Mark this date down…..Our world just changed..

I know..I know….how many times has someone said the world changed and nothing seems different in your life. It seems to everyone, life is going on just like normal, what’s all the fuss I hear from some of these guys? They’re  just Chicken Little’s looking for the sky to fall, Right? I would like to agree, but this time I can’t, and worse, I find myself feeling a little like poor Mrs. Little, and here’s why……..

Money, finance, and business to many is an esoteric exercise in their minds. It’s too complicated or it’s too boring for most people to grasp. As long as they have a job to pay whatever bills or fees that come about in ones daily life, they feel secure that the so called ” Big Stuff ” will be handled by others. World finance, Bonds, and all that stuff is much too complicated. They just invest in their 401K’s and seem to be done with it. Gives everyone the “feeling” of being an investor. Trust me……you’re going through the motions similar to an investor, you have money in the markets, but an “Investor” you’re not.

People were scared when the collapse of Lehman Brothers happened. The stock market tanked, the news was dire, and people saw the effects pretty much immediately in their 401K’s, but unlike “Investors”…they just looked at their statements in disbelief, and believed all the talking heads on TV that said in almost unison” Hey..Corrections are normal…Stay in for the long haul…Things will get better” and so far it seems to have been the case. Some wouldn’t even open their statements for fear of seeing their balance. ( If that is you..You are Not in control of your finances as much as you would like to think, but that’s another column.)

The reason for the United States being the “Financial Capitol of the World” has been the rule of law. Some think the word “law” means the “Rights and Protections” afforded by police and such, but the world of finance is much different. Your protection is the ” Rule Of Law ” for business. People, Countries, Pensions, and like invest in certain structured dealings based on how much money can be made..and most important…How Much They Can Lose!. If you now change the rules that…for 250 years if X happens…You’re protected by this law. To now if X happens….Who knows what might happen, and you could lose Everything, but we can’t say for certain…You have just given your Gold Standard away…and You’re NO LONGER even a precious metal or stone……You resemble Costume jewelry…and nobody will pay you , or treat you like the Diamond you once were.

It wont happen overnight, but trust me, it will show it’s head very, very soon. The frightening thing about this type of shock to the system is this…250 years of contract law has just been eradicated in the last 24 hours, the damage I believe that this will do not only to our economy, but to our standing as the “Financial Capitol of the World” will be horrific, and will NOT be able to be remedied for years, if not decades.

Chicken Little was a fable….My hopes in the end that this column turns out to be one also, but I feel a little like you know who.

Mark

What if Nobody thought…….What if?

As I write this column we are less than 12 hours away from General Motors filing for bankruptcy. There are so many legs to this story a spider would be envious, but I only have two so lets look at this from the only sides I think matters…The Pros…and The Cons.  I’ll leave all the hoopla for the “Left..Right…Dems… Repubs..Union… Non Union, et al. (Fasten your seat belts, keep your hands inside the car, and restrain all loose objects, it’s going to be a dizzying ride!)

The pros of this decision to many will be,” The company is saved at this time, workers will still be employed, a collapse would have been debilitating, it gives us time to reorganize”, and there are many others. All of them sounding like they’re on sure footing. So one might say “OK Where’s the Cons?” Well here’s  a couple….”What happens now that the UAW and the Government owns GM and the price, and wage concessions were not enough. They were too zealous in their assumptions, cuts of another 10, 20, 30 percent are needed immediately. What then?…..The new “Greener Models” are not selling…projections were far too optimistic…the forecast for sales is off 10, 20, 30 percent. What then? The competition such as Toyota, Nissan, Honda, begin building even better ” Greener ” cars than GM, all with American workers, and factories located in the USA. What Then?”  As you can see, true business decisions are far more black and white than others would give credence to.  That’s also the reason for the distinct difference of being a “Businessman”, and being an “Employee”. The mindset of each comes from two different universes where the expenditure of  money and resources are involved.

As in all these scenarios, one never knows exactly which way is best with 100% certainty. If one could, you would never be in trouble, and also be the richest person in the world because you would know Everthing! So all we can do as business people or investors is put Capitol or Money if you will, in the surest and seemingly safest place we can. From the outside looking in, I believe the whole General Motors story will be written in the history books of economics 101 as a detailed map, and example of  what NOT to DO and what Wont Work!

Some will say …”You have to give this time too work….Things take time to work out….You can’t turn a large boat on a dime!”…Seems like all that makes sense, but I’ll give you the other side of the coin….If  I told you 18 months ago…Investment Banks as you’ve known them over the last 100 years will cease to exist….The Government will OWN…Freddie Mac, Fannie Mae, AIG, Citi just to name a few….Spent over 8 Trillion Dollars, and propose to put the USA federal deficit to over 12 Trillion dollars when we were at a surplus just a few short years ago, and General Motors would be owned by 70% of the US Government and 20% by the UAW, and be bankrupt, and DE-LISTED from the Dow Jones as of today.

You’re right….a boat that big doesn’t turn on a dime….It’s more like a pin!

Mark

Educating yourself right out of competition…..

I was reading that the current administration is changing the laws to allow unemployment recipients to attend school so they can further their education, and compete for those ” New Jobs” in the future.

Don’t get me wrong,  I am a big proponent for education. My Lord I wish I  had the chance to attend a university when I was growing up. As some can tell by my writing skills…… it shows  I didn’t . I was a High School drop out, but with some prodding by an uncle. ( Actually it was more of a threat!) I went for, and received my G.E.D. from the University of Southern Maine. ( How’s that for getting a diploma that sounds weighty!) but lets get back to my real point.

In today’s world one of the first things one will find they must do is Look For Work…and Look for Work ..NOW!…I don’t care what age you are, you need to be in the race and running at full pace NOW or you’ll get left behind with all the doors in front of you locked shut. The only reason you should find yourself in school at this moment is either your in the process of finishing a specialized study .e.g. Doctor, Lawyer, Architect, etc. where the degree is a prerequisite to the job, or your finishing your education this year. If you think you have the pleasure of taking the time you now have as a result of being Unemployed as a time to  “Stretch Out…Relax….Contemplate Life.”… I’m sorry to say your being delusional.

Time is of the essence, people who are thirsty and understand how to get ahead will ( and already are!) running full steam at looking for the jobs with what they believe to be valuable companies. People who can do what they say, and say what they will do, are negotiating with employers right now, Some are taking pay cuts ( Yes Pay Cuts!) to get into leadership companies where they believe they can excel in the coming environment. They are looking to show anxious companies that if they hire them, and trim out unproductive employees it can be a win win for them and the company. They will show value, and will demonstrate the “Value Proposition” to these companies. They are not afraid of seeking out these interviews, and they don’t need, nor will they wait for someone to ask them for an interview. They are the movers and the shakers, they are the ones who never listen to  anyone saying…. “The odds are against you….The economy is too rough right now…..Everyone is looking, Why would they be interested in you?”…etc.,etc. you get my point. But that’s exactly why they’ll prosper in this economy when others will not. Why?…because for the true “Movers and Shakers” there’s no time like the present. Opportunities abound for the person who doesn’t need a “Job”….They’re looking for a company who needs the value of their services, and ALL companies need assets that add value, what they can’t afford is expenses. So if your not adding value…your an expense…harsh as that may sound….it’s true.

I know your asking….”Why wouldn’t these people have more competition now than before?”     That’s easy…….Their competitions in school!

Mark

America, Love it or Leave it….But what happens…..

America…Love it or Leave it…but what happens if they do!

Before anyone decides this is a column based on a Right or Left debate to stir up tensions, you would be not only mistaken, but foolish. I want  you to think outside the box because so many are finding themselves stuck inside the box. Such headlines as the above come from every direction that one no longer thinks about whether the questions  are relevant.

I have said before that it’s up to you to decipher and put into context all the information or questions that you come across, and see if you can use it or just file it. Just because the phraseology of a question might now seem politically incorrect, you must still ask yourself is it relevant. So look at the question again and think with this mindset…..As a business owner, entrepreneur, CEO, or multi-national company ( or just fill in your own ) would you still be, or stay Head Quartered in the USA if you could move your business anywhere in the world, and your customers would not know or probably even care? This question is very important if not crucial for where you need to position yourself for the upcoming business future.

For those who think they can wait, might I remind you that over the last 18 months the business future that you believed to exist is now…GONE. The banking system, the financial vehicles, the corporate governance, political meddling, and on and on, are forever changed…Period!. If you haven’t been up at night sleepless at times, or overcome with confusion of where or what you need to do in order to move ahead, I’ll assume your either not in business, or you don’t understand the real depths of what has transpired over the last 18 months.

What happens to your thought process as a business person once you learn your Business Taxes, or other Mandates  could be raised to a point your business might either be hindered, or unable to compete at Any Time! Do you Close your business? Pass on the expenses? (yeah that’ll work….not!) ….OR?………..Move!

Just liked conditions have changed at a breathtaking pace, the technology that allows companies and people to be global in reach and presence has also. So why wouldn’t a company strategically think about utilizing all the tools available to compete? Take myself as an example to qualify my questions. I could be writing this article as I’m sitting in an airport in Singapore half way around the world. I could call you later this evening from my hotel room in Hong Kong…( yes China ) and you wouldn’t know, or most likely not even care because I could conduct business with you in the same manner as if I were in my office in the United States.

So once again it begs the question….If it can be done, and done easily….Why wont it be done, and done quickly if it can mean profits, or could stave off bankruptcy? All questions have answers, it’s up to you if they’re relevant. By the way….How do you say ….I have to leave in Mandrin?

wǒ děi zǒu le

Mark

Stress tests….Is the treadmill going fast enough?….

(Banks speaking to the auditors)…..

Stress…What stress…I feel fine…just give me a minute to catch my breath…get your hand off that start button or I’ll…….

A lot of people seem to be breathing a sigh of relief since the release of the so called  “Stress Test Results” were released. However no one seems more relived than the banks themselves.

It reminds me a lot of the old days when I was in the Food Industry. You are under the inspection of the USDA on a daily basis. Your local inspector kept tabs on what you were doing, and made sure you were following procedures and laws accordingly. But…and here’s the big But…If you had any type of problem that resulted in a recall or equivalent, you would have a detailed inspection from department heads and their bosses, and would be put under a microscope, if not an electron microscope for possible defects in any of your previously approved regulations. This could result in fines of Hundreds of Millions of Dollars for certain violations, if not the complete liquidation of the company. ( Remember Sara Lee approximately 10 years ago?)

Don’t get me wrong, I’m not arguing against the regulations or fines ( That’s another column) what I am stating is that they were merciless in looking for flaws or possible breeches in protocol to insure the “Public Safety of the Food Supply”…Agree with them or not, I have been on the record both in public and private meetings stating…” We have the safest, and the best food supply chain that is the model, and currently the envy of the world.” I state that because no matter what challenges arise within the food industry, the so called “Stress Tests” that are put on after, push the industry to higher standards, not just to give a passing grade.  Passing to some  can be C- or worse D+ so passing is a relative term. That’s not so for food. A is truly the only passing grade…if you’re company  is a B-, rest assured you will be prodded to get that B to an A, and soon!

If you look at the data from the banks with a prying eye, you’ll notice it doesn’t appear to look all that stressful. What is truly stressful to the financial system? A test from a body of auditors that want you to pass…Or from the auditors that are trying to see where the true breaking point might be.

Here’s my case in point. Just on this scenario you be the judge…..A bank loans money to a company that builds a Strip Mall…He in turn rent the space to business owners….they in turn sell their wares to the public..which is You…………..You no longer shop there……The store owner doesn’t have money now to pay the rent so he skips the rent….The mall owner doesn’t have anyone to rent the store out to so he lets the business stay without throwing them out because it’s better than being empty…He now can’t make his mortgage payment so he skips his payment…The bank now moves his loan from one page of his books ( Performing loan ) to the other page ( Non performing loan )…but what is the value of the loan?..100%…50%….10%….Zero?

It’s 100% as long as one still has Hope that they will be paid…but as the treadmill starts to get faster..or time passes faster, or longer…the closer Zero becomes more relevant.

Instead of looking at the treadmill, we had better make sure we’re not going to let those running shoes drop before we get off. Then the speed wont be relevant any longer, and we had better hope there’s a dead man switch attached to our clothing!

Mark

Everybody wants it…..but nobody will pay.

When I was first writing the above headline, one of my favorite Van Halen tunes kept coming into my head…” Everybody wants some…I want some too…” That seems to be the best way to describe every new social interaction web do thingy that comes along on almost a daily basis. First came email then Chat, then Instant Messaging, then Web cams, You Tube, Face-book, and now…..Twitter. I know I’ve missed a few others ( probably more like a myriad ) but you get the point.

In talking to business people and others, it seems everyone is now trying to figure out if they should Twit, Tweet, or God knows what else. In discussions the question I pose is this….How much revenue do you think it will generate in 3 to 6 months? Well that’s all I need to get the glazed deer in the headlights look out of them before they search the deep dark crevasses of their mind in search of answer. What happens next is what I call the ” Pie in the Sky diatribe”.  If you’ve ever been in management you’ve seen this for yourself. You’ll ask someone about the great project, program, widget, do thingy they want to turn the company upside down for and be allowed to have an unlimited budget to research their ideas, but have NO clear answer to show how it can make PROFIT.

I used the word profit specifically because making money is easy, making Net Profits is quite another. All the fore mentioned networking or social networking outlets themselves are NOT…let me repeat this NOT generating profits. The very core users of these mediums if anyone would care to notice not only refuses to pay actual dollars for its use, but believes it is their right to have it supplied for FREE, and objects with the fierceness of a junkyard dog when anyone tries to monetize their use of the service.

I will make a statement that some will laugh at, others will shake their heads and say I don’t know what I’m talking about, but that’s par for the course if you ever been in charge. So here goes……..

“Every form of social networking that is currently being used at this present time within 12 to 24 months will either not exist, or they will be consolidated into one or two entities that will be minuscule compared to their current size, and will cost money to use or have access. The other part of the so called FREE social media networking will be absorbed into platforms like Google or Yahoo or some variation, and more likely will be an ineffective way to monetize  products or services for most business owners. It will only be away of trying to create a so called  BUZZ that most will fail in trying.”

Why do I say these things? Have you ever noticed that every time one of these So Called “Social Networks” comes along ( I call them Time Dumps )…and the company tries to monetize it, what happens? The users move on to another one that’s free. And what happens to all that planning you put into figuring it out? Let’s just say Time Dump becomes a relevant term.

Hold on did I hear a Tweet?…Oh wait…It’s just a bird…but I don’t see him carrying his GPS?…How does he ever get around?…I better Google that.

Mark

The deal is done, and so might they….

One would have to be living under a rock to not know the dealings going on in the auto industry in the US. ( Many have their heads in the sand, but that’s a column for another day.)

Chrysler just announced it’s filing for bankruptcy, and they will be merging with that juggernaut of innovators, and market movers of the industry…Fiat. ( Yes…I’m being sarcastic.)

I am being inundated on TV, print, radio,politicians, and anyone else who can speak telling me ” What a Great thing this will be”…”Chrysler will now build a better car with Fiats technology” , and blah, blah, blah.  Am I the only one who remembers that Chrysler was purchased by the current owners when..Daimler-Benz…Yes that’s right, the same people who own and manufacture Mercedes decided to jettison Chrysler when it became obvious that they couldn’t bring Chrysler up to their standards with all the “Legacy costs, and other baggage” that came along with Chrysler. All it did was hurt the image and brand power of Mercedes.

This is what happens when a great company acquires a faltering one and is not able to impose it’s strict vision of quality, and perceived value. It’s a lesson shown time, and time again. The better of the two companies merged will suffer, and fall to the lower standards of the failing one…It rarely, if not ever works the other way. Once Daimler Benz had the chance to scrap Chrysler, even though it took a large financial hit. It did what any well run, well managed company will do….Take it’s Lumps…and Move on! That’s what great companies do, and in the end Mercedes is the better for it. But why take my word for it?….Once your able to afford the car of your choice, I’m sure the first one you want to get on the list for is that new…Chrysler Fiat model. Besides when it’s parked at the curb……Who cares about quality, and style. It’s a bargain,  Right?

Mark

What’s worse than a house of cards?……

The answer is much easier to state than  getting  someone to understand. Here’s an example….

A house built of solid materials,  new technology, great neighborhood, energy saving technology, new paint, etc, etc.  What  could possibly be wrong?…..How about a  weak foundation….. or improperly mixed concrete……..shoddy foundation work…etc, etc.

Most people (and even worse a lot of business people )  today seem only interested in the superficial. You can build a great house with the finest materials and craftsmanship, but if the foundation is not properly constructed, it’s only a matter of time till it All comes crashing down.

Today, yesterday, and tomorrow the foundation of this country, and it’s economy IS, and WILL BE,  for as long as you or I am alive is, JOBS.

Jobs, Jobs, Jobs is what an economy is built on. If unemployment is growing at record levels, and no end in sight, I don’t care what your selling, you’ll be hard pressed to find buyers. No buyers, no profits, no profits, no jobs, no jobs, No Economy…..Period! This notion that we are going to create all these jobs when company after company announces layoff after layoff is In my estimation….Fool Hearted.

We are at a point as I’m writing this post over 6 Million unemployed..and at 8.5 percent…with the number continuing to climb with No End In Sight!….Every report this year has been titled as…The worst since 1945, or 37, or 42, or 77…….The current theme is Worse than…Not Better than…and with that you’ll see politicians, business leaders, and talking heads quote this statistic, or that statistic stating why one shouldn’t be  worried.  I gave this statistic at a speech I did at the End of last year and I believe it to be more relevant now than then…….The so called ” Experts ” and ” Analysts” who make their living, and are paid by Fund Managers, and people like the ones who probably control Your IRA…correctly called 2 of the 500 companies earnings on the S&P 500……I did not miss type…..2 as in TWO…out of 500…yes Five Hundred. That’s a winning percentage of let’s see…….Zero….Oh wait ..I’ll move to a floating decimal point….0.004%……I guess that’s better than zero right?

So here’s the rub, and why I’m so indignant on this issue…. I was speaking with someone the other day who was telling me how the      “Government” was in the process of fixing the economic conditions, and will be ” Creating better business conditions”.  Then they went on to tell me how this was going to be, and how that was going to be, and how this projection will put that projection, and all will be profitable in the end. So me being me I asked only 1 question….I said I’ll assume all of your projections are correct if you just simply answer this One Question.

Your projections are based on unemployment not going any higher than 8.2%…and it has to be no higher at any time over the next 10 years to make your projections credible….We’re 3 months into the first year, and we’re currently at 8.5% and it has been rising every month for the last 6 months. All indicators, and all corporate reports are stating more layoffs are coming, and larger, and larger layoffs are announced weekly…( 16,000 more announced from one company just yesterday)…So already your numbers, and projections are suspect are they not?

There was silence for about a minute, then he started telling me how well  the windows were constructed, and what color the house would be, and………..I think you get the picture.

Pinochle anyone?

Mark


They’re on TV so they must be smart. Right?

Over the last several weeks the television, radio, and papers have all been a buzz. I’ve see talking heads, and columnists stating how they predicted the current rise, and now the giving details on why they were correct, and blah blah, blah.

Problem is with most of these so called experts, they seem to think that the only people who listen to them are as vague in memory, and details as they are.  Not so fast Charlie Brown…( My apologies to Charles Schultz ) some of us are listening, and watching, and keeping score on you. We’ re watching because we want to make sure we do the exact opposite of everything you’re saying, and also want to know how the misinformed, and lazy in their analysis gathering are going to view the world. And why would one do this you might ask?….To exploit it!…That’s correct, I didn’t stutter or miss type. I’ll say it again so I’m not misunderstood….To Exploit it!

In business and in life there will always be people or companies that will make bad decisions, wrong decisions, panic decisions, and on and on. It’s up to you to make sure your using the best information available to make the best decisions based on the size and scope of your needs. An example of this would be…If your building a dog house, and you have some basic carpentry skills, you might not need a blueprint. However…If your a master carpenter and your building an office building, you would NEVER even think of picking up your hammer without a seeing a detailed set of plans from what you believed a reputable architect.

So would someone please explain to me why people are putting so much faith and weight into this craziness I’m observing in the media?  I have listened to people who I believed to have a very good handle on their finances, and other things tell me they are doing this and that based on what they saw on TV, or read in the paper, and here’s the kicker, they have not looked up or even tried to find evidence to solidify their position.

I have been pointing this out time and time again.  If you had taken the advice, or followed their predictions over the last 2 years….You would be Broke, Out of Business or both.

Tough times demand pertinent information from credible sources, and yes….It’s going to be expensive. Probably much more expensive than your paying now. However, true actionable, and relevant advice usually does cost more than your cable bill, or the newspaper.

So here’s some free advice,    You’ll  get what you pay for, one way or another.

Mark

Let’s call it….”Problems Solved”

I’m writing to inform everyone that I solved the financial crisis. I also solved “Global Warming”, the “Energy Crisis”, and while I was at it “World Peace”.

Some of you I  imagine are very skeptical as you should be, but take my “word” for it…Yes I did.  I wrote it all right down here on my blog. I gave stellar details on how I did it. I wrote flawlessly with every correct syntax, and punctuation that would make an English Teacher proud. ( That in itself should make you suspect! )

My thoughts were bold…my use of debate skills were extraordinary. Well that’s what I would have liked to write…However the real reason for the post is this…In the process of trying to add some new features to the site…Some of my recent posts were Permanently Deleted and Erased! Since I can’t retrieve them, and don’t remember exactly what I wrote, I figured what better time to tell of accomplishments that I never did, and no way for anyone to prove I didn’t.

I figured why not try the same type of false claims most of the so called ” Speakers” claim they can do, or have done. Seems to work for them.Then I came back to my senses….Making false claims Never Works….Might fool others and yourself for awhile, but in the end your going to have to Prove it!

Mark