Thursday, October 31, 2013

Obama now seeks to have the Feds control the home health care market - another big debacle on the way?

President Obama now plans to extend control of home health care workers to the Federal bureaucracy and technology wizards.  Apparently he can do this by executive fiat, as from what has been read here, it seems like a done deal, set to begin in on January 1, 2015.

Home care of the elderly and disabled is a big issue that is getting bigger year by year.  Why states cannot handle this regulation and communities not be full fledged participants in its implementation in their areas is not understandable.  Obama has now extended minimum wage and overtime "protections" to what is estimated to be two million home care workers.  Sounds fair on the surface, but an ad hoc working system for this difficult, very difficult, issue is already in place and Obama's never ending federal government reach will blow it out of the water.

Most adult Americans need no primer on this issue.  They have seen it in their families.  The community based ad hoc system that works better than anything the Federal government will impose is one based on many home health care aides being groups of independent contractors.  Their roles vary widely.  Certainly there should be protected in some ways and there are rules in almost every state, maybe every state, that make it a crime to abuse home health care workers, treat them as slaves imported from other countries, or otherwise force them to play their role.

As independent contractors they are running their own business and under the Obama proposal the elderly and disabled will end up being the employer who plays the business role.  Is that really possible?  Maybe, but for many it may be only if they hire generally expensive large service providers with limited reliable personal touch( those bigger companies provide bodies, not  relationships), something that many can't afford, would exhaust their funds, and then would send them to many of the woeful nursing homes that exist where they would live out their lives in complete boredom with bad food and away from the homes that they have lived in and are familiar with.

Are home health care workers exploited as the all knowing Obama implies.  The guess here based personal experience, and observations of many other situations, is not generally, not generally at all.  Many receive an hourly wage above the minimum wage, they can arrange flexible hours, and are often obviously given the money to be buyers of the food they can cook and eat what they choose while making sure that their client is as well.  The situation is so difficult that most home health care aides are highly valued.  As they build  a relationship with a client they can at times receive perks or gifts or needed financial advances.

These are in many areas coveted jobs.  Think about it this way.  While they certainly have serious responsibilities and at times deal with out of sorts or sickening clients, they also often have lots of free time.  Most elderly and disabled are not exactly running around out of control.  Depending on their condition they may read, watch television, help prepare meals, and sleep more than a healthy younger individual.   The sicker individuals will be taking medication and often sleeping more.  Some will have sleeping problems and this is more difficult but often treatable with medication.

Personal experience has seen responsible caretakers who are part of a 24 hour coverage regime.  One would come in at around 6pm, spend time with their client and maybe drive him out to a joint restaurant dinner, or warm up some take-out, and then go through the slow ritual of getting their charge to bed.  Their client, actually my father, would call out maybe two or three times a night with a need for help to get to his walker safely and go to the bathroom, but otherwise the caretaker could watch television, mostly all sports, until he was tired and then sleep for most of the evening excluding those few interruptions.  Is this a 12 hour day under Obama's approach, requiring overtime and Federal oversight?  The caretaker could go home in the morning, see his family, go about his home repair job, and maybe take a short afternoon nap at some point although he claimed to never need one.

Whether an elderly person is incapacitated marginally or completely, they do need care and much is provided by family members if available, but with the dispersion of jobs across the country this is not the 1950's anymore.  Family members are often not immediately available, or if available not necessarily so healthy themselves, and at times they are outlived.  Neighbors and friends cannot take on the burden of full time health care although they can be and are at many times godsends as visitors and helpers for an elderly person's needs.  Put this Federal control system in place and it will quickly drive many people out of their homes, out of their savings, and into Medicaid institutions.

I have had first hand experience with one of those institutions on Long Island in the last year.  It was and is Peninsula Center for Extended Care and Rehabilitation in Far Rockaway on Long Island.  The Rehabilitation part is advertised as a center for physical therapy which I had some need for at the time and doctors at North Shore hospital insisted that I go there or I would not have completed treatment and they would not file for my insurance claim.  What a lame and arrogant threat I think that was, as if it was in their power, but I followed their advice and went.  Maybe it would be helpful.

What I found was a large decrepit former hospital that had been turned into a Medicare and especially Medicaid scam organization.  I was there for four days and received 15 minutes of physical therapy in total.  To use the old Woody Allen joke about a complaining Catskill's visitor, "the food was terrible and the portions were so small".  This was not a joke at Peninsula. For one dinner I opened the ubiquitous hospital plate cover and there was the equivalent of one scoop of macaroni and cheese.  At this point I was already quite vocal about my treatment and in a hostile way I was told that my food what everyone else received. I could go on and on about what a dump this place with broken furniture, non-responsive workers, and how hostile the mostly west Indian island nurses aides were if asked to do anything.

I saw some of the abuse of the elderly on my floor the few times that they let me out of my room(I was like a prisoner there), but there were three floors above me that were all extended care.  The only person who told me the truth about the place was the worker who cleaned my room each day and he had been working there for 17 years.  He explained that until three years ago it had been a well regarded full service hospital for the community but somehow its placement and financial condition led to it being sold to  a group of corrupt Hasidic Jews.  They fired 200 people, cut back on any quality food, and let the place deteriorate while packing it with Medicaid recipients.  Why was there not some oversight of this.  Who knows?  This is Long Island so payoffs just might be the answer but that's just speculation.  In fact the place should be closed and the owners charged with crimes.

The point of all of this is that Obama's desire to insert itself into the rigid regulation of home health care will do much more harm than good.  That's the opinion here and it is a strongly held one.  Everything does not need be run from Washington, and communities are smarter, more resilient, and more caring than the strangely elitist Barack and Michelle Obama give them credit for.

At this point there is a part of me that hopes there will be an excuse to gets impeach Obama before something like this actually takes place. That's not likely and not a wise suggestion but he is just too arrogantly blind on so many issues at the moment that I am losing perspective, and admit it.

I should say no more. 

Wednesday, October 30, 2013

The positive opportunities to give up market share

A short anecdote came to mind today that links comments made in two of the most recent posts.

In the early 1990's Washington Mutual initiated their completely flawed strategy of setting up de novo banks in major cities.  These completely new banks, unencumbered by local market knowledge or contacts, planned to take market share in consumer banking and small business banking.  In New York it was a welcome opportunity for existing banks to unload underperforming or unwanted clients without going through bankruptcy or time consuming discussions seeking concessions or more collateral with companies that did not meet hurdle rates for internal profitability.  At the same time, small businesses that had never had the financial results, profile, or times the integrity to get a bank loan found a new great friend.

So the portfolios of the two seminal JPM predecessor banks, Manufacturers Hanover and Chemical, that really ruled the small business banking market, plus the portfolios of many smaller banks like Greenpoint and others could be reduced in an appropriate and easy way.  They had an irrational and uninformed aggressive new "competitor" in the market.  They let Wamu do its marketing and relieve them of many clients.

Washington Mutual quickly gained market share in New York and bragged about it in investor presentations and in their annual report.  They seemed to think that their khaki pants, blue shirt, no tie look was a real killer as a marketing tool(Washington Mutual never gave an investor presentation without all "good news" backed by dubious statistics).  To the extent necessary they cross funded the costs of the de novo bank operations across the country with profits from their only other big business, mortgages.  So when the mortgage market began to unravel and Wamu's many poor products collapsed so did all of their new branches in urban areas across the country.

So this little comment is not just one about the incompetence of Wamu, mentioned in a prior post, but also about the earlier commentary of insurance companies not necessarily wanting leading market share positions.  Since this is not a pure comparison, banks are, for mostly legitimate business reasons,not as rigorous about this in some areas but the above is an example of where they are.  The smart firms in the insurance industry are uniformly looking to mitigate risk relative to competitors, and this seemed be a good example of the concept.

Tuesday, October 29, 2013

The embattled Affordable Health Care Act

It should be noted at the outset of this commentary that the writer supports insurance some intelligent and rationed healthcare coverage in a reasonable form for all constructive American citizens who want it or need it.  The writer views himself as an independent and as a libertarian on many issues.  The writer votes for any viable independent thinkers, but since they are rarely available, by default he mostly votes for Democrats, sometimes holding his nose.  I say all of that to put the disappointment voiced here in perspective.

The initial implementation of the Affordable Health Care Act(Obamacare) has been a disaster.  As everyone knows now, computer systems with several years of lead time to develop have been largely a failure, insurance companies are sending out policy cancellations to existing account holders whose agreements do not fulfill Obamacare requirements which are essentially "one size fits all" in approach, renewing such policies that are cancelled is more expensive, many areas where the program is just beginning are seeing higher costs rather than lower costs due to, it is said, limited competition in their areas, and the ability to understand the plan is far from clear to many people.

The program is to date a debacle of incompetence, a scandal of lack of communication and misrepresentation, and a possible corrupt procurement system.How could a Canadian company named the CGI group that most people have never heard of have been made the lead consultant and highest paid consultant on the exchange contracts and the systems that support it.  What about Silicon Valley or Cambridge, Austin or the Research Triangle, where many companies with experience in complex implementations exist.  At the same time CMS, the Health and Human Services group with responsibility for Medicare and Medicaid technology and run by a former Virginia human services role player with limited experience, a Marilyn Tavenner that nobody has ever heard of, was the on the ground creator of the online insurance marketplace.  She worked under Virginia governor, now Senator, Tom Kaine and her biggest fan seems to be Eric Cantor, no doubt an expert in technology as he thinks he is in everything else.

Sitting above all of this with apparently no involvement except for political promotion of his Health Care Plan is the smooth talking President, with his Secretary of Health and Human Services, Kathleen Sebelius, playing the same role as her boss, a promoter and not a hands-on manager.  Now we are told that the systems will be fully functional by the end of November(that's two months late), but wait a minute that was yesterday, now it's up to "95%" functional.  The big question will be whether the current system is so flawed that all fixes will just be patchwork, not a good long term solution.  An uninformed guess here is that just starting over from scratch would be the optimum solution and that, of course, is not possible at this point.

The biggest surprise may be yet to come.  Obama's premise is that competition for new enrollment in the insurance plan will lower costs.  To my mind and based on my experience in banking, that is not how insurance companies work.  Insurance companies don't work to have more customers than others or attract by having the lowest costs.  They are not like car companies or appliance makers and many other consumer products.  Despite what the insurers' advertising implies,  measures of general market share are not crucially important.  Those companies that are successful do everything they can to let other companies pick up the riskier components of market share.  Obamacare promises to subsidize those who can't afford the insurance that the exchanges offer, but the ultimate cost of meeting the needs of the clients will be borne by those insurance companies with the worst book of business.  It will be interesting to see how this supposed competition will work out, how steep the government subsidies will need to be to cover many of the uninsured, and how rough the government will be in negotiating fees with doctors and hospitals for those that they are subsidizing.  These issues have no doubt(?) been thoroughly analyzed by the government but information on their estimates is lacking.

The other aspect of this that should be no surprise is that the whole plan is in fact a "hidden" tax increase on that part of the middle class that has saved for retirement and the upper middle class broadly.  In order to meet Obamacare requirements, insurance rates for that segment will continue to rise, probably at a faster pace than what already exists.  It will be the same for the really wealthy but not obviously a major hit to their retirement plans or lifestyle.

What should be troubling to all who have saved and planned for their current lifestyle in the way that was simply viewed as responsible or as advisers have suggested to them,  for the college costs that may be on the way, or their retirement, the big concern is whether this whole healthcare plan concept is the first major foot in the door of means testing, a concept that if applied to medicare, veteran's benefits, or disability benefits could make all of that prior planning meaningless.

This bill has been passed but has a long way to go to be functional, way beyond just getting the software working adequately.  Buried in those more than 2000 pages of regulations are gems of government authority that will continue to surprise many, and may be damaging to certain segments of individuals, companies, and the economy.

We will see over time, but so far things don't look so promising.

Postscript one --- a prominent Democratic pollster said that cancellations of policies taking place now affect only a "distinct minority of voters".  Now that's the real Obama political thought process laid out.  On the PBS newshour tonight an MIT based Obama supporter made the same point, and said that 80% of Americans are covered by plans offered by the businesses that they work for or the governments that they work for.  He should know that while government premiums paid don't seem to budge, private businesses pass on part of the increase in insurance costs to their employees each year.  The insurance stays but the costs will rise more than usual as Obamacare kicks in.

Postscript two --- the choice of the unheard of Canadian firm CGI to be the primary consultant on website integrations of the exchanges was supposedly partially based on their experience with the Canadian healthcare system.  Should that have been high on the level of relevance?  Canandians are unified for the most part in support of their longstanding program of broad government funding and control of healthcare.  Canada is a nation of 35 million people, the U.S. around 315 million.  The U.S. has 50 states with streaks of independence to say the least, Canada has ten provinces and three territories, with the only major on again off again conflict being between the French heritage and English heritage areas.  CGI?  Whose brainy idea was this?



Monday, October 28, 2013

50 year breakthrough for black driver in a Nascar race, first Wendell Scott, now Darrell Wallace Jr.

In Martinsville, Virginia yesterday at the fabled speedway there, Darrell Wallace Jr. won the Nascar sponsored "Camping World Truck Series's Kroger 200", whatever the heck that is, and became only the second black driver to win a Nascar race in the organization's history.  He was the first to be permitted to celebrate in victory lane. He received congratulations from all, including the Nascar CEO who called Wallace's win "a remarkable moment in our sport's history".

The first and only other black driver to win Nascar race, a traditional one with cars, was Wendell Scott on December 1,1963 in a Jacksonville Florida based race.  Scott, from hometown Danville, Virginia, was a pioneer in being a black member of Nascar, the only one the time(the Wiki bio of him is fascinating).  Even though Scott won the race by a wide margin of two laps, the trophy was awarded to the second place finisher to keep Scott out of victory lane.  Hours after the race was over and the victory lane celebration completed, Scott was declared the winner but he never saw the trophy.  Scott died in 1990.  In 2010 Nascar gave a replica of the trophy to his family.

Considering the obvious racial prejudice at the time, especially in the southern based Nascar, Wendell Scott had a courageous 13 year career in Nascar races, during which he finished in or just above the top ten in point standings each year.  His best year was 1966, in which he finished 6th in point standings among all drivers.  He was primarily his own mechanic with help from Danville friends and relatives.  He retired in 1973 due to injuries suffered in a wreck at the infamous Talledaga speedway.

Members of Scott's family were on hand in Martinsville to celebrate with the winner Wallace.  With Danville being just 30 miles away, Wallace acknowledged his pride at winning the race in Wendell's backyard.  

Bharara successfully prosecutes Mairone?

On the front page of Saturday's NYT business section is an article about and photo of Rebecca Mairone, a former mid-level executive at Countrywide who was accused of running a system of fast tracking mortgage approvals that led to significant losses.  Her "crimes" occurred in 2007 and 2008 when the coming mortgage market debacle was still unclear to many.  Apparently she refused to settle whatever charges were leveled against her, went to trial, and the ever growing megalomaniac Preet Bharara, U.S. District Attorney for the southern district of New York, now knows that in this still difficult economic environment a jury of one's peers most of whom have little or no financial background is easy pickings for the prosecution.

Why the big deal about a mid-level executive, single mother of two, and the planted feature in the NYT.  It is by now completely obvious that Bharara is using the evil and unethical Eliot Spitzer template of pre-releasing information to the NYT for articles on to be announced events(Spitzer primarily used Charles Gasparino of the WSJ for his purposes).  But why the big deal about Mairone.  She is now employed by JPMorgan's mortgage division in a credible mid-level operational role, the hiring of which would have required considerable vetting.  Is her current relationship with JPM the reason for this focus.

The bigger question is what about the many big fish who swim along almost untouched while JPM and a mid-level executive are crushed by bad publicity and penalties.  JPM was never the leader in mortgage originations or securitizations.  At the bequest of the government during the dire days of the economic crisis, it acquired failing companies that were big in these areas.  But where are leaders of those companies.

Where is Kerry Killinger, the former Mr. Fun CEO of Washington Mutual who not only did not pay attention to or understand the management of his company but also had by far the worst strategic plan in the financial industry, blindly optimistic at all times, some might just say stupid.  Where is Jimmy Cayne, the former CEO of Bear Stearns who played a little golf but mostly bridge while he smoked pot as his company was collapsing.  What about the cocky Angelo Mazilo who would arrogantly brag in presentations about the dubious tactics being used by Countrywide to gain market share.  Where are Stanley O'Neal and Chuck Prince, respective CEO's of Merrill and Citi, who originated major amounts of securitizations of mortgage assets and were both naive enough to hold much of it on their own balance sheets.  Where is Herbert Sandler, who with his now deceased wife managed to sell Golden West(the actual inventors of the no down payment good faith mortgage product) to the delusional Ken Thompson of Wachovia with perfect timing. Wachovia later was required to be rescued by Wells Fargo.  Where is Dick Fuld?  Where is John Mack?  How has Lloyd Blankfein bought his name out of the spotlight?  Is everything falling on the shoulders of Jamie Dimon and JPM at the direction of the embarrassingly transparent vindictiveness of Barack and Michelle Obama and orchestrated by Eric Holder and Preet Bharara.

Oops, one could guess that this was getting too obvious.  Why not throw in a mid-level exec from Countywide.  One should note that she had supporters and detractors within Countrywide and many clients who had high praise for her work to refinance their mortgages and keep them in their homes.  Yet one of her inside detractors who she did not promote when he felt the deserved it served the role of "whistleblower" for Preet, and will receive an estimated $1.6 million award under that dubious program once sentencing is determined.

There is something perverse going on here.

Tuesday, October 08, 2013

Talking with Fidelity

The Chairman of Fidelity has changed.  Abby Johnson is now expected to fill her father's big shoes.  This is a cause for concern.  More importantly my wonderful account manager at Fidelity for the last six years or so, Lacey Johnson, has changed, heading to the Palo Alto office.

She had been at 350 Park Avenue, the former headquarters of Manufacturers Hanover where I first worked in finance in 1981.  Call it finance from this long distance, but the company I joined was one under the tutelage of the old style banking bosses of feet up on the desk at 9am, reading the newspapers in the morning while ordering a few people around, then a liquid or very expensive lunch, and sneaking out at back hallways around 4pm to get to their afternoon golf games or family events.

Fidelity was essentially my tutor in finance.  My attitude as expressed above meant that while joining the bank at age 31 I had 6 jobs in 8 years, some by a choice of great relief and some because I understood the cost of capital and hurdle rates that must be obtained to have a profitable relationship with a company.  Heresy!  What about a job where you inherit a relationship with a linerboard company in Savannah run by a  Lebanese tycoon and scam artist, but a great relationship from the point of view of entertained prior account managers. The company had 2 million in equity and we a 42 million loan to it, an absurd imbalance, especially to a company in a notoriously cyclical business.  That made no sense.  In my handling of accounts when I finally became a VP in 1984 I cut off credit if possible or credit increases if not to half of these ridiculous accounts.  Were my bosses pleased?  As a understatement I can say no, but the world of banking was changing and they could not risk turning me down.  Talk about the former RAX restaurants.  Don't get me started  Companies like these I dealt with in golf games, drinking times, and serious discussions.  Unlike Obama I always talked and was obsequiously friendly, but I never changed my mind.  Financing that was wrong or just based on perks to former account managers were not for me.  These I dealt with  or at least tried to do so before I was once again transferred, not by accident.

After several more jobs I was finally rescued by a wonderful man named Kevin McMahon.  I never really knew why he liked me so much, except that he was smart enough to get accolades from the intelligence that I had as his own.  So what.  That's life.  He was very good to me.  That led me to being head of Investor Relations for ManHan, then Chemical, then Chase, then JPMorgan Chase.  Fidelity was with me all the way.  I won numerous awards along the way as being among the best in my field, starting with Institutional Investor naming me as the best IR manager for large banks in 1991, just a year or so after having my charismatic Chairman on the cover with a fake dunce hat.  Fidelity's portfolio managers were a major contributor to my learning process.  Just yesterday I received a call from someone looking for advice on Investor Relations.  My first comment, "never underestimate anyone, no matter how young, how old, or how stupid seeming.  Respect everyone."

From Peter Lynch to Will Danoff to Rich Fentin to Steve Peterson to Beth Terrana, to so many there they always understood what I was trying to do.  I never once gave them insider information.  They in fact taught me how a bank should be run and what was important to investors.   Now I hope that the Fidelity that I know can continue.   Management change is not trivial.

slip sliding away

As long as this financial stalemate goes on, this modest economic recovery will be overlooked but not ignored.  It's to me amazing how much confidence the market has in this resistance of a U.S. default on its debt.  It's actually possible, however stupid.

We  have a Speaker of the House who is impotent, a Majority leader of the Senate who is hostile and hot headed at best,  and a President who pretends to be above all problems, never paid much attention to the study of history and has no education whatsoever in financial markets.  He was a genius at attracting attention he is obviously talented public speaker or reader, somewhat tiresome at this point. Even like the two George Bush's focuses of all of their attention on international issues, Obama tends to overlook the obvious, sort of like the international only focus of GWB1 ok, GWB2 a disaster.  How convenient is that?

Now we have a President who shows no leadership at all.  Just good humor, or should I say he reminds me of Yanni in his faithful "Good Humor" truck around town, faithful to my girls and me.  How about a King Cone, they still remain my favorite.  This is not meant as an insult to the wonderful Yanni.

Monday, October 07, 2013

Wall Street lags as politicians lay low

Here I have the luxury of reading a book in a comfortable chair.   That may not be the case for most people in the world not by choice but by choice of these so-called politicians, but it is unclear whether any of them have ever read a book in their life.  Newspapers for sure looking for their names, and their watchdogs doing the same.

We are the most successful democracy in the world and on the cusp of becoming the most illiterate.  How can the public be so ill defined by both political parties?  HOW?  I would suggest that they do not read any history, went to colleges that taught them almost nothing, and work at mind numbing jobs that have little opportunity expect for more pay supervising more mind numbing job holders.

Is this harsh?  Of course it is and it is meant to be.  With jobs supposedly scarce, ignoring the vast underground economy of irreverent, off the grid,  and talented young Americans suggests that there is one could suggest that there is not a real economic problem in this country.  There is an acute political problem and a problem with the old farts who get chosen to interpret all of this, and even though he is younger than me I include the increduouly Cramer in this group.  Enough has been written here about this. There are some really bad actors on the scene.  There is what has become an obviously incompetent President, however well meaning.  I wish him well but he is going too close to the edge now.  He thinks that he is popular.  Popular is relative, and he is not.  Who really likes him at this point.  Certainly no majority.  Fortunately the Republicans have no leader of consequence, only Boehner with his barroom tan, and the rising but crudely superficial ambitious Cruz.

Affordable Health Care act enrollment lags

The title of this blog is an understatement.  At this point it is unclear whether anyone has successfully been able to enroll in Obamacare via their website.  More than two years in the making with significant resources available, the Obama administration has thus far proved to be unable to have a working website.

With all of the political fighting around this plan plus the hopes of many uninsured people, this is just completely unacceptable government incompetence.  The above it all President has not even acknowledged the issue.  As mentioned in an earlier blog he has referred to it as a positive by saying that the demand for the program overwhelmed the software designed for the website.  What baloney.

How can the administration defend a well meaning health act when it is not even functional.  At this point, timing is everything, and everything seems to be invisible to the Obama administration.  He seems to view himself as beyond any criticism, sacrosanct aobe all
.  They need to get off of their pompous asses and make things happen that matter, even if it involves some minimal negotiation and compromise.  At least give the House Republican leaders a bone to gnaw on even if it has little meat on it.  Humiliating Boehner will only make the Tea Party faction of the House stronger, and further embolden Cruz and Paul in the Senate.


Sunday, October 06, 2013

Obama versus the Redskins, out of his mind now?

In the midst of this financial Congressional and Executive administrative chaos, President Obama has chosen this as the time to challenge the name of D.C.'s longtime football team, the Washington Redskins.  The closest team to me in southern Virginia, they were a favorite from the age of 5.  I never once thought about the name, and we were a family that never used the "N" word or had any problems with those who were poor or of different race.  In fact my mother would take me on trips around town as a child to deliver any excess food that we had to homes that shocked me, the extreme poverty even scared me at times.  We never had that much since we had not so much money, and ethnicity was not an issue.

I have read much about "Native Americans" on the "Daily Yonder" website and sympathize to a large extent with Native American problems, their lapses of federal funding and heath aide but  many of their issues unfortunately seem to be traditionally self-inflicted.  Yet as the "Yonder" points out, more federal help could deal with this if it were welcome and available, but in some cases it is not.  The violence, rape, and division of wealth in many of these reservations, especially those with casinos, is like something out of a bad Islamist country.  The one closest to some "wish to not be" relatives of my wife, the Onondaga reservation is a mess.  It does not even have a casino, but a drive through shows a ghetto despite all of the federal assistance.  There are still those there that play damn good lacrosse, but would even that statement be seen as politically incorrect these days.

So are "Native Americans" insulted by being called Indians, or Blackhawks, or Braves, or any other moniker of their names dating from the arrival of the English in the 1600's.  I personally have no idea about the majority of Native Americans but do know that their leaders will exploit anything for profit and attention, and do think that this "politically correctness" could be overdone.  What if today's young  native Americans actually like it when one of their teams does well?  No idea here.  Obama thinks he knows all.  I definitely do not.  Change can happen, but is now the time to focus on this?  Change-em if they insult, but Obama has been in office for five years and in these crucial few weeks is it the time to raise the issue? ABSURD.

The main thought here is that Obama is out of his mind to take on an issue like this attracting attention to himself while refusing any discussion about compromise on the budget and debt ceiling, and the compromises being asked for now are extremely modest at best and some important in the near term.  These compromises are not unprecedented over the last hundred years.  Obama's refusal to even talk to the opposition on a few serious matters is. 

Saturday, October 05, 2013

How did Ted Cruz become so influential, so powerful, so intimidating, and so quickly among the Republicans

The most recent Bloomberg Business Week has the cover title "John Boehner Doesn't Run Congress.  Meet the Man Who Does."  Their take is Jim DeMint, the recently retired outspoken rigidly rightist Senator from South Carolina who is now President of the conservative "think" tank, "The Heritage Foundation" is the real force.  In that role as head of a very well funded anti-government K Street political action group, DeMint has far more influence than he did as a Senator from a predictable right wing racist conscious state.  He has an impact.  He allocates funds to tea party candidates.  He funds research to distort the comments of fellow moderate Republicans.  He is a festering sore on our democracy.

Problem is for DeMint and the BBW opinion, he has been upstaged by a freshman Senator from Texas, the intellectually disingenuous  but seemingly brilliant legal mind of Ted Cruz.  Behind the scenes Cruz and his Texas cabal orchestrated our current budget and debt ceiling crisis.  How did this happen?

My first knowledge of the veteran Texas political force Cruz, age only 42, was while watching of all things the Republican National Convention.  Various speakers came and went, all working mainly from scripts and repeating the party lines about the Affordable Care Act and Obama in general.  They were all limited speakers, protected by the podium and sometimes gripping it.  Then came this guy Ted Cruz, who worked from no script, walked the stage and ignored the podium.  He did not come across as radical at the time and did not vary much in content from the other speakers, but in style in was light years ahead of all of them.  As someone who in a former life in banking had learned through hard work to be an effective public speaker, and do what Cruz was doing, I was extremely impressed and said so in a blog two years ago.  Little did I know.

Cruz is by all accounts is already running for President.  His attitude is, I think,  that if Obama can do what he did so can I.  He too is a Harvard Law School graduate from a mixed family without great means.  He too was a primary editor of the Harvard Law Review.  Of all people, the Harvard professor and libertarian liberal Alan Dershowitz, when asked referred to him as "off the charts brilliant".  In his role as Solicitor General of Texas for six years he wrote more than 89 briefs presented to the Supreme Court and argued nine of those cases personally before the Supreme Court while Obama, in his mind correctly, was no doubt in the lowest Chicago courts defending simple cases involving community groups.

Cruz is formidable, but also vulnerable.  He is beginning to annoy veterans in his own party even as  the Koch dynasty and the radical right west Texas community support him completely.  Boehner fears him.  At the moment we do not have time for this drama to play out in some rational way.  Cruz would shut down the government and crush the global economy if he could force his way.  That's just my take on this, but it is based on a substantial amount of study of Hitler's rise from obscurity in the early 1930's, study through both textbooks and erudite historical fiction.  Cruz would do anything to rise to power.  Unlike WWII this is not based on ethnic prejudices or even any kind of pure libertarian principles.  It's about pure ambition.  It all reminds me of those pseudo intellectuals who repeat the Santayana phrase that goes something like those who do not study history are doomed to repeat it.  Get a life, that's a long term civilization comment.  In the short term there is no such thing as a permanent outcome that can be predicted.  Anything can happen.  Cruz is not with the American people on most issues, but that is no assurance that something unfortunate cannot happen.

His stance is supposedly based on his interpretation of certain parts of out constitution that was written in the late 1700's for a different era and can be contorted and distorted in almost any way at this point.

To make personal comment about this phenomenon, I should note that I have a sincere friendship with a wealthy and well connected San Antonio guy that I met in 2004.  We keep in touch, him more than me with these off the charts radical right wing forwards of attacks on Obama and any progressive ideas.  Even his wife seems to have given up on him as, while he has four beautiful children, the Christmas card this year was him and his dog.  I did not ask.  The point is that these many forwarded e-mails are from EVPs, Presidents, and even CEO's of Texas companies.  His brother is CEO of his large family company and my friend has some vaunted title.  I like the guy despite myself and know he would always have my back, and he is a dedicated Catholic whatever that means.  That seemingly does not get in the way of the vitriol toward Obama and anything progressive or even polite.  While I give him kind hints from time to time in response to his e-mails, even saying things like "this is not you", the over the top stuff never stops.

Cruz comes from this kind of "moral" and financial support and he is talented.  At Harvard and other schools he perpetually, on his own or with a partner, won almost any debating contest available.  He is dangerously talented as a speaker.

If the even minimally mainstream Republicans had any spine, they would cordon off this Senator NOW, despite his legal skills and public speaking prowess.  Even if it's not many people's cup of tea, a minimalist Republican mainstream is far safer than making Cruz their nominal leader as they have in recent months.  What a huge mistake.   What a huge indication of the lack of real leadership in either party that within eight months of being elected a Senator, in an upset and being largely unknown outside of Texas,  Cruz could become such a political force.

If all of the above seems too alarmist, please accept that is just one person's opinion and that is allowed still in the USA, despite any actions of the NSA.

Friday, October 04, 2013

Equities hang tough

Sure it's a fact. Equities have been sliding some over the past six weeks, but all things considered they could also be viewed as resilient and as presenting modest opportunities.  With the lack of a Congressional agreement on a budget and a debt ceiling calamity, however unlikely, still looming, the equity or bond markets have still not been anyone's biggest worry.  That can change in a heartbeat, but for now most equity investors are simply taking some gains earned earlier in the year and giving back a little.  Bond investors, apart from parts of the high yield show, are in a slow but certain flight that is picking up steam.  Regardless of the outcome of the debt ceiling issue, global rates for U.S. debt have already been damaged and a rise in required returns is in the cards.

From this completely non-networked intuitive perspective, it appears that investors are taking partial gains on stocks that have done particularly well in order to shore up cash positions and overall liquidity, but they are also nipping at stocks with some potential that had already been down earlier in the year, have slipped more, and look like they would have meaningful gains if no disaster is by any chance in the cards.   They are also scouring the market for merger events that could yield a quick gain, and there certainly have been some.

The net result is that investors are raising some liquidity in the aggregate but also looking for opportunities at the same time.  The relevant question is where are they supposed to put liquidity, meaning cash raised, in any place with the potential for a meaningful or even barely adequate return.  Real estate has already had somewhat of a modest run and commodities are somewhat stagnant as China, India, Brazil and other emerged or emerging markets are working through some challenges that slow their growth.

For those with the connection to really good research, or good luck, certain health care stocks should offer significant opportunity.  Financial stocks are surviving Obama administration attacks on multiple fronts, but they will play a meaningful part in any recovery.  The auto companies do not necessarily represent any gold mine(obviously excepting Tesla's hype), but they are indicative of a slow but almost sure recovery in some U.S. manufacturing.  So do certain energy, materials, and rail names.  Finding those names is not easy for any investor for the most part, and certainly not for the retail investor.  Despite so many projections to the contrary by securities analysts over 2013, small caps indexes continue to perform well, maybe better than well.

Infrastructure plays should offer long term opportunity in the U.S., but for those companies with strong multinational networks the reward could come sooner.  The crowded investment of choice over the last two years has been dividend paying stocks, and it has not been a bad bet.  They offer yield and because of the demand for the names with strong balance sheets they have also offered capital appreciation.  This will not go on forever, as dividends are clearly taxable and the best companies are savvy enough to find ways to profitably reinvest their earnings into even more business opportunities.  Just look at Amazon.

So now it's wait and see time.  Will rationality prevail or will harsh political antagonism pull the plug on everything.  It's difficult to see corporate America letting that happen, but God only knows these days.  

Thursday, October 03, 2013

Colluding management and Union abuses an epidemic in Metro NYC area

For those who follow this blog, they are familiar with gripes about the power of unions here and the many abusive practices that have developed over the years.  They are just so egregious that I just can't help myself.  Some must be reported.

Today's NYT has an article, "For First Time, Strike Shutters Carnegie Hall".  This forces the cancellation of an opening of the season that is described as a "star studded gala".  Oh well.  Is it any wonder that most New Yorkers cannot afford to attend anything at Carnegie Hall unless guided by a Sherpa to their seats.

The reason for the strike is that stagehands were not given more responsibility for a new second floor educational extension of the building.  Here is the stunning statistic  --- THE AVERAGE SALARY OF A STAGEHAND AT CARNEGIE HALL IS $400,000 A YEAR.  That's just the "average".  One could no doubt choke on what supervisors or long tenured employees make, if they haven't choked on the $400,000 already.  This is all courtesy of what is referred to as local union one, a one that they must obviously deserve according to corrupt union protocols.  Part-time workers for major productions do exceedingly well by the hour and with overtime, but the numbers are not available here.

Can anyone really fathom the fact that these beneficiaries of nepotism and favoritism are actually on strike with these wages in these economic times.  Could they make even 25% of this amount of money at any other job?  One could doubt it.

Obama fatigue

President Obama is once again going out on a U.S. tour to promote his programs and approach to the economy, as well as to alert everyone about the truly grave danger to the economy of not raising the debt ceiling.  As always the speeches will no doubt have him surrounded by a group of ardent looking supportive gender and ethnically diverse citizens.  As almost always the teleprompter will insure a well orchestrated message.  The question is, "What is he accomplishing by going out into these carefully choreographed settings and speaking to folks who already support him?"

The President's image has been tarnished recently.  His perhaps or hopefully off the cuff "red line" statement about Syria and chemical weapons was not seriously thought through, and now one wonders whether Iran, North Korea, Egypt, or any other troubled country will really take him seriously when he tries to make some bold statement.  On the domestic front, he spent his first term delegating almost all domestic issues to Nancy Pelosi and Harry Reid, and kept his hands clean and his rhetoric perfect. While well meaning and wanting to be decisive, in some ways he is seen by some now as just as divisive, rigid, and insulated as the Republicans have been from the beginning of his Presidency.  His inner circle of Chicago advisers could remind one of Jimmy Carter's almost exclusive group of Georgia insiders.

To take a phrase out of context from the song made famous by "The Animals" years ago, Obama must be thinking "I'm just a man whose intentions are good, Oh Lord please don't let me be misunderstood."

The real question is whether he and his influential wife Michelle any longer have any true perception of what they are projecting, or whether they are just winging it.  Where is the passion in his speeches and why so much self regard.  He is President, not a professor.

This comment comes from someone who seriously wants Obama to be successful.  It's sad to say but it is clear that, if there were the unlikely possibility, the new extremely outspoken unattractive tea party Senator from Texas Ted Cruz would crush Obama in any debate at the moment, not based on his flawed and dangerous content but based on energy, agility, and intensity.  The President needs to sharpen up his thinking, step up his intensity, and be less mindful of his upbeat image and athletic run up and down Air Force One's steps(his agility and fitness is enviable but has nothing to do with being a capable President---Franklin Roosevelt could not walk), and more mindful of toning down his pretense of privilege.  No more eight days of golf with Jerry Seinfeld and others just a week before a major budget vote. 

Today's media madness over the White House and Capital attack

At the moment, 3pm, the news channels are full of nothing but commentary and repetition about the events at the White House and Capital today.  Even CNBC financial reporters are full of opinions and speculation about gunfights or terrorism.  In fact, at this point we know almost nothing.  We don't know who the female perpetrator was, how she was able to get her car close enough to ram into the White House gates, how she was able to drive the two miles down Constitution Avenue without being stopped, and whether there were any injuries beyond her death from police gunfire.

None of the lack of knowledge is deterring the news outlets from non-stop repetition of what little we do know, interviewing anyone within a mile or more of the scene and constantly talking to congress members who were locked in their offices and saw nothing.  There is absolutely no reason to watch all of this media exaggeration and speculation.

More will be revealed over time of course, but there nothing of value now on any news outlet.

Postscript 1  --- same day, early evening --- the police essentially murdered an unarmed mentally ill woman.  The only federal officer injured wrecked his own car in the enthusiasm of the chase and was not bumped or otherwise affected by the fleeing woman.  Her actions are still inexplicable at this point, but she had no gun and thus fired no shots at anyone as earlier reported.  With perhaps hundreds of police officers on the scene, couldn't she just have been arrested, however forcefully, and not killed.  Should the killers be put on leave like normal police officers and face a review of their mental fitness for their duties, or even a consideration of a charge of involuntary manslaughter. ?  That would be normal in New York in the killing of an unarmed person who had endangered many by her driving but not yet harmed anyone.

Postscript 2 --- news reports keep mentioning that an officer had already been injured.  The facts are that one rolled across the hood of her car just as it began moving at the White House area and was unhurt and, as mentioned, the officer that was hurt was an inept driver who is responsible for his own injuries that had nothing to do with the murdered woman.

Wednesday, October 02, 2013

A Government of the Congress, by the Congress, for the Congress --- oops, just forget the people

Today's dilemma of a government shutdown has nothing to do with the needs and wants of the great majority of the American people.  It's a fight among a group of stubborn, arrogant, hopelessly provincial politicians, many of whom seem to have no broad concept of American democracy, or for that matter any significant education.

One thing is completely baffling.  There are 233 Republican members of the House of Representatives.  30 of those are extremely activist anarchist, nihilist, cranks or radicals by any standard.  Another 50 or so members of the House are estimated to be relatively quiet but strong supporters of the 30 crazy people.  What's happened to the other 153 members of the House.  Are they just too intimidated to think like responsible American citizens?  Do they feel like just being followers protects their dear House seats for another election.  They all vote as a group, just following the extremists.  The media acts as if the extremists are the central element of the House.  So does the White House.  Where are the 153?

Are they just afraid or racist or such non risk takers that they have no spines(I could use another word).

Anyway, most Americans, maybe 90% by some polls, agree that Congress is an incompetent and ineffective mess.

Obama can't be left untouched by this comment.  From this perspective he has made three critical mistakes.  First, from the outset he stated that any hint of a compromise was non-negotiable.  That may have been true, but why say it at the outset with no outreach and essentially make the 153 and their constituents feel completely disenfranchised.  Second, buried in an NYT article on the health care bill last week was the information about software systems not being "completely" ready.  How many years have they had to work on this, and we saw yesterday the truth of that NYT observation.  Obama turned it around by saying the failure to the system to handle a majority of those trying to access the system demonstrated the success of the demand for the program.  On top of that the Spanish language version of the system will not be ready for "several weeks".  Again, two or more years of lead time and the systems are either inadequate or don't work.  Third, to my knowledge the administration has never published what in business would be called an executive summary of the program, and what here could be called a "people's summary" of the highlights.  That has left most citizens simply reliant on the media and the politicians to interpret this program that is bundled into a more than 2000 page document.   It is safe to say that many of the uninsured are either working too much and have too many family responsibilities to study these program choices.  Many may have minimal education and many young people are too busy with their lives to care.  Perhaps even more to the point, many generally well informed people do not know the details of the program.

How simple would it have been for the government to put full page ads in the NYT and newspapers across the country explaining the program in basic layman's terms?

There is so much more to this that this brief post can't possibly cover.  Why are so many states not participating in aspects of the program that would only benefit both their embattled budgets and the health of their citizens?  It appears to be simply a political unwillingness to accept anything designed by Democrats or Obama. --- and on and on the questions could go.