2014 The Bad News Goes On

Bad News

What a 2014 it’s been as the world continues it’s descent into madness.  


If Ebola, the War with Hamas in Gaza, the shoot down of Malaysian Airlines Flight MH17 killing 298 including 80 children and 15 crew, the intransigence of Iran on Nuclear Weapons, employment still near a 30-year low, the National Debt hitting over $18 trillion (and growing $2.43 billion a day!) and the suicide of comedian, Robin Williams wasn’t enough…


– Criminal Records: 1 in 3 adult Americans (i.e. 80 million people) now have a criminal record…hmm, if the average family has around 2.5 people then just about 1 person per household has a criminal record. Are you starting to look around you now?


– Economy: Uber, yes, it’s a online “ride-sharing” (i.e. taxi) service, but after it’s recent IPO, Uber is worth over $41 billion dollars (more than Delta, Charles Schwab, Salesforce.com, and Kraft Foods). Someone’s getting taken for a ride. Is this even surprising considering the S&P is priced over 27 times average 10-year earnings (while the historical average is only 16), the result of pumping the economy with short term easy money policies.  


– Cyber Attacks: After a blithering cyber attack by North Korea, Sony withdraws the release of the movie, The Interview, surrendering to cyber terror, and putting us all at greater risk in the future because cyber crime does pay!


– Islamic Terrorism: While ISIS advances in Syria and Iraq, 132 school children (mostly ages 6-18) plus 9 adults massacred by the Taliban this week in Peshawar, many shot in the head and others lit on fire with gasoline and burnt to death so they are unrecognizable. This only 9 months after the April kidnapping by Boko Haram of more than 280 schoolgirls in Nigeria, which was repeated this week with the kidnapping of another 185 woman and children.


– Russian Militarism: The Great Bear is back with a vengeance as Putin continues driving Russian nationalism and buildup of advanced weapons, including WMD (e.g. nukes), aircraft, submarines, and ICBMs to counter alleged “Western Aggression.” And despite, the rubbles’ massive decline, Putin promises an economic comeback within 2 years–he’ll wait out the West and hold Crimea hostage and spoil it for everything it’s worth


So where are we going next–more hell on Earth or at some point a turnaround towards heaven again?   


(Source Photo: Andy Blumenthal)

The Games Organizations Play

split
So HP, under Meg Whitman, is breaking up into a PC/printing
company and an enterprise products and services firm.

Um…well of course it’s the right thing to do to focus each and release the
great value of these two companies.
Only, just a few years ago, under Carly Fiorina, HP a
printer and enterprise products company combined with Compaq, a PC company, in
order to gain the size and clout to succeed in the ever-competitive technology
marketplace.
The B.S. of corporate America—everything and the opposite–to
try and do something, almost anything, to try and raise the share prices of those
strategically stalled companies.
From Meg Whitman, CEO of HP:
– October 2011–“Together we are stronger!”
– Then today, 3 years later–“Being nimble is the only path
to winning.”
Yeah, whatever.
Merge, split—wash, rinse, repeat…fool the fools.
HP is still HP—especially compared to Apple, Amazon, Google,
and even now Lenovo. 😉
 
(Source Photo: here with attribution to Angie Harms)

Care To Be Curious?

Care To Be Curious?

Here’s three topics for the curious of mind today:

Are we technologically safer? As we attempt to beef up IT security, we continue to be technologically insecure. Just this last week, BBC reported how a fridge was part of 100,000 devices used to send out 750,000 pieces of spam. Yes, a fridge, and there was also a television involved–sounds like the beginning of a bad joke, right? But this is our reality these days…Proofpoint, a cloud computing and security company said “Many of these devices are poorly protected at best, and consumers have virtually no way to detect or fix infections when they do occur.”

Is our economy healing or hurting? As unemployment fell from 7% to 6.7% last week–an impressive reduction–the overall labor force participation rate didn’t rise, but rather sank to 62.8%–its lowest level in 35 years! And while, the Wall Street Journal explains that U.S. employment is simply not keeping up with population growth, the S&P 500 hit a new record high just last Wednesday. Meanwhile, the Fed continues to pour money into the economy, although at a slowing rate (expected to go down next week to only $65B a month), speculation is building whether we have another real bubble brewing, and this one of our own making, perhaps.

Is this the lead up to peace or war with Iran? As we continue to seek a long-term deal with Iran on their dangerous nuclear weapons foray, we read from Bret Stephens that Iranian President Rouhani said during his presidential campaign, “Saying ‘Death to America” is easy…We need to express ‘Death to America’ with action.” If we are getting a good deal that can truly lead to WMD disarmament of Iran, why did Rouhani tweet, “In #Geneva agreement world powers surrendered to Iranian nation’s will.” Curious, whether this is for political consumption in Iran or whether he sees the deal as just a stalling tactic leading to a breakout capability in nuclear weapons as well as a way to get some goodies in terms of sanctions relief for his country in the meantime.

What does little kitty cat say about these? 😉

(Source Photo: Andy Blumenthal)

Government Shutdown – Starbucks

Government Shutdown - Starbucks

So today is Day #2 of the Federal Government Shutdown.

This is a picture from the local Starbucks that is typically billowing at lunch time–as you can see it’s basically a morgue.

Unfortunately, hard-working Federal employees, contractors, and local business are feeling the impact!

Even from those that are still working, there is word of “survivor’s guilt”–like with a plane crash or other calamity, when those who survive the catastrophe question why they were so fortunate when the others weren’t so lucky and perished.

With both the budget shutdown and the impending debt ceiling showdown–we are facing the perfect storm, with real negotiation and compromise yet to emerge.

With this all, our significant national problems aren’t going away–to the contrary, Iran and North Korea are still global nuclear threats, Syria still has chemical weapons, the economy remains on shaky ground (in the paper today, the once high-flying pharmaceutical company Merck is planning to lay off 20%!), the national debt continues to spiral out of control (albeit at a “slower pace”), cybersecurity remains a major national security risk (although Cyber Command continues to stand up its new headquarters and firepower), and so much more.

Bubble stocks rose again yesterday after an almost 20% one-year return. Not only that, but the safety of gold took a beating again after an almost 40% one-year decline (full disclosure, I am a recent investor in the latter). One has to wonder how long it will take for sanity to prevail once again.

(Source Photo: Andy Blumenthal)

Is This The Way It’s Supposed To Work?

Is This The Way It's Supposed To Work?

As talk and warnings escalate about a potential government shutdown next week (not that long since the last time this happened a couple of years ago), one cannot help wonder is this the way government is supposed to work?

The partisanship and fighting has gotten so that either nothing significant gets done or get’s done by just one party leaving the other fuming.

The fight over healthcare reform pushed through for better or for worse has come back to haunt the Hill. Aside from a lot of talk about exchanges, I haven’t found many people that even really understand the changes or whether it actually benefits them or not.

The continuing Fed stimulus that many anticipated was going to start tapering off, but hasn’t, has left many concerned whether there is another huge economic bubble building and what will happen to stocks, housing, and jobs when the Fed finally does pull back.

The Sequestration which was never supposed to actually take effect, but was to replaced with more surgical budget cuts, continues to leave the nation vulnerable in terms of potential budget shortfalls for areas of national priority (e.g. defense and so on) and still leaves a mounting national debt (albeit growing at a slower pace).

The seesaw between the threat of military intervention and the potential for diplomatic solutions with Syria and Iran on no less than weapons of mass destruction have us asking whether these countries are serious, stalling, and really willing to give them all up or just buy time in their efforts to get over the finish line of proliferation, hiding, and burying the stockpiles.

Somehow we seem to be fighting each other more than we are tackling the issues.

Are we really talking with each other, listening with intent to understand, and seeing what is at stake?

We are playing brinkmanship on critical issues of national security that may leave us holding the toilet paper and plunger as we swirl around the bowl ready for the royal flush. 😉

(Source Photo: Andy Blumenthal)

Balancing The National Books

Balancing The National Books

Bret Stephens had an interesting opinion piece in the Wall Street Journal (28 May 2013) called “The Retreat Doctrine.”

He argues that America’s retreat militarily from Iraq and Afghanistan may not mean revitalization for us by refocusing on domestic issues, but rather decline by prematurely ending a war with enemies that may not have ended their hatred and hostilities to us.

Interestingly enough, it is not just on the battlefield that we are retrenching, but on many other fronts as well, for example: economically, we are cutting federal budgets; monetarily, we are anticipating cutting the $85 billion per month bond buying by the Federal Reserve; social entitlements like Social Security and Medicare are on the butcher block, defense cuts are imperiling military programs, and employment cuts have resulted in a labor force participation the lowest in 30 years.

While many cuts are beneficial in terms of beginning to get our arms around the over $16 trillion deficit we’ve accumulated and in forestalling another rating downgrade by the big three credit rating firms, it is as Stephens implies, perhaps not a sign of health and renewal, but of national illness and a retrenchment of a global power.

I remember in Yeshiva learning (Exodus 34:7) about the sins of the fathers being visited on the children and grandchildren–3 and 4 generations–and I always wondered how could a just G-d hold future generations responsible, accountable for what the prior generations did?

But perhaps, the answer is evident here, where we cannot blame G-d for our own actions, where we live big, beyond our means, and cause future generations to pay the piper.

When the stock market is rallying–up almost 17% year to date and about 27% over the last year, while our GDP growth is only about 2.4% annually, something is very off-Kilter.

You can argue that retreat is renewal or you can see retrenchment as leading to decline, but either way we will be paying the national bill coming due and all our children will be on the hook for cleaning up after the party is over. 😉

Desperate For A Meal

Hungry_child

I was really moved by an article in The Washington Post (5 November 2011) called “A Hungry Challenge With Food Stamps.”

Last week was the launch of the 2nd nationwide Food Stamp Challenge–“part of an interfaith campaign to raise awareness about America’s poor.”
For one week, Rabbis, Pastors, Imams, and members of Congress (600 people) took part in the program to live on $31.50 a week (or $4.50 per day) for food–the average that an adult gets on the food stamp program.
Intuitively, knowing what food costs these days, it makes no sense!
Even a basic meal from a fast food restaurant costs more than what the Supplemental Nutrition Assistance Program (SNAP) provides for a whole day.
The money for food is so meager that participants in the challenge report being overwhelmed by thoughts of food–“When am I going to eat?  What am I going to eat?”
According to the USDA, food stamp usage has risen to the highest level ever, with almost 46,000,000 Americans on the program (that’s more than 1 of every 7 people in this country!)
This is up almost 65% from 28,000,000 people in 2008–just 3 years ago.
With the food stamp program, while better than getting no help at all, people are still surviving on limited types of food and meager portions of things such as lentils, cornflakes, eggs, and so on.
It is frightening and humbling to think that any one of us–or our families–could be in that situation–wondering where our next meal is coming from.
I remember as a kid, before the SNAP program issued the food assistance on debit-like cards, seeing people in the supermarket actually tearing off and handing stamps to the cashier–they never seemed to have enough and invariably had to put back groceries.  They were noticeably embarrassed, self-conscious, and fearful–often holding children in their arms or by the hand as they tried to work the math of feeding them all with what was obviously not enough.
While I have not participated in such a program as the Food Stamp Challenge, I am awed by those who take the time and effort to see what such hunger feels like and to learn the lessons of empathy, social justice, and charity.
As we enter the last few weeks of deliberation by the Deficit Panel Super Committee, I am afraid at what $4,000,000,000,000 (trillion) in cuts looks like to our nation and how the very real pain coming will be distributed.
With a nation already feeling squeezed by lost jobs, sunken housing values, near zero interest rates on fixed income investments, an rickety stock market, and global economic challenges from abroad, I wonder how our nation can take the deep cuts that we must without going into economic cardiac arrest.
Yet, Moodys and Fitch are waiting in the wings to downgrade our debt, if we do not embrace the tough love or if we fudge the numbers rather the do what our long-term economic health demands.
I pray that G-d helps us through this challenging period for our country and that the people who are hungry today and those that may suffer tomorrow are spared by the almighty in his everlasting mercy.
(Photo Source: here)