BIG PICTURE

Dick Cheney

Cheney says that it's likely we'll be attacked again, and if so it's the new guys fault. I don't know...it kind of sounds like a guy who hopes we're attacked so he can be vindicated.

Kinda like the quarterback who, when benched, secretly hopes his team loses and the backup fails so that the fans and coaches will see all along that he was the man for the job.

I must say that as a former Fortune 100 CEO and VP of the USA it's pretty sad (and selfish) when you blow your chance and then place your vindication above the success of your teammates.

Really South Carolina Sheriff?

Going after Phelpsie?

I don't condone drug use but come on dude don't look so hard for you 15 mintues.

Uniteds States of Africa?

I read today that their is cursory talk among members of the African Union about a single, US style govt. For those of you who don't know the African Union, similar to it Asian and European counterparts, is a formal agreement between African countries to act in concert on a host of issues such as currency, security and development.

I always thought that Africa with it's massive population, agrarianism and abundance of natural resources could easily be a superpower if united. I also realize that the European colonist during the Scramble for Africa in the 1800's realized this too. That's why they purposely segmented Africa, encouraged tribalism and stoked civil wars upon their departure. By doing this they ensured Africans would engage in centuries of fighting over crumbs instead of simply baking their own dough. This mindest still persist.

Gaddafi, the president of Libya, is spearheading this effort, but I'm not quite sure what to think of this guy. As recently as 2 years ago he, the other Northern African nations and Turkey were begging the EU for membership based on the history of colonization. Their argument was as best I can tell 'that Europe owed them for the centuries of pillaging and angst.' That's a clownish, victim mindset...I think. Similar to Alaska or Texas, if France or Britain or Portugal wanted you as part of their nation they would have claimed you as citizens and not colonies at the turn of the last century. They didn't. And they haven't called you in 100 years. So it's pretty safe to assume they're not that into you. Move on.

I'm not sure Gaddafi is the guy for the job though. It's massive and the western politics may be more difficult than the intra-continental politics to overcome which would be a bear. I'm also not sure it happens without some kind of continental threat that forces the nations cooperation, from which grows the United States of Africa.

Silly populist bonuses are for incompetents!

Read and watch as Megan McCardle of The Atlantic and Erin Burnett of CNBC defend TARP funded institutions paying bonuses with taxpayer bread.

Please note I like both - Megan is uber-smart and Burnett gets me the news throughout my trading day - but it seems that they, like the Wall Street execs, are contending for perks in a world where Lehman's stock is at $56.92.

In that world, their defense of bonuses and private jets and lavish retreats are defended most staunchly by me - the capitalist progressive. But in a world where i-banks, their brethren (commercial banks) and cousins (large insurers) are feeding at the public trough then all bets are off. Burnett tries the weaksauce "left pocket, right pocket argument" but no dice.

When you and your wife move in with her parents hallway rug burns and kitchen table boom-boom are indefinitely on hold.

Ring King

I got back in the ring after a week off and it felt at once good and bad.

The good was mental. There is nothing that equates to the feeling you get when you out think an opponent and put on a nice combination - in good competitive spirit of course. Equally, yet not masochistically, it's also mentally refreshing to survive a furious onslaught with nose, eyes and kidneys intact.

The bad, is purely physical, but not in the way you may think. My head and body bloodied and bruised long ago have grown accustomed to assault, but protracted hands suddenly clinched into balls of pounding masses time and again seem to not have gotten that memo.

Stimulus Issue #2

I outlined some of my disappointment with the stimulus' lack of WPA like make-work programs in an earlier blog this week. My other main issue is with the budget gapping portion of the bill.

The NYC government is getting ready to announce 20k across the board layoffs in local govt services. Writ small this means that the stimulus will have to create 20k new jobs just to get back to even.

Why not give the money to the local and state govts with the stipulation that it is used to fill budget gaps that would otherwise result in layoffs? Wouldn't that be easier than trying to find another bridge for 20k people to build?

Baron, Robber

$18.4B? I guess. I'm a trader and eternal capitalist and even I'M APPALLED.

You're reeling - yes even you Wells - and your insurance brethren may be in a worse shape than you and your argument for paying out out 2006 like bonuses is talent retention?

Here's my .02:

Your Talent: They now holds the honor of worst risk managers ever...literally. And it turns out their success over the last 3 years was bubble driven. Which means, literally, anyone could have done what they did. You know. Make up stuff no one understands. Securitize it. And convince people it's worth more than it is. Talent? I guess.

Retention: In case you didn't notice, it's a buyers market right now. That includes for skilled finance professionals. So instead of paying inordinate bonuses, just let 'em walk. You can get the same skill for cheaper tomorrow. Kinda like your stock.

It seems you are using capitalism to abuse your shareholders and in the instance of TARP funded institutions the American taxpayers. In case you haven't noticed you are not the rockstars of the business world you're the bane of it's existence.

You took a perfectly good product, the mortgage backed security, and pumped it so full of andro that it literally burst. That's like Detroit taking the SUV, putting turbo rockets on the side and watching as the world's highways turn into a bloodbath. And then asking for a bonus. Way to go!

Humor: Can I hit you back girl?

"Mom put me in time out, this is bulls%$#...." Hahahahahaha!!!!

Minnesota: I Like This

It reminds me of what leadership is really about. Leading.

VIRGINIA, Minn. - The Virginia mayor and City Council members are sharing the budget pain by voting to take 10 percent pay cuts.

Virginia's elected officials voted unanimously, but informally, for the cut during a meeting Monday. They are expected to make it official during a meeting Tuesday night.

To be sure the overall decrease from the base is nominal but nonetheless it's the 'leaderly' thing to do.

Article here

Another Bright Idea

Here is my first creative idea (in conjunction with shovel ready and budget gapping) for make-work stimulation:

Education Aids: Two of my state's biggest firms, Target and Best Buy, are laying off more employees this week. A good percentage of these employees are young and sophisticated. Why not create a make-work program that places a under 28 college educated professional in the classroom of any public school for a year. This would be different than a traditional teacher's assistant and would probably be well received by K-12 students seeking a different PoV. A $50B program could create 1.6M+ jobs at an average salary of $30k. I know the salary pails in comparison to private salaries but I bet dollars to donuts those with limited prospects for the next 12 months would jump at the opportunity! Everyone can't build a bridge. This program would fill up and BANG...like that 1M jobs that have value are created.

I think it would work. I'm going to bundle it with a few other of my ideas and email it to Amy Klobuchar and Keith Ellison and Norm Coleman. If you like it send it to your congressperson too! Maybe it can make it into Stimulus Part II - The Sequel coming October 2010

American People.

I love it, I absolutely love it when DC pols say "I'm doing what's best for the American people."

What they should say is "I'm doing what's best for my career, then for my party and lastly for those people who voted for me. And if you didn't vote for me, hopefully it helps you too."

Honestly, that would be really refreshing to hear.

Minnesota: Budget Woes

Minnesota policymakers are struggling with the future of state budgeting. Like all other states they will get bailed out by the feds this time. But this same massive shortfall happened in 2003. And will happen again if they don't fix the core problem. Spending. In 2003 they used tobacco suit settlements to fill the gap and like I said, the feds will fill the ditch this time. But what I'm wondering is what happens in 2013 or 2015 when the feds and big tobacco's aren't around?

Intuitively you would think policymakers would get long term spending inline with projected revenues. You would think. I've said it once I'll say it again, business people in general would make much better politicians than lawyers. They don't spend more than they take in. If they do they fail. Simple. The finance part of of govt is and always will be superordinate to actual law making always.

From the Star Tribune

"The fiscally appropriate thing to do would be to create a permanent solution." But it's hard to sell painful long-term solutions when quick fixes are at hand, even though an aging population means the state's long-range budget outlook is troubled.

Really Obama?

Poking China in the eye over currency manipulation?

Smoot-Hawley like protectionist rhetoric for US industry?

I guess.

Dude I know you're a trained lawyer and the whole P&L, global business, supply-demand thing isn't really your bag. That's cool. I still confuse post hoc with prima facie, so we're even.

But I must admit your rhetoric has me on edge. I wrote yesterday on learning from the 1930's. And I think you should take a look. It centered on the failure of modern day markets and consumers to learn from the late 1920's greed and risk that caused the depression. But the spirit of the article - learning from the past - is your main takeaway as the 3rd leg of the capitalist triumvirate...govt.

Your recent rhetoric is straight out of the 'I don't understand commerce' handbook that past pols used in economic downturns. Burn it. Limiting trade and ostracizing other economic powers will only make things worse. Especially since exports will play a signifcant part of our resurgence. You don't have to placate labor with your rhetoric. You're the President now. In the end all they want are jobs and fair pay. It may take time, but on the right terms those jobs will come back online and you will be hailed. Limiting trade is the wrong term and a sure fire way to a quick 2012 exit.

This liberal anti-trade meme plays well in a healthy economy when corporations are flush, and stock prices soaring. But investors (rich people) and businesses (rich people) aren't going to put up with this crap during a once in a century downturn. They're scared too. And when you talk about limiting their options to make money by limiting trade you force them back to the sidelines...with their money! Once there they will simply sit on the sidelines and wait you out. Hear me loud and clear. This is a waiting game you will lose.

You and I and Geithner and Summers and Bernanke and any MBA know we need rich people to ultimately pull us out of this. I don't have $125K to pay myself to consult on a supply chain but Nike does. The unions don't have $40K to pay a worker to build beams but US Steel does. US Steel and Nike make money through trade. Limiting their trade will ultimately limit jobs. The laymen may really think we can indefinitely print money for stimulus year over year but you and I know better. Get your business bona fides up and do it quickly!

Those who don't....

I watched FDR's first inaugural address yesterday and gleaned five major themes from his speech:

1. Better supervision of banks
2. Reckless speculation with others money
3. A crisis of our own doing
4. Putting people back to work
5. Return to personal responsibility

Sound familiar?

The trite aphorism - those who don't learn from history are doomed to repeat it - permeated my thoughts all day yesterday.

Well not so much the learning part. You see greed, which drove this crisis from all sides is a powerful motivator that genuflects only to fear. It trumps circumspection all day everyday. So it's no suprise that in the absence of fear (it's not my money) there wasn't anything powerful enough to motivate us to learn. And we didn't.

But it's the consequent of that cliche, the repeat part...that gives me pause. Bear with my abstraction. In 1933 there was no 1935. No 1937. No 1943. That is, there was only an unwritten future. A future that promised better times, jobs and a return to normalcy. A normalcy that wasn't 1935 or '37 or '43.

Well, today there is no 2011, or 2013 or 2020 just a future that promises better times, jobs and a return to normalcy....



FDR's 1933 Inaugural Address

Darkside

I and the public know what all schoolchildren learn.
Those to whom evil is done do evil in return.
dddddddddddddddddddddddddddddd-W. H. Auden

I wondered at the time of the alleged atrocities what those innocent (yes there were innocent detainees) persons at Abu Ghraib and Gitmo felt. Being plucked off the streets of their hometown and imprisoned as a result of wrong place wrong time or mistaken identity or specious intel. And given no recourse.

I'm not a leftie. I understand the necessity of war. I understand what war means. I understand that the bright side of safety has a dark side. A darkside most Americans don't want to think about. A dark side that includes dead children, rape, looting, torture and collateral damage. A darkside that didn't begin with Abu Ghraib. A darkside that won't end with Barack Obama.

This darkside is old. It takes root before ancient Pelopenessus spans middle age Jerusalem and runs through modern day Germany. This darkside is as old as man.

I wonder if this darkside will manifest itself anew in former civilians. Civilians that had good intentions and families and pride. Civilians that had dreams and plans and hope. Civilians that had an unfortunate run in with the darkside.

Bad Economic News? I guess.

Only on CNBC can good news be hyperbolized into bad...only on CNBC.

Housing starts, a favored economic indicator of activity, was down for the period. Anything being 'down' sounds bad to the accidental economist, but to the initiated, who learned to put A and B together in the second grade it's not so bad.

The reason this is GOOD news, is because we currently have a 6 month supply of houses on the market that needs to be worked off (sold) before the economy can truly bottom. Adding to existing inventory will both forestall that turnover and further weaken existing prices. So the fact that we added fewer homes is a positive.

Sometimes I forget news is a business, and purposely scaring people seems to be good for the P&L.

BIG PICTURE

What's the position you hold?

A lot of speculation on the monies I've made.
Honey's I've slayed
How is he for real?
Is that dude really paid?
KKKKKKKKKKKKK-Jay Z

I'm listening to the confirmation of Tim Geithner, O's choice for the position of Treasury Secretary. I'll readily admit that if he's good enough for O than he's good enough for me. But I, like some Rs, have concerns about dude. Mainly, why did he only go back and pay taxes AFTER he was tapped for Treasury Secretary?

Statute of limitations or not, if you in good faith underpaid taxes on various sources of income wouldn't the natural inclination be to make it right...in good faith?

Dear Barack....

Dear President Obama-

Please focus on the moment and not the greatness.

Unlike great athletes, entertainers or businessmen, great presidencies are driven by responses to external events. There is no chance to manufacture a knockout, merger or hit single that transcends time. You take what the position gives you. And if you're human, you hope and pray it's not much. If the past 6 years have given us anything, it's a case study in the folly of attempting to manufacture greatness.

President Bush desperately wanted to be a war president in the mold of Washington, Lincoln and FDR, so he manufactured a war, ostensibly to feed that desire. But he was confused. Revolution, emancipation and democracy were watershed moments to which greatness reluctantly rose, not events manufactured with ersatz greatness in mind. As such he leaves office en route to a potential worst ever label all but ensured for the existence of the union.

What's weird is that unlike Washington, Lincoln and FDR who each struggled with recalcitrant citizenry, his watershed moment - wished upon no one - actually saw him gain the full support of the nation in the blink of an eye. What's weirder is that had he focused more on the moment and less on legacy. More on effectively dealing with this new threat and less on 2050 history textbooks, he would be leaving, destined for greatness.

So again, I implore you to focus on your moment or moments as it may prove. Arab Radicalism? Depression?? TBD??? Whatever it is focus on it. Your legacy, like Washington, Lincoln and FDR will write itself.