I am not one for mushy sentimentality. I find it http://www.despair.com/ humorous. But, work is making a lot of people lose their individuality - its a cliche - but they are becoming mere drones. People however do have a way to make a difference and ultimately it is up to them to find the way.
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:
http://www.stservicemovie.com/
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
http://www.amazon.com/Three-Signs-Miserable-Job-Employees/dp/0787995312
And...
What the hell, something else to feel warm and fuzzy about:
http://www.sonnyradio.com/duckstory.htm
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.
Thursday, July 31, 2008
Tuesday, July 22, 2008
Derivatives and the Oil Market
An interesting article in the LA Times explains the effects of derivative trading on oil prices.
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.
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
Here is an email I sent to Obama's campaign
It started as a blurb but it became a speech.
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.
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
Back to the 70s?
What previous era does the present represent? I am vacillating between the sixties and the seventies and I am hoping it is the former but it increasingly looks like the latter.
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.
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
The price of Gas
It cost us $53 to fill up the mini-van on 5-26. Gas was averaging $3.80 a gallon. Some commentators are already projecting significantly higher prices and saying that we will look back with nostalgia at $4/gallon gas.
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
5)speculative trading
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.
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
5)speculative trading
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
Euphoria over Interest Rates
Do you invest in the stock market and are you sometimes perplexed about the stock market reaction to the Fed's action be it in raising or reducing the interest rate?
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!
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!
Teacher Appreciation Week
As many parents in the United States (at least those with school going kids) are aware, May 5 to May 9 is teacher appreciation week.
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?
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?
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