Timing Is Everything

Citigroup Tower, NYC

If there is an aphorism that relates to fancy company headquarters, it's well-known:

"When an organization has a truly comfortable headquarters which meets all its needs, its decline has begun."*

*Thanks to

tomstreeter.com

It's All Good

It might surprise those unfamiliar with blogging to know that most bloggers' immediate family members don't often, if ever, read their blogs. It follows, then, that bloggers don't get much encouragement. They also get paid less than mathematicians, like most hard scientists, another group whose writings tend to be unread by their own families. The point is, it's a wonder of the world that there are any bloggers at all.

On the other hand, it is fun to get your own views out there, and sometimes, you know that extremely intelligent and educated readers in places far, far away have read your entries for a long time. Maybe they are quietly reposing alone with candlelight and a sleeping pet. Perhaps they just want to rest for a few minutes on a sunny, breezy mountaintop with a view and an internet connection. Somehow that makes it all worthwhile.

Hedgies Have Their Day

Thanks to CNBC, here is a wonderful chart of a summary of the testimony of hedge fund managers today:

Highlights From Hedge Fund Hearing

George Soros:— Crisis Was Generated By Financial System Itself
— Financial System Pricing Somewhat Distorted In Proportion To Actual Problem— Regulators Must Accept Responsibility For Controlling Asset Bubbles
— Controlling Credit Means Using Regulations That Have Fallen Into Disuse
— Financial Market Reforms Must Be International In Scope— Basel Accords Need To Be Replaced By New Rules Reflecting New Paradigm
— Hedge Funds Need To Be Regulated Within New Framework
— Underregulation Helped Cause Current Problem, But Overregulation A Danger As Well
— Hedge Funds Helped Cause Bubble, But Have Been Devastated By Its Bursting

James Simons:
— Rating Agencies Are Among The Most Culpable For Current Problems
— Hedge Funds Were Not A Major Cause of Current Systemic Risk
— Additional Regulation Focused On Market Integrity Would Be Appropriate
— Most Important Step We Can Take Is To Keep People In Their Homes
— More Transparency From Hedge Funds Could Be Helpful
— Any Change In Tax Policy Should Be Applied Equally To All
— PIMCO, Others Should Sponsor A New Derivatives Rating Agency

Philip Falcone:
— Hedge Funds Have Positive Role In Financial Markets
— Compensation In Hedge Fund Business Is Performance Based
— Short Selling Is A Valuable Long Standing Feature of our Markets
— Our Analysts Perform Thorough Due Diligence, Not Relying On Rating Agencies

Kenneth Griffin:
— Champions The Idea of Building Clearinghouse For Credit Default Swaps
— Proper Regulation Is Key To Health Of Financial Markets
— Congress, Regulators, Industry Must All Work Together
— We Must Not Stifle Best Innovative Qualities Of Our Financial Markets

 Major news outlets are saying that they were "called to testify" before a House committee.
James Simon politely thanked the House for the opportunity to offer comments. He made my favorite quote:

There is much blame to be shared: the SEC and perhaps the Federal Reserve for taking such a hands-off position on the leverage posture of the investment banks and the uncontrolled nature of the CDS market; the players all along the chain of creation and distribution of the paper, each of whom should have blown a whistle rather than passing the problem on to the next guy; and finally, and in my opinion the most culpable, the rating agencies, which failed in their duty and allowed sows' ears to be sold as silk purses.

http://www.cnbc.com/id/27699730

Start a Business!

There is a very interesting article and slideshow today at Forbes.com that details thirteen businesses that anyone in the U.S. can start for less than $5,000. Here they are in a list, all at once:

1. direct retail sales
2. interior design
3. event planner
4. home landscaping (esp interior)
5. SAT tutoring
6. yoga instructor
7. computer trouble shooting and repair
8. child care
9. writing software
10. graphic design
11. consulting
12. public relations
13. web work

For more information on these, see this:

http://www.forbes.com/2008/10/29/startup-under-5000-ent-fin-cx_mf_1029underfivethousand.html?feed=rss_news

A few more ideas would be:

1. staging or "use what you have" decorating to ready for sale
2. painting, interior and exterior
3. painting pictures or doing sculpture for a gallery
4. bead jewelry-making and sales
5. house-cleaning business
6. handyman, because not all men are handy
7. piano lessons (especially mobile)
8. novel-writing
9. blogging
10. personalized greeting cards and birthday cards
11. calligraphy (fancy handwriting)
12. pet-walking, boarding, feeding
13. "personal shopping" for others; many niches such as food and gifts for the elderly, the ill, children

There are lots of businesses to start, depending on your situation, education, desire, what you already have and how much time and energy and good health you have. There are businesses to start in your area that are already thriving nearby or in other countries that most likely could be started with little expenditure. The list goes on and on!

Many of my acquaintances have combinations of these. A friend of mine has four businesses at once: staging, pet-feeding, giving professional massages, and teaching horseback riding when she isn't riding or caring for her three almost-launched children. Another is a concert pianist who can play for ages by memory in front of a packed audience with an orchestra, models on request and has done so in major cities, makes over-the-top jewelry (dodidesigns.com) and gives piano lessons while taking advanced degree classes.

This entry could be titled "start another business". The possibilities are endless, and the advantage of many is that you can choose your hours and have flexible convenient work.

For many, these started out as hobbies. Test them out to see if they make enjoyable pastimes. You can finally do what you may have always wanted to do, and keep learning something new.

Currently, anyone with American citizenship (or resident alien card) can own a business in the U.S. Different countries have different requirements.

Invest in yourself. And keep your health. Always. These jobs could help you do just that.

Kiplinger's Magazine: Ten Cash Cows

Here is an excerpt of an article from Kiplinger’s Magazine listing ten large-cap companies that should do well over the next ten years:

1) Procter & Gamble (PG): Daily grooming products, 10% earnings, div + yield

2) Electronic Arts (ERTS): World’s biggest video-game software company. Sales and earnings over 21%.

3) First Solar (FSLR): American government subsidized. Alternative energy will be especially popular if oil prices rise. 56% earnings; efficient production process.

4) Gilead Sciences (GILD): HIV and other portfolio of drugs, robust growth.

5) Google (GOOG): 22% earnings. Internet giant with advertising revenues.

6) Monsanto (MON): 41% earnings. Technology lead and worldwide sales.

7) Norfolk & Southern (NSR): More efficient than rival railroad CSX.

8) T Rowe Price (TROW): low costs, profits of 15-39% annually.

9) Schlumberger (SLB): world’s largest energy services &exploration company, 12 % earnings.

10) Visa (V): world’s largest payment processor, recent IPO, more business expected.

We can check this list in a decade and see which ones did as well as propounded (if we remember).

By the way, not a single one of these stocks has achieved more than O% gains in a one-year chart. Going back years they look far more compelling.

Most important, they are all considered by Kiplinger’s to be very well-capitalized to survive a challenging marketplace. Oct. 31, 2008

http://www.kiplinger.com/features/archives/2008/08/ten_great_stocks.html?kipad_id=5?kipad_id=5?kipad_id=5?kipad_id=5

"Most Profitable Home-based Businesses" in America 2008 - Forbes Magazine

1. Securities and Commodity Brokers

Average Pretax Profit Margin: 14%

2. Software Publishers

Average Pretax Profit Margin: 14%

3. Artists, Writers, Performers

Average Pretax Profit Margin: 13%

4. Insurance Agents and Brokers

Average Pretax Profit Margin: 13%

5. Specialized Design Services

Average Pretax Profit Margin: 11%

6. Consulting Services

Average Pretax Profit Margin: 10%

7. Personal and Household Goods Repair and Maintenance

Average Pretax Profit Margin: 10%

8. Offices of Real Estate Agents and Brokers

Average Pretax Profit Margin: 9%

9. Electronic and Precision Equipment Repair and Maintenance

Average Pretax Profit Margin: 9%

10. Grant Making and Giving Services

Average Pretax Profit Margin: 8%

My apologies for the uneven type which I cannot seem to correct.

The only one that surprised me is #7, where shoe repair shops are cited as the next big “home-based business”!

Further information is at the article here:

http://www.forbes.com/2008/10/14/profitable-home-businesses-ent-fin-cx_mf_1014mostprofitablehomebiz.html?feed=rss_news

Most generous corporations - Forbes Magazine

Forbes has just published two lists of the ten most generous corporations, one by percent of company income, and the other by actual cash donations. Here is a list of the names together.
Big round of applause time!

Most Generous Corporations - Cash Donations:

No. 1: Wal-Mart Stores

2007 cash donation: $301 million

No. 2: Bank of America

2007 cash donation: $211 million

No. 3: Exxon Mobil

2007 cash donation: $173 million

No. 4: Citigroup

2007 cash donation: $146 million

No. 5: Johnson & Johnson

2007 cash donation: $127 million

No. 6: Chevron

2007 cash donation: $122 million

No. 7: AT&T

2007 cash donation: $119 million

No. 8: General Electric

2007 cash donation: $114 million

No. 9: Microsoft

2007 cash donation: $110 million

No. 10: Wachovia

2007 cash donation: $103 million

Most Generous Corporations - Percentage of Income:

No. 1 Kroger

1.7% of operating income
2007 cash donation: $57 million
2006 operating income: $3.3 billion

No. 2 Tyson Foods

1.6% of operating income
2007 cash donation: $8 million
2006 operating income: $492 million

No. 3 Bristol-Myers Squibb

1.4% of operating income
2007 cash donation: $59 million
2006 operating income: $4.1 billion

No. 4 Best Buy

1.4% of operating income
2007 cash donation: $31 million
2006 operating income: $2.2 billion

No. 5 Eli Lilly

1.3% of operating income
2007 cash donation: $70 million
2006 operating income: $5.4 billion

No. 6 Wal-Mart Stores

1.3% of operating income
2007 cash donations: $301 million
2006 operating income: $23.6 billion

No. 7 Fluor Corp.

1.2% of operating income
2007 cash donation: $10 million
2006 operating income: $531 million

No. 8 Xerox

1% of operating income
2007 cash donations: $25 million
2006 operating income: $2.5 billion

No. 9 Caterpillar

0.9% of operating income
2007 cash donation: $74 million
2006 operating income: $7.8 billion

No. 10 Northrup Grumman

0.9% of operating income

2007 cash donation: $30 million

2006 operating income: $3.2 billion

Interesting how diverse these companies are. They are not all, say, grocery stores. Also, it is interesting to note how different the companies on the lists are. Only Wal-Mart and Exxon-Mobil make both lists.

Here's the full article:
http://www.forbes.com/home/2008/10/16/most-generous-corporations-corprespons08-lead-cx_mk_1016charity.html

Nobel Prize-winner Paul Krugman's "Gordon Does Good" article

The New York Times currently has fine reporting with one of its reporters, Paul Krugman, today capturing the Nobel Prize for Economics. 

Paul Krugman's article "Gordon Does Good" in The Times today illuminates the banking issues at the heart of the American financial crisis and posits that the U.K. has taken on a leadership role:

http://www.nytimes.com/2008/10/13/opinion/13krugman.html?hp

Here are my favorite excerpts:

What is the nature of the crisis? The details can be insanely complex, but the basics are fairly simple. The bursting of the housing bubble has led to large losses for anyone who bought assets backed by mortgage payments; these losses have left many financial institutions with too much debt and too little capital to provide the credit the economy needs; troubled financial institutions have tried to meet their debts and increase their capital by selling assets, but this has driven asset prices down, reducing their capital even further.
...to deal with the problem of inadequate financial capital by having governments provide financial institutions with more capital in return for a share of ownership.

This sort of temporary part-nationalization, which is often referred to as an “equity injection,” is the crisis solution advocated by many economists — and sources told The Times that it was also the solution privately favored by Ben Bernanke, the Federal Reserve chairman.

But when Henry Paulson, the U.S. Treasury secretary, announced his plan for a $700 billion financial bailout, he rejected this obvious path, saying, “That’s what you do when you have failure.” Instead, he called for government purchases of toxic mortgage-backed securities, based on the theory that ... actually, it never was clear what his theory was.

...Meanwhile, the British government went straight to the heart of the problem — and moved to address it with stunning speed. On Wednesday, Mr. Brown’s officials announced a plan for major equity injections into British banks, backed up by guarantees on bank debt that should get lending among banks, a crucial part of the financial mechanism, running again. And the first major commitment of funds will come on Monday — five days after the plan’s announcement.

At a special European summit meeting on Sunday, the major economies of continental Europe in effect declared themselves ready to follow Britain’s lead, injecting hundreds of billions of dollars into banks while guaranteeing their debts.

...Mr. Paulson — after arguably wasting several precious weeks — has also reversed course, and now plans to buy equity stakes rather than bad mortgage securities.

...All across the executive branch, knowledgeable professionals have been driven out; there may not have been anyone left at Treasury with the stature and background to tell Mr. Paulson that he wasn’t making sense.

Luckily for the world economy, however, Gordon Brown and his officials are making sense. And they may have shown us the way through this crisis.

It's an excellent article from Paul Krugman, now an even more influential journalist, after this morning's announcement of his Nobel Prize, and I am sure it reflects very well on The New York Times and other journalists there as well.

It also reflects well on Princeton University where he is professor of Economics and International Affairs, and more celebrated than ever.

Interesting that the Nobel Committee must have had its eye on him for at least five years "for his work on global trade patterns".

Lawmakers and government finance heads must actually and in real time "do the right thing" with lasting consequences, very serious achievements in my view. Let's hope they too get their just rewards.

There aren't enough Nobel Prizes to go around. It is, as always, a gift.

Hakuna Matata

From today's New York Times:

Greenwich Time

Op-Ed Contributor

By TOM WOLFE

Published: September 27, 2008

...the Masters of the Universe are smarter than the people they left behind at the investment banks. Their hedge funds have blown up here and there, but unlike the investment banks, they are still very much in business. They have hurriedly pulled themselves into defensive positions inside their shells, like turtles. Their Armageddon, if any, will not come for two more days, which is to say, Tuesday, Sept. 30.

Most hedge funds open up a crack on Sept. 30, Dec. 31, March 31 and June 30 to give investors the chance to “redeem” their investments, meaning take their money out. These moments are called gates, like a series of gates in a prison. The gate is the limit, the fixed percentage of your money, that the fund will allow you to take out at one time. Even with these strict caps on withdrawals, some funds may end up nothing but shells.

Shed no tears for the Masters of the Universe, however, not that your correspondent actually thought you might. Most of the young Masters already have their own personal nut free and clear. “Nut” is the term for the amount of money you need salted away in weather-proof investments in order to generate enough interest to live comfortably in Greenwich on Round Hill Road, Pecksland Road or Field Point Road in a house built before the First World War in an enchanting European style, preferably made of stone featuring the odd turret, with a minimum of five acres around it and big enough to be called a manor. Every Master of the Universe knows the number.

Tom Wolfe, the author of “The Bonfire of the Vanities,” is at work on a novel about immigration in Miami.

Hope Legislation Passes in a Timely Fashion

Bernanke Reiterates Need to Act Quickly

Doesn't this headline at the top of "The Wall Street Journal" sum it all up?

Yesterday, watching the Treaury Secretary, Henry "Hank" Paulson, and the Chairman of the Federal Reserve Board, Ben Bernanke, attempt to face a grilling from lawmakers on CNBC, I felt so sorry for them.

Their questioners were doubting their credentials to be doing this. But what were the credentials of the lawmakers to be questioning them except that they have passed popularity contests with the American voters? Since the lawmakers have to pass popularity more importantly than educational contests, why should they be the judges of economic experts?

Paulson and Bernanke are noble men doing what they can to help their country, and they are being publicly abused for creating solutions that their abusers cannot begin to understand, let alone fashion. These appointees (appointed for their expertise and cooperative skills) don't need or deserve this abuse. They would quit in exasperation and impatience if they were not such responsible men. Let's hope they can get this important effort completed with their health intact, and that they do it well, for future generations.

Paulson, especially appeared to be very sleep-deprived and nervous, and was instantly expected to answer with conversational solutions some difficult computer-dependent problems. Big problems take a lot of time to solve, if they can prove to be solved at all by people. If these two individuals had been harder scientists, they would not be there.

These are very friendly, cooperative, knowledgeable men, and all of their precious intellect and energies and time were being spent, wasted, on this hearing. If executive salary and other positions are going to be bundled onto this legislation, the whole American economy could collapse while legislation takes ages to pass.

How to Choose Purchases

ON COURAGE:

Be still my heart. Thou hast known worse than this.
Homer, 850 B.C.

It is definitely not the worst use of your mind and time and money to learn "how to budget". Money you don't spend now can be saved and invested with compound interest to your future benefit. Here are some tips to help you make wise purchase decisions:


1) Relax and take a deep breath. This should be good clean fun. No one can buy everything. Just generally in many ways and for one's whole life, it is necessary to make choices constantly, of what one needs to have and what cannot be kept.


2) Since one needs to choose, and everyone must choose, it is necessary to realize that what one needs is individual and is not the same as the next person.


3) Purchases, most of them, are made on whims.


4) Set priorities. Since everyone has limited resources for keeping all that one would like to, choices must be carefully and thoughtfully made. Consider such factors as:

a) keeping to your budget, and everyone has one (if one pays for this, can one also pay for something else down the road. How much can one afford to pay for this item and still afford other purchases one must make?)

b) the utility of the purchase (does one really need it?). Think many times: why buy it? How much does one really need? What one cannot know is what one will not buy if one does buy now. The purchase might be cheaper or better made somewhere else.

c) the wisdom of the purchase (can one give it a good home and keep it well stored? Will it be regretted if it does not fit one's space?)

d) the beauty and desirability of the purchase (as often as possible).


5) Availability which would seem first in importance is actually last and, in America, least in significance. Just because if it is available for purchase does not mean it must be purchased. The internet is making so much available for purchase now that was not available in the past and widening choice. Be philosophical and humble; if it is not there when you want it, then it was somehow not meant to be yours. Save that money for something else. Don't forget that what is coming down the road toward you is likely to be huge and you will want to be ready with the money.


Happiness does not just involve making purchases. Studies show that we derive the most happiness from our relationships with others. lift your self-esteem or erase loneliness. Instead, find lots of ways to increase your cheerfulness. While it may seem that money and purchasing makes the world go around, it is best to aim to expand your friendships and interests. Purchasing to lift self esteem and erase loneliness spends our future benefit when we should be searching and educating ourselves in ways that will always, in many situations, meet these needs. While purchasing is a solitary activity and resourceful use of time, our relationships with others most influence our happiness.

Ultimately the goal of purchasing well is appreciation and satisfaction. Purchase wisely, so that one will not have buyer's remorse, or regret a purchase decision. While I, personally, always try not to judge or define anyone by their purchase decisions because I know how easy it is to make inappropriate purchases, please be aware that many out there do exactly that. We all sometimes make bad decisions from haste or inadequate funds. Your purchases are your choices and they differentiate you from others. What you think is a wonderful buy is individual to you, and not necessarily widely shared.

Choose carefully, but go ahead and shop. It is one of the great pleasures of life. There is scientific proof that your heart beats faster when a purchase is made and the interaction can be fun. It is a privilege to purchase and and a joy to receive.