The Day After the Day Before

Yesterday was staged to be a historic moment for the U.S. Regardless of the outcome, election day 2008, America would select a leadership team that represented significant change. As it has turned out, Barack Obama has been elected the first African American President.

Regardless of your personal persuasion, now is the time to put aside the political differences and return to a unified America. Time and time again, the people of America have demonstrated a resolve to face our challenges, both foreign and domestic. We find solutions, we decide a course, and we move forward.

It is my hope that we the people, can once again rekindle our collective spirit to overcome the financial, security, and cultural challenges that face the United States. May we return to an all-inclusive faith in a Holy God, that is a supreme being, the creator of the universe, the One who ordains our leaders, and the One who is in ultimate control regardless of the person sitting in the White House.

Vision Building

Small businesses need to think about creating or maintaining their vision. Many new companies start with a fairly well written vision statement. In the beginning, it is easy to harness the energy of the creation process and jot down the key points that are front-of-mind while the building is happening. But as time marches on, the original vision can become hazy. Perhaps through market change, economic slippage, employee turnover, or brutal competition, the original vision need some adjustment.

It is very important that the stakeholders review and reassess the vision. Make strategic or tactical adjustments as you must, but just do it.

Fannie and Freddie; Not Just Distant Relatives

All of the market hype and shock that ran its course last week first suggested these two behemoths may be headed for extinction. Not so fast. The Treasury Secretary ran to the rescue opening the Fed window and relieving the steam from the pressure cooker. Fannie Mae and Freddie Mac are so-called “government sponsored entities” (GSE). The trouble is that the concept was to build faith and trust behind these operating companies so that capital markets would accept the transactions they were chartered to originate. Of course, the overarching charter was to establish a vehicle for “affordable housing”. Instead, it seems that the years of unbridled operation have created a true monolith of financial prosperity. The catch is that both entities are highly, highly leveraged. For them, it truly takes money to make money. More begets more in a seemingly never ending frenzy of growth. As soon as the cash spigot turns even slightly “off”, the model grinds to a slow stop.

In the case of this past month, stock prices became the immediate barometer of the viability of these GSEs. Their underlying market capitalization dropped roughly 75 to 80 percent compared to the prices last year (when the mortgage meltdown began).

Fortunately, for all of us hardworking tax payers, the market is correcting a bit and the stock prices have already doubled since last week. Clearly there is a long way to go. Many regulators and members of Congress are saying the road ahead will be long and rocky.

For now, the bullet seems to have been dodged. Whew!

Cash may be King for a while….hmmmmmm

Tough Day in Paradise

The US financial landscape saw some large new litter today. IndyMac Bank became the second largest bank seizure in US history. The OTS moved to exercise its power and take control of the bank. In short order, control was handed off to the FDIC. A large portion of the deposit accounts were declared uninsured under the FDIC $100,000 limit per account.

This event, coupled with another decline in stock prices for Fannie Mae and Freddie Mac spells trouble on Monday. Could we see another Black Monday around the corner? I doubt it. Congress moved quickly to prop up Fannie and Freddie, opening the discount window midday today.

Clearly it IS time for bank management at all levels to take heed. Stress test any and all loan portfolios with mortgage product. I do NOT advocate exiting the mortgage business. Quite the contrary. I propose that community and regional banks expand mortgage operations. Go back to pre-1960 banking in respect to home loan finance.

I Can Control Gas Prices !!!

Ok, not really. I just think it’s odd that no sooner than I started my blog with a mention of record high gas prices, PRICES STARTED TO DROP. Yippeee. I’ll keep going if you all don’t mind. $9 per barrel drop in 10 days. Pretty sweet.

BTW did you know the proverbial barrel of oil is only 42 gallons? So at $140 per barrel, we have $3.33 per gallon cost of raw materials. $4.10 at the pump sounds like a bargain. Just Kidding.

Summertime Blues?

Is there a cure for the Summertime blues? An old pop song once claimed there was NOT. Ah, but these times they are a changing…. (Dylan I believe). Gas reached an all time high of $4.11 per gallon, national average. Depending on the press you read, we are seeing prices climb for building materials, consumer goods, loaves of bread, and even movie tickets (I understand Hancock kicked you know what at the box office this weekend). Is there no end in sight?

Well, as naive as it may sound…what can you do about it? Yes, we can get out to work for and vote for the party and the candidate(s) we think can influence things. And that is a good start. But what about making our own individual contributions by way of good old fashioned hard work. Yes, I mean get up each day, get to work on time, clock a full day’s work, then go home and do it all over again. I am writing this at 7:00 p.m. Sunday night. That is my personal time, at least on the clock I live by for the moment. What I mean is, I am not doing this on company time or while a client’s meter is running. I am burning my own time to lay this down. Tomorrow, when I resume my daily chores I will be focusing time and energy with my clients. No web surfing, no junk email day dreaming, etc. No texting. Wow, you must be reeaallllyyy old Dude. No Dude, not reeaalllly. Just practical. Think about it.

Have a great week. Do something new and wild this week. 



July 4th

OK today IS the day. July 4th, 2008. Great day of celebration, family, food, fireworks, and fun.  Most of my gang was here today including new in-laws who joined our family by virtue of a beautiful wedding held May 31. One of our sons married a sweet and wonderful soul mate of a bride. This was our first 4th as the new clan. Great times.

As the kids have grown (I have 5), they of course have conflicting events they must block on their calenders. My wife and I get that. So we miss them, but do not brood over it. Quite the contrary. We celebrate with them their newly expanding lives. We actually enjoy our empty nest a bit too much perhaps some would say. But it works for us.

Today though was a great day of super food, fine fellowship, and all around fun.

Independence Eve – Is That A Holiday too?

Tomorrow is July 4th, US Independence Day. Most (not all) US citizens know and understand the meaning of July 4th. Children get excited about fireworks, parades, picnics, ice cream, watermelons, soda, and funny characters dressed up in garb of red, white and blue. But have you ever thought about what our forefathers may have been thinking on July 3rd, Independence Eve? They knew what they were contemplating the next day. Meetings had been held and discussions leading into sometimes violent debates ensued. But when July 3rd came around, most of that was now behind them. It was time for the pregnant anticipation of the birth of a new nation.

I just wonder what those guys were thinking the night before signing day. Did many of them sleep? Or had they started their celebrations. I am sure some historians somewhere have the answers to my questions. I mean these questions to be more rhetorical than not. Does the average American today think much at all about the things our founding Fathers thought. I fear not. The gene pool of pure American spirit has been too diluted with generations of idealism that has become compounded by so much independence that hardly anyone agrees in the concept of the common good. It’s all about “me”.

Ok, where did this missive go off course? Back to the point… I am just curious why we don’t have July 4th Eve like we have Christmas Eve. Heck, at Christmas time, lots of families do more on the eve than they do the day of Christmas. Why don’t some of us do that for July 4th too? Surely something was going on in the hearts and minds of the guys who gave us July 4.