Earthquake Japan vs. Earthquake USA…Mix in 1 Storm and Blend

I must admit that in watching the events of the recent and relatively minor East Coast earthquake that it  left me feeling a little blue.  I will explain the point momentarily.  I suppose growing up in San Francisco has somewhat coarsened me to earthquakes to a degree and without question I find them almost routine.  I guess 50+ years on the fault line is to blame for this as I have felt the shaking countless times and witnessed the sometimes sad results which are always tragic.  So please  do not conclude I am downplaying in any way as to the potential severity of an earthquake .  Just a few passing thoughts.

If you can patiently listen to one somewhat amusing anecdote, you might no from where I come.   Many years ago a dear friend and I were on a visit to my child hood home on a hill overlooking San Francisco.  We had been out for drinks the prior evening and were sleeping like babies in the comfort of twin beds.  At 6 am the ground and the house shook violently.  The beds were now touching.  My non native S.F. friend was in panic mode.  He said what do we do.  I rolled over and told him, we go back to sleep my friend as this is a common occurrence.   Easy for me , hard for him. Fortunately one broken plate suffered its demise.

Now back to current times. And again I do not intend to make light of any disaster.

I just have the misfortune of putting it into context with a recently devastating quake which triggered a Tsunami in its wake in the northeastern sector of Japan.

It was the manner in which these events were handled which is my internal conflict.  At last count Japan is in Nuclear meltdown and at least 40,000 missing and dead.  Contaminated food abounds and by all accounts and reports not a one have I heard suggesting looting or violence.  I saw man helping man. Obviously honorable people.

Conversely on this side of the pond, we had a far more moderate if you will 5.8 richter scale event and all proceeded to go home for the day.  Outside of a plate or two, the reported damage was none. You make the call.

My concern here is in how events are now handled and my bigger concern is in how apparently soft our citizens are becoming.  It may be blow back from too many “New Deals” and “Great Societies” and remnants left by these such as coddling our every wish and dream and the perennial call by the very same utopian lovers seeking a perfect existence for all but with out any grasp on reality whatsoever and no worries for anyone  as the nanny state will cure all your ills.  We are not children are we?.

Perhaps I am being to hard on my people.  Maybe it is a simple case of Media Frenzy wherein they scare the you know what out of people.  I know it is done for ratings, but protect your pacemaker from these types.

Witness the Irene Hurricane.  24/7 coverage.  Are you kidding me? All I know is yes there is reported damage and injury, but what I saw pass as reportage was shameful at best. I would bet no one was well served by these self serving self loving narcissist’s, however I hope some good came to someone.

Again I may be wrong, but in the aftermath I am hearing a lot of sheepish talk as the hurricane  was just a really bad storm. The National Hurricane Center is saying ” hey you can’t believe everything we say, we just predict”  Merchants are angry, evacuees are angry.  We managed to create a panic.  Again do not get me wrong, preparation is extremely important and I heard the Governor of each threatened State almost one week ago preparing their respective constituents.  I think emergency agencies were all ready as where the people.

The losers where the media.  I could just see it in their eyes and voice, ” oh please make this a bad one, we need ratings”.  I find the whole event rather sordid and mostly repugnant, but it is just one mans opinion.

False promises of a perfect world engineered by big brother and sold by the mass media.  I am not buying folks and neither should you.  Their track record is abysmal and leaves much to be desired. How nice if  it worked, unfortunately history shows time and again to beware.

Do you think the media have played a role in our weakening perceived or real? Turn them off! And never forget our valiant first responders on 9/11.  I know they have a sacred home in my heart. We would all be wise to follow in their footsteps and I assure you we would all be most proud. They seek  no glory, they seek no ratings, they do the job!

Why America Will Once Again Rise To Prominence….

Some call me the eternal optimist and some think I am just plain banana’s.  Well truth be told with all that I  am witnessing on a daily basis,  those who call me by the  latter title would seem to be on the right track.  I beg to differ and here is why.

Yes I know, sleazy politicians and crooked bankers abound.  Of course we have no leadership either and the ship seems to be floating with nary a Captain in sight let alone  on deck.  Trillion plus dollars in annual deficits are enough to boggle anyone’s mind. Reserves being pumped out into the system by the trillions, yet these same dollars go no where and therefore have zero velocity, meaning they are virtually a moot point. Of course we can be certain this liquidity will help re- liquify our stupid, er excuse me, greedy, excuse me again,  easy money Bankers of old who are now tighter than my pants on Thanksgiving night. The obvious conclusion to the stimulus  and cash infusion can only be it was designed to stimulate the biggest contributors to Washington D.C. Don’t you agree?

I mean let us be honest about who is kidding who.  The secret bailout list was just released and a who’s who of megacorps were on the list and included a fair amount of foreign owned firms. Hmmm. No one I know is on the list and I assume you can all make the same claim.

Of course this is only the beginning of this ice cube my friends. And to be honest I must question myself daily as to why am I so optimistic.   I have not even mentioned my personal industry has already self destructed, yet I see the silver lining.

Before I explain, I heard an explanation for $1 Trillion , I found a fitting metaphor.  In $1 increments, you can fill up almost 600 Olympic size pools.  A spectacular visual comes to mind.  Let us peek through this curtain and see what is on my mind.

I will begin by defanging the so called unfunded liability issue which will scare anyone.  The figure bandied about is approx $100 trillion.  What is not widely reported is the point that this amount is to be paid over the next 50 odd years.  I submit further malfeasance in reportage from our media friends by not stating that over this period of time, the US will have a combined GDP of some $800 trillion  assuming a zero growth rate for the next 50 years.   I think it is clear economically that we can cover these liabilities although I do concur that we should dramatically curtail this spending none the less just as a matter of prudence.  Just because it will be available, no need to let congress spend it imprudently I say.

Next to demographics.  The US and the Middle East are the only geographic sectors on the planet with population growth capable of sustaining and growing economies.  In simple terms many nations are aging and most will not be able to fulfill their obligations.  Demographics tend to drive growth so it is a good position to be in at this point in time.

I also like the comparative freedom and business spirit inherent in most Americans.  It is truly remarkable and has brought us to this point.  Of course bad policies and management have us currently hamstrung, but we have been here before.  We will be out of this cycle as well. We no doubt will see the greener pasture again.

I do  not deem to make it sound oh so simple.  It will require hard work and inspirational leadership, but we have it within us all.  We must insure our leaders are capable of not stopping our moving ship, but allowing us to steam at full speed ahead and most definitely unhindered.

Make your voice heard and tell them all what you want.  What we all want.  Remember, they work for us.

I personally never want to hear a former KGB man call us ”  a parasite on the world ”  again, and have it go unanswered. This should not stand.  Ever.

Taxing the Wealthy? Smart or Disingenuous? You Make the Call…

Well troops I am once again hearing the  refrain of  ” balanced approached”,  in this ongoing struggle for budget balancing.  This phrase is not a code.  It simply means let us go after the wealthy and the rich. I say disingenuous as my prior notes to you  have indicated the sums our government  needs dwarf anything the ” rich ” can provide.  Yes you can confiscate the whole of their wealth and fund Uncle Sam for about 5 months.  Then what?   Believe me I am far from that category currently  being worked over   and can only dream of achieving their  status someday.  But I must tell you I find the class warfare verbiage most repugnant if not downright un-american.  To me equal in the eyes is equal in the eyes. Period.  To say it is divisive is to say the truth.  Brother against brother.  Eerily reminiscent of the Civil war, but not as tragic.  I must admit I just don’t get it. What is it with successful people that makes us want to punish them.  Personally I hold these people in esteem.  Yes I know many are obnoxious and full of hubris, and of course the majority are good and decent people but so long as they broke no law and delivered a good or service in which their fellow citizens freely chose to exchange currency for product, then I say hurrah. After all is that not what the American dream is about?  I will discount for the moment the widely available statistic that the top 5% of earners pay approx 60% of all revenue and the bottom 50% pay zero and I shake my head in disbelief.  For full disclosure I believe we are all equal in the eyes of the law and should all pay the same rate.  Not only is this reasonable but the most logical approach in my opinion. As I mentioned I have nothing against my rich neighbor or uncle as I witness daily the efforts they expend.  Herewith a simple example to ponder…  my rich uncle has an extra $10 million.  Now being a bright and tech savvy fellow, he invests his money in the technology of tomorrow and wisely so. These firms he chose to seed  are working on new medicines and new chips and batteries for us all .They also need plenty of staff to usher their products through from development  to market launch.   He also anticipates a fine return naturally. This is only a fair reward for his risk.  Suppose I agree on the class warfare issue and demand he turn his funds over to the government.  Do you honestly believe they will spend or invest it more efficiently?   Maybe they will purchase some $1500 hammers?  Or more of the $2000 toilets they are famous for?  Or maybe they will hire an investigator to find the 5000 odd aircraft they own, and spend $10 billion a year on, yet no government agency can find . I think any reasonable mind would conclude,  let my uncle have his way as his returns will better all of humanity not to mention create jobs.  After all it is new technology that has always led to better days historically speaking. Perhaps  we can throw more billions down the ethanol rat hole or spend them on green jobs whatever that might be.  Just don’t ask Spain as they found out the hard way by ” investing ” $50 billion in green jobs and over regulating their economy to that end on some dream of green.  What they received was countless thousands of business’s have left the country ballooning their unemployment rates into the 20’s and of course a corresponding decrease in revenue.  To be blunt, they are broke. Needless to say they have abolished this flight of fantasy for now.   Maybe our leaders should wise up and show us some wisdom.  Admit to the error of their ways and let my uncle as well as the rest of us do what we do best when we are unshackled and let the wheels turn. I know this is a lot to ask as they are wedded to the special interests they are beholden to, but one can,  to steal a phrase, Hope for Change.  As always, I see the answer in true and inspired leadership.  Unfortunately I see no such person on the horizon. I know the Scottish cloned Dolly the sheep.  Did they by chance have the foresight to clone Ronald Reagan? Forgive me but one can dream.   Enough demagoguery and let us see some real leadership as promised. Washington D.C. are there any leaders left? Prove it as we are not buying. My friends  let your voices be heard as this is the best we can do and a better day is coming I am sure of this as sure as I am in the spirit of this great nation.

Malaise? Jimmy Carter the 2nd? Or a More Severe Problem…..AA+ Ouch!!

I submit to you my friends that there is far more at play here than what your CNBC reporter is peddling to you.  Herewith is my attempt to bring a little clarity to a most serious situation, yet a most curable problem. Let us begin with what I believe is at the core of the current market meltdown.   Please recall our ” Leaders ” in action during the  recent debt ceiling negotiations.  Aside from the fact that they will now put an additional  $2+ trillion on the AMEX card in the next two years which in itself is bad enough, but from my perspective as a market observer for many years I  tend to view this in a slightly different light.  The utter shamelessness and outright demagoguery let alone a classic missed opportunity to actually achieve something worthy and with merit is purely disgusting in my opinion.  This is not lost on investors both large and small, witness the daily selloff for two consecutive weeks.  An absolute and worldwide lack of confidence in leadership is of severe reason for concern.  Our leaders appear petty, clueless, vindictive and unwilling to put the nation first with actual solutions that work.  I have many to offer, yet have not heard a one from D.C..   This my friends is problematic as it is confidence that leads a market and spurs economic activity. This lack of confidence has also shaken investors to the core. After all it is the US consumer that makes up over 70% of our economy.  I know when I lack confidence and visibility, I do not invest, spend or enjoy.  This has a contracting effect on GDP and I venture a supposition that most of you feel the same.  Also lost in the cloud of the  debt talks were the quietly reported figures on GDP.  On the day the President quietly and without the usual rose garden fanfare signed the bill in his office, well  that same morning the GDP was reported at 1.3% for Q2 and Q1 was revised down to 0.4%.  Absolutely devastating and the selloff has continued ever since. Add in the weak job market performance and it is simple to see why investors are worried. To sum things up… weak economy, weak jobs,  toss in massive borrowing and most wasteful and unproductive spending and here we sit.  I almost find it ironic in what Russian Czar Mr. Vlad Putin recently said, ” The US is a parasite on the world economy with all the borrowing it does” . Ironic because of who said it, but I can’t argue with the man.  This my friends is a royal first for yours truly to admit agreement an ideological opposite. But as the old saw goes ” when the US sneezes, the rest of the world catches a cold”.  So Putin is only mildly correct on his assessment.  I submit to you that the world has had the flu for quite some time now.  Witness Europe in its current state of basket case.  Now that is a problem.  Witness Japan with a debt to GDP three times our level and with an aging population to boot and that is a problem.  How about the rising star of China?  I will elaborate in more detail in a later column but suffice to say they have Banking issues that makes us look almost solvent.  So as you see we are truly a global economy and repercussions abound regardless of where the problem begins.  I take comfort in living in the USA as irrespective of what ails us, we have a spirit which can bring us back where we need/want to be.  The title of the column mentions malaise to describe a similar period in the late 70’s.  It literally felt the same as today and the leaders were equally incompetent at the time.  As history proves a successor leader arrived and implemented new and workable policies and before long we received GDP figures in the 7% range.  So I say to you be strong and patient.  Invest prudently towards a brighter future and don’t allow the professionals to steal your shares cheaply in an engineered panic. If you buy at the right price in any asset class, then you should be able to weather the storm clouds.  In other words,  buy bargains as you would any home appliance thus avoiding the ” buy high sell low ” syndrome which fear can produce.  And always keep some cash on the table for the hurricane which allows you to buy your favorite firms at a discount.  And finally, watch the fundamentals and do your homework. At the end of the day, the final and most needed solution to all our ills is a healthy growth rate averaging in the 4% level and as the worlds largest economy the USA must sustain that level on an ongoing basis.   The rest of the world will thrive and recover as well. We are in a position in need of sound economic policies which can assure this pace.  We are not receiving them from our leaders as they are clueless or naive  in the area of economics  or wedded to failed ideologies and not wise or courageous  enough to change course.  Hence it is time for new leaders. A better day will ensue.