring times - Americans along with many other sovereign nations do reveal a glimmer of humanitarianism and compassion.

Bush is so "out to lunch". This goes well beyond lame duck. This is dementia.

The UN fully supports and leads efforts to promote family planning all over the world. Family planning is about choices and responsibility. Without access to act responsibly - people are left to act randomly. Poor, third world countries are craving to act responsibly, feed themselves, support their families and build an infrastructure that would some day allow them to prosper. Birth control helps, enormously. If you can't feed children, you should think twice about having them. The gracious, hard working, women of Africa assuredly get this - and therefore seek and use birth control.

Bush on the other hand - sees cutting off access to birth control as a way to force his narrow, archaic, chauvinistic views on all the world. "No gratuitous sex". "Sex only for procreation". If you follow God's word - you will have sex only, in a sacred marriage, to procreate and bring more little, God fearing children, into the world.

Spooked yet?

I consider myself to be a fair minded person. I love differing points of view. And I love people to be passionate about their points of view. But to force conformity is weak, ignorant and evil. Bush used the power of his office to deny a whole country something they desperately need, merely because, he thought they shouldn't have it.. What kind of convolution, and narcissism is required to do this? I mean does he really think that if he limits access to birth control, people will stop having sex - inside or outside of marriage? What could possibly lead to this level of confidence? This level of disregard for human rights? Can his ignorance be so significant that he actually lets it feed his ego?

What gives him the right to deny anything to anyone?

The irony of his decision, is that it will perpetuate abortion. Last time I checked, even the "Christians" consider abortion to be a far greater sin, than "sex for fun". Thank you Mr. Bush, because of you and your self absorbed global decisions - more abortions will be performed in Africa, most of them dangerously. More children will be conceived and more children will be aborted. Not to mention the mothers. They will die too. Abortions in third world countries are not surgical. They are brutal.

If you read between the lines and look at one distinctive pattern in the Bush administration you will see what I characterize to be nothing short of frightening and dangerous. It started when he walked through the threshold of the White House on January 8, 2000. On that day, I think, he felt "god like". This was his holy house to rule. Separation between church and state could finally be overruled with his heavy hand and resounding voice over the mountain top !

More frightening, at least to me, is that this resonated with Americans. People rally around this man, still. Yes his approval rating is 27%, one of the lowest in history. But don't be deceived. People disapprove of Bush, now, because they feel poor, and in fact are less well off now, then when he stepped into office. But his theology, and evangelism is revered. Admittedly my religious beliefs are not, in any way, representative of the majority - I am almost alone, in my belief, relative to the world's population, when it comes to religion. But that is not the point. Government and religion should not coexist. In fact it is unconstitutional to have them co-exist. Worse, it is despicable to use government to spread religion.

God, I love this country! In China, they block blogs....

Wednesday, October 8, 2008

There is a roadmap but Paulson has lost it...

I'm confused.

Will this first of possibly - three bail out plans actually stimulate the credit markets? Even in the short term? We all recognize, that this "Bail Out" is a bandage to stop the bleeding in a capital market that is clearly broken and requires significant, long term fixes. But the enthusiasm rallying around the bail out was that it was necessary to "restore confidence". And without passage of the bill within "days" a catastrophic downturn in the economy would ensue. I am paraphrasing - but is that not what we heard? Today Paulson is back peddling and sidestepping. He is both right and wrong. Typical, in Washington.

He was right: We are continuing to see a significant downturn in our financial markets and the downturn is spreading globally.
He was wrong: The $700 billion check we just wrote, did not restore confidence. It perpetuated fear.

It appears, based on statements made today, that Paulson is continuing to scramble to gain support to infuse even more money into troubled financial markets. More banks "will fail" he warned. He acknowledged that the "flurry of emergency steps had done little to break the cycle of fear and mistrust, and pleaded for patience." Now he is pleading for patience ? If patience is what is needed to correct this mess, we should have left the markets alone, and demonstrated restraint to let them correct themselves. Capital markets do that you know, on their own, when, left alone, and allowed to react and adjust to the realities of consumer economic activity and the pace of trade.

Theories and principles don't have to get elected, they just prove themselves over time.

Is Paulson that egotistical and narcissistic to think that because he figured out how to make himself rich by taking advantage of gratuitous, and overwhelmingly dangerous economic loopholes in the capital market (for which he lobbied aggressively) that he can contradict himself to cover an error in judgment, with potentially grave national consequences, and not have people notice? Pleading for patience? Is he out of his mind? Did he not say, over and over again...there is no time - we must act now !

Is there no sane, reasonable, expert direction available. Is this problem solvable ?

$750 billion represents 5% of our GDP. This, on top of the Bush administration's $550 billion deficit, which will be given to Obama (hopefully), will put us on record with the highest percentage deficit relative to the GDP. In 1983 the deficit hit its peak at 6%. Numbers in the billions and trillions are hard for me to grasp. Percentages, however are much more clear. I am not an economist or financial expert at any level, all I really know is that small things cost more, large things have less value and my paycheck is not keeping up. But I am wondering about this:

If we could increase our GDP, our deficit would be less significant and therefore less threatening. That is a good thing, right? Why don't we provide more significant incentives to increase domestic manufacturing, limiting imports, and creating jobs. This could and should go well beyond energy. I have no idea how many trillions of dollars we spend importing goods and services from other countries but doesn't it stand to reason that if we regulated that activity, even slightly, we could materially change our cash flow in this country. Relatively quickly? I know that importing and exporting breeds healthy competition, resulting in lower consumer prices. But in the wake of this crisis, would it not be smart to fuel all, or at least most of that competition within our borders? We can export all day long, but do I really need to buy $200 worth of t-shirts and underwear for my son, that are made in China. 75% of the clothing in my household, is made and has been shipped from a far away land. This is crazy. I don't want to buy things that kids are forced to make. Overseas labor is cheap. I get it. But the system is wrong on an economic level and in some cases on a moral level. My neighbor, now, needs a second job...and he can sew.

This idea seems obvious, even to me. But what is not obvious, is why it is not being talked about by our candidates, our manufacturers or our "economic guru's" as part of the solution. I know the focus is on lending, but what are we really trading. Shouldn't we be producing something -more things here in the U.S. ?

I hope the next administration opens a US history book, and keeps it open in the oval office to the chapters on FDR economics. Talk about a road map ! The highway has changed slightly, it is much faster and more efficient, but the scenery is pretty much the same. We have fortified the financial health of this nation before. We can do it again. OK - we lost our heads for awhile, because they fell into our wallets which we keep in our back pocket and sit on...so we have some recovering to do. But we can recover.

Tuesday, October 7, 2008

I've said it before, should I say it again ?

Although worth watching, I don't feel I learned anything new tonight, regarding policy, records or proposals from either side. The differences in how each candidate will approach health care, taxation, financial stress and security resonated fairly well. But the message was not new.

I am at the point, however, that the cute digging gestures, and outright lies crossing the lips of McCain feel expected. Which is unfortunate, as it reduces my ability to listen fully to his rhetoric. When "complete transparency" into decisions made at the white house is promised, as it was tonight by McCain, I shut down. That "my friend" is ridiculous.

It also is unsettling to hear that I have suddenly become an investor in this bail out plan. It was said that the American taxpayers should be treated like investors. News flash - investors take on risk. They typically have the capacity to loose their investment. Didn't we just loose "a bunch" ? There is no empirical or anecdotal data that points directly and unequivocally to a "win fall" regarding the $700 billion bail out. That jury is out and will be, for quite some time. I guarantee you, the ROI will not exceed a break even point, and that point will be fluid. There are countless ways for the government to mask the pay back. Believe me, we as taxpayers won't ever know what portion of our tax dollar will fund this pay back. And when our taxes are raised do you really think the government will be sending us a bill that is clearly identified as
"Bail Out Remittance"?

Enough about that rage. It will not be quieted anytime soon.

The "zen" question, was an interesting close, but I was not impressed with either answer. Each candidate scuttled around the "What don't you know" portion and somewhat disjointedly moved to a message of gratitude and opportunity. The meat of that question lies in the second part, however "How will you learn it". A response to this question offers a window to a person's character. And a place where I perceive Obama to have missed a stunning opportunity. The greatest gift Obama has as a leader, is his unwavering commitment to and respect for comprehensive perspective. Obama is an idealist, and a pragmatist. He has a keen sense of fairness and a devotion to it. He is intolerant of gratuitous injustice and has a strong character record to support this. Obama should have revealed this tonight. The undecided voter needs a hook, something to cling to, even something to believe in. Taxes, health care, security, energy, global warming - these fall into the column of "Facts I need to know before I vote", but character, connectedness, passion, understanding - these fall into the column of "Things I believe In" A much more powerful and important distinction. Obama has a clear advantage here. He inspires, he embraces and he listens. He needs to show us more of this compassion. I've got the facts, now, I need the touch.

Monday, October 6, 2008

With Eyes Wide Open

As you watch the debate tonight keep this in mind.

Amidst the massive failure of our financial institutions and shrinkage of the capital markets... no one has gone or is anticipated to go to jail. No laws were broken in this devastating process. Although the SEC is investigating and will likely find misconduct in investor leading, the demise of our economy to its current state, happened lawfully.

Over the course of 30 years, politicians, civil servants, members of the house and senate voted to deregulate and significantly reduce oversight of our financial markets. Lobbyists pushed for deregulation, politicians accommodated and the inner circle grew giddy and greedy. Further distancing themselves from the greater good of the constituency, and their oath of office while pandering to the wealthy few.

There are two men on the stage tonight. One has been outspoken in his concern about the state of the economy, the worsening conditions, and the need for regulation and oversight since he stepped into the arena as a junior senator, and more aggressively in the past 2-3 years. The other has consistently voted for deregulation. He has participated and been complicit in unlawful banking practices, which wiped out entire savings accounts of thousands of people. Although a member of the Keating Five, he emerged unscathed.

Both call for change, and possibly both can affect change moving forward. But it is important to remember that government has had a hand in this crisis, corporations and financial institutions perpetuated the crisis, and the taxpayer is paying for the crisis...

So listen carefully to the facts. Be hopeful for the future, but do not discount the past as "water under the bridge" or insignificant history. History repeats itself because human beings are fundamentally hard to change. So looking at a person's repeated, past behavior, and getting a glimpse into his character should, at the very least provide some level of insight as to what his behavior might be in the future...

This election is important. What we do as a country moving forward is of grave importance, given the unprecedented hole we have found ourselves in today. Yes we have faced financial distress in the past, but correct me if I am wrong, we have not faced it in conjunction with a clear lack of perceived judgement and strength by our global neighbors. For the first time, in my life, America feels dangerously weak.

I will watch to be informed and yes, inspired. But mostly to be involved. It is clear that neither a capitalistic country nor its government can prosper without the guidance of its citizens.

Spread the pirated wealth.

$497,000,000 This is the combined $ - not paper value - but cash value - of the severance packages of the 12 CEO's who recently fell in the wake of their crumbled house of cards. It is not productive to list the amounts given to each individual, as it may only garner personal vendetta that will move us more toward resentment and negativity, at a time when we need to be thinking constructively on how to organize ourselves for the greater good. It is worth noting, however, that the cumulative $ figure would have been + $22 million - had it not been for the fair judgment or at least constraint of Mr. Willumstud of AIG, who left his package perks on the table....

$497,000,000...hmmmm even if we agreed to pay each of the exiting CEO's $5 million for their failure, admittedly a collective failure involving others beyond themselves, but a failure none the less, what could we constructively do with $437,000,000?

The first check I would write would be to those hard working Americans between the ages of 59 and 65 who were so close to retirement they could taste it. But today are very likely sitting down, hunched over, searching deep inside themselves to pull out another significant dose of energy and enthusiasm to pick up the pieces and keep moving forward. Those Americans who may just be too weary after working and contributing to their 401k's for 30 years, to face another 10 years of work, merely to rebuild what they lost last week. Those hard working Americans who, have sent their kids to college, donated to charity and continually thought of others as they went about their day to day business. What can we materially do for these people?

Although it is documented, in gov't records, I don't know how many families had this milestone shattered this week. I don't know what the cumulative "lost" cash value in their retirement accounts represents, but my instinct is that $437 million evenly split among this group could create, at least of glimmer of hope and renewal of spirit. Just for grins, what about forcing those 11 individuals who are sharing $497,000,000, to look this massive group of people in the eye - and offer a solution. My fear is you would see a choreographed shrug, insincere apology, turn and departure. Although I don't know any of these people personally, my guess is that they would do this with little regret or apprehension. I mean they are powerful, bright people. Don't you think they have the ability, if not the capacity, to organize themselves around something that is meaningful, and work together to accomplish it? They have had a few weeks to do this.....voluntarily. I am not holding my breath.

Of course I am not naive enough to think this would ever happen, but what disturbs me, is doing the right thing doesn't even enter into the conversation any more, and we all readily dismiss it as if it is a pipe dream.

What does it feel like? Credit score 690's and above !

Isn't it frustrating that those of us who have "excellent" credit ratings, and continuously pay all of our bills on time, acting fiscally responsible month after month, year after year, get no kind of relief whatsoever when there is a financial crisis in our capital markets. Keeping in mind that we as individual, credit worthy contributors had absolutely no hand in creating the crisis. Instead we get strained, even further

Has anyone ever thought about the simple concept of rewarding good behavior to generate more good behavior...rather than focusing on the negative, with reactive punishment or "adjustment" that doesn't change long term bad behavior. Think about the impact on credit risk, if we instituted a 2% decrease in your interest rate on a commercial or home loan if you paid on time every month for 10 years...Yes the bank would make less of a margin on your loan over the life of the loan, but more loans would be active and healthy, which lowers the overall risk that the bank/government has to carry, and if amortized over the life of the loan would only result in a marginal loss of margin. Hello - many businesses across a variety of categories, weather profit margin shifts much more drastic than "marginal" in a given quarter....Don't you think the average consumer or business owner would consider this to be a significant financial gain, and thus try hard to achieve it? The only relief a good credit rating receives today is the "ability" to get a loan at an advantageous rate. This is reasonable, but why not continue to recognize that stability with ongoing "financial perks" so that it further perpetuates on time credit payments.

Unfortunately, our financial health is getting dangerously close to collapse, so some kind of a taxpayer sponsored bailout was necessary, but instead of using the $700-$840 billion to write down bad debt, that the fiscally responsible taxpayer will have to pay back, why don't we use it to reduce principals in home loans across the board, so that even those that are paying on time, but likely struggling to some degree, like that small sector of the taxpayer base called "The Middle Class", get some relief? How about that for a concept. The percentage decrease overall would be lower for everyone, but it may fuel spending by the middle class, who have the largest impact on the health of the economy. And it might weed out those "dead beat" borrowers that will never be able to be current on the debt they have acquired. Why should we exclusively aid this segment of the economic base - they will never be able to generate enough positive fiscal activity to impact the economic health of the country, one way or the other.

I am not advocating that we ignore this sector, they deserve assistance, because they have been taken advantage of, by the wealthy corporations who are nothing more than self serving. But if we want to stimulate the economy, we should think about deploying some level of relief to the group that can actually move the market as well as materially assisting those that are working 3 jobs and still can't cover their obligations. At some point doesn't it stand to reason, that you can only push the American worker so far until they give up, and are forced into the welfare system, further straining the taxpayer base.

I mean think about it, the bailout will reward bad fiscal, even predatory behavior that the Bush administration (and those before - generally beginning with Reagan) has allowed wall street to legally conduct, through massive and irresponsible deregulation. And the reward is at the taxpayers expense - entirely...And to throw salt in the wound, the deal on the table will impact executive compensation packages moving forward...only impacting new employment contracts. It requires that all current contracts be honored as written. So - all of those fat cats on wall street that have been revered, and generously compensated, while playing with our money, have no consequence for loosing the game. It is a high stakes game, consequences for loosing should be as significant as the rewards for winning have been. And to further enrage, it is apparent now that wall street has had to cheat, to win. Another example of the elite protecting the elite.

This whole thing makes me sick. I feel like defaulting on my mortgage so that I can get my principal reduced. Seriously, I am sitting in my office working - but asking myself what the heck am I working for. I will never be able to amass enough cash to afford to live, once I am too old to work - so why not spend my time figuring out how I can take advantage of credit issued to me so that I can live on credit for the next 40 years. It seems that growth within our capital markets comes from issuing more credit, fictitiously backed, rather than retiring it. I might as well join that dysfunctional crowd.