Reflation, you have heard of inflation and deflation, now meet reflation

Reflation is going to occur throughout 2010 and will be the final nail in the coffin of the US economy, it will be caused by massive inflation of 6% per annum after the governments artifical lowering. It will be coupled with huge job losses, the collapse of the US dollar and will signal the beginning of the next great depression.

Feeling cheerful, bright and breezy........

Sorry for doom and gloom but it is almost impossible for the situation to change whilst the banks and government are artificially stemming the growing tide of foreclosures, whilst the Autoworkers Union is left intact in any form and whilst people continue to listen to the clueless rating agencies that can do basic maths and have no real understanding of business.

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Looking Back - Predictions from 07 - did they materialize

I am reading through some of the older blogs i have on this site, it is interesting reading as we are now a year on and can look at the accuracy of the predictions:

Tuesday Sept 11th 2007

Banks:
Don’t be surprised to see a bank failure or something close spark the next stock market crash, QIV may well be the cause of financial illiquidity of a medium sized banking institution
Expect to see more mortgage originators file for bankruptcy (possibly even Countrywide to clear off some debts)
Countrywide pretty much went, Wachovia and WAMU too

Real Estate:
The real estate bubble is bursting, expect to see significant price decreases and increased foreclosure over the next several years
Foreclosures should hit over 1m

Prediction:
i am predicting a 500+ (probably 1-2,000 point drop) towards the end of October...caused by a liquidity short fall by a major bank, Countrywide becoming insolvent (or admitting it is) a major house builder filing for bankruptcy or someone finding out that the banks are carrying in excess of $250Bn of off balance sheet debt that they need to do something about and can't!!!
Bailout is $750Bn and climbing, market has lost closer to 9,000 points, too many house builders have gone to name

Wednesday September 12th 2007

P.S The car industry will be the next to suffer as dealers give away cars with huge incentives and ultra low financing (even Honda the most frugal of all companies) to clear inventories ready for 2008 models!!!
GM, Ford and Chrysler are after $75Bn in goverment money to stay afloat, GM and Ford have both said they will run out of money in late 08 or 09

P.P.S By the way if you haven't realized all this spells the way for a recession of "Great Depression" portions
It has arrived

Sunday October 21st 2007

It is only a few month since I was discussing the impact of credit card and consumer debt on the economy and that everyone saying American Express etc would not be impacted by the sub prime meltdown was crazy. If you aren't paying your mortgage and are establishing bad credit , why would you pay your credit card bill. If you are going to go bankrupt as a method to protect any money you do have, why not throw the cards in it.
Amex was at around $70 and is now $24

Sunday November 4th 2007

1) Bank stocks look cheap, buy them now!!!I say don't bother, they still haven't priced in the full extent of the crash yet as no one realizes how bad it will be.
I hope you didnt buy bank stocks

4) Oil at over $100 a barrel.I think this is price gouging, whilst supply is not indefinite, $65-70 per barrel is a real figure.
Wow oil is now around $65 a barrel

Monday December 3rd 2007

Firstly, we live in an age where Google (goog) is quoted at some $681 at time of writing which gives the company a valuation of approximately $213Bn. This is for a company that if my memory serves me correctly has about $11Bn of revenue and $4Bn profit.Do I use google every day, resoundingly YES,Do i think that Google has a fantastic search algorithm, again YES,Do i believe that the company is worth 20 times its revenue and more than 50 times its profit, one second, did i just say 50 times their profit...something must be wrong with my calculator, maybe i have time warped back to 1999 and we are pre millennium and euphoric with Greenspans low interest rates!!!
Wow google is now at $314

Monday December 10th 2007

These companies stock will in my estimation drop a minimum of 60% during 08 – I am expecting to see a $10-$13 GM share price during 2008. I am further expecting to see their Bonds drop down to a B- or junk bond rating.
GM is now at $3

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SIV's rear their ugly head agin in the most unexpected of places

SIV's are blamed by many as the cause of the current economic crisis. With companies placing undesirable assets off their balance sheets they could report profits and other good news whilst hiding the truth. Thus today i was shocked to hear that SIV's have once again reared their ugly head in the most unusual of contexts.....

The US governments financial system has always been propped up by the hot air of the treasury requesting blank checks be filled by the federal reserve (who has no money in essence) and therefore driving inflation. Now with AIG's guidance and assistance the government is creating SIV's to carry AIG's bad debts and high risk credit swaps etc. What does this mean, well essentially they are washing AIG clean and hiding the dirty laundry for the US taxpayer to pick up, if they have any intention of balancing the books at any time.

There are a few extra tidbits for those interested:

1) expect oil to rise in price to around $80 a barrel once the markets are ressurrected, making now a great time to buy.

2) expect gold to continue to rise in value as any collapse in the US dolar and currency markets in general will cause a flight to quality and this is the truest mark of quality.

3) expect to see the US dollar collapse some time in the next 12 months making the Euro the currency of choice

4) expect to see Ford file for bankrupcty in the USA, years of trade union power have created an unviable model and weighted the company down with a health and pension burden it cannot meet.

5) I have been saying it for a while, expect to see GMAC die the death, GM will get bailed out some how i am sure.

6) watch for AMEX to devalue and possible go bankrupt. Creating a bank has allowed them access to fed funds which may save them but remember they are the highest risk of the credit card companies as they make their own loans by owning both sides of the transaction instead of just being middle men.

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Stock Chasing for double digit returns

Some hedge funds must be doing well, the higher risk player who havent been using more conservative assets like MBS must be doing well in the current market as must those hedge funds that properly hedged, I personally have been getting high double digit returns just chasing stocks of damaged goods banks and inurance companies that get bought out.

Following WB to their lows and buying in has proven to be a very interesting strategy as you watch the stock increase in value exponentially within a matter of days with take over rumors. Cents on the Dollar WB is now back at a healthy $6 plus so the question is who is next to fall and how well will they rebound.

Wels Fargo has to have a pretty shakey balance sheey if they cant sell the shares they are issuing to pay for a Wachovia takeover so look for them to take a tumble.

Goldmans looks a super safe bet as always their accounting department knows how to weather pretty much any storm and move underperforming assets off the balance sheet. Lloyd Blankfeld was declaring profits whilst everyone else wrote down in 2007, I stated it was suspicious and I dont think i was proven wrong. Plus Buffet is a great benefactor to have behind any company.

Oil is going to contnue to drop as the speculators who have been overinflating prices run out of balance sheet to back their speculation, $90 a barrel or less would seem reasonable.

General Motors and Ford should be softening up pretty fast as they have low and constantly falling sales in the current economy and how their finance divisions will hold up will be a wonder to behold.

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The Problem With Modern Politics - "politicians the lowest and slowest form of whit"

The problem faced by joe public in the modern political arena, is knowing what candidates stand for, what they represent and what they really intend to do on coming to power. The absolute inability of political candidates to answer any simple question with any degree of honesty, accuracy or most importantly detail is unbelieveable. Contrite statement and sound bites fill speeches, retoric stands at the fore and promises of something different are all thrown with great gustow but no detail of how anything will actually change and if the president has an power to bring about those changes are few and far between.

I have yet to hear Obama Bin Laden give any concrete or firm details on how he will improve healthcare or taxation, how he will get us out of Iraq or how his open diplomacy policy with a country like Iran will happen and how he has any capability of understanding what is actually happening. He has been groomed for a role and his primary qualification is going to be his ability to say and do nothing that can be held against him, simply because he hasnt been doing it very long and has never really done anything about anything. Seeing the sucess of this plan, John McCain has decided emulation is the best for of flattery and has appointed a VP with the same credentials of having done little or nothing and knowing even less about the world and its current issues. His only advantage is she only gets to be president if he dies, giving the American people some hope where Obama leaves non.

The governmental interference in the bailout has been a clear example of how no one in the public wants an uneducated and unknowledgable group of politicians to interfere in the free market economy and now they further claim to have the desire to meddle further and ensure the current meltdown never happens again. The problem is they still have no idea what has happened and the plan they have proposed helps no tax payer only shareholders of banks who would have gone down in flames.

Where will the money come from for the bailout if not taxation, last time i checked that was the only way the government generates income to pay for its promises Had the government simply paid off part of the "current" the mortgages in the USA they would have spent less money and fueled the us taxpayer to avert a recession by providing free capital and freed up further consumer overspending. The non current defaulting mortgages would have been foreclosed upon and the banks would return the overheating and overpriced real estate market to parity due to oversupply. The banks would have generated liquidity and the problem ould have been better solved than its current guise where much of the money will end up overseas and helping the wealthy who carried stocks in the companies in question.

Free market economics would have eliminated banking inefficiency and helped us clean out the trash effectively. Part of the problem is banks are being bought and the banks buying them are issuing new shares to do so. they are also issuing enough shares to try and generate the capital to cover their own illiquidity and bail themselves out with their own write downs, should those shares not get bought and rescue deals will die a sudden and firey death. Furthermore the bad assets are still out there and while the new bigger banks write them down along with their own write downs we get a continuing cycle of bank insolvency. The only sensible part of the entire bail out bill is the increase in the FDIC insurance to $250,000 which has long needed to change to a real figure. So long as you can find anyone with cash assets anymore..........

The biggest question of the bail out is why the American government is so willing to throw its cash overseas and further derail its highly damaged and fragile economy. Let foreign countries fund their own portion of the debts incurred by their debt. The UK has made one of the worst gaffs when they nationalised "the Bradford and Bingley" keeping all the bad assets for themselves and allowing the Spanish bank "Santander" to asset strip all the best parts. It just goes to show that those with any competence are in business and those without are in politics, maybe they should modify the phrase too "politicians the lowest and slowest form of whit"

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Why the Bail Out won't work

The Roman legions understood failure and the issues that the country currently faces. They understood overstaffing, undermotivation, and they had this fantastic system called decimation where one in ever 10 person in the legion (made up of 100 soilders) is decapitated. Whilst I do not propose death, certainly heads need to role and not just the CEO who everyone seems to be focusing on. The majority of the problem is that during good heady times, people are hired, departments are staffed and mediocrity becomes the norm, during tough rough hard time require departments staffed with exceptional people who look after the bottom line.

So I know that houses arent selling, the market is dead. I know that WAMU is looking for a buyer, they are in big trouble. I know that they own alot of properties now that they dont want that dont generate them any money so I figured they would be willing to sell me one, two, ten, or even a hundred or more properties at 30-40 cents on the dollar. This way they have cash that they so desparately need to pay their staff and I have properties at realistic prices, where rents cover the mortgage without the artificially inflated craziness Greenspans interest rate cutting has generated. 

Well the model is simple, It has been done before and is very effective, however this story went somewhat differently and explains why WAMU will be out of business very soon. The REO department is spread throughout the country, the main office is in Jacksonville, FL. However my quest to find a decision maker encompassed Texas, Newport Beach, CA, Los Angeles, Ca until i finally found the decision maker right back in Jacksonville, Fl. I did speak to her bosses enrouted and that gentleman was at least compentent. He probably could easily have done the entire job himself using the companies outsourcing technique but we will get to that. WAMU had used some smart outsourcing and hired REO World out of Newport beach and there team would make the ultimate decision of which offers were made to the bank, when and how long the property stayed on the market. They too had a manager with a team of staff under him, understandable considerin that they would have to deal with a multitude of brokers and accept offers, which they then assess and forward to the bank. Wow sounds like another guy who could do the job single handedly again.

They in turn had expertly hired a broker who they knew who was nowhere nearby over an hours drive from the property in fact, he had never visited it and in turned hired another broker to co list the property. This woman was actually a secretary who sold maybe one or two houses a year. The decision maker in Jacksonville unfortunately knew non of this....... Lets also think a little about fees, so WAMU pays the consolidation/ asset management house for there services, they also pay the broker about 5-6% which he has to split with his co listing agent - how much work would they be willing to do for what could end up being a few thousand dollars. Meanwhile WAMU has spent at least 10% or more to sell the property ontop of whatever they are loosing in the cents on the dollar deal and opportunity cost. 

So the house is sitting on the market, vacant for a decade now, slowly rotting and dying, depreciating constantly, its half finished, has a whole load of code violations the front door wont even open properly as the steps are too close. All the internal walls need to be torn down, the electric wiring has to be removed as it was never finished and doesnt match the plans, the radiant heating leaks and finding the leaks will be so costly its cheaper to redo the system. However, the decision maker has a valuation from the peak of the market, has never seen the property and as a caveate knows nothing about real estate. This is the kind of utterly pointless employee that has to be shed if the American economy is to recover. 

When will people learn that a proprty is worth what someone will pay fr it, that there is an opportunity cost to having cash tied up in dead assets and that ultimately this whole crash is about property, assets and commodities reestablishing true value rather than an artifically inflated value due to traders, speculators and of course the uninitiated who try to follow in the wake of those who make the real money.  

Altold it is almost irrelevant what I offered and paid for the property the bank looses so much money that when wages are thrown in ontop of losses, opportunity cost etc the assets are probably only worth between 20-30 cents in every dollar. Therefore the government would need around $3 trillion dollars in assets from banks to justify putting in the $800 million required to solve the current problem. Without that the US tax payer gets utterly exploited and will live with the consequences of the banks being able to keep employees they shouldnt employ and unloading their worst assets. This like reducing interest rates in august/ september 2007 will prolong the recession and actually serve to make things worse than letting things reach a natural free market bottom. 

This is why the bail out isnt going to work

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Expect the Dollar to Crumble

Expect the $ dollar to crumble over coming months as the government buys up distressed assets and bails out the banking industry. With this perfect parachute to protect those who have made huge profits from risky investments what can we expect in the future. Financially prudent individuals and companies are essentially being punished. We have seen lower returns due to cautious investment strategies, we should have been more aggressive, taken our profits and used a government bailout to cover the losses we ultimately faced.

This is going to significantly damage the dollar as americas economy wil be burdened with worthless and worse money consuming assets. 

What is going on with Obama and his new hair dye to make him look older and more mature. they are trying to make him look like he has some experinence, knows what to do and how to bail out the economy, talk about a rock and a hard place, we have someone who profited from the S&L scandal (savings and loan back in the 80's) and someone who has no idea what he is doing and will be a puppet for a government system that is so flawed that it will soon be overtaken by China as well as India, Germany etc etc

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Obama Bin Laden

So the DNC is coming up in Denver next week..... I think it may be a bit of an abortion myself...... sorry for the poor humor but with Al Jazeera both wanting to come and being allowed to come and film it signifies the worst potential interest possible in Obama. For anyone who doesnt know Al Jazeera spends its life as an arab promoter and endorser of terror, suicide bombings and everything wrong with the world. Their glorification of violence and terror is legendary.

With the additional comments from terror organizations that publicly support Obama we really must question his Muslim heritage and what he stands for and world events that transpire if the American populace makes their greatest mistake and he was elected.

I received the following as an interesting email attachment, i dont vouch for its accuracy but i couldnt find much to corroborate any other achievements:
On another note. Someone did the math on Obama the Senator.

* He has only been a Senator for 18 months.
* With all the recesses, four day weekends, campaigning and absences,
Obama has only spent about six weeks of workdays on the Senate floor
as one of the most junior Senators.
* Most of his votes, about 80% when he was not absent, have been
'present' or 'abstain'.
* He also chairs a committee that has never met because the chairman
has never called a meeting.
* As a trial lawyer he only tried 14 cases in court - and minor ones
at that.
* As a 'community organizer' his major cause was getting the asbestos
out of a housing project. After two years of trying, the asbestos was
still there when he left and is still there even now that he is a
Senator and presumably has some pull to get things done.

That's it. His entire real world work resume.

* Six weeks work in the Senate with nothing to show for it.
* Two years as a lawyer and only 14 minor trials.
* Two years as a 'community organizer' with nothing accomplished.

Let the free world hope and pray that we go with the "Prisoner of War" rather than Obama Bin Laden

p.s Dont know if anyone has been watching the Beijing games which have been truely fantastic but spare a though for the million plus people who were forecibly relocated, without compensation to spend the remainder of their lives in ghetto squallor, to make way for the beautiful Birds Nest, Water Cube etc....... America can't fool itself in these games with a total medal tally, a gold is worth more than a silver and bronze, the Chinese have and will win these games.

p.p.s Congrats to Li Ning on his opening ceremony performance, it is very exciting to think that he owns the chinese equivalent of "Nike"

p.p.p.s Michael Phelps, i think that you are the Greatest Olympian even though my wife insists you are the Greatest Olympic Swimmer

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Oil - Black gold or White Elephant - the Bust that must inevitably come

Why oh why do i feel like the price of oil is going to come a tumbling down?

So we have a weak dollar no longer trading at parity with some of the middle eastern currency, we have a strengthening China with an insatiable demand for oil... a china that will probably also decouple its currency in the 3rd or 4th quarter of 08.... and we have a US recession, no looming but already started....

All these factors tell me oil will become a more expensive commodity because the dollar has less buying power, the big question is though how low will the dollar go....

Why do i ask this, well we know that the oil supply is finite and some major fields are slowing production, therefore it is only natural that the price rise somewhat as the "owners" of the oil try to capitalize on the sole supporter of their economy (some like Dubai are trying to turn themselves into tourism hot spots and free trade zones so they have something to fall back on - very commendable and progressive)

Canada's oil fields are fairly poor quality, thick and viscous, Texas and Central America have nice sweet crude but alot of the surface supply is tapped and deeper drilling and exploration is more costly and risky, Alaska and Russia have a strong supply, there is always Brunei and of course the Middle East.

America consumes at least 20% of the worlds oil, but China and India are gaining fast, so what will the outcome be????

I think what is happening right now is the weakness of the capital markets have driven the spectators and many investors towards solid commodities, tangiable items that they feel are safe, this makes sense, Gold is tangiable, it is considered by many to be fairly inflation proof although i am not so sure with currencies having been decoupled quite how much this applies in reality.... Platinum and other metals with high value uses i like better, which leaves you with something like oil.....We all know ethanol isnt going to take over the work, I have tried HHO ands it isnt so hot, Hydrogen would be perfect but the car manufactureres and oil companies are too strong and have to much of a vested interest to let the money spinner go until they have to.... Note most of them are using their immense profits to diversify into Wind and Solar farms as well as Nuclear power plants!!! They are planning forward with their current wealth as the middle eastern nations are!!!

Thus we see why Oil has run up, and why it has run up beyond its true value, like the real estate boom and the tech boom, investors have a pack or herd mentality and are piling into a good thing, not realising that they are making the early smart front runners rich as is always the way. These individuals will soon pile out with Billions of dollars in profit leaving people holding overpriced assets!!!

I expect Oil to be sub $100 within 12-18 months possibly sooner and i think anyone buying oil futures and options based on growth and increased prices are going to be caught with their trousers down!!!

Which does lead us back to Real Estate which is in the process of crashing, far from done and far from bottomed out, we will see the best buying opprtunities of the next 20 years within 2 years, lets sell some Oil Futures to provide the cash we need to buy all the property that the people who are currently speculating on oil will loose to foreclosure........

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Popular Culture

I had a revelation

It occurred to me tonight wasn't that Pop Idol has succeeded and become a part of popular culture, what astounded me was my realization that it was essentially a draft (NFL, NBA, College etc) Anyone of the top 10 or 20 or however many it was were on the show tonight had to attract a contract tonight or fade into history forever....

I had always seen it as a last chance or only chance for many who do not have the right network to get a break. A way to find out who 13 year old girls have a crush on so you can sell them single (they are really who buy singles for the charts, adults buy albums)

Then it got really scary they started putting people like Seal next two the acts and wow what a difference, the only one who could potentially hold his own was David Cook with Bryan Adams as they sound so alike.

Most of all, what pop idol shows you is how incredibly talented a lot of the singers today and of yesteryear have been and also what these new fad singers are missing. Thank g-d even with all the judges pushing that the talented David Cook won out, Bono, George
Michael, Bruce Springsteen and Bryan Adams have acquired another member of the raspy voice brigade

At least we can look forward to so you think you can dance where we get some real truly amazing talent!



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Entrepreneurial Myth

America is full of so called entrepreneurs, over 1,000,000 new businesses are established every year, about 2700 a day...

What most people dont understand is that they are buying themselves a job, they are not entrpreneurs, they do not have an established exit strategy, they do not have clearly defined goals with detailed steps of how they plan to reach those goals....

I do not look at any investment or deal without working out how i walk away from it, what my payoff is, how i will deal with unexpected misfortune.... Risk management is about thinking out everything that can go wrong and how to avoid it, success is planned for by understanding everything that may cause you to fail and not reach your goal.... ignoring this and calling it positive thinking is much like an ostrich burying its head in the sand.

So before you call yourself an entrepreneur, do you have clearly defined exit strategies and and have you sought out solutions to every outcome imaginable

Alternatively do you work for someone and feel that you are making them all the money and if you set up by yourself you could make more, do you feel that your expertise in a niche field is going to allow you to beat your competitors, because the thing that makes you a business owner is the ability to delegate, train and implement systems and strategies for success. Otherwise you just bought yourself a job......

Beware if you do buy yourself a job you may end up working "IN" your business rather than "ON" it and this means you may end up working longer hours for lower pay and not be able to take holidays and get a way..... I you ask anyone running their own business if they were to walk away how much would it cost them to hire someone or several people required to do their job and how much would it cost. If this figure is lower than you are paying yourself then why? and did you just buy a job and underpay yourself, you will be more dissatisfied than when it was all someone else's problem....

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Travelling like a true Road Warrior

Everyone talks about the big things in travel, I want to bring up a few of the smaller items that people so often omit or don't even know about, the creature comforts that make travel not just easier but a pleasure. Her is my top 12 items that could change your perspective......

1) The difference between a 5* hotel and a 1* is invariably their sheets - I turn the worst bed into a luxury with a 100% Silk Travel Liner. It comes complete with a pillow pocket so that even my head is lying upon the finest silk and it all fits in a 3x2" 6oz bag.
You can buy one for $60 from REI - http://www.rei.com/product/695429

2) Never check a bag again or borrow an iron. Use Space Saver Vacuum Bags are the best way to pack for travel, they will compress your clothes to 1/4 or 1/8th the size, they will leave the clothes wrinkle free and the airport TSA staff wont open them and mess up, touch or expose your clothes/ dirty laundry in public. I always carry 3 - 1 clean, 1 dirty and a back up.
You can buy them for $20 from Bed Bath & Beyond

3) Rain X Wipes - These could and will save your life, grab one and give your windows a quick wipe before you set off and for the next 3 days, no matter how much rain or snow fall you will be able to clearly see your way - make sure you get wipes as TSA will remove the liquid.

4) Buy your own GPS - It will cost you from $150 for a basic system up to 350 if you want traffic - this will take a lot of the stress out of finding your job, your hotel and your way late at night in the dark. If you work it out renting units will be more costly within 10 days. I also program my job and hotels prior to leaving home or in the airport or even on the flight so that I dont have to deal with it when I arrive and I know what time I will arrive

5) Energizer battery charger - plug it into your phone or your computer and use normal batteries to get you by!

6) Dry Cleaner Secret - Put any suit or piece of clothing in a tumble dryer for 20 minutes on medium heat and it comes out like new

7) Yak Trax are indispensables in snow and ice if you don't want to end up on your ass or looking like one! Slip them on over and pair of shoes for perfect traction in any conditions. Visit http://yaktrax.com/productspro.aspx but shop around you can get a pro for as little as $16.95

8) The dreaded 4S's may seem like an excerpt from the 7 deadly sins to you but to the frequent air traveler 4 SSSS 's in the bottom right hand corner of your ticket means extra special attention from the TSA. Your going to get everything searched and its gonna take and extra 10-50 minutes to get through security as a result..... Avoid this like the plague, adding an airline frequent flyer program and talking to your airline can reduce how often you face this problem, especially when you have last minute, one way tickets!

9) Clinical Strength Deodorant makes sure you make it through a long harrowing and often energetic day without any telltale wet patches or odor - add anti odor, anti bacterial, cooling undershirt for the perfect finish and finish with a 50ml bottle of EDT aftershave for that fresh scent.

A little more Expensive but these items make a huge difference for me:

9) IPOD Shuffle/ Noise Canceling Headphones/ Eagle Creek Travel Pillow/ Eye Mask - primarily used as white noise to block out the crying babies, engine roar on props and insulate me from the rest of the world for a little while. The travel pillow has a great pocket it folds up into and also allows you to carry all your travel items in one place - i keep my mask and ipod etc in there all the time.

10) Tom Bihn Empire builder suitcase and Brain Cell are the perfect briefcase and laptop combination. Whilst expensive the pockets are so well thought out it makes work and travel a breeze, the padded laptop case means you can drop your bag by mistake and get away with it. It will also ride ontop of your work case effortlessly.

11) You will think i am mad but quality pays for itself - Victorinox 22" Carry on plus Suit Carrier is expensive but should it break for any reason the company will get a brand new bag to you within 24 hours for free and that is for life. Expect to go through 2 lesser cases a year, so go figure, little extra upfront saves a lot of hassle in the long term.

12) Tablet notebook computer- laugh at me all you want but 20% of my jobs are a go as soon as i pull the computer out and start writing on the screen like a notepad. It saves you carrying pads of paper and writing up your notes later - use all the free time you have for the recognition training and it will virtually never make a mistake.

I hope this helps ease the woes of Travel

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Very Politically Incorrect

I know I am going where no one should go but I have a few very contentious statements, comments and questions? No one seems to be voicing these out loud but I am sure people are thinking it.......

Is Barak Obama a Muslim and how extreme are his views? Why does he seem to want to hide his beliefs in the closet??? Is he ashamed or afraid his beliefs will hurt his chances of election, if so should his deception be permissible??? How will his faith affect his dealings in the Middle East and Pakistan?

With Americas track record of racial prejudice and extreme behavior, how long will Barak Obama stay alive if he is elected president? Has America changed that much since Martin Luther King and Malcom X??? Do we need to concentrate very hard on his running mate for Vice President?

Will John McCain survive his presidency if he wins, he is rather old for the stress and pressures of the role.... Does he have the energy to take on the backbreaking workload or will he be a part time president like George W and spend most of his time on holiday???

Does Barak Obama have any job skills or experience appropriate to being president or that qualify him for the job?

Is it ego that stops Obama from running on the same card with Hilary Clinton, surely it would sense for them to become a 16 years dream team?

When will Ben Bernanke step down from the Fed where he has been doing a horrible job?

Could Al Gore be any more hypocritical about global warming with his house, car collection and private plane useage?

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Crude and Gas Prices, Global Economic Change

Its funny what travel will do for you, it may even make you cynical. As i travel all over the USA i see a huge fluctuation in the price of gas at the pump.... in many cases in excess of a dollar. Los Angeles always seems to trump at the pumps, even beating Hawaii which to my knowledge has no indigenous supply and therefore must be importing its gas from overseas.

What does all this lead me to speculate? What does my cynicism indicate.....

I think that the oil and gas companies know that with more efficient cars, alternative fuels and other such measures demand and consumption will decline, therefore they are gouging profits now to ensure their future.... The Gulf Nations know that their liquid gold is disappearing and that they have to make everything they can, capitalizing on a weak dollar and decoupling to further enhance their wealth.

Meanwhile the US governments continued investment in foreign policy that has huge financial burden and limited recompense further enhance cost and distention within the oil producing world. Expect that heating gas/oil/ electric etc rise significantly next winter creating further pressure on the already lackluster housing market as well as a sweltering summer and increased air conditioning hurting this summer in the southern states. (This will also become a major factor affecting the commercial real estate markets and causing more of a downturn, along with added market pressure.)

Ultimately how can the US deny we are entering a recession or more likely a depression, all the smart money is heading to China which now benefits from a burgeoning internal market. Look for the Yuan to decouple from the dollar after the Olympics further shaking the global market place, stocks and commodity prices.


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Roll the Dice and Play the Financial Market Lottery

Working and investing in the financial markets is for the majority the same as visiting a casino, ill thought out investments, lack of knowledge/ understanding and of course the untold riches of success and high rates of return draw the more aggressive individuals into a high risk game of guess and second guess. The general parameters are the house always wins, much like a casino, and by this we are talking major financial institutions and experienced players who are hedging and using complex financial instruments to allay their risk and to pass it to the investor.

The secret is to work on a long term ride in lower return funds - growth and income is really the place to look and avoid individual stock picks in favour of a mutual fund/ etf to spread and mitigate your risk. Remember that market downturns are buying opportunities more than anything else..... Just maybe not till the end of this year or early next!

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Troubled Market - Obvious Change Required, But How to Achieve It

Performance Related Pay has been the primary method of compensation for high level employees for the last 20+ years....Anyone with the ability to affect the volume of sales or profitability from sales should be directly compensated from this money, thus motivating them to bring in more business, cut costs and increase profit. It is also one of the primary components of the SubPrime Crisis and other financial mishaps.... With huge bonuses available at the end of each year and one good bonus being enough to pay for a house, set you up for life or start your own fund/ company employees are willing to take huge risk to ensure their bonus this year is amazing with little or no care for two to three years distant....

With this factor in mind, large financial institutions have phenomenal profit and growth so long as the market has the capacity to absorb it, however in economic downturn many of these short term maneuvers become illiquid and are unsaleable. Thus the bank has to take the brunt of the loss.

When i use the term absorb, I am of course taking about off balance sheet, international companies. This is something that Goldman Sacks has excelled at and continues to excel at by hiring the brightest and the best. It is only a matter of time before which they have to admit openly to some of the losses they have incurred and to some of the downsides of their investments that they can no longer hide. The major factor is that no one wants a "holey" ($0) bonus so they will continue to find ways to hide losses and to look like the shining hero's of the sub prime crisis. Remember they were no less greedy and no smarter than all the other institutions they just hide it better! Thus i factor a major "scandal" within the next 8-12 months which will significantly affect their share price.

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Hidden Time Bombs that investors should learn to look for

Investing in businesses in the stock market is riskier business than you realise. The American standard accounting practices hide a multitude of sins from the unsavy investor. Companies like Enron, Countrywide Financial and GMAC can be huge titans one day with seemingly positive and healthy balance sheets and gone the next in a sea of debt.

A business may have a healthy dose of working capital and good profitability however it can be very short on money, constantly looking for cash and never having enough.... This can create a long term problem that you will do well to spot today.

Accounts Receivable can severely inhibit a businesses cash flow
Carrying and servicing too much debt can cause cash to dry up

Retained Earnings are a beautiful method of balancing the books, however if the company does not have the actual money the question lies as to where it is retained?

Depreciation is a great way to avoid and mitigate some tax payments, however how does one buy new equipment when the old items have expired (hence the title depreciating assets). Is there a separate account funded by this depreciation write off?

Does the company significantly reinvest in capital improvements? How are these allocated and what is the usefulness of these investments in earning profits for their investors? Did that fancy new office with 5,000sq ft managers suites really increase productivity at all ....... to the same token did the sale and leaseback of the company head office which gave us a great deal of cash this year reduce the overall and long term profitability of the company and deceive investors and managers alike to the problems brewing in the future of the business with reduced profitability?

Share buy backs are great, but were they funded with cash or loans, did VC's come and buy the company with its own assets and saddle the company with debt...this allows them to deploy money, but what will the return be and how will it help the company fuel expansion and growth. Will that growth be in core business and profitability or will it be a mistake? (take Ford who spent Billions of its cash surplus buying into repair and maintenance as the future profit center for the company only to sell it for cents on the dollar and crash the companies stock value)

A perfect example would be Microsoft, who should they deploy they buy Yahoo will become an ideal target to short as they will have to absorb phenomenal costs to integrate the two companies and go through several iterations before problems are rectified, they will also see some serious degradation of their balance sheet as the goodwill values of both companies is absorbed.

One of the biggest give aways though is the share dealings of insiders, these acts must all be recorded and become part of the public domain, if you see key figures SEC Form 4 buying or selling heavily then this is a great indication of a buying or selling opportunity. (look at Angelo Mozilo's 925,815 CFC shares in about 1 year) Do not less this one pass you by, you will never get a better indication of a companies future...

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Positively Profit

America seems to have lost its focus on the most critical element of business - profits - companies now seem to manage for and use ever metric possible but profit.... Turnover, productivity, employee satisfaction, every other buzz word, trend and "business phenomenon" has driven the American business owner from his core purpose. The business of making money.

Alot of this advice about avoiding profit comes from one place in particular, your Accountant who is now in essence works for the IRS (which you may not have realized) and is fined and penalized every time they try to find a creative way for helping minimize your tax burden. Therefore the less you have the easier his job and the lower his risk and the higher his profit margin.

Profit should not be the mistake that drops out the bottom of your P&L, an accounting aberration at the end of the year, it needs to be planned, predetermined, the first line of expense for a company and not the last!!!! When you set up your budget or forecasts for the year, ensuring a healthy profit should be the first thing you do, the remainder of the year should then be spent protecting and defending that number by minimizing expenses.

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Inevitable Evolution

I have been thinking alot recently about the progression, development and ultimate evolution of the Homo Sapien (humans) and it started to occur to me as I develop out Brain Make Over that the ultimate advancement of society may well be slightly different to the course most have predicted.

Many see futures of Robots etc in control (Terminator, i-Robot etc) however i think it may be a little different in reality - and here is why:

Technological advancement is leading us towards smaller and smaller devices that we collaborate using with greater frequency. No one will doubt or be suprised at the suggestion of a hearingaid sized cell phone or glasses that act as computer screens.... these have already been depicted in movies. However the very next stage of development would be the complete integration of such devices subdermally. (like pet tagging)

These integrated bio/neural chips would then directly connect individuals into the World Wide Web (www) etc. We already have examples in self monitoring (telemetry) pacemakers and other such cardiac devices. Such integration would ultimately if followed to its natural and logical conclusion create for a world where humans are to some degree controlled by computers (not in the Matrix fashion) but in a far more real system where dependency led to enhancement of the human organism. Nano Technology and biology would start to merge within the human development process creating a greatly improved human....

AKA evolution


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War on Iraq - the video about the 1980 destruction of its Nuclear reacto.

The Gulf wars have had many casualties, there has been immense expense and a cost greater than money to the people of the USA, the coalition and Iraq. Many of the benefits were gained by Halliburton who recently moved their company to Dubai and the free trade zone, meaning that the USA will not benefit from the taxes. Great Britain didn't benefit with any major contracts in Iraq to repay its role in the war.

One looks at history and notes the incredible impact that Israel had on stabilizing the Middle East and allowing the USA to win so easily in Kuwait and on George Bush's claims of Weapons of Mass Destruction in 2002. Iraq was neutralized as a nuclear power in the early 1980's whilst the American Government was still supplying weapons to Iraq, Afghanistan and Al Queda.



http://video.google.com/videoplay?docid=-5549292708092323592

http://video.google.com/videoplay?docid=2295792449224502914




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