Apple.....were you excited?

Apple just released their new IPhone's with alot of media coverage and hoopla, however I miss the days of Apple shocking the market with amazing new products and innovation. Since the passing of Steve Jobs, Apple has continued to produce good products but the excitement is not there anymore. Their share price reflects this as its down 40% from its high. Maybe my expectations are too high for Apple as fingerprint technology, the IPad Mini, lightening fast processors and a larger iPhone screen were great, but nothing really blows me away. Too often technology companies are like athletes, they are great for a while but burnt out quickly. I hope Apple is too great to potentially follow that path. I hope one day I will be surprised and shaken again!

And please, the IWatch is not going to SHAKE ME :)))

Cheers

Too Big to Fail?

The FED and US government officials have stated that no firm will be ‘bailed out” or rescued like Bear Stearns or AIG. They are not being honest with us. Everything now is TOO BIG TO FAIL! What do they plan to do in the event of another major financial crisis? Banks and financial firms have never been larger and riskier. The mechanisms in Dodd Frank for an “orderly” wind-down of a large financial firm is to prevent widespread market panic. However, anyone who understands finance knows that markets behave irrationally.  How can the federal government or the FED say nothing is too big to fail after the debacle of Lehman Brothers? While it is true that Lehman and other financial firms caused their own demise, the chaos of letting Lehman fail exacerbated the financial crisis.  Can you imagine Citigroup being left to fail? The economy is still in a shaky recovery. Letting big financial firms fail will never happen again because of the overall damage to the US and global economy. When Ben Bernanke and the government claim they will not ‘bail out firms in the event of another crisis' it makes me think they are lying to everyone.

The Rutgers Debacle....Failure of Leadership

As Rutgers alumni, the Mike Rice situation is disturbing. Unfortunately, this behavior is not uncommon and is becoming emblematic of college sports today. More and more we are seeing individuals in college athletics who should not be in leadership roles. For background, Mike Rice, the Head Men’s basketball coach, was videotaped violently shoving, grabbing and throwing balls at his players along with using gay slurs. The athletic director, Tim Pernetti, was given the information and the university conducted an investigation. Ultimately, they fined Mike Rice $50,000 and ordered him to go to anger management classes.  Recently, the incident took center stage when ESPN’s 'Outside the Lines' aired the video footage. The outrage was palpable across the country with many politicians, including the NJ governor Chris Christie, speaking out due to the violent, abusive and racist behavior of Mike Rice.

I can write pages and pages on how college sports have issues that are hugely problematic. It is unacceptable to have this violent, racist behavior especially when the money to pay the Rutgers employees comes mostly by the state taxpayers. These types of issues and cover-ups happen in politics and corporations frequently.  Many people are outraged when it happens but at least the people are grown adults and not young men and women in the formative years of their lives. In college athletics, the focus should be on the student’s education and personal growth. Having people such as Mike Rice and Tim Pernetti try to cover up and sweep under the rug this type of behavior is more reprehensible because we entrust these individuals to care for these students like they were their own children.  Did we also not learn from Penn State that lying and covering up incidents is the worst thing you can do?  Getting paid millions of dollars to be a racist bully is a disgrace for Rutgers and overall college athletics.

Let’s try to restore the confidence people have in college athletics and let’s start with firing the whole Rutgers athletic administration.

Detroit.....can we save this amazing city?

How can we save Detroit? I understand the car industry made the economic engine of Detroit run and was a large part of its downfall as the industry collapsed and many of the jobs went away.  But when a city had 300,000 manufacturing jobs in the 50's and now only has 27,000, you can see the profound and devastating impact that it would have on any city. When I hear the poverty rate is at 35% and the murder rate is as high at the early 1980's I wonder how this can be turned around.  I have gotten to know more about Detroit in the past year as my girlfriend's family are natives.  I finally got to experience the city and saw some vibrant neighborhoods, but mostly utter poverty.   It is still a vibrant city with a great music and art culture.  It has great parks and outdoor spaces but most have fallen in disrepair.

I am not saying we "bailout" Detroit,  but let's "put a think on it" and try and save this amazing city.

More to come...

Bloomie and his gun $$$

Well Michael Bloomberg the seemingly 9 term (its only been three) mayor of NYC is putting his considerable money behind his mouth ($12m worth) to put ads on TV for tougher gun laws and the NRA is up in arms saying he "can not buy America".  Guns is a very sensitive topic now and with multiple shooting like Sandy Hook and the one in Colorado, we understand that the issue is not purely guns, but maybe parenting, mental health care and other circumstances.  What we can control is the easy purchase of assault weapons which in my view have no place with anyone.  I am not going to tell people they can't own guns and hunt, but NO one needs an AK 47.  In the end we can never make guns go away whether they are legal or not, but can't we all agree that assault weapons should be illegal........

Cyprus

The whole Cyprus situation brings to light the fragility of the Euro. Such a small nation but it is pretty much bankrupt and the euro folks can't agree on a way forward as forcing depositors to shoulder part of the bailout failed. I often wonder when i see the stock market rocketing ahead across the globe whether people still see the fragility of the debt bomb we have out there. Europe I believe is more prone to having issues due to the euro nations having huge growth issues on with their economies. Growth is the debt bombs only elixir, not taxes and austerity. More to come, but it will be interesting what happens on this little nation....

Oh Paul oh Paul

Paul Ryan's plan to reduce the debt which basically changes the Medicare program is bold. I have also stated before  that his plan will never happen. I understand he truly believes that this is the way to cut the budget and I agree with him that entitlement reform is the key, but fundamentally changing Medicare for seniors will never happen especially when you offer a repeal of ObamaCare with it. I am all for being principled but maybe he could spend sometime working on a solution that COULD be enacted into law. I am not saying Medicare doesn't need to be reformed but making it a voucher program for millions of seniors is not ever going to pass.

Dow climbing....government sinking

The US stock market is hitting highs seen right before the financial crisis even as the government continues to bungle the sequester and creating a real fiscal plan for the US. I do not know what to make of this situation except to believe that people really want to invest and get out of this malaise for the past 5 years. I really thought that the POTUS or congress would step up and start realising we can't maintain our debt unless people think it's so much better in the US than in Europe. The debt spigot and cheap money will eventually end and then we will realise the impact of doing nothing. Only in government can you promise something that will never happen and ignore when people talk about it.

Skip to the "Lew" my darling

So the incoming secretary of the treasury will be Jacob Lew is an interesting character. I know the POTUS likes hammering those evil banks and bonuses they pay, but mr Lew was a managing director at Citigroup and ran an internal hedge fund that bet on the housing market to collapse. I am completely fine with his background but I am surprised Mr O doesn't have an issue with his experience as an "evil" banker. Politics is funny as people argue two sides of the same story and truly believe everything they are saying. I am sure a conservative with a similar banking background would have sailed through the POTUS's approval chain....

As my old boss used to say "right right right...."

Pounded

As an American, I know having your currency get “pounded as the dollar fell against the Euro and other major currencies. The British pound topped out at 1.62USD per GBP back in April and Oct 2012 and since Oct, it has fallen steadily. The realization the British government needs to continue quantitative easing (what hurt the dollar originally) and continues to have an extremely weak economy or even falling into another recession is the best reasoning for the falling pound. Economic cycles are funny as history very often repeats itself. When you deflate your currency, your goods become more attractive overseas and you sacrifice the international purchasing power of your country’s folks overseas, OR when your economy continues to be weak, you have to try everything including the kitchen sink. The US FED has done this and somehow the US has not collapsed under one of the most disastrous spending sprees in history. I hope other countries learn, that economic growth and lower barriers to entry and free capital flow, makes everything better…….not just buying your own debt and priming the pump. Happy Monday…Cheerio

Debt....and taxes and debt and taxes

It is funny because all politicians and government officials talk about is debt and then taxes and then how much debt they have and how to raise taxes. Oh I am sorry, did I repeat myself :-). Taxes should be set at rates that allow the government to collect the amount needed to not borrow 1.6 trillion extra each year but allow growth in the economy. After living in the UK for a few pay periods I now realize that high tax rates along with a 20% VAT tax really makes you wonder why are you even working at all. Sorry but now know why people envy our debt, at least out taxes aren't that crazy...YET!!

U.S. Banks Bigger Than GDP as Accounting Rift Masks Risk...not sure if I agree

Easing there boys...Easing.....

When will the FED stop its QE 3 or 4 or 5 (sorry I have lost track on which one it is), is a great question. At some point they will have to stop flooding the market with liquidity as they insinuated yesterday that it could be soon. I am not convinced they will, but putting that aside, the market and banks are already making the program seem like it should be ended. While the stock market reacts negatively, banks and corporates are issuing more junk debt and chasing yield by issuing more structured products and securities that kind of got us in the problem years ago. I realize that ending the program is a hard choice, but at some point rates need to rise otherwise you will have a massive asset bubble (call Alan Greenspan). The real issue here remains that the way we grow our economy is the cut corporate taxes, encourage hiring and make businesses want to spend money. While low interest rates help,corporations are still hoarding cash and not investing the capital in their businesses.

QE needs to end soon otherwise we will have another crisis.....

Coming next, England and slamming the pound!

Back in the saddle....London perspective

There is no excuse for malaise in government or writing a blog, so I am back in the saddle and ready to start blogging again.  Since I recently moved across the pond I find it interesting how the British press is all over its government on the economy, but the focus seems to be overly weighted with banks bonuses, tax increases and making everything fairer.  The British economy along with Europe has had a malaise for a while and it makes the US seem like the roaring twenties. The government here is caught between a rock and hard place.  Thy want growth, but taxes here are so high which restricts growth.  They have deficits (Like the US), but need they need to invest in their economy.  They want more homegrown energy, but have not gotten on the shale gas bandwagon.   They want jobs in the financial sector, but want to hammer the bankers and make they feel like they are evil.

I realize that there is no perfect answer these days, but it just seems like no one has creative ideas to make things better and WHEN they do, people say that will never work or is too extreme. 

Cheerio......

Guns......

I know I haven't dropped anything in the while but i think a short update on the gun issue is needed.  I respect the amendment that gives us the right to bear arms.  I also know that most gun owners are good, law-abiding citizens, but when people can buy automatic weapons and there are so many loopholes, i have to draw the line.  The incidents that have happened recently Colorado movie theater and Sandy Hook, really make me think differently.  I am very torn as I hate restricting people rights, but CAN we all agree that assault weapons should be banned and something else on top of that needs to be done??? More to come.....

The cliff...did we fall over

It is a little frustrating when politicians say they fixed a problem because they compromised and accomplished so little. I mean raising taxes or increasing revenues was going to happen but to have nothing on spending cuts or entitlement reform really shows how divided this nation is. Leadership on both sides of the aisle has been lacking and as I have said numerous times that the solution to this problem is not simple but will need compromise. People will not be happy but you can not keep spending into debt. Higher taxes will not fill the gap! Happy new year!

Fiscal Cliff...part 2....

So both the POTUS and SOTH keep going back and forth on a "fiscal cliff" deal.  I am sure both parties feel they have leverage, but the Dem's won the election and probably feel very annoyed they can not get their full proposal through.  I find it very interesting still that neither party feels compelled to propose a game changing plan to eliminate the long-term deficit and debt issues.  They all seem to like hot button topics like "tax the rich" (yes we know its going to happen), "Eliminate waste", "cut money going to drug companies" etc.  The real solution here is to reform the entitlements programs along with simplifying the tax code.  Less IRS paperwork will mean people will spend less time trying to pay less taxes and more time just paying them. I just hope that we get  a deal that actually helps American regain some its fiscal footing, but I am not very optomistic......are you?

Fiscal Cliff.....

So taxes are going up......ummmm..thanks I think we all knew that.  We know after BO won the election, taxes for the wealthiest will be going via marginal rate increases or limiting deductions.   The Dem's favor the former and the Repub's favor the latter.  I would prefer limiting deductions as that seems like an equal revenue items and raising rates is not the best elixir.  But let's focus on the other HUGE issue here.  Raising taxes on the "rich", will not solve the problem.  The deficit is still massive and with the middle tax reduced tax rates along with massive entitlement issues.  The POTUS and speaker can go back and forth, but the headline of taxing rich and spending cuts that are phantom do not fix the problem.

It is very disappointing that after an election people can not honestly discuss the issues and propose plans that are balanced and actually fix the deficit. Fine, tax the rich, but then also find $3 trillion in other cuts that actually bring the spending in line with the minimum deficit that ratings agency wont cut our rating again...

We can do better......more to come

What a week...

What a week.  General P, fiscal cliff, DOW plummeting, Israel and Hamas.... The world is a fascinating place with so many dynamics at work.  Selfishly I hope Congress addresses this budget / "Fiscal Cliff" issue very soon with precision as the markets are already very skittish about it.  BO needs to be a leader and push the parties together on a compromise that works for all.  Specifically real cuts in spending and reforming the tax code with the focus on reducing deductions. 

With respect to Israel, this situation is very bad and I can never see it getting better.  As long as the Palestinians and Hamas resides within the borders of Israel (legitimate or not), there will never be peace. Does everyone agree?

Finally, General P, what a fall.  I not sure if you gave up any intelligence because of your affair, but more importantly, I lost respect for you as just one of the thousands of politicians who cheat on their spouses.......

Have a great weekend!

Fiscal Sanity......here is the plan

So let's get back to the country's business here and create a plan to make our country fiscally sound. Here is my plan to solve our fiscal issues. 

1. Raise taxes on rich and middle class.  The rich should bear a larger burden but raising taxes solely on them doesn't balance the budget
2. OR reduce rates across the board and get rid of deductions.  The latter in my view expands the tax base and is a better solution.
3. Raise cap on Social Security taxes to make the system fully solvent
4. Cut corporate taxes to encourage hiring and companies wanting to stay in the US.

More items to come......