Monday, December 8, 2008
A tradition is to look at the ads that are inserted into most weekend editions of newspapers. Typically in the Feeble house the conversation goes like this. The Feeble wife chimes up: "Wow, Macy's is really offering a discount on the 100 piece dinner set". Feeble would look wistfully at the chipped coffee mug he is drinking from and agree - how much nicer it would be to have a coordinated set for day to day living rather than to have a mishmash of remnants from the survivors of prior dinner sets.
But then the feeble mind gets a kick. Wait, didn't we plan not to buy a single thing this month other than the essentials. So we plan on sometime in the future when we will dump all our old crockery and replace them with a shining coordinated set. It makes sense to wait after all given that our kids have slippery fingers.
Then it is Feeble's turn. There are a couple of electronic retailers whose weekly offerings Feeble studiously pursues. The six year old computer is so slow and well overdue for an upgrade. But given that Feeble and his wife have a company issued laptop, should one splurge on a newer model just so that junior can access Nick Jr. faster?
The digital camera went on the blink and Feeble's eyes lit up. This would be a justified purchase. Since the old camera was toast anyway, Feeble decided to open it up to see how it looked inside. After opening the camera, he pressed the on button and lo and behold the camera started functioning again. Dejectedly, Feeble put the camera back together again.
The point is that we have become such a shopping driven culture. I can't help but notice that some houses in our neighborhood just don't get guests. It could be that they are transplants from far away places or just that they don't know anybody to call over for a drink or a meal. These homeowners are not reclusive. They are people who smile and have a conversation if you meet them walking the dog. But there is a distance they keep that prevents one from becoming friendlier. We find it happening a little for us too. In the weekend after the kids activities are done, Feeble or his wife sometimes wander off just to browse in a store or mall. More often than not this pleasurable interlude results in a purchase or two and a mild high.
Now that we are trying to curtail these ad-hoc shopping trips, we are realizing that the shopping high can result in withdrawals - especially when one tries to curtail it cold turkey.
Tuesday, November 18, 2008
It is a great concise essay, the type this feeble mind is more apt to follow....but to summarize it even further, its main points are
- The growth of global crop yields has slowed dramatically since the 1990s.
- Under the pressure of the IMF and the World Bank the various national Agricultural Control Boards (ACB) were done away with in the interest of free markets
- The demise of the ACBs lead to the decrease in the stockpiling of food grains by various countries making them susceptible to food shortages since they then depended on exports and did not have any internal reserves.
- The free market did not necessarily lead to increased production and when it did, it was more for cash crops rather than staples.
- Very few 3 - 5 countries supply most of the food exports and any shortages in any of these countries can dramatically drive up prices (note the recent draught in Australia)
- Reliability is key to food supply rather than efficiency and in a business as complex as agriculture, maybe redundancy and over production is a good thing.
Some of the other concerns this feeble mind may add include the dramatically growing population which when coupled with lowered yields could precipitate a food crisis.
This Thanksgiving though, lets us all appreciate the bounty we have on our tables and be grateful for it.
And look for long term investments in the agricultural sector ;-)
Friday, October 24, 2008
I have a fascination with small successful countries. Iceland was not in my radar until now but I was always a fan of Israel and its people. But Iceland is inching up my popularity index. Not because it defrauded a bunch of Europeans - I have sympathy for the people who invested - but because as I learn about this country I seem to like it more. They seem to be a tough resourceful and resilient people who cheerfully survive months of near darkness.
So I searched the web for Icelandic newspapers and came across this article. I appreciate them even more.
Another country that evokes admiration is Sweden. My fascination stems partly because many of these countries have populations that are smaller than some of the world's major megapolises. But their innate decency, concern for their people's welfare, industriousness and entrepreneurship has contributed greatly to a prosperous society in their countries.
If only many of the other countries with a wealth or resources and talent could try and replicate their models.
Since this is a random post, on a different topic, the stock market is not doing too well these days. So the newspapers and news sites have taken to showing the faces of traders in the floor of the stock exchange. More often than not the faces paint a picture of hyper misery, dejection worthy of the most melodramatic of Mexican soap operas.
Though I am hurting as much from the crash of the market as the next person, I can't but smile every time I see one of these images. We get it. The news is bad. Thanks for the open jawed, eyes raised toward the ticker, hand on head image to really drive home the point. I really wanted to post some of my favorite images, but did not want to run into copyright issues.
At least I have something to laugh about in the current mess.
But I am still Bullish on America!
Tuesday, October 14, 2008
The feeble mind begs to understand where the government is going to come by with this money. From what it understands, the feeble mind knows that:
There is a budget deficit
There is a trade deficit
A budget deficit means that tax revenues are not enough to fund current government spending.
A trade deficit means that imports are way more than export. While a trade deficit might result in currency valuation issues, it is inherently a private figure - that is it is comprised of the import and export totals for private company activity. It is not public money.
So with a budget deficit, spending the trillion dollars means
borrowing some more - by selling more treasuries and other bonds
printing more money eventually paying back the money through that most steady stream of government revenues – taxes.
I suppose in the scheme of things, greater minds can wrap themselves around these huge numbers and the miracle of the American economy can resurge and pay itself out of debt. One hopes that the preceding statement is true.
To a certain extent, tracing the current crisis, one gets the feeling that many people managed to dig themselves out of the tech bubble by creating a real-estate bubble. And people thought that there might be another bubble around the corner to salvage a real-estate bust. Unfortunately no build up immediately followed real-estate to take over where it left off. But given the huge amounts of liquidity being pumped in, which is not to say that there is not another bubble in the making?
As the economy gets more financial services oriented, companies will try harder to make money without really offering a tangible product. The current crisis is just a manifestation of that. What boggles the mind however is the number of people asleep at the wheel.
Companies start issuing sub-standard debt instruments.
Companies get away with giving the highest ratings to these instruments.
Companies insure this debt, but they label this insurance as credit default swaps so that they
don't fall under the insurance industries regulatory purview. Ironically some of the largest insurance companies offer these swaps.
Companies actively trade in the sub-standard debt instruments and swap without really understanding the mathematical models that define them - sort of reminds me when I started trading stocks and literally chose them on a whim (not that I am doing much better now).
To fuel this destructive model, more money is made available to mortgage brokers who happily sell mortgages to Joe Schmoe public. Joe Schmoe public conveniently ignores any nagging worries on affordability. And Joe Schmoe's mortgage gets lumped into a sub-prime Collaterized Debt Obligation which gets gets a great "AAA" rating and gets "insured" with a credit default swap and gets sold to a mutual fund. Joe Schmoe buys the mutual fund since it has a spectacular return for some inexplicable reason which he does not bother to understand or reason out. So in a way Joe Schmoe finacially cannibalizes himself.
Everybody is happy until it all breaks apart. Joe Schmoe can’t pay his mortgage. The Credit Default Swap cannot pay the “insurance” because –since it was outside insurance regulations- it did not have the capital to “insure”. Banks go psycho and stop lending. And the economy which has become dependent on financial services comes to a standstill.
And the Government HAS to step in.
And we pay "no" new taxes through our nose while the creative types devise another plan for another ponzi scheme wrapped around an algorithm.
Monday, September 15, 2008
Mexico has a rich culture and a sophisticated economy in addition to the poor who try to illegally immigrate. China has huge backward swathes amongst the uber growth regions.
In these days of readily available news, why is it that people - even those aspiring for political office - can't be bothered to scan through the multitude of sources on the Internet to get familiar with people, news and culture around the world?
The important thing is to avoid a spotlight effect where a culture is only identified by its most popular or notorious trait. A holistic view - with both the pluses and minuses of a society, its problems, its opportunities, its social mores would make a leader more in command with dealing with that country. This feeble mind would love to have a leader who does his or her own reading rather than rely on the snippets offered to him by his advisers.
Tuesday, August 26, 2008
All in all, it was a great trip. It helped cap an uneventful summer, but it helped in giving us a break away from home and day care.
Boston is a fun place to visit. We stayed at the Hampton Inn in Cambridge, Ma. I chose this based on the price and the fact that I could use points to pay for our stay. Also, most of the reviews in Tripadvisor seemed positive.
The reviews were accurate. It is indeed a pleasant, budget hotel in Cambridge with a good breakfast and free parking - a rarity in the Boston area. I was a little apprehensive of the neighborhood since I only planned to use the rental car to travel to the wedding but do most of the sight seeing using the T which is the Boston subway.
However, the neighborhood was just fine. Actually the subway - Lechmere station on the Green line - is only diagonally across from the hotel though it appears farther when viewed in Google Street View. So all in all, it was a very convenient location.
The great thing about travelling via subway is (for those who have not done so before) is that since the stops, lines, interconnections are so well mapped, it is very easy to figure out what trains to get on, where to go and when to change trains. I had borrowed a great guide book that listed sight seeing locations with mapped to T stops and so planning an itinerary was easy.
A couple of words of advise - if travelling on the green line, it splits into 3 destinations - so always know which branch to take. The trains are well labeled. Also, be aware of the rougher parts of town, though for the touristy things, chances are you won't have to stray so far.
Since we only had a couple of days to sight see, on day 1, we went over to the Aquarium stop after transferring to the Blue line from the Green line at the Govt. Center station. We took a water taxi (just $1.75) from Long Wharf which is a very short walk from the station to the USS Constitution
in Charlestown. This way the kids got to experience a ferry ride. Also you get a chance to take some photos of the Boston waterfront. You can spend a couple of hours there looking at both the ship and the museum. We skipped most of the museums in the trip because our kids are not at the age where they have patience for these things :-( . Because this is an active duty USN ship, admission is free and tours are conducted every half hour.
After returning to Long Wharf, we trundled down to Faneuil Hall and Quincy Market for some lunch and to wander around looking at street performers. It is pretty entertaining with a lot of crowds especially during lunch time.
Later on, we took the T to the Prudential building which offers a 50 story high view of the city. It is a little pricey at around $15 but it gives you a birds eye view so to speak.
That evening we did not do much since we had to visit some friends but the following day, we visited Boston Common (the Arlington stop on the Green Line) and went for a Swan Boat ride. After wandering around the garden for a while we walked around some of the neighborhoods which are really pretty (and expensive). There was a really old church but we couldn't find a way to get in which was a shame.
We then used the T to transfer to the red line and visited Harvard. The unofficial tour of Harvard is given by actual students and it is free but for a tip at the end. It is supposed to be entertaining but again, with small kids, we opted to just walk around. I was fortunate enough to happen upon Henry Moore's sculpture in the yard - so that was my little encounter with world class art in this trip. However there appears to be more art scattered about in plain sight if you are more curious and have the time. Of course there are several great Harvard museums in proximity which I would have liked to visit but maybe next time.
A quick word on museums - the Museum of Fine Arts in Boston is free on Wednesday afternoons for those who would like to visit. Obviously the website will provide more up to date information. Also the Go Boston card might be worth considering as it may offer savings on ticket prices. I did not research this fully since I didn't plan to buy one.
After lunch at Harvard square - plenty of restaurants - we opted for a taxi to the hotel and the friendly cabbie took us past MIT and pointed out various sights. This was a plus.
That unfortunately was the extent of our sight-seeing, though with more time we would have done the Paul Revere house, the Boston Tea Party and perhaps the Minuteman park in Concord which is about an hour away.
Again with more time, we might have opted for a day trip to Cape Cod as well.
All in all, it was a fun break and Boston being a compact city, it is easy to get around. I would advise not to drive, but to use its public transit system. The 1 day Charlie card gives you 24 hour access to the T and is about $9. And, as in any American city, food is not a problem. There are plenty of restaurants.
The front desk of the Hampton Inn provided us with a bunch of restaurant menus for local restaurants that delivered, and the Cambridgeshire Mall was a short drive away and it had some pretty good restaurants along with a decent food court. While there is a parking charge, we didn't find it excessive.
Also, we found the souvenir carts on Long Wharf offered the best price for caps, t-shirts and other memorabilia though I rued not having purchased it here and ended up paying more.
Thursday, July 31, 2008
It probably is a sign of growing older and (?) wiser that you dwell a little more on the intangibles, rather than merely the trappings of success. Ultimately, your job should be fulfilling. Some people may say that they will fill fulfillment and emotional contentment in their personal life and they will treat their jobs for what it is - a way to make a living. I have tried this latter approach and I am convinced that being fulfilled in your job is key to being happy. You may aspire for more, but never despair or let your job frustrate you.
Simply speaking most people spend the majority of their waking life at work. It then becomes almost impossible to lead a dry soulless existence at work and suddenly transform into an animated caring and giving person outside work. Our existence has many levels and to be happy, each level should synchronize and be harmonious with the others.
So much for the new age stuff.
Here is an inspirational link:
and a book I really liked:
The Three Signs of a Miserable Job: A Fable for Managers (And Their Employees) (Hardcover)by Patrick M. Lencioni
What the hell, something else to feel warm and fuzzy about:
I am not affiliated with any of the above links.
Not sure why I posted this. Must be one of those days....or the fact that I got a venti intead of a tall and drank it all up.
Tuesday, July 22, 2008
There is an inherent lack of transparency in derivative trading. Over time, these derivatives spawn other derivatives which then get re-packaged and re-sold. Ultimately, no one has a true picture of what is held by who and for how much. Just look at what is happening with the losses in the housing markets.
Even the Chief Executives of some of the largest banks in the world have no idea on the extent of losses or liabilities in their income statements or balance sheets (or off-balance sheets for that matter). Isn't that a shameful inadequacy on their parts? These people are paid in the millions, yet do not have an authoritative picture on the risks and financial implications of the complex instruments that they sell.
I suspect that the derivative frenzy will affect the oil market a little differently than it did the housing market. For one, oil is a more dynamic commodity and by all indications it is getting scarcer and more expensive to retrieve. It is the dynamic nature of the oil business and the fact that oil is consumed and is exhausted, as opposed to a house that is a capital asset that can be resuscitated after a foreclosure leads this feeble mind to think that the speculative frenzy will continue until supply starts handily overtaking demand once again.
However, as OPEC and other oil producers start savvying up to using derivative trading to their advantage and in effect, wrenching that function away from middle men, they might actually start making larger bets and promote the instability for larger and larger profits.This would be the only way for countries that currently produce large quantities but whose oil wells are in decline to be able to generate larger profits. Ultimately of course, the whole thing comes crashing down. When that happens, as always, the Joe Schmo who holds the derivative instrument at the bitter end will hurt the most.
However, will the crashing of the oil derivative market lower oil prices? In the sub-prime crisis - when the housing CDOs' collapsed, house prices went down. Could the crashing of the oil derivative market trigger higher prices for oil because instability and rising oil prices go hand in hand? It that hypothesis is true, then, the derivative speculation is causing higher oil prices and a derivative market collapse will result in even higher prices. Of course, this feeble mind readily accepts that this is just a feeble minded hypotesis with many holes.
As an aside, a previously referenced Wall Street Journal article (subscription required) profiled two gentlemen who until recently held among the senior most positions in Saudi Aramco. These two gentlemen could not agree on the depletion rates and existing reserves in some of Saudi Arabia's largest oil fields. Remember, no international organizations have been given permission to make estimates either.
Unless the recent Brazilian or Kazakh or Kurdish and some other hitherto unknown oil discoveries prove substantial enough can be turned on and released into the world market within a very finite time frame, we are in for interesting times.
In the short term however, it appears like the crude price rice will hit some ceiling and then go lower - the consensus being around the $115 ballpark. Whether this level will sustain itself for several decades or if it is a momentary plateau in a relentless upward march is anybody's guess. Devising individual strategies - be in moving closer to work or buying a smaller car - to reduce our discretionary hydrocarbon footprint probably is the only hedge we have to weather this storm financially.
Wednesday, July 16, 2008
The American people are hurting with high prices, a crumbling infrastructure, unaffordable health care, extremely high college costs and a stagnant job market.
The American people have been generous in giving to causes all over the world. We are the first to dispatch aid when trouble strikes anywhere in the world but it is a sad testament that when some of our neediest citizens needed help after Katrina, we were slow to respond.
This slowness is not a lack of compassion or a lack of resolve. This slowness is a manifestation of some of the strains we face domestically as a nation.
We need to look inward and use OUR money to help OUR people.
This is not welfare but a proactive approach in strengthening our infrastructure, our health care, education, job creation and energy independence.
We call this collective focus a Focus on America and if I am elected President, I will direct a substantial portion of my energy and the energy of my administration on America and I will build on its strengths. We will do this in a coordinated fashion and we will demand results.
The American people deserve a little attention from Washington. They don’t want charity. But they want to see their money being spent on infrastructure and education and healthcare reform and policies that create jobs. As the pre-eminent nation in the world, we will not ignore our international commitments but we will very definitely Focus on America.
Tuesday, July 15, 2008
I view the sixties and the seventies as the "coasting" years. Decades of technological advances and suddenly improved lives for a lot of people. This led to a couple of decades of loafing. Towards the end of the seventies however the country had gotten itself into a rut and it took some painful and progressive ideas to crawl out of the hole and to innovate and advance again.
True, the sixties were a significant decade in themselves. Vast improvement was made in the area of human rights and a coherent "world think" rather than an ethnocentric focus started to take shape in that decade. Technologically too major breakthroughs were made, not least the landing of a man on the moon.
No present era can completely mirror a past era. Too many of the variables are different both politically and socio-economically. But this simple mind wonders if there are some parallels and what we should do to come out of this relatively unscathed?
How should we plan to a bumpy but flat lined period economically? The best option appears to be to hunker down and dramatically improve savings. This however would mean trouble for the larger economy given that it depends so much on consumer spending. Warren Buffet said that he looks forward to bear markets because it gives him a window of opportunity to add to positions of the the good companies he owns on the cheap. Maybe, we should follow that lead and do less of consumer spending and more of investing instead and let the economy shake itself out.
Tuesday, May 27, 2008
Why has it come to this? An emotional part of me says that we are getting our come-uppance after gorging when gas was less than a dollar in the 90s. However, as widely reported there are a combination of factors.
1) the concept of peak oil
2) increasing demand in the US and more importantly rest of the world
3) no major oil field discoveries (except Brazil) and constriction in supply in areas with oil due to socio-political issues
4) aging infrastructure for transporting and refining oil
As reported in the Wall Street Journal on 5-27-2008, it is still unclear if the rise in gas prices can be quantified as a bubble. The uncertainty mainly arises due to a difficulty in figuring out the fundamental value of a commodity. However it does appear that speculation and trading sentiment has driven the price of oil at least a few points higher than it should be.
What are the options for the Joe-Schmo's? Very few. It is amusing to a feeble mind though to see people rushing to ditch their less fuel efficient vehicles for ones marginally better. People almost seem to disregard the fact it does not matter whether you pay for a new car or pay more for gas on an old one, it is still money out of the door.
Perhaps an analysis on gas usage through a site like mpghead would be in order as also a perusal of the government benchmarks for fuel efficiency.
Personally, I have been hard pressed to get anything consistently over 20mpg on a mid-side car when I have rented one. So I will continue to limp along on my 15mpg Jeep until the inconveniences of a faltering air conditioner prove to be too much.
Tuesday, May 6, 2008
Given the transparent nature of the Fed these days, they all but tell the market what they intend to do in their meetings. So the meetings almost appear to be a formal declaration of intent rather than a debate on the best course of action.
However, in my simple mind, I can't understand the euphoria a 1/4 point interest rate cut or the dejection a similar increase commands. There is a several 100 point dip in the market if the rates raise and a similar gain should the rates reduce.
I can understand that the fed sets the benchmark rate and that the banks lend money to their consumers after tacking some points to this rate. But I can't really figure out how a 1/4 or a 1/2 point increase or decrease materially affects the lending or the borrowing of money for anyone but for the most borderline customer whose credit or repayment ability is so compromised that this becomes a big deal.
Truly, have you set your mind on a car or a remodel? Would you stop this project based on a small interest adjustment in any direction? I wouldn't and I can't understand why the stock market could care!
Sure enough the grocery store had "Teacher Appreciation Gifts" including single roses and the like.
There appears to be elaborate planning involved by room moms in classrooms across the country in planning the week's festivities. Our kids were requested to bring flowers one day, a sweet snack another day and a salty snack the third. The PTA contributed some goodies the fourth day and the children were expected to contribute a book the final day.
In all, the festivities left me a little under whelmed. Call me a cynic but when did school become a series of gift exchanges? God know that teachers deserve all the appreciation that they can get. But when does it go from being heartfelt to a mechanical marking of the occasion?
Monday, April 28, 2008
Entrepreneurs have made America great. They have embraced and monetized new ideas and created world beating companies. However, how many of these entrepreneurs have been held back because they become too scared to take a risk? A risk of going out on one's own without the safety net of a health insurance?
It is one thing for a brilliant 18 year old in great health to start a fantastic company. What about the bright 40 year old with two kids who has plodded through his job and obtained a knowledge he feels he can profit from. A realistic assessment would show a probability of failure, but that is not what stops him. What does stop him is the possibility that until his idea makes it, he will be placing his family at risk by forsaking medical insurance.
How many such entrepreneurs exist in this country and is there any hope for them?
One might argue that entrepreneurism without risk is an oxymoron. But if a sense of responsibility prevails that prevents a would be entrepreneur from following her dream because it may put her family at risk by striking out on her own, the country as a whole has lost.
60% of our population has medical insurance and are reasonably satisfied with it.
But upto 40% don't and this is an unacceptably high number.
What do we do to ensure everyone has coverage?
1) do we go wholesale into an universal government controlled program and its attendant ineffeciencies?
2) do we leave the 60% alone but provide some sort of government program for the 40%? If so, who will pay for it? Would it be a tax that even the 60% who have private insurance will need to pay? Can we consider this as one of the sacrifices we make as a nation for the common good?
3)If we adopt this idea of private insurance with a government safety net, what will prevent private insurance from promptly dumping all their unprofitable patients? Also, why would employers bear the expense of offering private health insurance if the government is doing so?
4)Can a public/private partnership work or should it only be one way or the other?
5)Should the private insurance industry be made non-profit? Would this be anyway better than government?
6) Can we reform laws to prevent denial of coverage or increase in premium for pre-existing conditions? Isn't it a travesty that you can be denied coverage because you have a disease or be charged outrageous premiums?
7) How do we ensure -in a private scenario - that health benefits are protected at low rates in the event of a loss of job or serious illness that necessitates stoppage of work?
8) Or do we just accept that you only have as much right to life and good health as you have money in your wallet? Is this an acceptable premise to our society and its values?
9) Do we accept that some aspects of the medical insurance business will be necesarily unprofitable - if they do accept everyone with lower premiums - and can we realistically expect a for profit company to allow certain segments of its business to be always unprofitable?
10)Can we put a cap on how much a family can spend on health insurance based on tax returns and the overage be picked up by the government? In effect, this means a catastropic coverage that is guaranteed by the government and would result in people getting the care they need.
11) Can we NOT replicate the British model of National Health Trusts? Keep the hospitals and the doctors who work in them in the private sector but have some sort of federal tax based guarantee on the bill payment.
12) How do we make medicines and lab tests more affordable?
13) What about the financial markets? What about all the traded stocks in health insurers, hospitals and labs? Can we afford to take this whole sector off the market?
Wednesday, April 23, 2008
We start of the new year with maybe a party and buy some party favors. Then comes Valentine's day when many of us buy some dreadful stuffed animal toy or some such unmentionable. Father's day, mother's day, boss's day secretary's day follows in progression and we reward the unfortunate recepient with a cheap guaranteed to fall apart gift. This may not be the main gift, but we have a tendency to add a stocking stuffer to give the impression of plenty.
One gift is no longer enough. The main gift is accompanied with...junk. Either a stuffed animal or a small case of dreadful chocolate or a plastic trinket whose sole purpose is to be thrown away. Why do we spend so much of our income on nonsense like this?
These days I am noticing that even junk has stopped pretending to be anything but junk. Not too long ago, when the dollar was a little stronger, a lot of the craplets were a little better made. The stuffed toy didn't start molting as you picked it off the shelf. It wasn't stuffed with wadded newspaper.
Surely we can do without?
Tuesday, April 22, 2008
Jeep stall left turn
1997 Cherokee engine cut off
Jeep turning problems
It suddenly struck me that I am doing this more frequently these days. I have started to think in Google Query. Any time I need a question answered, I invariably try to formulate a query that I think will get me the results I need. Even when I am away from my computer, rather than think of a solution, I start thinking of ways to express the problem to the Google search engine.
I am sure, I am not alone in this. In a way, the Internet is making us lazier. I find myself trying to find the answer to a question by typing it into Google rather than figuring out the answer myself. If someone already has found the answer, why re-invent the wheel? I wonder if this is a sign of intellectual laziness or just a matter of using the tools at our disposal?