There are all kinds of risks associated with any kind of economic activity, but the one that seems to have been overlooked in the training I received at the populist brokerage firm Schwab and Company or perhaps just seems to have neglected an appropriate emphasis on it is "legislative risk"; the fickle finger of government politicians and their inability to stand by the policies that created the economic climate in which we are operating.
By the way, when students ask me, "How many sentences have to be in a paragraph?" I often tell them, "I can do it in one, but I'm a professional writer, and you shouldn't try that until you've managed to get better than I am." (Actually the "required" number of sentences often depends on the grade, the school district and the individual teacher's requirements as to what constitutes adequate number of sentences to satisfy their definition of "paragraph", which the Online Etymology Dictionary defines as a section of text with no other specifics as to structure, size or anything else, because it was originally just a margin note "next to the writing" (para=near, graph=writing) to show that there as a "change of sense.")
It certainly seems this is a propitious time to be writing about "legislative risk", though, doesn't it? I mean, the Iowa caucuses and New Hampshire state primaries are mere days away, with what many Americans like to think of as the fate of the free world hanging in the balance. I hate to think of it that way, but certainly in some senses they are correct about that too. Certainly with respect to the evolution of American foreign policy toward the Middle East in general and now, toward Pakistan more importantly than ever, balance of the world seems like not too strong a term for it. I'll have more to say about that in a minute.
For the present, however, the effect of the recent legislation in the US with respect to energy policy is clearly a harbinger of things to come. Not only were the “improvements” to the CAFÉ standards pitiful, but Syntroleum and Tyson’s variations on biodiesel (synthetic diesel, non-ester diesel or whatever you want to call them) were fairly specifically excluded from the “goodies”.
As I see it, and admittedly I have three different optometric prescriptions to cover different focal lengths with respect to actual vision, never mind the fact that I've misplaced my "crystal ball", so my insight and foresight might not be any better than yours, I think we are in for a significant change. I think it is clear that we will have a predominantly liberal Democratic congress after the next general election, and that it doesn't even look like it matters at this point which Democratic Party candidate is put up against any of the Republicans (save the slimmest of chances that Ron Paul's libertarianism might buoy him to the top) we will have a Democratic Party President. None of the Republicans are sufficiently anti-war, and specifically anti-Iraq-war, enough to find the majority of Americans backing them come voting time. Unforeseen events may happen, as the recent assassination has shown, but the weak legislation signed by President Bush is not going to get us anywhere near where we need to be in the next 8 or 9 years.
The fact that we have not had politicians with sufficient qualities of statesmanship to make some of the hard decisions, take strong steps, even if they are unpopular, to solve the nation's and the world's problems means that the next crop of legislators whom we elect to serve in Washington are going to have to make some of those decisions, quickly, decisively and with the determination to implement those policy changes with effective measures. Those measures must also prevent and avoid stalling and delaying tactics on the part of those in entrenched positions who might have to revise their thinking and their way of doing business in order to survive. Rio Tinto (second largest US Coal producer through its Rio Tinto Energy America division with almost 2 billion short tons in reserves after the recent purchase of an additional $150 million of US Government land in Wyoming, and 3rd largest mining company in the world) and Peabody Energy Corp. (US largest coal producer) may have to clean up their act at both ends. They will have to improve both in mining practices (although Rio Tinto's safety record is good compared to many), and at the "market" end (selling to electric companies, producing electricity from coal). Companies scarring the land on that scale will have to put it right before they move on to the next hundred billions in profits. We may need better legislation to put an end to slippery practices like selling off "assets" near the end of their life cycle, only to watch the new "owners" go bankrupt and be "unable" to do the proper remedial land reclamation work required under their licenses. But they are also going to have to be enthusiastic partners in carbon dioxide sequestration and reuse or resorbtion by algae or some other source of cellulosic materials that can be blended into the fuel stream of the electric generating facilities which are their main customers and the main source of industrial carbon dioxide in this country (as they are in much of the world).
Perhaps Google's dipping a toe into the energy research area is no threat to these giants at the moment, but it is unlikely that will remain the case for long, for the influence of the best and the brightest on politics is undeniable. When the power shifts from one party to another, the new broom may not sweep clean, as the old saying goes, but it is likely to knock some of the cobwebs out of the thinking that goes on at the uppermost levels. Inside the government, at some level, you get some of those outstanding people like George Stephanopolous, or Robert Reich, men of real genius who are willing to take time to serve their country. That is not to diminish the other side of the political street either, Dr. Milton Freedman, John Kenneth Galbraith and Alan Greenspan (all were trusted advisors to multiple presidents) were/are some of the cleverest people ever to provide advice to the White House. Ideas change people, and the liberal side of the political spectrum has been under-represented for over a decade in Washington.
And that was the GOOD news!
Are you ready for the bad news? I instantly became fond of the orchestra joke that the oboe is (as double reed instrument) "an ill wind that nobody blows good." The real expression of course is, "It is an ill wind that blows no one some good." So, indeed although this is bad news for much of Europe and for European farmers in particular, Germany is going to begin a new tax on biodiesel sold in that country starting tomorrow, January 1st, 2008. Although the tax is minimal, a few cents per gallon, the doom-and-gloomers are saying it is the end of the European biodiesel industry because the tax will gradually but relatively rapidly increase over the next few years to remove any competitive advantage it might otherwise have had with the subsidies it now enjoys. There is the effect of "legislative risk". When the government policies change, the economics change and those who have invested heavily can be left holding assets that are suddenly worth far less than they were in the previous legislative climate. On the other hand, as I mentioned recently, Argentina is a net exporter of biodiesel, and even though Brazil is ramping up its biodiesel production, Argentina may well be a major beneficiary of the fact that German farmers are already planting less rape seed, in anticipation of declining prices.
On the other hand, and in the opposite direction, while it is hardly a good thing for biodiesel producers in America, soy bean prices reached US$12.48 beating a 1973 record ( and in particular soy bean oil) has hit a 34 year high according to the National Biodiesel Board. But again, by our old "ill wind" adage, that makes it a good time for farmers, and even potentially tax payers since fewer farm subsidy increases would be likely in the short term, one might hope. It surely does seem that the see-saw tips both ways, even if sometimes you have to wait your turn to be on the high side.
There is, somewhat suddenly, a flurry of activity in a company known as Biogold Fuels. Biogold is run by Steve Racoosin, who was introduced to me earlier this year (well, it is almost last year now) by a mutual acquaintance. Since then Mr. Racoosin, who has been actively "talking trash" as he likes to joke, for quite a number of years, has more recently acquired a CFO by the name of Chris Barsness, and relatively recently announced an agreement to partner with Universal Green Corp. As the name of the company readily implies they plan to be in the biofuels business, through a process they call "catalytic thermal conversion" taking trash and turning it into a synthetic fuel (close to biodiesel, though not exactly that). I can hardly state it more concisely, so here, from their recent press release are the basics of the alliance.
"The agreement allows Biogold Fuels to bring the energy and
waste stream contracts to joint projects, as well as its autoclave
technologies, while Green Universal Energy will bring the energy conversion technologies and plant design know how, as well as assist in obtaining the funding for each project the companies design and build."
I liked Steve, and really enjoyed chatting with him on the phone. I wish him well, and hope that working with Alan Richmond and Moshe Kreinberg from Universal Green Energy on Biogold Fuels' advisory board will be a highly productive and profitable enterprise for all concerned.
I would like to share with you a paragraph from my correspondent in Pakistan, Mr. Imran Khan. Mr. Khan works in the power industry in Pakistan, and writes for various publications around the world from Morocco to the American Chronicle. He has recently moved his family from a smaller town into the city following the death of his father. Here is part of the note he wrote to me, today, December 31, 2007.
"In 2007, I lost my father, a huge loss which I can never forget in my life. His kindness, his care, his love are with me and though I am under huge family burdens, I hope with the help of God I will be able to continue marching towards success. For my country, it was one of the worst year in the history of Pakistan. Continues suicide bombing and other barbaric acts thought 2007, resulted in the deaths of thousands of innocent people and in the end a great tragedy hit the country when we lost Mohtarma Benazir Bhutto. I may not be her supporter but still I can not believe that has happened and I have no words to express my feelings of great sorrow. I hope that 2008 will bring much needed stability in Pakistan, which is a desire of 160 million people. "
My reply to Mr. Khan is included below:
Imran Khan,
You do me an honor to be remembered in your thoughts at a time of such great sorrow, not only for you and your country, but for the world.
I may have (and I admit, at least partially out of my own ignorance) been more of a fan of Ms. Bhutto than you were, but her loss is felt by all the world, for we had placed in her a sacred trust to help guide her country and much of the world to a state of greater peace and a resolution to at least some of the violent conflict that afflict us all.
I too have suffered a great loss in my family this year. My sister died last month. Her daughters have arranged a memorial service for January 3rd, but unfortunately I will not be attending. I did attempt to bring both some insight and some mild humour to the proceedings by writing a recollection of our life together. I expect that my “gift” of writing something for the occasion will better serve the intent of recalling her than would my tears if I were present at the ceremony.
I spoke of Ms. Bhutto’s death a moment ago as a matter of sorrow for the world. I assure you, that from my perspective the tragedy of her assassination echoes my reaction to the assassination of President Kennedy. You will recall that I was born in Canada, and that at the time of President John F. Kennedy’s assassination I was just 13 years old and still living in that country. Yet, I cried for days at the great sadness, not only of his loss, but of the inhumanity of such an act. That is the only event in my lifetime that I can equate to the feelings of sadness I want to express at this time. There are tears in my eyes, now, as I write about both our personal tragedies, and those of the wider scale of the world, and while my tears mean little in terms of condolences to you, your country and the world, I hope most sincerely that my words may help you feel the kinship that is a bond between all the people of this planet.
(a personal note was omitted here)
Sincerely, etc.
As you know, I like to end on a positive note. This is not it.
Following the events of this past week, and I haven't even begun to touch on the violence following the elections in Africa, and I suppose, to some extent the uncertainties of the outcome of the political situation with both sides of the presidential races so much in the air, I think my mood was one of vulnerability as I attended a screening last night of "The Kite Runner". The tale of Pashtuns and mullahs, Afghanistan and Pakistan, violence and intimidation, fear and courage tugged at my emotions deeply. The story of two boys growing up in Kabul before the Soviet invasion was almost entirely in subtitled dialogue. I am not fond of "reading my movies" but I guess I do still prefer it to badly sync'd dubbing. The movie was very well done. The amateur actors, in some cases, seemed a bit stilted, but overall were quite natural, and certainly the professionals left little to criticize. The photography was very well done, and the directing by Marc Forster precise and well tuned. The emotional effect was devastating. I was stuck early on by a terrible sense of loneliness and helplessness, and it never left. The evolution of the main character is both subtle and perhaps, a little too small a progression, given the magnitude of the challenges he faces (mostly rather badly). The acting of the young man, Ahmad Khan Mahmidzada, who plays Hassan was incredibly charming, a perfect "street urchin" type. I would say that I recommend the movie highly, but if you are feeling depressed when you enter this world, you may come out positively suicidal.
On to the brighter notes.
I mistakenly (apparently) believed, because of the involvement of Robert Lantos, founder and famous producer from Alliance (now Atlantic-Alliance) that the film Eastern Promises was a Canadian made movie that you can't tell is a Canadian made movie. That's about as high of praise as I can give to most movies from Canada. They don't quite have an artistically unique character, and yet they normally have a technical quality that is readily distinguishable, at least to those of us raised on a diet of occasional "Made-in-Canada" movies. It is unfortunate that the political forces that be in Canada insist on the funding mechanisms from government sources must have their logos appearing in all the advertising as well as in the end credits. Sometimes it just puts me off. Not in this case, however. Director David Cronenberg, master or horror and suspense that he is, just happens to be from Montreal. Naomi Watts and Viggo Mortensen do good work as the heroes of the movie, although it is tough to tell sometimes who the "good guys" are (which is a good thing, in this case). Armin Mueller-Stahl is suitably menacing as the villain, and even he manages to looks mildly innocent at times. The story is well woven, the surprise twists and turns, including the violence (though bloody) well crafted too. Viggo has already won a couple of "best actor" awards, Cronenberg is nominated, Mueller-Stahl won at least one already too, and 3 Golden Globe nominations (upcoming) certainly speak well of the quality in this one. The production has "many fathers" as the old saying goes, including BBC and various other countries involved in the financing (Canadian Director, Stars and producer tend to make it eligible for Canadian government backed financing too, I believe, though I haven't checked their ever-changing rules recently).
Lastly, on my list (if you were expecting a maudlin retrospective on all the famous people who died this year, I'm getting too old for that. I know too many of the names, and it would take me most of the rest of the year just to attempt to do justice to the contributions of all those who have left us in the preceding year) another film worth watching.
Rescue Dawn probably never should have been made. That is NOT, however, to say that you should not watch it. Christian Bale and Steve Zahn give riveting performances in a tension filled drama that had me so enthralled that I "forgot" to take a sip from my glass of juice for over an hour while mesmerized watching it. It is often brutal and violent, and almost constantly unpleasant, and yet, it seems to have some of that slow motion automobile crash quality that makes it hard to take your eyes off the screen. I saw this movie last night AFTER having watched The Kite Runner, so it is possible I just wanted to escape the very "real world" that The Kite Runner presented. Oddly enough, though, this was a "true story" from the early days of Vietnam, 1965 bombing the Ho Chi Mihn Trail in Laos that put the leading characters into a series of prison compounds controlled by various factions from Pathet Lao to North Vietnamese. The fact that it was actually told from the point of view of the pilot (Bale's character) made it a "fictionalized account" that left the guards as cardboard cutouts, only the dwarf they called "Jumbo" had any more than one dimension. The jungle settings didn't convey the sense of a harsh gritty reality achieved in the dusty Chinese locations that passed for Afghanistan in The Kite Runner. The overall tone was far more "Hollywood" and escapist fare, which was a relief after The Kite Runner. But as I say, it was completely absorbing, and therefore not entirely surprisingly that, thus far, the visitors to the films' pages on IMDB.com have rated both films at exactly the same, 7.8 out of 10. That rating is certainly not bad considering that Eastern Promises with its tons of award nominations only rated a 7.9 from the regulars on IMDB.com. And to be fair, The Kite Runner has been nominated for Golden Globe and is expected to be seen somewhere in the AMPAS "Oscar" nominations soon, too.
Please note:
This is probably the last of my regular WEEKLY columns for American Chronicle. From now on my contributions here will be occasional, not on any regular schedule. However, I plan to take this WEEKLY column to a "private" site. It usually takes me all day to write this column (sometimes more than one day), and if I am going to be able to keep it up, I am going to have to try to "monetize" it somehow. Check at http://winfotech.com or at http://thesecondmostimportantpage.blogspot.com/ or http://thesecondmostimportantpageontheinternet.wordpress.com/ for more information.
Love
Stafford "Doc" Williamson
Why are you still paying retail for printer ink or toner?
http://www.Sav-Mor-On-Ink.com
Monday, December 31, 2007
Sunday, December 30, 2007
Course on Blogging
Okay, this feels to me to be a little like the athletics scholarship moron signing up for "Basketweaving 101 - Introductory Course for Illiterate Jocks" but I am "studying" with one of the "masters" of internet marketing, so he asked me to post this following as payment of the tuition to a new course he just started. So here it is:
I'm evaluating a multi-media course on blogging from the folks at Simpleology. For a while, they're letting you snag it for free if you post about it on your blog.
It covers:
- The best blogging techniques.
- How to get traffic to your blog.
- How to turn your blog into money.
I'll let you know what I think once I've had a chance to check it out. Meanwhile, go grab yours while it's still free.
=========
Well, Mark, you asked for it. You got it.
love
Stafford "Doc" Williamson
Why are you still paying retail for printer ink or toner?
Tuesday, December 18, 2007
Will the REAL Alan Greenspan, PLEASE, SHUT UP!!
When you get REALLY BIG, people have to pay attention when you start to, "throw your weight around." This is literally the way that elephant seals dominate a harem of females and prevent lesser males from invading their territory or their harem. It is the way that very many of the largest species create dominance and leadership in their group. It is the figurative or statutory value we place on certain people and the positions that they occupy that turn them into bellowing buffalo or benevolent bull elephants.
Unfortunately, like the reaction to bellowing buffalo and trumpeting elephants, the rest of the herd has a tendency to stampede. This is too often the case on Wall Street. Panic sets in very, very quickly in the stock market. The bond market reacts to those panicky movements though by sheer size a "huge" influx of cash from a stock selloff is a relatively minor event, a mere "blip" on the radar of bond markets. The debt markets are just so huge they dwarf Wall Street.
There are, too, "whales" of comparatively behemoth sizes that also slow the turning of the equity market. The mutual funds take hedges against any major movement in their portfolios, and it not only takes a cautious hand to protect the value of their assets, it takes a bit of unwinding to untangle the interdependencies to avoid being exposed by selling off assets that form a part of a complicated hedging strategy. In all of these situations economic espionage is a huge advantage because advanced warning of impending news is a potential windfall, but more importantly, a chance to prepare to avoid undesirable consequences.
If all of that is just a dizzying earful of financialspeak, then perhaps I can simplify my point by pointing to a movie. It is a rather good movie, even a favorite of mine. The movie I am referring to is, Trading Places, starring Eddie Murphy and Dan Aykroyd, with delightful contributions from not only Jamie Lee Curtis, but also Don Ameche and Ralph Bellamy (it must be one of my favorite movies, because I didn't even have to look up the names of the stars as I often do, not because I don't remember who they are, just because I can't put the names I know perfectly well onto the faces I remember).
In any case, the movie tells the story of a pair of financial moguls who toy with the lives of the Murphy and Aykroyd characters, but their own financial scheme is to corner the market on orange juice and profit from (illegally obtained) advance information from the official "crop reports" prior to their public release. After being set against each other by the financial powerhouse Duke brothers (Bellamy and Ameche) Murphy and Aykroyd's characters set about to take revenge on them by manipulating the impression of the news prior to it actually being released. The panic in the trading pits quickly sets in, and then reverses, leaving the old fellows broke and their previous victims victorious.
Do you know what the problem with that is? The problem is that the story is all too real. Not the part about manipulating individual lives, although presumably the writers, producers and director of the film felt that big financial institutions and the heartless villains that control them have no care or concern for, "the little guy." The "real" part is that it closely resembles the real life instance of the Hunt brothers (from Texas) who, already being billionaires, decided more or less on a whim to try to corner the market in silver. The good news was that they were not successful and it cost them dearly, but the "movements" of a few certainly sent shockwaves throughout the commodities industry.
The same kind of thing happens when "the Oracle of Omaha" (as they call billionaire Warren Buffet) makes a major move in his portfolio, or some other significant financial force surprises the financial world with either an actual major sell-off, or purchase, or even just a filing of "intent" documents with the Security and Exchange Commission. If an "elephant" is going to lean in the direction of the tree you are sleeping in, you had better wake up and be prepared to shaken up a bit.
But sometimes, and this is one of them, when the elephant has given up its leadership role, it is time for the "herd" to stop twitching nervously with every flap of his ears. Or in this case, the flap of his gums. Alan Greenspan became such a heavyweight in financial markets that he even swayed the debt market's course when he spoke, because as chairman of the Federal Reserve Board, he controlled the money supply and financial policy (which indirectly, and in effect directly, controlled interest rates). Alan Greenspan, when he was Chairman, spoke usually cautiously, but when he was too overt, the shockwaves were a financial tsunami.
Greenspan's pronouncement that the fantastic growth of wealth that corresponded with expansion of the economy at a tremendous rate was due to overly enthusiastic "irrational exuberance" over the internet, tech stocks and "dot com" boom. That comment was essentially by itself the principal cause of the, "tech crash," the loss of value of so many technology stocks and the absolute destruction of others in 1999 through 2001.
Greenspan recently admitted that the low interest rates implemented by "The Fed" (as the Federal Reserve Board is commonly known) "might" be partly responsible for the rapid expansion of home equity that has led to the "mortgage crisis" that is the current financial headache in America. But now that he is retired, I do wish he would just shut up and enjoy his retirement. But NOOooooo, he has to publicize the book he has written.
Do you think it is because he "needs the money" from book sales? I am pretty sure he and his wife, news reporter Andrea Mitchell, could live fairly comfortably on her salary alone. Yet, Greenspan keeps talking and the market keeps reacting even though he is no longer Chairman.
Greenspan commented last weekend in an interview that we were in danger of "stagflation" in the American economy in the near future. What he actually said was that the danger of stagflation was looming and what we needed was for the housing surplus to be absorbed quickly so that this kind of slowdown in the home building industry did not trigger a recessionary period. The oracle had spoken, and the doomsayers were quick to quote him.
Newscasts on at least two major networks on Monday used Greenspan's predictions to drum up interest in their broadcasts that night. Even prior to the widespread reporting on Greenspan's doom and gloom prediction the markets reacted with a triple digit decline in the Dow Jones Industrial Average. But too much like the Duke brothers from Trading Places, I suspect, Greenspan already knew that housing starts were down significantly in November. In fact, "down significantly" is putting it too mildly (not that I want to be known as a doomsayer myself). MarketWatch, a Dow Jones web site, reports that housing permits reached a 14 year low in November of this year, and housing starts a 16 year low, down by 5.4%. I somehow doubt that Mr. Greenspan was unaware of this, and thus, his criterion for avoiding recession was already inevitable. His "prediction" is more or less guaranteed by a reduced supply in the housing market because fewer homes are being built. The three month and six month supply of newly completed homes will be significantly lower, and Mr. Greenspan looks like a genius, again.
And the result of this was ... Greenspan's name is again in front of the public, his books sell better, and meanwhile, the little guy, investing in the stock market gets clobbered with a triple digit point drop in the Dow.
It is not like Mr. Greenspan has the kind of influence he had when he was Chairman of the Fed. Nor do I think he is malevolent in his intent. But "the markets" (including the debt market) can't seem to stop listening to him like he had some magical window into the future. I know I can't stop people from listening and making irrational decisions, so I am going to appeal directly to Mr. Greenspan.
My investment portfolio in my IRAs got KILLED in the tech stock decline thanks to Mr. Greenspan. In 2000, my wife and I calculated we would have plenty of money to be able to retire (not that we actually planned on changing anything) by 2008. Then came the "tech crash". We know you are a genius, Alan, and we owe you a great deal for your steering the financial ship for so many years, but can you please avoid any “loose lips” that might sink other people’s financial “ships”, please.
In other words, Mr. Greenspan, would you please just keep your big mouth shut?
Unfortunately, like the reaction to bellowing buffalo and trumpeting elephants, the rest of the herd has a tendency to stampede. This is too often the case on Wall Street. Panic sets in very, very quickly in the stock market. The bond market reacts to those panicky movements though by sheer size a "huge" influx of cash from a stock selloff is a relatively minor event, a mere "blip" on the radar of bond markets. The debt markets are just so huge they dwarf Wall Street.
There are, too, "whales" of comparatively behemoth sizes that also slow the turning of the equity market. The mutual funds take hedges against any major movement in their portfolios, and it not only takes a cautious hand to protect the value of their assets, it takes a bit of unwinding to untangle the interdependencies to avoid being exposed by selling off assets that form a part of a complicated hedging strategy. In all of these situations economic espionage is a huge advantage because advanced warning of impending news is a potential windfall, but more importantly, a chance to prepare to avoid undesirable consequences.
If all of that is just a dizzying earful of financialspeak, then perhaps I can simplify my point by pointing to a movie. It is a rather good movie, even a favorite of mine. The movie I am referring to is, Trading Places, starring Eddie Murphy and Dan Aykroyd, with delightful contributions from not only Jamie Lee Curtis, but also Don Ameche and Ralph Bellamy (it must be one of my favorite movies, because I didn't even have to look up the names of the stars as I often do, not because I don't remember who they are, just because I can't put the names I know perfectly well onto the faces I remember).
In any case, the movie tells the story of a pair of financial moguls who toy with the lives of the Murphy and Aykroyd characters, but their own financial scheme is to corner the market on orange juice and profit from (illegally obtained) advance information from the official "crop reports" prior to their public release. After being set against each other by the financial powerhouse Duke brothers (Bellamy and Ameche) Murphy and Aykroyd's characters set about to take revenge on them by manipulating the impression of the news prior to it actually being released. The panic in the trading pits quickly sets in, and then reverses, leaving the old fellows broke and their previous victims victorious.
Do you know what the problem with that is? The problem is that the story is all too real. Not the part about manipulating individual lives, although presumably the writers, producers and director of the film felt that big financial institutions and the heartless villains that control them have no care or concern for, "the little guy." The "real" part is that it closely resembles the real life instance of the Hunt brothers (from Texas) who, already being billionaires, decided more or less on a whim to try to corner the market in silver. The good news was that they were not successful and it cost them dearly, but the "movements" of a few certainly sent shockwaves throughout the commodities industry.
The same kind of thing happens when "the Oracle of Omaha" (as they call billionaire Warren Buffet) makes a major move in his portfolio, or some other significant financial force surprises the financial world with either an actual major sell-off, or purchase, or even just a filing of "intent" documents with the Security and Exchange Commission. If an "elephant" is going to lean in the direction of the tree you are sleeping in, you had better wake up and be prepared to shaken up a bit.
But sometimes, and this is one of them, when the elephant has given up its leadership role, it is time for the "herd" to stop twitching nervously with every flap of his ears. Or in this case, the flap of his gums. Alan Greenspan became such a heavyweight in financial markets that he even swayed the debt market's course when he spoke, because as chairman of the Federal Reserve Board, he controlled the money supply and financial policy (which indirectly, and in effect directly, controlled interest rates). Alan Greenspan, when he was Chairman, spoke usually cautiously, but when he was too overt, the shockwaves were a financial tsunami.
Greenspan's pronouncement that the fantastic growth of wealth that corresponded with expansion of the economy at a tremendous rate was due to overly enthusiastic "irrational exuberance" over the internet, tech stocks and "dot com" boom. That comment was essentially by itself the principal cause of the, "tech crash," the loss of value of so many technology stocks and the absolute destruction of others in 1999 through 2001.
Greenspan recently admitted that the low interest rates implemented by "The Fed" (as the Federal Reserve Board is commonly known) "might" be partly responsible for the rapid expansion of home equity that has led to the "mortgage crisis" that is the current financial headache in America. But now that he is retired, I do wish he would just shut up and enjoy his retirement. But NOOooooo, he has to publicize the book he has written.
Do you think it is because he "needs the money" from book sales? I am pretty sure he and his wife, news reporter Andrea Mitchell, could live fairly comfortably on her salary alone. Yet, Greenspan keeps talking and the market keeps reacting even though he is no longer Chairman.
Greenspan commented last weekend in an interview that we were in danger of "stagflation" in the American economy in the near future. What he actually said was that the danger of stagflation was looming and what we needed was for the housing surplus to be absorbed quickly so that this kind of slowdown in the home building industry did not trigger a recessionary period. The oracle had spoken, and the doomsayers were quick to quote him.
Newscasts on at least two major networks on Monday used Greenspan's predictions to drum up interest in their broadcasts that night. Even prior to the widespread reporting on Greenspan's doom and gloom prediction the markets reacted with a triple digit decline in the Dow Jones Industrial Average. But too much like the Duke brothers from Trading Places, I suspect, Greenspan already knew that housing starts were down significantly in November. In fact, "down significantly" is putting it too mildly (not that I want to be known as a doomsayer myself). MarketWatch, a Dow Jones web site, reports that housing permits reached a 14 year low in November of this year, and housing starts a 16 year low, down by 5.4%. I somehow doubt that Mr. Greenspan was unaware of this, and thus, his criterion for avoiding recession was already inevitable. His "prediction" is more or less guaranteed by a reduced supply in the housing market because fewer homes are being built. The three month and six month supply of newly completed homes will be significantly lower, and Mr. Greenspan looks like a genius, again.
And the result of this was ... Greenspan's name is again in front of the public, his books sell better, and meanwhile, the little guy, investing in the stock market gets clobbered with a triple digit point drop in the Dow.
It is not like Mr. Greenspan has the kind of influence he had when he was Chairman of the Fed. Nor do I think he is malevolent in his intent. But "the markets" (including the debt market) can't seem to stop listening to him like he had some magical window into the future. I know I can't stop people from listening and making irrational decisions, so I am going to appeal directly to Mr. Greenspan.
My investment portfolio in my IRAs got KILLED in the tech stock decline thanks to Mr. Greenspan. In 2000, my wife and I calculated we would have plenty of money to be able to retire (not that we actually planned on changing anything) by 2008. Then came the "tech crash". We know you are a genius, Alan, and we owe you a great deal for your steering the financial ship for so many years, but can you please avoid any “loose lips” that might sink other people’s financial “ships”, please.
In other words, Mr. Greenspan, would you please just keep your big mouth shut?
Saturday, December 15, 2007
Why This Is the SECOND MOST IMPORTANT PAGE on the INTERNET
You might not agree with me, and generally that's okay with me. There are certain to be no shortage of people who disagree this is, or ever will be, the second most important page on the internet. And if you think that the title is the most egotistical title you have ever heard then you probably have never read my book, The Day I Changed the Shape of the Universe, have you? Indeed if you decide to pick up a copy and read that book, that alone could eventually make this page THE most important page on the internet because some day some bright young (well, probably young, since young people seem more open to new ideas) person will read that book, and it will change the future of mankind because of the understanding it gives them about the nature of matter, energy and gravity. But that is only incidental to the purpose of this page.
It is my intent to make changes in the world. Small and personal, bold and radical, evolutionary and revolutionary, changes that will make the world a better place and life less of a frightening battle between hunger, starvation and poverty, illness and death for at least a large number of people who see little else in their lives because that is the whole of the reality they live in. I plan to bring some of that about as a direct result of what appears on this page (and I plan to put this page on more than one of the "social networking sites" to make it more widely available too).
I am going to talk about things that you might not have thought about, some that have bothered you for years, and some that are on the tip of everybody's tongues (because they are in the "news" at the time I write about them).
But, in particular, I want to help people whose children are having difficulty learning. I have already written two books for students in the "middle school" grades (6th, 7th, and 8th) who are not reading up to their grade level. These books are depicted in the "header" graphic for this page (on the wordpress.com blog at least) and have sold rather poorly thus far. They use several techniques to "lure in" the poorer readers of middle school based on observations I personally made of that type of student in the classrooms. They tend to gravitate toward books that are "picture books" and in particular look like they are written for the lower (primary) grades. That is exactly what Puppyfish and Puppy Goes to Lambergarten do. They are written at a reading level of an advanced 4th grade reader, so can also be used as challenging reading for very advanced 2nd or 3rd graders too. But they are specifically designed to be used for middle schoolers by attracting them to the format of colorful illustrations of cartoon style animals on the cover, and continuing the illustrations in the pages of the book, yet introducing them to "chapter book" style content, not the one or two sentences they expected to find in primary grade reading materials. The stories are simple and easy to follow, but the text is extensive.
One of the best ways to employ these books is to turn these children who are struggling themselves into the "tutors" for children in primary grades, especially using these books (or books like them)(I can't write them all). If the middle school students are given these books to read out loud to primary grade children as part of a mentoring program for those younger children, the responsibility of being chosen for this "honor" will strengthen the middle school student's self-esteem. It will help motivate them to learn to read better, and indeed in some cases, they may find that the younger students actually end up mentoring the middle schoolers on how to work out pronunciation through phoneme recognition or just having a more extensive established vocabulary.
If you have a pre-teen who is struggling to keep up with school work because of their difficulty reading up to grade level, you might want to become a regular reader here. Not everything on this blog will be just on that one subject, but it will probably serve as the freely available “newsletter” for http://helpkidsread.winfotech.com as well as http://remedialreaders.winfotech.com and http://whykidscantread.winfotech.com (which for the present at least, all point to the same content). Those sites will also have suggestions for members on products to buy, reports to read, and techniques to help young readers to be better readers.
READING is FUNDAMENTAL to ALL SUCCESS. Reading MORE is IMPORTANT so developing ENTHUSIASM for READING is almost more important than developing the mere reading skills. The LOVE of READING will teach someone to read far faster and far better than any formal technique. And that is why this page is so important. We want to promote the LOVE of reading as well as the ABILITY to READ.
The “people of tomorrow” cannot be expected to make RESPONSIBLE, INFORMED and INTELLIGENT DECISIONS about themselves, their families and their future without being able to read and understand the choices and the arguments for both sides of any decision, as well as recognize the difference between an irrational emotional appeal and a logical convincing statement of an informative nature. Any hope for democracy surviving as more than a sham, a mere appearance of participation in government will be lost unless we can raise both awareness and intelligence in the citizens who will be voting in elections in just a few years from now.
Those “people of tomorrow” are the students of today. Imagine the horrifying prospect of the majority of citizens who have never had the benefit of reading books like BRAVE NEW WORLD, or 1984, or SOYLENT GREEN, being drawn into an emotional appeal to “save your children” by cutting off all social assistance programs to persons over the age of 80. “What do you want, healthy children or drooling, grey-haired vegetables in wheelchairs? Save the National School Lunch funding! Vote for the New Neocratic Party candidate in your district.”
Think about it.
READ.
Love,
Stafford “Doc” Williamson
It is my intent to make changes in the world. Small and personal, bold and radical, evolutionary and revolutionary, changes that will make the world a better place and life less of a frightening battle between hunger, starvation and poverty, illness and death for at least a large number of people who see little else in their lives because that is the whole of the reality they live in. I plan to bring some of that about as a direct result of what appears on this page (and I plan to put this page on more than one of the "social networking sites" to make it more widely available too).
I am going to talk about things that you might not have thought about, some that have bothered you for years, and some that are on the tip of everybody's tongues (because they are in the "news" at the time I write about them).
But, in particular, I want to help people whose children are having difficulty learning. I have already written two books for students in the "middle school" grades (6th, 7th, and 8th) who are not reading up to their grade level. These books are depicted in the "header" graphic for this page (on the wordpress.com blog at least) and have sold rather poorly thus far. They use several techniques to "lure in" the poorer readers of middle school based on observations I personally made of that type of student in the classrooms. They tend to gravitate toward books that are "picture books" and in particular look like they are written for the lower (primary) grades. That is exactly what Puppyfish and Puppy Goes to Lambergarten do. They are written at a reading level of an advanced 4th grade reader, so can also be used as challenging reading for very advanced 2nd or 3rd graders too. But they are specifically designed to be used for middle schoolers by attracting them to the format of colorful illustrations of cartoon style animals on the cover, and continuing the illustrations in the pages of the book, yet introducing them to "chapter book" style content, not the one or two sentences they expected to find in primary grade reading materials. The stories are simple and easy to follow, but the text is extensive.
One of the best ways to employ these books is to turn these children who are struggling themselves into the "tutors" for children in primary grades, especially using these books (or books like them)(I can't write them all). If the middle school students are given these books to read out loud to primary grade children as part of a mentoring program for those younger children, the responsibility of being chosen for this "honor" will strengthen the middle school student's self-esteem. It will help motivate them to learn to read better, and indeed in some cases, they may find that the younger students actually end up mentoring the middle schoolers on how to work out pronunciation through phoneme recognition or just having a more extensive established vocabulary.
If you have a pre-teen who is struggling to keep up with school work because of their difficulty reading up to grade level, you might want to become a regular reader here. Not everything on this blog will be just on that one subject, but it will probably serve as the freely available “newsletter” for http://helpkidsread.winfotech.com as well as http://remedialreaders.winfotech.com and http://whykidscantread.winfotech.com (which for the present at least, all point to the same content). Those sites will also have suggestions for members on products to buy, reports to read, and techniques to help young readers to be better readers.
READING is FUNDAMENTAL to ALL SUCCESS. Reading MORE is IMPORTANT so developing ENTHUSIASM for READING is almost more important than developing the mere reading skills. The LOVE of READING will teach someone to read far faster and far better than any formal technique. And that is why this page is so important. We want to promote the LOVE of reading as well as the ABILITY to READ.
The “people of tomorrow” cannot be expected to make RESPONSIBLE, INFORMED and INTELLIGENT DECISIONS about themselves, their families and their future without being able to read and understand the choices and the arguments for both sides of any decision, as well as recognize the difference between an irrational emotional appeal and a logical convincing statement of an informative nature. Any hope for democracy surviving as more than a sham, a mere appearance of participation in government will be lost unless we can raise both awareness and intelligence in the citizens who will be voting in elections in just a few years from now.
Those “people of tomorrow” are the students of today. Imagine the horrifying prospect of the majority of citizens who have never had the benefit of reading books like BRAVE NEW WORLD, or 1984, or SOYLENT GREEN, being drawn into an emotional appeal to “save your children” by cutting off all social assistance programs to persons over the age of 80. “What do you want, healthy children or drooling, grey-haired vegetables in wheelchairs? Save the National School Lunch funding! Vote for the New Neocratic Party candidate in your district.”
Think about it.
READ.
Love,
Stafford “Doc” Williamson
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