Friday, October 2, 2015

Friday Post - Your services are no longer needed

Heads will roll

While the good news fairies of Wall Street would have you believe that everything is just hunky dory the truth is it's not. In order to make bottom lines look better and keep stock shares high companies have resorted to buy backs, asset sell offs and finally layoffs. The guise of the latter being the company is restructuring in order to meet global demand or some such other BS explanation. That's become very easy to do given the lack of ethics and the new corporate vulture capitalism. Also quite easy given the rise of investment groups who could care less about a product or process as long as it makes their shareholders money. Then there's the hedge funds that bet on a company's failure, but that's another story. Everywhere you look there's layoffs. Microsoft, Caterpillar, the banks, insurance companies all laying off to tighten balance sheets and make some CEO look like a winner at the shareholders meeting.

Customer service or no service as some call it - Seems those boiler rooms in India have finally come back home to roost. Note the southern drawl in the operators' voice. It's a good bet these people aren't working full time or get anything more than minimum wage and in southern states that isn't even the federal level (look it up). The "technicians" who do come out to your home mostly look like high school dropouts and just hope your problem isn't too complex or the old trouble shooter will have to be called in for a follow up visit. Once had a cable "technician" come out and install a cable box backwards. Resident 12 year old figured it out and fixed it. And good luck trying to change service. That's a guarantee for a sales pitch to a pricier package complete with features you'll never use. Forget trying to understand a remote, it takes a NASA engineer with an advanced degree to figure that one out when all you want to do is turn the damn thing on. And if all these smart cars and smart phones and smart this and that are so smart how come they keep failing? Machines do not necessarily need to talk to each other. My refrigerator, dishwasher, water heater, and stove have done quite well without having to talk to anybody. And it's an open invitation to hackers. We've already seen it in planes and cars. It's apparent there's no system that can't be hacked one way or another. So maybe it's time to simplify life and go back at least to some of the old ways. We just might be better off for it. 

bank fail later…
Two bank fails this past week one in WA. and one in GA.   

Friday, September 25, 2015

Friday Post - Cap and trade

That familiar sounding buzz word that everybody's talking about. To environmentalists it sounds like a slam dunk. To the conservatives backing dirty oil you'd think Armageddon was to start tomorrow. but this may be more a boon to Wall street than either groups. While it would on the face of it force companies to clean up their act by making emissions more expensive it doesn't take into account what happens when a company is forced to buy credits on not just the open market but a secondary market set up complete with derivatives. And once the hedge fund boys step in it's open season on market manipulation. And exactly how do they monitor emissions when there's not enough inspectors at present to keep up with safety inspections? OSHA only has one inspector to cover 4 states in the west just to give you an idea. The EPA has been pretty much gutted in terms of personnel and funding. And we know companies cheat whenever they can. It increases profits the environment be damned.

And another thought came to mind. What's to prevent large companies that have high emissions from buying smaller companies with little emissions, using the credits and selling off the assets as we've seen with the rest of vulture capitalism? Then there's the possibility of shell companies being set up off shore that produce no green house gasses but provide a nice benefit for the parent company. They could in theory make billions by gaming the system. We're on to their little games.  

A better solution would be a pollution tax but one that could be gained back by installing control equipment. Throw in a 10 or 20% bonus on the tax rebate and you'd see quick changes in industry overnight. The added money could be gained from those who refused to comply or were fined for breaking emission standards. Sort of an carrot and stick approach.

To its' credit China will at least begin to clean up its' act. Maybe having to shut down factories for a month to clean up the air around Beijing was a wake up call. After it's burned all that tar sands oil smoke just drifts back over the Pacific and pollutes us. But the real proof in the pudding is how the economics of this will work. If they have to rely on outside investors to keep markets going it's an open invitation for manipulation.

Part Two - Greed

It starts at the top. A CEO issues a memo to the underlings to cut costs and increase profit margins. Managers tell estimators much the same. Estimators pad their bids telling the CEO one price while informing the project manager that the bid was far less. Managers always want to look good so they cut the bid even more and pass it on to the supervisor. The supervisor tells the foreman that the project was under bid but to do what he can without upsetting the workers. He too shaves off a few hours. The foreman then cuts some hours from the bid and tells the workers it's a tough job and must be done in the time given. His time of course. The workers manage to get the job done in just under the bid which isn't the real bid as we know. The CEO stands before the company and tells them the company isn't making any money so he'll have to cut costs even more. That may be in the form of refusing to replace broken equipment or maintaining company vehicles. And when there is an accident it's always the employees' fault. Driver/ operator error they say and be sure to drug test him. When an employee dies on the job so much the better because the company had an insurance policy on him. Worth more dead than alive. Of course in a large company CEOs don't care because the guy was just a number on a spread sheet. Only concern will be cover up story and the lies and fabrications to be addressed. When media inquires just tell them the matter is being investigated. But the workers usually know exactly what happened, but they won't talk for fear of losing their job.

bank fails later
No fails this week

Friday, September 18, 2015

A phony and a failure


After watching part of the clown show the other night it's a safe bet none of these guys or girl is capable of running anything. It looked more like a side show than a debate. Trump the bloviating usually master of ceremonies toned down his usual bombastic style yet had no answers as to exactly how he'd pull off one of the largest construction projects in U.S. history all the while making Mexico pay for it. The rest of the pack took turns spewing the usual right wing line complete with lies and falsehoods. 
The "Donald" was seen at an event just the day before aboard the U.S.S. Iowa. Touted as a support for veterans event a little research turned up some discrepancies. The group Veterans for a Strong America was there and to quote Donald has "hundreds of thousands of members". A little research indicates otherwise. The group only has one member, Joel Arends its chairman and if you go to the web page there's no way to join this organization. If that was bad enough an IRS filing from the organization showed that it had $30 in the bank and owed $300 in expenses. (Hat tip to Rachel Maddow for her investigation on this matter.)  Haven't dug much into the Donald's past but I'm sure it will surface as time passes.

I think what we're witnessing here is the last bastion of the death throws of a dying party. While they resurrected the images of their patron saint Ronnie they fail to realize that Reagan got away with it because back then there wasn't the internet to fact check and everything wasn't archived via cell phone. Anyone now can check their statistics in real time and pick out the lies post haste. Spouting the deep seated and usually hidden hatreds of a waning base will not expand their numbers. But now we have Trump doing just that on the national stage. These conversations were usually reserved for the exclusive party dinners in places average Americans could never see the inside. As we all recall it was the secret recording of Mitt Romney at one of these events that was his downfall. While he mentioned the 47% who rely on government handouts he failed to mention corporations who take far more or of the 1% who produce absolutely nothing for society.
That brings us to Carly Fiorini the "businesswoman". Stepping in at Hewitt Packard she laid off 30,000 workers, purchased a company that was overvalued losing Packard millions and was fired taking with her a $42 million dollar golden parachute. She may have done well but the workers sure didn't. And this was before she lost 1/2 billion dollars for Lucent at her previous job. Some business record no?

But this entire debate thing is more about a beauty contest than actually picking a world leader. More points seemed to be given for style and performance than actual facts and policies. Fear not all of this will be long forgotten come next October or November when who knows whom will be on top of the pack. But to have to endure another entire year of this…ugh!

bank fails later...
none this past week

Saturday, September 12, 2015

Meanderings of the brain and no you can't get there from here

Guess I'm getting writer's block because I just can't think of much to write that I haven't beaten to death. 

The mass exodus from Syria Iraq and Afghanistan continues. It's expected that 1 million more people will flee before year's end. Little we can do about it as world governments poo poo about the issue. Funny how 60 years ago we were more than capable of dealing with things like this. Now it requires a blue ribbon panel to discuss the problem which will take months. And all the while not much more than another report of an air strike campaign. No mention of casualties unless it's some ISIS big whig or cache of militants.This has to be the most hidden war in all of world history. No mention of exactly how they're targeting those on the ground. For all we know some poor kid finds a cell phone calls his grandmother and the next thing you know he has a missile coming down his chimney.

Other thoughts randomly thinking. Our roads here are slowly crumbling. They just did a quick fix by putting tar in all the cracks. That might last until spring but it's no permanent fix. Some roads they used what's called chip seal. They cover the road with tar and spread small stones on top before it sets. All well and good for a short time fix with one drawback, tires kick the stones up until the roadway is compacted. All this cheap work when the state has some of the highest gas taxes. And don't get me started on mass transit around here. That's become a money pit. We're building what appears to be the biggest underground tunnel around. Only problem the machine broke down about a year ago and they just now getting it repaired. Adding tolls to the tunnel to boot when or if it gets finished. People are stupid they'll just take other routes to avoid the toll. Same as they did with a new floating bridge they're building. And slowly car pool lanes are no longer free. That'll make things better right? Should we be surprised? When the idiot republicans keep lowering taxes and the state has no money for things like schools or roads they expect somebody else to pay for it. And it's funny how when the state wanted to put a toll on a bridge to their area the uproar was tremendous. 

Seattle is in a state of "build it and they will come" mode. There's no less than 15 tower cranes slapping up office buildings, apartments and condos and I'm talking big ones. It seems to be a repeat of what you could see before the last bust. Investment organizations are buying up homes and condos not to sell but to rent and rents are going up. A "cheap" place in Seattle can go for $1600 a month and you're talking small one bedroom places. 

bank fails later none last week
No fails this week

Friday, September 4, 2015

Money money money

No rate hike at Fed meeting. But of course being that the Fed is controlled by bankers why should they raise rates? Cheap money continues to flow to the gamblers on Wall street while the rest of us suffer. But this game of musical chairs can only go on for long. Eventually the band must be paid. Think about it for a sec. Investors took out loans to buy stocks in companies that weren't making much money. Their values were based purely on perception. Customers are slowly drying up and the housing market in China has hit a bubble. Their government has done just about everything it can to prop up the markets while their banks have faltered and the yuan is nose diving. And people wonder why.
Fear not they can always buy insurance to cover their losses unless of course there's not enough in the coffers to cover the losses as before. Lloyds of London went bankrupt the last time round. They're the ones who will insure anything and it took a UK bailout to get them going again. Somebody's going to get stuck with a lot of bad paper yet again. And those big "too big to fail" banks have gotten bigger so the fall will be greater.

Last time around the markets hit a little over 14,000 before dumping 7000 points. To date the markets hit a high of around 18300 and have lost nearly 2000. I don't see people rushing out to buy big ticket items. They say consumers run the economy and it doesn't look like we're buying much from China even though just about  everything is made there. Always look for the made in USA label.

Oh Canada looks like you're in recession already. Maybe if Harper hadn't put all his tar balls in one basket things might have been better. Tariffs aren't helping and by the looks of it Stevey would trade his grandmother for some cheap Chinese trinkets. And he has a masters in economics? Must be an honorary degree. Where's that cheap gas they promised. Nova Scotia I hear ran out of gas. How'd that happen the world is swimming in oil? Maybe that what happens when you put bean counters in charge.

Bank fails later...

Friday, August 28, 2015

Friday Post - Migrants and bankers

“Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tossed, to me:
I lift my lamp beside the golden door.”

Migrants - The current situation is bad because rather than deal with the situation in an organized manner, creating processing centers and spreading that population out across multiple countries, migrants are crammed into camps with poor conditions and treated like criminals. Their only offense is wanting a little safety and maybe a shot at a better life. Rewind to the days of the end of the Vietnam war when those who helped the U.S. fight the North Vietnamese were airlifted to safety, brought to the U.S. and Canada and neatly spread out across cities and towns. Done so well that nobody realized that 450,000 were settled here. No town or city can handle the influx of tens of thousands of people all at once yet that's what we're seeing in Italy and Greece. That's also not to mention the refugee camps in Lebanon, Turkey and Jordan. The problem as I see it is that they're trying to deal with the symptoms and not the problem which is political instability and war. And this has to be a drag on the world economies. The arms dealers, bankers and morticians may be doing well, not so much for the rest of us. There has to be a breaking point. 

There is the issue of China which for the moment is desperately trying to pump up a slowing economy. But there are other factors at issue. Mainly they followed the U.S. lead of allowing their investors to borrow money to invest in the stock market. All went well until their economy slowed and values fell. Add to that the loosening of real estate regulations that permitted the ownership of second homes and just like the U.S. market when the bubble burst prices fell. In a feeble attempt to pump up the market the Chinese government lowered interest rates. It's worked for a brief while but even that ploy is set to fail. A small snippet from a Chinese analyst today gave credence to what the future may bring. The government is buying stocks to try and keep the markets high. “If the government sustains buying there are terribly negative consequences, such as impact to [People’s Bank of China’s] credibility and yuan credibility…Any bank can create money out of thin air, which is why confidence is so important,” said Cui. “So if they keep printing money to buy high valued stocks, it will damage yuan credibility.”

Wall Street would have you believe that this was just a minor glitch, a temporary correction but the fundamentals say otherwise. And this isn't happening in just China but other countries as well as others devalue their currency to make their products more attractive. But I don't see a rush to buy more stuff. While there may be pockets of building in some cities this isn't a broad based boom like after past recessions.

Bank fails later
No fails this week

Friday, August 21, 2015

Friday Post - Cast your ballot but hang on to your wallet

Thought about doing a small straw vote on the candidates here but it's become a real circus. Here was some possibilities:

However after further review as they say in football we find that there's far more than the 17 plus on the republican side or 5 democrats running as attested to by a Guardian article (sheesh you have to go overseas to find out what's going on over here). Interesting to note that according to a Guardian article there are 585 registered candidates for U.S. president in 2016, including Sydneys Voluptuous Buttocks (independent), President Emperor Caesar (Democrat), Buddy The Cat (Democrat), Crawfish Crawfish (other), Bailey D Dog (independent), Buddy The Elf (write-in). Forget voter fraud the elections board might do better to scrutinize the candidate's qualifications. It's a safe bet some of these aren't even human beings. With the actual numbers in the voter fraud non problem a half dozen votes wrongly cast has not changed an outcome yet, at least not since the days of Tammany Hall or the Chicago party machines.

 The sad fact today is that unlike Canada or the UK we here in the U.S. must endure the better part of 2 years of campaign BS and just like retailers the day after Christmas when the last of the tinsel has been swept up the preparation process starts all over. Should you wish to keep warm all winter it's an easy task of picking up yard signs the day after an election. Wooden stakes and cardboard burn quite well.

The more things change the more things stay the same and they aren't getting any better. Looking at the markets the Dow has taken a 600 point dump so far in the last two days. It's obvious they weren't realistic in the first place but we all knew what happened when the fun and games ended with the crash of Wall Street in 1929. And if you thought 2008 was bad you ain't seen nothin yet. China's economy is slowly freezing up. Germany thinking they are in some power seat hasn't realized that they are broke too. How many of the euros did they just hand off to Greece? And those were borrowed euros at that. So let's face facts when the money isn't put to actual use for things like building bridges or roads or schools and gets filtered directly to banks who only make money by creating more debt (all paper shuffling) then eventually the music stops and everybody is left chairless or in this case homeless. This appears to be the very start of an economic freeze up. With the cost of two wars still ongoing a decade later and not paid for and the round after round of tax cuts it's a sure bet there won't be another bail out like the last time. Expect some of the larger brokerage houses to fall this time along with a few of the larger banks.

I'm sure Voluptuous Buttocks, Buddy The Cat or Deez Nutz could solve the financial problems given a chance but in the mean time we endure another year of election campaigning.

bank fails later...