“When times are tough, vision is the first causality. Before conditions can improve, it is the first thing we must recover.”
Michael Hyatt
This post will be a little different. I will synopsize and review an article from the January-February 2010 edition of the Harvard Business Review entitled “How to Bounce Back from Adversity” without a lot of additional comment. The coauthors are Joshua Margolis, Associate Professor of Business Administration, Harvard University and Paul Stoltz, founder and CEO of PEAK Learning, a consulting firm specializing in the study of and solutions for businesses that find themselves in crisis situations. I recommend going to your local library and making a copy of this article for future reference or buying a copy on line directly from the Harvard Business Review.
Stoltz has spent his life studying human psychological response to negative experiences in financial and business environments. He contends that whatever your initial reaction to a setback might be, the key is turning this negative experience into a productive experience, “that is, to counter adversity with resilience.” The author describes psychological resilience as the central dynamic in almost all survival stories.
The authors point out that in moments of fear, anger, confusion, or paralysis we tend to receive bad advice even from the best intentioned mentors, generally a “how to pep talk delivered utterly without empathy or understanding, or a sympathetic ear and reassurance that things will turn out OK.” The authors contend neither approach is useful. They have found that asking a series of three questions applied to four different areas, will provide constructive information that can then lead to a productive reaction to crisis events.
The questions are, “Specifying questions that help managers identify ways to intervene; the more specific the answers, the better. Visualizing questions help shift their attention away from the adverse event toward a more positive outcome. Collaborating questions push them to reach out to others-not for affirmations or commiseration but for joint problem solving.”
The Four Areas and the Three Questions
1) Control
When a crisis hits, do you look for what you can improve not rather than trying to identify all the factors even those beyond your control that caused it in the first place?
Specifying: What aspects of the situation can I directly influence to change the course of this adverse event?
Visualizing: What would the manager I most admire do in this situation?
Collaborating: Who on my team can help me, and what’s the best way to engage that person or those people?
2) Impact
Can you sidestep the temptation to find the origins of the problem in yourself or others and focus instead on identifying what positive effects your personal actions might have?
Specifying: How can I step up to make the most immediate, positive impact on the situation?
Visualizing: What positive effect might my efforts have on those around me?
Collaborating: How can I mobilize the efforts of those who are hanging back?
3) Breadth
Do you assume that the underlying cause of the crisis is specific and can be contained, or do you worry that it might cast a long shadow over all aspects of your life?
Specifying: What can I do to reduce the potential downside of this adverse event-by even 10%? What can I do to maximize the potential upside-by even 10%?
Visualizing: What strengths and resources will my team and I develop by addressing this event?
Collaborating: What can each of us do on our own, and what can we do collectively to contain the damage and transform the situation into an opportunity?
4) Duration
How long do you believe that the crisis and its repercussions will last?
Visualizing: What do I want life to look like on the other side of this adversity?
Specifying: What can I do in the next few minutes or hours, to move in that direction?
Collaborating: What sequence of steps can we put together as a team, and what processes can we develop and adopt, to see us through to the other side of this hardship?
The point of this exercise is not to come up with a final plan, but to generate possibilities and a series of short term actions. Such planning and small actions taken on a consistent basis over time will lead to major breakthroughs.
The authors recommend writing down the answers to the twelve questions as a timed exercise. They recommend allowing 15 minutes a day, a length of time they believe you will find both too short and too long for the practice. They believe that doing it every day until the crisis is past is critical.
I repeat they believe repetition and writing down the answers is critical to success.
This is the best that modern organizational psychology can offer in dealing those moments when life seems like nothing but broken promises and shattered dreams. Perhaps I have a high opinion of this research as it seems to support the findings of the Silver Eagle Experiment.
Saturday, February 27, 2010
Thursday, February 25, 2010
The Cost of Giving (Part IV)
The Gift of the Heart
Can you open your heart? Can you give something of yourself that is beyond time, treasure and emotional energy? Can you give your heart to a hurting world, openly, honestly, without regret?
It is inordinately difficult, this giving of our heart and often painful beyond bearing. Parents understand this; lovers understand it; husband and wife understand it; and at least once upon a time, at the moment of salvation, we Christians and our Savior understood it. The gift of the heart is a gift given from person to person, one person at a time. It always includes time, treasure, and emotional energy, but it is always more than that.
It starts with our own self. Can you, can I accept myself, just as I am, just as Jesus accepted me? Can I extend a blessing, a blessing to be well, happy, and fulfilled to my own person? It is harder than it sounds. If we can not love ourselves, how can we love our families, our neighbors, strangers, or even our enemies, as our Lord commands?
Would we do anything possible to spare another from pain, from suffering? I have known parents, grandparents who honestly would go through anything to spare their children or grandchildren from suffering and pain. Can we open our hearts to another in that same way? No matter what the risk. No matter what the cost.
Can I find unconditional joy in the success and happiness of another, even as I suffer failure, disappointment, or betrayal?
It is very dangerous this gift of the open heart. To expose ourselves that completely to another, to open ourselves completely to pain, disappointment, betrayal, and even death, is dangerous beyond words. If we open our hearts to another we will experience pain. It is inevitable. The center of the human heart is tender beyond imagination. But ultimately, this gamble is what makes us human. In seeking freedom for others, without conditions, without limit we ultimately become free.
Some Catholics and a few Orthodox practice a meditation on the Sacred Heart of Jesus. In this devotion they come to understand that Christ’s Divine Heart and his love for a fallen hurting world, His love for you, and for me are inseparable.
John 3:16 (NIV)
For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life.
In picturing this meditation on the mystery of the incarnation, Jesus is showing his heart and the wounds he suffered on the cross. The perfect model of the love of God the Father and the love of neighbor is portrayed as a heart on fire surrounded with a crown of thorns. If that makes no sense to you, ask the parent of a teenager; ask a lover; and above all ask your own heart. It will answer you.
His ministry here on earth cost Jesus in terms of time, treasure, and emotional energy. I imagine He found His life here on earth extremely painful and disappointing, even before His crucifixion. Can we expect anything different?
From the Love Chapter
First Corinthians 13: 1-13 (NIV)
If I speak in the tongues of men and angels,
But have not love,
I am only a resounding gong or a clanging cymbal.
If I have the gift of prophecy and can fathom all mysteries and all knowledge,
And if I have a faith that can move mountains, but have not love, I am nothing.
If I give all I possess to the poor and surrender my body to the flames,
But have not love, I am nothing.
Love is patient, love is kind. It does not envy, it does not boast, it is not proud.
It is not rude, it is not self seeking, it is not easily angered, it keeps no record of wrongs.
Love does not delight in evil but rejoices with the truth.
It always protects, always trusts, always, hope, always preserves.
Love never fails.
But where there are prophecies, they will cease;
Where there are tongues they will be stilled;
Where there is knowledge, it will pass away.
For we know in part and we prophesy in part,
But when perfection comes, the imperfect disappears.
When I was a child, I talked like a child,
I thought like a child,
I reasoned like a child.
When I became a man, I put childish ways behind me.
Now we see but a poor reflection, as in a mirror;
Then we shall see face to face.
Now I know in part; then I shall know fully,
Even as I am fully known.
And now these three remain: faith, hope, and love.
But the greatest of these is love.
Can you open your heart? Can you give something of yourself that is beyond time, treasure and emotional energy? Can you give your heart to a hurting world, openly, honestly, without regret?
It is inordinately difficult, this giving of our heart and often painful beyond bearing. Parents understand this; lovers understand it; husband and wife understand it; and at least once upon a time, at the moment of salvation, we Christians and our Savior understood it. The gift of the heart is a gift given from person to person, one person at a time. It always includes time, treasure, and emotional energy, but it is always more than that.
It starts with our own self. Can you, can I accept myself, just as I am, just as Jesus accepted me? Can I extend a blessing, a blessing to be well, happy, and fulfilled to my own person? It is harder than it sounds. If we can not love ourselves, how can we love our families, our neighbors, strangers, or even our enemies, as our Lord commands?
Would we do anything possible to spare another from pain, from suffering? I have known parents, grandparents who honestly would go through anything to spare their children or grandchildren from suffering and pain. Can we open our hearts to another in that same way? No matter what the risk. No matter what the cost.
Can I find unconditional joy in the success and happiness of another, even as I suffer failure, disappointment, or betrayal?
It is very dangerous this gift of the open heart. To expose ourselves that completely to another, to open ourselves completely to pain, disappointment, betrayal, and even death, is dangerous beyond words. If we open our hearts to another we will experience pain. It is inevitable. The center of the human heart is tender beyond imagination. But ultimately, this gamble is what makes us human. In seeking freedom for others, without conditions, without limit we ultimately become free.
Some Catholics and a few Orthodox practice a meditation on the Sacred Heart of Jesus. In this devotion they come to understand that Christ’s Divine Heart and his love for a fallen hurting world, His love for you, and for me are inseparable.
John 3:16 (NIV)
For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life.
In picturing this meditation on the mystery of the incarnation, Jesus is showing his heart and the wounds he suffered on the cross. The perfect model of the love of God the Father and the love of neighbor is portrayed as a heart on fire surrounded with a crown of thorns. If that makes no sense to you, ask the parent of a teenager; ask a lover; and above all ask your own heart. It will answer you.
His ministry here on earth cost Jesus in terms of time, treasure, and emotional energy. I imagine He found His life here on earth extremely painful and disappointing, even before His crucifixion. Can we expect anything different?
From the Love Chapter
First Corinthians 13: 1-13 (NIV)
If I speak in the tongues of men and angels,
But have not love,
I am only a resounding gong or a clanging cymbal.
If I have the gift of prophecy and can fathom all mysteries and all knowledge,
And if I have a faith that can move mountains, but have not love, I am nothing.
If I give all I possess to the poor and surrender my body to the flames,
But have not love, I am nothing.
Love is patient, love is kind. It does not envy, it does not boast, it is not proud.
It is not rude, it is not self seeking, it is not easily angered, it keeps no record of wrongs.
Love does not delight in evil but rejoices with the truth.
It always protects, always trusts, always, hope, always preserves.
Love never fails.
But where there are prophecies, they will cease;
Where there are tongues they will be stilled;
Where there is knowledge, it will pass away.
For we know in part and we prophesy in part,
But when perfection comes, the imperfect disappears.
When I was a child, I talked like a child,
I thought like a child,
I reasoned like a child.
When I became a man, I put childish ways behind me.
Now we see but a poor reflection, as in a mirror;
Then we shall see face to face.
Now I know in part; then I shall know fully,
Even as I am fully known.
And now these three remain: faith, hope, and love.
But the greatest of these is love.
Sunday, February 21, 2010
The Cost of Giving (Part III)
Level Three Giving – Emotional Energy
We all know time is money and money is time. If you are blessed enough to have a job and family responsibilities, time is the premium commodity. If not then money is more precious than time. Both, however, are external to the essence of our being. We can give time and money without the violation of our physic defense mechanisms. For this reason I believe that the gift of our emotional energy is more precious than the gifts of money or time.
Consider, how might I respond to the beggar who works a certain corner on my way to church most Sunday mornings? I drive by with my eyes forward and an expression of displeasure on my face, hoping he will go to the next car without any need for further contact. Another man might roll down the window and give the beggar some change. Someone, perhaps a little farther up the ladder might offer the beggar some money and a few words of encouragement, a small gift of time before the light turns green. A Saint, like Mother Teresa of Calcutta, would invest her time, her possessions, and her emotional energy in this man whom I consider an urban parasite.
Mother Teresa observed, “Being unwanted, unloved, uncared for, forgotten by everybody, I think that is a much greater hunger, a much greater poverty than the person who has nothing to eat.” She spent her life pouring her emotional energy into the lives of discarded, unwanted people wherever she went. She was willing to offer herself as a living sacrifice in a manner that was meaningful to the unloved whether in the third world or the wealthiest country in the world, America.
My fearful heart has seen energy vampires that will take everything I could offer and demand more, people who are simply a black hole, people who can never be filled. I don’t have the time or energy to deal with such relationships. God tells me the outcome is none of my business, be obedient and leave the outcome in His hands.
Even if I am successful, would my neighbor understand the emotional energy I sacrificed for their well being? God tells me it doesn’t matter because He will know.
I have seen Christians who are doing a better job serving the Lord than I have managed. They can be found in homeless shelters, hospices, and even churches, wherever a person shares the burdens and concerns of another in an open and honest manner. I am not talking about the dispassionate expertise of the professional counselor, although, God knows, there is definitely a crying need in our churches for that skill. I am talking about the sacrificial gift of concern to another.
But there is still more.
Luke 16: 10-12
(10) Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much.
(11) So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches?
(12) And if you have not been trustworthy with someone else's property, who will give you property of your own?
We all know time is money and money is time. If you are blessed enough to have a job and family responsibilities, time is the premium commodity. If not then money is more precious than time. Both, however, are external to the essence of our being. We can give time and money without the violation of our physic defense mechanisms. For this reason I believe that the gift of our emotional energy is more precious than the gifts of money or time.
Consider, how might I respond to the beggar who works a certain corner on my way to church most Sunday mornings? I drive by with my eyes forward and an expression of displeasure on my face, hoping he will go to the next car without any need for further contact. Another man might roll down the window and give the beggar some change. Someone, perhaps a little farther up the ladder might offer the beggar some money and a few words of encouragement, a small gift of time before the light turns green. A Saint, like Mother Teresa of Calcutta, would invest her time, her possessions, and her emotional energy in this man whom I consider an urban parasite.
Mother Teresa observed, “Being unwanted, unloved, uncared for, forgotten by everybody, I think that is a much greater hunger, a much greater poverty than the person who has nothing to eat.” She spent her life pouring her emotional energy into the lives of discarded, unwanted people wherever she went. She was willing to offer herself as a living sacrifice in a manner that was meaningful to the unloved whether in the third world or the wealthiest country in the world, America.
My fearful heart has seen energy vampires that will take everything I could offer and demand more, people who are simply a black hole, people who can never be filled. I don’t have the time or energy to deal with such relationships. God tells me the outcome is none of my business, be obedient and leave the outcome in His hands.
Even if I am successful, would my neighbor understand the emotional energy I sacrificed for their well being? God tells me it doesn’t matter because He will know.
I have seen Christians who are doing a better job serving the Lord than I have managed. They can be found in homeless shelters, hospices, and even churches, wherever a person shares the burdens and concerns of another in an open and honest manner. I am not talking about the dispassionate expertise of the professional counselor, although, God knows, there is definitely a crying need in our churches for that skill. I am talking about the sacrificial gift of concern to another.
But there is still more.
Luke 16: 10-12
(10) Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much.
(11) So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches?
(12) And if you have not been trustworthy with someone else's property, who will give you property of your own?
Saturday, February 20, 2010
The Cost of Giving (Part II)
Level Two Giving – Time
There is something more precious than money, at least in suburban America, our time. Many of us are blessed with good jobs or successful businesses; we have enough surplus to give God a portion of our wealth without feeling too much pain. However, in a world where a 50 hour work week is a pretty average for both husband and wife, a 10-12 hour weekly commute is normal, and the demands of home and family must be met no matter what the cost, what is left for the Lord?
Usually the first place we give of our time is on Sunday morning. Getting the family together, in the car, and off to church might take an hour or more. The church service itself will likely run one to one and a half hours. After a few minutes of chatting on the way out, the commute back home, and the unwind prior to fixing lunch, ½ the day is gone. That is actually a big investment for the harried, overworked white collar workers of Montgomery County. As a result, not many of them attend church on a regular basis. Churches provide other opportunities for their members to invest time in worship activities, small group meetings, choir practice, and weekend retreats to name but a few. Many churches provide opportunities to go beyond these normal activities and give time to others. The best examples are short term mission trips. Adult or youth groups are organized to travel to the third world or even an American slum to work for those less fortunate than themselves. For an overstressed office worker to donate a week of vacation time to serve as a construction worker in some unpleasant impoverished location far from his world is a gift indeed. There are other ways to give of our time.
In thinking about this section on the cost of giving, I concluded that writing this blog was also an example of giving time to the Lord. However, I began to argue with myself, “This isn’t really giving because I have learned so much over the last year. Writing this blog has really been of benefit to me.”
Then I heard a little witness in the spirit announce, “Bingo! Now, if you can just hold that thought.” Even secular authors understand that in an interconnected world we are ultimately rewarded for being generous. Seth Godin writes, “In the digital world, the gift I give you almost always benefits me more than it costs.” As we donate our time to God, we change the world.
Luke 6:38
Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you.
But there is more, so much more.
There is something more precious than money, at least in suburban America, our time. Many of us are blessed with good jobs or successful businesses; we have enough surplus to give God a portion of our wealth without feeling too much pain. However, in a world where a 50 hour work week is a pretty average for both husband and wife, a 10-12 hour weekly commute is normal, and the demands of home and family must be met no matter what the cost, what is left for the Lord?
Usually the first place we give of our time is on Sunday morning. Getting the family together, in the car, and off to church might take an hour or more. The church service itself will likely run one to one and a half hours. After a few minutes of chatting on the way out, the commute back home, and the unwind prior to fixing lunch, ½ the day is gone. That is actually a big investment for the harried, overworked white collar workers of Montgomery County. As a result, not many of them attend church on a regular basis. Churches provide other opportunities for their members to invest time in worship activities, small group meetings, choir practice, and weekend retreats to name but a few. Many churches provide opportunities to go beyond these normal activities and give time to others. The best examples are short term mission trips. Adult or youth groups are organized to travel to the third world or even an American slum to work for those less fortunate than themselves. For an overstressed office worker to donate a week of vacation time to serve as a construction worker in some unpleasant impoverished location far from his world is a gift indeed. There are other ways to give of our time.
In thinking about this section on the cost of giving, I concluded that writing this blog was also an example of giving time to the Lord. However, I began to argue with myself, “This isn’t really giving because I have learned so much over the last year. Writing this blog has really been of benefit to me.”
Then I heard a little witness in the spirit announce, “Bingo! Now, if you can just hold that thought.” Even secular authors understand that in an interconnected world we are ultimately rewarded for being generous. Seth Godin writes, “In the digital world, the gift I give you almost always benefits me more than it costs.” As we donate our time to God, we change the world.
Luke 6:38
Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you.
But there is more, so much more.
The Cost of Giving (Part I)
Recently, I became involved in an extended email conversation with an old friend. He wants his church to become more involved in their local community. While his church is very active in supporting foreign missionaries that are really impacting their communities in terms of both spiritual and physical needs, they don’t do anything local except attempt to convince their friends to believe the right things and attend their church. This started me thinking about the true cost of giving and how my own level of spiritual development could be measured by the cost of giving. Looking, honestly, into your own heart is always an uncomfortable exercise.
Level One Giving – Money
The first thing we learn to give is our money. It is pretty difficult to open our pocketbook and return even a portion of our increase to the Lord. In the old covenant, Israel did rather poorly at paying their tithes on a regular basis. Sometimes, those Israelites who managed to honor the Lord with their first fruits on a regular basis, became so proud of their own sanctity, they fell into serious sins of the heart.
Matthew 23:23 (NIV)
Woe to you, teachers of the law and Pharisees, you hypocrites! You give a tenth of your spices—mint, dill and cummin. But you have neglected the more important matters of the law—justice, mercy and faithfulness. You should have practiced the latter, without neglecting the former.
After watching Christians at work over the last 40 or more years, I have concluded we are no better than those Pharisees. Often I have seen Christians engage in a form of giving that poisons their hearts with pride and avarice. They are utterly convinced that their giving establishes their own righteousness and guarantees God’s favor, even as they stiff waiters, underpay their employees, and cheat their customers.
Even if we avoid those traps, giving money is just a first step in a very long journey. Money is an important measure of serious intent. Giving is hard. Money is a form of potential energy that can only be used once. Giving to the Lord limits our options in this world. I think that is why God considers giving of our wealth an important first step on the road to spiritual maturity. He wants to teach us that ultimately, focusing solely on our wealth is an illusion that causes a great deal of pain and the ruin of many.
As we learn to give, we become a river of blessings. The river endlessly pours its water into the sea. The river does not worry about where the water it receives began nor does it worry about where its gifts to others might end. The river blesses the farmer and the thirsty, both man and beast, both the righteous and the unrighteous. It serves as conduit in an endless cycle from the sea to the sky, from the sky to the land, from the land to the stream, from the stream to the river, and finally from the river to the sea. When we give to our churches and other ministries, we have taken the first step in a long journey to the center of our own being and the Heart of God.
Level One Giving – Money
The first thing we learn to give is our money. It is pretty difficult to open our pocketbook and return even a portion of our increase to the Lord. In the old covenant, Israel did rather poorly at paying their tithes on a regular basis. Sometimes, those Israelites who managed to honor the Lord with their first fruits on a regular basis, became so proud of their own sanctity, they fell into serious sins of the heart.
Matthew 23:23 (NIV)
Woe to you, teachers of the law and Pharisees, you hypocrites! You give a tenth of your spices—mint, dill and cummin. But you have neglected the more important matters of the law—justice, mercy and faithfulness. You should have practiced the latter, without neglecting the former.
After watching Christians at work over the last 40 or more years, I have concluded we are no better than those Pharisees. Often I have seen Christians engage in a form of giving that poisons their hearts with pride and avarice. They are utterly convinced that their giving establishes their own righteousness and guarantees God’s favor, even as they stiff waiters, underpay their employees, and cheat their customers.
Even if we avoid those traps, giving money is just a first step in a very long journey. Money is an important measure of serious intent. Giving is hard. Money is a form of potential energy that can only be used once. Giving to the Lord limits our options in this world. I think that is why God considers giving of our wealth an important first step on the road to spiritual maturity. He wants to teach us that ultimately, focusing solely on our wealth is an illusion that causes a great deal of pain and the ruin of many.
As we learn to give, we become a river of blessings. The river endlessly pours its water into the sea. The river does not worry about where the water it receives began nor does it worry about where its gifts to others might end. The river blesses the farmer and the thirsty, both man and beast, both the righteous and the unrighteous. It serves as conduit in an endless cycle from the sea to the sky, from the sky to the land, from the land to the stream, from the stream to the river, and finally from the river to the sea. When we give to our churches and other ministries, we have taken the first step in a long journey to the center of our own being and the Heart of God.
Saturday, February 13, 2010
Stay Out of Debt Unless Absolutely Necessary
1)Stay out of debt unless absolutely necessary (four exceptions)
a)Just about no one can pay cash for a house
b)Medical bills come whether you have money or not
c)Borrowing for school (with and only with a goal) is OK. Scholarships and work study grants are better.
d)Starting a new business or expanding an existing business. Keep that cash flow positive
I haven’t written a good rant about debt for a while. I think it is time to revisit that subject. Quite a few years ago I wrote a list of ten basic financial rules for young couples. I wrote this list before “all this” happened in the past 19 or 20 months. My number one rule, stay out of debt unless absolutely necessary, remains unchanged. However, some of the exceptions are probably in need of a closer examination.
Right now, depending on your location, it might not be a good time to take on debt in order to buy a house. In many areas, the cost to rent has dropped below the cost to own. Housing prices, again depending on the area, may be close to a bottom, but in some areas they are still dropping. Homeowners who need to sell into such a situation due to loss of a job or transfer to another area of the country are finding themselves underwater, that is to say they owe more than the house is worth and have to come up with cash to cover that balance at the time of sale. In many cases that is impossible and they must decide between mailing the bank a jingle letter, wrecking their credit, and in some states opening themselves to law suits or toughing it out in an area with no jobs and hoping for the best before their savings are exhausted. One of my neighbors was transferred to another area. He could not sell his home, so he rented it out for less than his mortgage payment. Unfortunately, a few months later he lost his job. He was fortunate enough to arrange a short sale with his bank. He managed to limit his losses. The financial loss and the damage to his credit rating will take years to repair—once he finds a new job.
One of the new things I have discovered while writing this blog is just how dangerous educational loans can be to the future of our young adults. Borrowing for school is not OK, unless you are pretty certain a job waits for you upon graduation. With 10% unemployment, guaranteed jobs are few and far between. They seem to be pretty well limited to health care and certain technical fields. If you are working towards a degree in Chemical Engineering or looking for a B.S.R.N, more power to you. Otherwise think twice before taking on a student loan. Not even bankruptcy provides a remedy to this problem. Even without a job, even with a decree of bankruptcy, those student loans remain on the books.
Greece is facing a major financial crisis caused by debt. Portugal, Spain, and even the United Kingdom are facing lower bond ratings. Debt is still sending tremors through the world’s financial system. If a second destructive wave whips through the market for government debt, much like the first wave that took down some of the world’s largest banks and brokerage houses, experts believe it will be triggered by default in some small subprime economy, like Greece. Remember, a relatively small number of subprime real estate loans nearly froze the credit markets of the entire world.
Experts predict that within two years the U.S. deficit will exceed 100% of the Gross Domestic Product. 90% is frequently considered a tipping point. Beyond 90% an increase in debt leads to a decrease in GDP, creating a vicious cycle from which there is often no escape.
Some of the world’s wealthiest and most productive economies are facing similar dilemmas. The Japanese bubble economy of 1986 to 1991 resulted in a deflationary spiral. The government poured billions into “zombie businesses” and make work projects in order to keep their economy from collapse. Although this resulted in what the Japanese term, “the lost decade,” their economy did avoid the complete destruction of a major depression. Now there is a price to pay. The Japanese are saddled with enormous debts and an aging population. The birth rate in Japan has dropped below replacement levels. Unlike, the United States and Western Europe, Japan has protected her borders from illegal immigration. The result, fewer tax paying workers must support this debt and an ever growing number of elderly citizens drawing pensions and medical benefits.
Managers of state pension funds are looking to juice their return on investment with borrowed funds. Recently the Wisconsin state pension fund announced the will be able to borrow about up to 120% by 2012. Many financial experts, writing in a variety of publications, find the prospect of our state governments gambling on the future with borrowed money a truly scary scenario. An article in Smart Money magazine, observed, “To properly position pension funds for a variety of economic conditions while achieving the rate of return assumed for actuarial purposes, fund managers would need to invest at least 200% of assets.”
Richard Young adds that in such a situation, “Losing 50% wipes out the entire pension plan. That could never happen, right?”
I think it is time to remind ourselves that God considered the ability to lend money part of the blessing and debt part of the curse. When you find the time, read the entire chapter.
Deuteronomy 28
[1] And it shall come to pass, if thou shalt hearken diligently unto the voice of the LORD thy God, to observe and to do all his commandments which I command thee this day, that the LORD thy God will set thee on high above all nations of the earth:
[2] And all these blessings shall come on thee, and overtake thee, if thou shalt hearken unto the voice of the LORD thy God.
[11] And the LORD shall make thee plenteous in goods, in the fruit of thy body, and in the fruit of thy cattle, and in the fruit of thy ground, in the land which the LORD sware unto thy fathers to give thee.
[12] The LORD shall open unto thee his good treasure, the heaven to give the rain unto thy land in his season, and to bless all the work of thine hand: and thou shalt lend unto many nations, and thou shalt not borrow.
[15] But it shall come to pass, if thou wilt not hearken unto the voice of the LORD thy God, to observe to do all his commandments and his statutes which I command thee this day; that all these curses shall come upon thee, and overtake thee:
[43] The stranger that is within thee shall get up above thee very high; and thou shalt come down very low.
[44] He shall lend to thee, and thou shalt not lend to him: he shall be the head, and thou shalt be the tail.
a)Just about no one can pay cash for a house
b)Medical bills come whether you have money or not
c)Borrowing for school (with and only with a goal) is OK. Scholarships and work study grants are better.
d)Starting a new business or expanding an existing business. Keep that cash flow positive
I haven’t written a good rant about debt for a while. I think it is time to revisit that subject. Quite a few years ago I wrote a list of ten basic financial rules for young couples. I wrote this list before “all this” happened in the past 19 or 20 months. My number one rule, stay out of debt unless absolutely necessary, remains unchanged. However, some of the exceptions are probably in need of a closer examination.
Right now, depending on your location, it might not be a good time to take on debt in order to buy a house. In many areas, the cost to rent has dropped below the cost to own. Housing prices, again depending on the area, may be close to a bottom, but in some areas they are still dropping. Homeowners who need to sell into such a situation due to loss of a job or transfer to another area of the country are finding themselves underwater, that is to say they owe more than the house is worth and have to come up with cash to cover that balance at the time of sale. In many cases that is impossible and they must decide between mailing the bank a jingle letter, wrecking their credit, and in some states opening themselves to law suits or toughing it out in an area with no jobs and hoping for the best before their savings are exhausted. One of my neighbors was transferred to another area. He could not sell his home, so he rented it out for less than his mortgage payment. Unfortunately, a few months later he lost his job. He was fortunate enough to arrange a short sale with his bank. He managed to limit his losses. The financial loss and the damage to his credit rating will take years to repair—once he finds a new job.
One of the new things I have discovered while writing this blog is just how dangerous educational loans can be to the future of our young adults. Borrowing for school is not OK, unless you are pretty certain a job waits for you upon graduation. With 10% unemployment, guaranteed jobs are few and far between. They seem to be pretty well limited to health care and certain technical fields. If you are working towards a degree in Chemical Engineering or looking for a B.S.R.N, more power to you. Otherwise think twice before taking on a student loan. Not even bankruptcy provides a remedy to this problem. Even without a job, even with a decree of bankruptcy, those student loans remain on the books.
Greece is facing a major financial crisis caused by debt. Portugal, Spain, and even the United Kingdom are facing lower bond ratings. Debt is still sending tremors through the world’s financial system. If a second destructive wave whips through the market for government debt, much like the first wave that took down some of the world’s largest banks and brokerage houses, experts believe it will be triggered by default in some small subprime economy, like Greece. Remember, a relatively small number of subprime real estate loans nearly froze the credit markets of the entire world.
Experts predict that within two years the U.S. deficit will exceed 100% of the Gross Domestic Product. 90% is frequently considered a tipping point. Beyond 90% an increase in debt leads to a decrease in GDP, creating a vicious cycle from which there is often no escape.
Some of the world’s wealthiest and most productive economies are facing similar dilemmas. The Japanese bubble economy of 1986 to 1991 resulted in a deflationary spiral. The government poured billions into “zombie businesses” and make work projects in order to keep their economy from collapse. Although this resulted in what the Japanese term, “the lost decade,” their economy did avoid the complete destruction of a major depression. Now there is a price to pay. The Japanese are saddled with enormous debts and an aging population. The birth rate in Japan has dropped below replacement levels. Unlike, the United States and Western Europe, Japan has protected her borders from illegal immigration. The result, fewer tax paying workers must support this debt and an ever growing number of elderly citizens drawing pensions and medical benefits.
Managers of state pension funds are looking to juice their return on investment with borrowed funds. Recently the Wisconsin state pension fund announced the will be able to borrow about up to 120% by 2012. Many financial experts, writing in a variety of publications, find the prospect of our state governments gambling on the future with borrowed money a truly scary scenario. An article in Smart Money magazine, observed, “To properly position pension funds for a variety of economic conditions while achieving the rate of return assumed for actuarial purposes, fund managers would need to invest at least 200% of assets.”
Richard Young adds that in such a situation, “Losing 50% wipes out the entire pension plan. That could never happen, right?”
I think it is time to remind ourselves that God considered the ability to lend money part of the blessing and debt part of the curse. When you find the time, read the entire chapter.
Deuteronomy 28
[1] And it shall come to pass, if thou shalt hearken diligently unto the voice of the LORD thy God, to observe and to do all his commandments which I command thee this day, that the LORD thy God will set thee on high above all nations of the earth:
[2] And all these blessings shall come on thee, and overtake thee, if thou shalt hearken unto the voice of the LORD thy God.
[11] And the LORD shall make thee plenteous in goods, in the fruit of thy body, and in the fruit of thy cattle, and in the fruit of thy ground, in the land which the LORD sware unto thy fathers to give thee.
[12] The LORD shall open unto thee his good treasure, the heaven to give the rain unto thy land in his season, and to bless all the work of thine hand: and thou shalt lend unto many nations, and thou shalt not borrow.
[15] But it shall come to pass, if thou wilt not hearken unto the voice of the LORD thy God, to observe to do all his commandments and his statutes which I command thee this day; that all these curses shall come upon thee, and overtake thee:
[43] The stranger that is within thee shall get up above thee very high; and thou shalt come down very low.
[44] He shall lend to thee, and thou shalt not lend to him: he shall be the head, and thou shalt be the tail.
Wednesday, February 10, 2010
Fluctuate
I tell ya’ the economy is bad.
How bad is it?
It's so bad, that when I ordered a burger at McDonalds, the kid behind the counter asked, "Can you afford fries with that?"
I recently read an article that predicted the price of oil would go down from a lack of demand in the United States. Cheaper energy in the United States would increase economic activity and then make the price of oil rise, unless the Chinese continued to subsidize the use of ever greater quantities of gasoline. This, of course, would make the price of oil go up.
Gold is pulling back from record highs. Another article suggests gold might continue to go down as the dollar strengthens or perhaps the problems in the European bond market might cause the value of gold and the dollar to rise simultaneously.
Several different articles suggest things might get better in America, or not. Banks seem to be a little more willing to loan out some of their money. This could help jump start the economy, but no one seems to be in the mood to do any hiring except a few temp agencies. Municipalities and states have lost a lot of projected tax revenues and they have seen their expenditures climb as more and more Americans fall into the social services net. Their bond ratings are dropping, causing the rate government has to pay for new money to increase, lowering the amount they can borrow. If National Health Care goes away, health care stocks will rise. If it comes back they will fall. Even the most defensive consumer non-cyclical stocks, such as Coca Cola and Procter and Gamble (I own both) are worrying about the new tight fisted mood of the American public. Construction, both residential and commercial is as bad as the joke at the beginning of this post. Most people think it will get worse over the next year or two, sending REITs further down into the stock market’s toilet bowl, unless they are close to a bottom and decide to head up.
With increased government spending at all levels, increased taxes are a certainty. The most likely, a Value Added Tax (VAT), a national sales tax starting at perhaps 7% and rising with no end in sight. That would put a dagger in the heart of the recovery, if in fact we are in a recovery.
Oh, and while I am thinking about shoveling the snow in my driveway, blizzards are not a good thing for the economy unless you own a store that is well stocked with toilet paper, bread, and milk. Yesterday the good wives of my little town hit the local grocery store like a horde of Bosnian refugees fleeing a civil war.
J.P. Morgan once had a friend who was so worried about his stock holdings that he could not sleep at night. The friend asked, “What should I do about my stocks?”
Morgan replied, “By all means, sell down to your sleeping point.”
Since the end of October I have been worried that the market was overvalued given persistent high unemployment. I have been slowly moving money out of stocks and into bonds, selling down to my sleeping point. I should have done more, or less. Yesterday was a pretty good day and today the stock futures are up, at least at 5:44.
Isn’t investment research helpful? Another J.P. Morgan quote, once Morgan was asked what he thought the stock market would do over the course of the next year. He replied, “Fluctuate.”
And hey, Please, Please, let’s be extra careful out there today. It is icy and the pavement is treacherous.
How bad is it?
It's so bad, that when I ordered a burger at McDonalds, the kid behind the counter asked, "Can you afford fries with that?"
I recently read an article that predicted the price of oil would go down from a lack of demand in the United States. Cheaper energy in the United States would increase economic activity and then make the price of oil rise, unless the Chinese continued to subsidize the use of ever greater quantities of gasoline. This, of course, would make the price of oil go up.
Gold is pulling back from record highs. Another article suggests gold might continue to go down as the dollar strengthens or perhaps the problems in the European bond market might cause the value of gold and the dollar to rise simultaneously.
Several different articles suggest things might get better in America, or not. Banks seem to be a little more willing to loan out some of their money. This could help jump start the economy, but no one seems to be in the mood to do any hiring except a few temp agencies. Municipalities and states have lost a lot of projected tax revenues and they have seen their expenditures climb as more and more Americans fall into the social services net. Their bond ratings are dropping, causing the rate government has to pay for new money to increase, lowering the amount they can borrow. If National Health Care goes away, health care stocks will rise. If it comes back they will fall. Even the most defensive consumer non-cyclical stocks, such as Coca Cola and Procter and Gamble (I own both) are worrying about the new tight fisted mood of the American public. Construction, both residential and commercial is as bad as the joke at the beginning of this post. Most people think it will get worse over the next year or two, sending REITs further down into the stock market’s toilet bowl, unless they are close to a bottom and decide to head up.
With increased government spending at all levels, increased taxes are a certainty. The most likely, a Value Added Tax (VAT), a national sales tax starting at perhaps 7% and rising with no end in sight. That would put a dagger in the heart of the recovery, if in fact we are in a recovery.
Oh, and while I am thinking about shoveling the snow in my driveway, blizzards are not a good thing for the economy unless you own a store that is well stocked with toilet paper, bread, and milk. Yesterday the good wives of my little town hit the local grocery store like a horde of Bosnian refugees fleeing a civil war.
J.P. Morgan once had a friend who was so worried about his stock holdings that he could not sleep at night. The friend asked, “What should I do about my stocks?”
Morgan replied, “By all means, sell down to your sleeping point.”
Since the end of October I have been worried that the market was overvalued given persistent high unemployment. I have been slowly moving money out of stocks and into bonds, selling down to my sleeping point. I should have done more, or less. Yesterday was a pretty good day and today the stock futures are up, at least at 5:44.
Isn’t investment research helpful? Another J.P. Morgan quote, once Morgan was asked what he thought the stock market would do over the course of the next year. He replied, “Fluctuate.”
And hey, Please, Please, let’s be extra careful out there today. It is icy and the pavement is treacherous.
Sunday, February 7, 2010
It Costs More To Be a Woman
Every year we test and calibrate low speed current meters for NOAA. On one such occasion a couple of women engineers from that agency joined the man normally responsible for certifying such devices. During a little down time in the work, one of the women was looking at a catalog of “bath products.” She announced to her friend that the company was offering a free carrying case with the purchase of seven bath products. They both seemed excited by the offer and started a little mental shopping spree. I asked how in the world one could purchase seven different bath products at one time. I was told it would be easy and the two women started reeling off the names of creams, moisturizers, conditioners, body splashes, and who knows what. The men working on the job just shook their heads in dismay. When they quizzed us, it was determined that the men on the job either used one bath product, bar soap or two bath products, bar soap and shampoo.
It does cost more to be a woman. I expect that most of the ladies reading this article would not just limit this statement to financial issues. Women pay more for haircuts. The reason given is that they have more hair, but does it take 25% longer to cut a woman’s hair? When I worked in a department store one summer during my college years, I learned that the markup on women’s clothing was much higher than the markup on men’s clothing. On average, women pay twice as much as men for clothing. Women also pay more for dry cleaning. The excuse, women’s clothing has more frills that require extra attention.
Numerous consumer investigations and exposes’ have proven what everyone already knows. There are far too many car dealers and auto repair shops that will charge women more for exactly the same products or service than they charge their male customers. In some instances the truly disreputable are more likely to charge women for unnecessary work. They don’t think that a man would be as gullible.
Women pay more for health insurance. This at least has some basis in fact. Women do cost the insurance companies more than men. Of course the cost associated with pregnancy and childbirth is the largest factor in this discrepancy. However, there is more. Women are overwhelmingly responsible for the cost of birth control. Women are twice as likely to require antidepressants, tranquilizers, and sedatives as men.
For reasons I can not comprehend, women pay more for mortgages and are 32% more likely to be sold subprime mortgages than men earning similar incomes. The subprime rate at the time of the report (December 17, 2009) was 7.66% while the average normal rate was 5.87%. Women are 41% more likely than men earning the same income to end up with high cost subprime loans at rates in excess of 9.66%. (M.P. Dunleavy) I guess this is the same assumption of gullibility at work in the retail automotive business. Women are also frequently charged more in rent for an identical apartment than men, sometimes significantly more. Women do get bargain prices on two products, life insurance and auto insurance. Women live longer than men and are less likely to engage in the sort of behavior that would result in wrapping their automobile around a tree.
Then there are cosmetics. My father was a research chemist. For a short time he was tasked with investigating some questions in cosmetic chemistry. His conclusions were that cosmetic chemists were the most cynical people he ever met. They believed that women would pay any price for any product no matter how ridiculous. He contends that if women knew what went into the stuff they were putting on their faces they would become ill. But let’s get back to those “bath products.”
The following information comes from Consumer Reports, quoted in an article by M.P. Dunleavey for MSN Money.
Identically sized bottles of Nivea Body Wash for Men $5.49, for women $7.49.
11 ounces of Barbasol Soothing Aloe shaving cream $1.69. The same product for women in a 9.5 ounce can, $2.49. The company claims the can for women has a rust resistant aluminum bottom on the can since women shave in the shower. It also has more fragrance than the product sold to men.
O.5 Ounces of Neutrogrena Hydrating Eye Reviver for men $10.00. The same identical product in the same container with a label identifying it as a product for women $15.00.
In summary Consumers’ Union found that women paid 50% more than men for shaving cream, antiperspirants, pain relievers, eye cream, body wash, and razors. In many instances these were identical products in different packages.
So there you have it. THEY are lying to you and THEY are manipulating you, but you already knew that. Jesus observed, “I am sending you out like sheep among wolves. Therefore be as shrewd as snakes and as innocent as doves.” While he wasn’t talking about shopping for mortgages or bath products, the advice is sound, especially if you are a woman. Men, well we have our own problems.
And now for the mandatory passage from Proverbs that even the most God fearing women dislike.
Proverbs 31: 10-31
[10] Who can find a virtuous woman? for her price is far above rubies.
[11] The heart of her husband doth safely trust in her, so that he shall have no need of spoil.
[12] She will do him good and not evil all the days of her life.
[13] She seeketh wool, and flax, and worketh willingly with her hands.
[14] She is like the merchants' ships; she bringeth her food from afar.
[15] She riseth also while it is yet night, and giveth meat to her household, and a portion to her maidens.
[16] She considereth a field, and buyeth it: with the fruit of her hands she planteth a vineyard.
[17] She girdeth her loins with strength, and strengtheneth her arms.
[18] She perceiveth that her merchandise is good: her candle goeth not out by night.
[19] She layeth her hands to the spindle, and her hands hold the distaff.
[20] She stretcheth out her hand to the poor; yea, she reacheth forth her hands to the needy.
[21] She is not afraid of the snow for her household: for all her household are clothed with scarlet.
[22] She maketh herself coverings of tapestry; her clothing is silk and purple.
[23] Her husband is known in the gates, when he sitteth among the elders of the land.
[24] She maketh fine linen, and selleth it; and delivereth girdles unto the merchant.
[25] Strength and honour are her clothing; and she shall rejoice in time to come.
[26] She openeth her mouth with wisdom; and in her tongue is the law of kindness.
[27] She looketh well to the ways of her household, and eateth not the bread of idleness.
[28] Her children arise up, and call her blessed; her husband also, and he praiseth her.
[29] Many daughters have done virtuously, but thou excellest them all.
[30] Favour is deceitful, and beauty is vain: but a woman that feareth the LORD, she shall be praised.
[31] Give her of the fruit of her hands; and let her own works praise her in the gates.
It does cost more to be a woman. I expect that most of the ladies reading this article would not just limit this statement to financial issues. Women pay more for haircuts. The reason given is that they have more hair, but does it take 25% longer to cut a woman’s hair? When I worked in a department store one summer during my college years, I learned that the markup on women’s clothing was much higher than the markup on men’s clothing. On average, women pay twice as much as men for clothing. Women also pay more for dry cleaning. The excuse, women’s clothing has more frills that require extra attention.
Numerous consumer investigations and exposes’ have proven what everyone already knows. There are far too many car dealers and auto repair shops that will charge women more for exactly the same products or service than they charge their male customers. In some instances the truly disreputable are more likely to charge women for unnecessary work. They don’t think that a man would be as gullible.
Women pay more for health insurance. This at least has some basis in fact. Women do cost the insurance companies more than men. Of course the cost associated with pregnancy and childbirth is the largest factor in this discrepancy. However, there is more. Women are overwhelmingly responsible for the cost of birth control. Women are twice as likely to require antidepressants, tranquilizers, and sedatives as men.
For reasons I can not comprehend, women pay more for mortgages and are 32% more likely to be sold subprime mortgages than men earning similar incomes. The subprime rate at the time of the report (December 17, 2009) was 7.66% while the average normal rate was 5.87%. Women are 41% more likely than men earning the same income to end up with high cost subprime loans at rates in excess of 9.66%. (M.P. Dunleavy) I guess this is the same assumption of gullibility at work in the retail automotive business. Women are also frequently charged more in rent for an identical apartment than men, sometimes significantly more. Women do get bargain prices on two products, life insurance and auto insurance. Women live longer than men and are less likely to engage in the sort of behavior that would result in wrapping their automobile around a tree.
Then there are cosmetics. My father was a research chemist. For a short time he was tasked with investigating some questions in cosmetic chemistry. His conclusions were that cosmetic chemists were the most cynical people he ever met. They believed that women would pay any price for any product no matter how ridiculous. He contends that if women knew what went into the stuff they were putting on their faces they would become ill. But let’s get back to those “bath products.”
The following information comes from Consumer Reports, quoted in an article by M.P. Dunleavey for MSN Money.
Identically sized bottles of Nivea Body Wash for Men $5.49, for women $7.49.
11 ounces of Barbasol Soothing Aloe shaving cream $1.69. The same product for women in a 9.5 ounce can, $2.49. The company claims the can for women has a rust resistant aluminum bottom on the can since women shave in the shower. It also has more fragrance than the product sold to men.
O.5 Ounces of Neutrogrena Hydrating Eye Reviver for men $10.00. The same identical product in the same container with a label identifying it as a product for women $15.00.
In summary Consumers’ Union found that women paid 50% more than men for shaving cream, antiperspirants, pain relievers, eye cream, body wash, and razors. In many instances these were identical products in different packages.
So there you have it. THEY are lying to you and THEY are manipulating you, but you already knew that. Jesus observed, “I am sending you out like sheep among wolves. Therefore be as shrewd as snakes and as innocent as doves.” While he wasn’t talking about shopping for mortgages or bath products, the advice is sound, especially if you are a woman. Men, well we have our own problems.
And now for the mandatory passage from Proverbs that even the most God fearing women dislike.
Proverbs 31: 10-31
[10] Who can find a virtuous woman? for her price is far above rubies.
[11] The heart of her husband doth safely trust in her, so that he shall have no need of spoil.
[12] She will do him good and not evil all the days of her life.
[13] She seeketh wool, and flax, and worketh willingly with her hands.
[14] She is like the merchants' ships; she bringeth her food from afar.
[15] She riseth also while it is yet night, and giveth meat to her household, and a portion to her maidens.
[16] She considereth a field, and buyeth it: with the fruit of her hands she planteth a vineyard.
[17] She girdeth her loins with strength, and strengtheneth her arms.
[18] She perceiveth that her merchandise is good: her candle goeth not out by night.
[19] She layeth her hands to the spindle, and her hands hold the distaff.
[20] She stretcheth out her hand to the poor; yea, she reacheth forth her hands to the needy.
[21] She is not afraid of the snow for her household: for all her household are clothed with scarlet.
[22] She maketh herself coverings of tapestry; her clothing is silk and purple.
[23] Her husband is known in the gates, when he sitteth among the elders of the land.
[24] She maketh fine linen, and selleth it; and delivereth girdles unto the merchant.
[25] Strength and honour are her clothing; and she shall rejoice in time to come.
[26] She openeth her mouth with wisdom; and in her tongue is the law of kindness.
[27] She looketh well to the ways of her household, and eateth not the bread of idleness.
[28] Her children arise up, and call her blessed; her husband also, and he praiseth her.
[29] Many daughters have done virtuously, but thou excellest them all.
[30] Favour is deceitful, and beauty is vain: but a woman that feareth the LORD, she shall be praised.
[31] Give her of the fruit of her hands; and let her own works praise her in the gates.
Saturday, February 6, 2010
It Has Been Quite The Year
I started this ministry one year ago. I would never have believed that I could find so many subjects but just when I thought I had run out of ideas, something else popped up.
May you live in interesting times is an old Chinese curse. This past year has been an interesting time for financial subjects. About ½ of the wealth of the entire world just vanished. Derivatives, collateralized debt obligations, non-traditional insurance products (translation: fraudulent), structured investment vehicles (translation: unregulated banks), carry trades, jingle letters, and bailouts are just a few of the topics that have caused the world’s wealth to vanish in the storm. In the past year we have lived through the worst stock market crash in eighty years, the highest unemployment since World War II, and an unprecedented real estate crash.
In the past year we have learned that there are lies, damned lies, and statistics. The unemployment rate fell last month even though there are fewer jobs and more Americans. This is because there are approximately 2.5 million American workers who have just given up or no longer meet the Bureau of Labor Statistics’ definition of unemployed and actively seeking work. The Bureau uses a “Birth Death Model” to statistically predict the current unemployment rate based on scant information. This model is always optimistic and has to be corrected months after the fact when more concrete information is available. Recently job loss between April 2008 and March 2009 was increased by about 850,000. I am asking people I know in the ministry and even people I don’t know to pray for Americans who have lost their jobs.
The efforts of the world’s government and central banks have been likened to plugging a hole in a dam with more water. In a recent article published in Bloomberg Press Caroline Baum writes, “In Chapter 10, Section VI of “The General Theory of Employment, Interest, and Money,” John Maynard Keynes advocates building pyramids as a cure for unemployment. In fact, “Two pyramids, two masses for the dead, are twice as good as one,” he wrote in his 1936 treatise.”
Our government can not spend money fast enough, even with projected deficits of $1.3 trillion this year and $1.6 trillion next year. But once all the pot holes are filled, all the bridges are repaired, unneeded high speed rail lines, and pyramids are constructed, then what? We still have no permanent tax paying wealth creating jobs to pay for all the debt we are creating in an attempt to extricate our nation from this collapse.
The Federal Reserve Bank is buying up pools of bad mortgages at face value in order to stabilize the banks that issued this toxic waste. On a couple of occasions some of these wretched things were sold on the open market at 10 to 25 cents on the dollar. As far as I know these were some of the better articles of the class. In spite of all these efforts the stock market is once again, headed down.
Until recently, I would have asked the question, “When will the Chinese grow tired of paying for our folly?” But they have problems of their own. Now the question might be better stated, “When will the Chinese no longer be able to pay for our folly?” Their economy is based on at least 10% growth per year fueled by exports. Their exports are dropping and their attempts at “juicing” their local economy are producing empty shopping centers and unoccupied office buildings. This is not sustainable.
Europe will not save the world’s economy. Portugal, Ireland, Italy, Greece,and Spain (now called the PIGS) are facing default on their bonds. Germany is not in the mood to save their neighbors, although they might be required to do so by the agreements that created the Euro. The former Soviet Bloc countries are in worse condition than their Western neighbors.
It has been a year for old fashioned values, modest lifestyle, paying down debt, saving money, and hard work (if you are lucky enough to still have a job).
A Prayer for our country from the Book of Common Prayer
ALMIGHTY God, who hast given us this good land for
our heritage; We humbly beseech thee that we may
always prove ourselves a people mindful of thy favour and
glad to do thy will. Bless our land with honourable industry,
sound learning, and pure manners. Save us from violence,
discord, and confusion; from pride and arrogancy, and from
every evil way. Defend our liberties, and fashion into one
united people the multitudes brought hither out of many
kindreds and tongues. Endue with the spirit of wisdom those
to whom in thy Name we entrust the authority of government,
that there may be justice and peace at home, and that, through
obedience to thy law, we may show forth thy praise among
the nations of the earth. In the time of prosperity, fill our
hearts with thankfulness, and in the day of trouble,
suffer not our trust in thee to fail; all which we ask through
Jesus Christ our Lord. Amen.
May you live in interesting times is an old Chinese curse. This past year has been an interesting time for financial subjects. About ½ of the wealth of the entire world just vanished. Derivatives, collateralized debt obligations, non-traditional insurance products (translation: fraudulent), structured investment vehicles (translation: unregulated banks), carry trades, jingle letters, and bailouts are just a few of the topics that have caused the world’s wealth to vanish in the storm. In the past year we have lived through the worst stock market crash in eighty years, the highest unemployment since World War II, and an unprecedented real estate crash.
In the past year we have learned that there are lies, damned lies, and statistics. The unemployment rate fell last month even though there are fewer jobs and more Americans. This is because there are approximately 2.5 million American workers who have just given up or no longer meet the Bureau of Labor Statistics’ definition of unemployed and actively seeking work. The Bureau uses a “Birth Death Model” to statistically predict the current unemployment rate based on scant information. This model is always optimistic and has to be corrected months after the fact when more concrete information is available. Recently job loss between April 2008 and March 2009 was increased by about 850,000. I am asking people I know in the ministry and even people I don’t know to pray for Americans who have lost their jobs.
The efforts of the world’s government and central banks have been likened to plugging a hole in a dam with more water. In a recent article published in Bloomberg Press Caroline Baum writes, “In Chapter 10, Section VI of “The General Theory of Employment, Interest, and Money,” John Maynard Keynes advocates building pyramids as a cure for unemployment. In fact, “Two pyramids, two masses for the dead, are twice as good as one,” he wrote in his 1936 treatise.”
Our government can not spend money fast enough, even with projected deficits of $1.3 trillion this year and $1.6 trillion next year. But once all the pot holes are filled, all the bridges are repaired, unneeded high speed rail lines, and pyramids are constructed, then what? We still have no permanent tax paying wealth creating jobs to pay for all the debt we are creating in an attempt to extricate our nation from this collapse.
The Federal Reserve Bank is buying up pools of bad mortgages at face value in order to stabilize the banks that issued this toxic waste. On a couple of occasions some of these wretched things were sold on the open market at 10 to 25 cents on the dollar. As far as I know these were some of the better articles of the class. In spite of all these efforts the stock market is once again, headed down.
Until recently, I would have asked the question, “When will the Chinese grow tired of paying for our folly?” But they have problems of their own. Now the question might be better stated, “When will the Chinese no longer be able to pay for our folly?” Their economy is based on at least 10% growth per year fueled by exports. Their exports are dropping and their attempts at “juicing” their local economy are producing empty shopping centers and unoccupied office buildings. This is not sustainable.
Europe will not save the world’s economy. Portugal, Ireland, Italy, Greece,and Spain (now called the PIGS) are facing default on their bonds. Germany is not in the mood to save their neighbors, although they might be required to do so by the agreements that created the Euro. The former Soviet Bloc countries are in worse condition than their Western neighbors.
It has been a year for old fashioned values, modest lifestyle, paying down debt, saving money, and hard work (if you are lucky enough to still have a job).
A Prayer for our country from the Book of Common Prayer
ALMIGHTY God, who hast given us this good land for
our heritage; We humbly beseech thee that we may
always prove ourselves a people mindful of thy favour and
glad to do thy will. Bless our land with honourable industry,
sound learning, and pure manners. Save us from violence,
discord, and confusion; from pride and arrogancy, and from
every evil way. Defend our liberties, and fashion into one
united people the multitudes brought hither out of many
kindreds and tongues. Endue with the spirit of wisdom those
to whom in thy Name we entrust the authority of government,
that there may be justice and peace at home, and that, through
obedience to thy law, we may show forth thy praise among
the nations of the earth. In the time of prosperity, fill our
hearts with thankfulness, and in the day of trouble,
suffer not our trust in thee to fail; all which we ask through
Jesus Christ our Lord. Amen.
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