Thursday, July 31, 2014

Today's significant equity market decline is difficult to brush aside

During 2014's slow but steady move upward in the equity markets, there have been some days of poor performance, even most of the month of February, but almost any downturn has been relatively quickly shrugged off.  Today's decline is a little more alarming.

It was uniformly negative.  The Dow was down 2.07, the S&P down 2%, the total market index down 2.01%, the small cap extended market index down 2.07%, the mid-cap 400 down 2.07%, and the QQQ down 2.02%.  This was obviously not a sector driven or market cap driven decline.  It was affected all U.S. equity categories.

Was it simply just some end of quarter wipe out to set up better performance for later in the year. Not likely.  It looked like widespread profit taking as some of the stocks with the best performance in all sectors took the biggest tumbles.  Was it also significant liquidity building based on the expectation of more negative performance ahead or, on the other side of the coin, better opportunities ahead.  Could it have just been building a bigger wall of protection, meaning building bigger cash positions to protect against the possibility of some longer term economic and geopolitical issues ahead.  Then again, was it just an early morning market fall that gained momentum as the herd felt as if it could not be ignored.

All or most of these factors are possibilities.  Certainly the deteriorating situation with Russia is not helpful, the Israel Gaza war is unsettling, the collapsing of a Portuguese bank provided no help, the default of Argentina on its debt being upheld by the courts means some upheaval broadly although that is not such an unusual event every ten years or so, and given all of that is there just a growing sense that overseas economies are not participating in the modest U.S. style recovery, not just in many emerging markets but in some of Europe as well(it should be noted that EEM, the emerging markets index that is dominated by larger cap names within that sector has had a meaningful rebound over the last six months, but did drop 1.75% today, participating with everyone in the fall).

The problem with this explanation is that none of this is really news.  Put it all together however, and it does add up to a possible troubling alert to some institutional investors and just one more reason for retail investors to keep hoarding their cash.

As to the U.S., jobless claims were at an eight year low, corporate earnings for approximately three quarters of mid-sized to large corporations have met or exceeded expectations so far, and U.S. wage growth(labor costs) had the highest gain in five years.  It must be noted that those companies that did miss their earnings or revenues targets were often heavily penalized by those who were disappointed.

Apart from those minority of shortfalls, in the aggregate this is all good news for the economy at large but for the equity market it raises a red flag.  Will interest rates and inflation begin to rise sooner than expected and thus increase the cost of capital for calculating equity values.  That must eventually happen to have a stronger economy, but the market wants it to be painlessly gradual, and not something that comes sooner than expected.  This could well be another reason for today's rout.

Today's experience may not be extended tomorrow but it is unlikely that the losses will be recouped either.  There is a lot to think about now for investors.

One thing that is not an issue is the one mentioned by some of the more out of touch CNBC and other media contributors and that it now is summer and everyone is on vacation.  That's a pre-1995 truism that some floor traders and pundits still repeat.  Communications technology does not allow lead steers or successful portfolio managers in the market to step aside, nor have they ever really desired to do so. Volumes have not decreased markedly, and on some days have been relatively strong.  The thought that this is an old time vacation time slump is a joke.  There is something real going on here, and we will as always learn more in the coming days and weeks.

Opportunities and weaknesses will soon become more clear.  The answer here is of course stay the course for the moment, trim a few big gainers that look frothy and maybe pick up a company or two that have been envied but too expensive.  Also, let the indexes ride.  Whether today was a constructive reset or a harbinger of coming market challenges is unknown amidst all of the somewhat informed but personal speculation in this speculative post.

Tuesday, July 29, 2014

In "Factory Man", journalist Beth Macy documents the demise of the mainstream U.S. furniture industry

Despite the somewhat less than exciting title of this post, the book is truly a fascinating story, well written, and told from the perspective of the people whose lives were affected.  By the middle of the twentieth century, the core of the U.S. furniture industry was along the mid-western Virginia and North Carolina borders, and at the center of it all was Bassett, Virginia.  The history of the Bassett family, Bassett industries, the unincorporated town of Bassett, and the story of one incorrigible, intuitively smart, and determined black sheep of the Bassett family who managed to defy the odds and maintain his U.S. made furniture company to this day in Galax, Virginia, all of this is the core of the tale.

To end any doubt about what happened,  Chinese manufacturers and other Asian manufacturers simply supplanted this basic industry for the area with their cheaper labor, products that were at first cheap but inferior but later became better made but still cheaper than what could be done profitably in the U.S, and benefiting from the support of Chinese government  subsidies.  The Chinese products were still not finely handmade products and dresser backs of linerboard, not wood, were common, but their price seriously trumped most U.S. products and on the surface they looked the same, or from this perspective that values antiques, they looked similar.    U.S. companies were hugely complicit in the Chinese takeover of the industry by not taking their threat seriously at first and giving away their techniques to those unusually interested foreign observers, then later selling all of the advanced U.S. products, designs, flourishes, and finishes to the Chinese for the inevitable profit to the owners of the U.S. companies, and finally almost universally just putting their long established U.S. names on imports.  This was hugely profitable for many owners but did not benefit the many workers at these companies whose livelihoods depended on jobs that slowly and then quickly disappeared.

While this book is about the furniture industry, it could just as easily be written about participants in the U.S. textile industry, shoe industry, or many other labor and quality intensive industries with embedded ownership that had either ignored the threat, taken advantage of it, or had been simply unable to honestly compete with it.  Globalization has many facets, many worthwhile broadly, some that benefit overall economic progress, but few if any that benefit the generations of meagerly paid workers that had depended on industries like these for generations for their lifestyle, culture, health care, and family cohesiveness.

The writer of this post has some biases and experience related to this book.  My hometown is Danville, Virginia, once a textile and tobacco town that is 60 miles from Bassett and 30 miles from the just as hard hit furniture town of Martinsville.  In 1950 Danville's huge Dan River textile mill employed 17,000 people.  By the mid-2000's it employed none.  It had been demolished by both Asian competition, shortsightedness, and chronic mismanagement that benefited those at the top.  Regardless of its management flaws, it faced a tidal wave that overwhelmed Burlington, Cone, Fieldcrest, and most if not all of the leading U.S. textile manufacturers that existed in the 1950's and had been the leaders for many years previously(a favorite management story of mine is that when I first started working in New York City in the early 1980's my parents came to visit me.  With the not so minor title of assistant controller, my father had occasional contact with the insular Harvard educated and none too aware President of the company who kindly offered my parents the Dan River company suite for their stay.  He also recommended that they eat at the Four Seasons restaurant nearby, his "favorite".  The company three bedroom suite turned out to be in the exclusive and small Regency hotel and condo complex at 63th street and Park Avenue, quite the address for a competitively stretched and marginally profitable company like Dan River.  The company leader's suggestion of the Four Seasons as a place to eat would have probably taken at least two weeks of my father's take home pay if the three of us had gone there for a modest dinner).

There I go venturing into my own stories while trying to comment on a real author's excellent book.  Beth Macy's story is at times a bit too detailed and a few times could have used a better editor due to some repetition.  Those are minor flaws compared to the pleasure and empathy this reader experienced reading this unusual book that writes about those who for the most part are not focused on by most economists or pundits, and they are those people whose generational lifestyles are uprooted and for whom any government training is hard to apply in towns and areas with no other industries.

While hometown Danville was walloped by the loss of Dan River Textiles by imports and by the loss of Dibrell tobacco company due to tobacco industry consolidation and more efficient management by their major buyers, mainly cuttting out middle men like Dibrell as much as possible, the city still survives, not at all prosperous for many but with some prospects and longevity ahead.  With still 42,000 people, a major regional hospital,  a contracting but still important union based Goodyear factory, a small but longstanding and growing four year college, a thriving community college, shopping malls and chain restaurants that serve a huge surrounding rural area, my hometown survives with some hope and some improvements.  For those many much smaller almost single industry furniture towns, the present has been bleak, and seeing a better future requires real faith.  Sometimes faith can be powerful, but it is rarely quickly rewarded.

There I go again, using comparative references rather than just commenting on "Factory Town".  This book is well worth reading to see a side of the Thomas Friedman's "The World is Flat" thesis that is largely ignored as a fact in the U.S., something Macy reminds the reader of several times.  The people that it focuses on are those on the unemployment and disability lists that many politicians decry but few try to understand.   Beth Macy does not focus on what many macro economists say about the future.  She understands what has happened now and the impact of major dislocation on individual people and families.  She writes about the hardships faced thoroughly and thoughtfully, and details familiar reasons or she might say rationales for globalization of business competitiveness but does not break new ground on the causes of these dramatic changes.

For different unexpected and creative thoughts, try George Packer's "The Unwinding, an inner history of the New America."  It may or may not be as entertaining and engaging as "Factory Man" depending on a reader's bias, but it is both exceptionally well written and also profound in some of its insights.  

Monday, July 28, 2014

Widespread disruption, uncertainty, and tragedy in the Middle East and Eastern Europe

There are so many issues and countries involved in various crises that commenting on them all in a post like this is impossible.  Iraq is splitting apart, as ISIS surges, Iran keeps meddling with its weapons and more across the region, Syria continues its virtual genocide and forced deportations, Pakistan has its hands full with insurgents in the northern areas near Afghanistan,  Afghanistan is facing an increasing build up and military successes by the Taliban, Libya is a land of militia chaos and fighting, Tunisia is facing significant political turmoil, the Israeli government and Gaza Hamas militants seem not close to any willing compromise, and the eastern Ukraine situation appears to be getting worse with Putin's stealth but certain involvement.  What's left out of this.  Likely much more.

A few brief comments will be made on what has been listed above.

---ISIS has taken control of major areas of Iraq with the help of many Sunnis.  Those Sunni insurgents are available because they have been shut out of government by the horrific and totally Shiite biased, even Iran biased, Maliki, as well as arrested, killed, and economically ruined.  They do not, almost uniformly, subscribe to the fanatic Islamism of the ISIS leaders, not even close as they enjoyed a secular life under their Sunni leader Saddam however horrible he was.  Now they have only ISIS to turn to in order to defend themselves against Maliki, who the Obama administration supported wholeheartedly until recent months.  This is headed toward chaos, if it is not already there.  The Kurds fortunately have so far defended themselves and stayed apart from the fray, not aligning with Maliki or ISIS.

---Iran provides weapons and supplies to Assad in Syria, Hezbollah in Lebanon,  Hamas in Gaza, and is sending elite but uncoordinated militias into Iraq to support the Shiites and protect Shiite shrines and eventually Baghdad.

---Syria's government attacks on civilians with horrible weapons continues unabated, humanitarian aid is blocked, and thousands continue to risk fleeing the country daily for refugee camps in neighboring countries.  Assad now seems more self assured and vindicated.  What a pathetic figure.  The Syria story is so long term and repetitive that it has fallen off of the front pages even as the killing, random imprisonments, torture, and destruction continues daily(700 civilians killed yesterday).

---Pakistan appears to be making an effort to defend itself against the hard core Islamist extremists that set up towns or settlements in its remote northern regions, but who ever knows Pakistan's real agenda or who is really in control.  That it has a nuclear arsenal is a huge concern if any takeover is ever possible by Islamist extremists.

---Afghanistan has seen rising Taliban strength for over six months, as a result of now President Karzai trying to build relationships before his presidency ends in the next few months.  Some optimists, like the Obama administration, have been saying that he was trying to build a working coalition before he left office.  I disagree strongly.  Karzai has been trying to build a relationship with the Taliban to protect his own head, literally, and his billions in overseas accounts before he is no longer massively protected by the Americans(is it well known that the U.S. regularly sends Karzai full planeloads of nothing but U.S. cash to pay off tribal leaders and his supporters, and of course Karzai and his brother control that, whether well known or not that is a fact-- (this is reported in Dexter Filkins award winning book from 2009).  Karzai is for Karzai, and just wants to get out alive and immensely wealthy.  The Taliban now feel free to make their advances and be well positioned for the full American withdrawal.  It should be noted that it was the Northern Alliance headed by Abdullah that ousted the Taliban from Kabul after the Americans showed up with weapons and back up.  While winning 46% of the initial vote to his Karzai supported main opponent's 32%.  Abdullah was defeated in the two way run off 54% to 46%.  He is outraged and calls the election a sham.  Some Pashtun districts reported more votes than their total population in the run-off.  Too obvious. It will be reviewed, but from here it appears to be one more near criminal and self serving manipulation by Karzai to protect his power, wealth, and health.

---Libya is clearly out of control, in complete and destructive disarray.  What more can be said from here?

---Tunisia's elected Islamist government is doing its best to show moderation, but that is not satisfying to its political opposition.  This is a powder keg that hopefully will not be lit in this country that had been seen as a model for the success of the Arab spring.

---Much has been written everywhere about the Israel/Gaza hostilities.  There is so much information that everyone can have their own opinion, but the overriding one should be that this carnage should be negotiated to an end.  It serves no good long term purpose.   From here it looks as if Hamas was waiting for the opportunity to start this and then draw international condemnation of Israel for responding.  It is unclear whether they actually expected Israel to invade and discover their vastly more extensive network of tunnels than previously known, made with concrete allowed in by Egypt and Israel purportedly to build schools, hospitals, and other public facilities.

---As to the eastern Ukraine fighting, the details remain murky but Putin and the Russian military, covertly or openly, are clearly involved.  The shooting down of Malaysian flight 17 was likely a mistake, or so it seemed at first.  With the hampered ability to search the wreckage sight thoroughly and still moving slowly, that first assumption may be flawed.  With the exception of the already illegally annexed Crimea, the majority of the population of eastern Ukraine would strongly prefer to be Ukraine citizens, but the militant Russian minorities are disrupting all plans knowing that they have Putin's support and weapons.

That's it on this, too much I guess and maybe not all exactly accurate.  Best that can be done from here.

Friday, July 18, 2014

Market impact now of horrific external efforts

At 3:30pm New York time there are the expected losses in this global imperiled market but not too steep, maybe just like a nice new car or two from backing out of the garage for some entitled folks.  The Ukraine incident is then put on the edges as an accident and the Gaza invasion is being seen as inevitable.  None of this should be seen like this, no business as usual or feeling that we are powerless here. Kind words will not help unless some resolution or compromise is reached in both cases, if not some work at resolutions it will be at our much larger peril. 

There are no answers here yet, will  try to make up some here, will try to make up some as if anyone will listen. There certainly will be answers elsewhere, likely cautiously lame  Any effort by the from the UN is almost always useless, and which almost always produces a group of horrible predators who stand for nothing, and create the prostitution and nightclub business,  and incredibly these highly paid "protectors" have been African mercenaries do not even behind hide their actions.  The UN is widely a cover for misogynist and homicidal behavior by their "troops", in parentheses if they choose to fight or patrol at all. Everyone knows this.  Take Cambodia as a multi-year example of what the UN troops accomplished,  as in creating a low cost young prostitution business and nightclub economy that is their primary legacy.

The U.N. is a useless tool.  It allows over paid people from other jurisdictions to live in luxury in New York with no responsibility.  

Johnny Winter dies at 70

This short comment is meant to cut the mood of the previous one.  How could a death do that?

Johnny Winter led a full life, and as a white, albino white, blues guitarist and at his beginning of fame in the early 1960's he was paralleled by few.  Seeing him performing with his hometown mate Janis Joplin, seeing them in a wet south Florida field at midnight in the late 1960's, was to see a manic performance of bottles on the stage and what at the time was incredible music.  Joplin outperformed him by far, but she poured for them both as she and Johnny played.  It was a close in setting, a few feet away,  andfor those adept at crowd jostling it seemed like being one with it all.

That was the high  point.  He was seen at Jazzfest in New Orleans at least a couple of times in the late 80's and early 90's and at a club in Manhattan in the mid-nineties, and this former big man looked as if he weighed no more than 100 pounds.  He and others that I got to know as performer at Jazzfest got to known here as vodka legs.

That's a joke, I guess but here meant many of the real old ones in town.  Little did I know of his later performances and that he, closer to age here, would join this generation before faltering.

In recent years his sound was no longer inventive and he played on his reputation and the fact that his fast licks on the guitar were ones that few could follow.  The fans came and he could deliver.  Wish I would have seen him in a club this year.

When I saw his obit yesterday there was a moment of remembrance, but more of an amazement that he was still on the road playing at age 70, with already laid plans for more.  Perhaps some good music was missed here as he evolved in later life as he probably did.  Did he ever record acoustic?

Thursday, July 17, 2014

Tragedy over eastern Ukraine war zone

It seems to be a fact now that Malaysian Airlines flight 17 was shot down by a missile launched from the separatist region of eastern Ukraine.  Much is yet to be determined and no rush to conclusions is constructive for anyone.  Here for the moment are what seem to be some facts.
 ---in this area only the Russian made Buk mobile launcher has the power and the capacity to reach a plane at this height.  One, at least, has apparently been seen in rebel hands.  Two Ukraine military aircraft have been shot down in the past week, a fighter jet and a large transport plane, but it is unclear whether either was flying at the 33,000 feet level of flight 17 or shot down by the identified Buk launcher, or perhaps launchers.
---flight 17 was flying just 1000 feet above the allowed level for flying in that area, an area which has been a widely used flying link between Europe and Asia.  Some major commercial airlines had decided on their own not to use that route, as for example British Airways only uses the route now once a week for a flight to Crimea, and otherwise does not use it for any of its many major Europe/Asia routes.  At least one major American carrier had decided not to use the route at all.
---that the tragedy happened within less than 24 hours after new U.S. sanctions on Russia is notable but hopefully not meaningful.  Conclusion on this to be determined.
---cell phone chatter between the Russian military and the separatists discussing the event has been provided by the Ukraine government, but it has yet to be validated.  If it is, it shows that the plane was shot down at the suggestion of the Russians by the separatists, but they thought they were shooting down a military aircraft.

At a minimum, this shows the danger of Russia putting extremely powerful military equipment into the hands of an uncoordinated group of separatists, ranging from dedicated local pro-Russia contingents, to actual members of the Russian military who have been slipped in as advisers and provocateurs, to outright trained anarchists and militias for hire from Chechnya and other regions.  What actually happened may soon be known, but Putin will make everything fit into whatever distorted tale he wants to spin.

Around six months ago Hillary Clinton made a comment that some journalists interpreted as comparing Putin to Hitler.  She said that she was misquoted.  From this perspective, if one would look for one person on earth today with the aspects of sociopathic megalomania, brutality, confidence, passion, and power that could evolve into something truly horrible, Putin may be the one.  Maybe he is "just a man who is misunderstood",  and that is what one would call a Western weakness in thinking.  He is certainly not yet a genocidal maniac like Hitler or Stalin, but he is certainly not a balanced individual that can be talked with rationally or trusted.  His reach for territory was the genesis of Clinton's supposed comment.  Hillary may have been misquoted, or maybe not.

As said at the outset, a rush to conclusions is not constructive.  A concern for the 295 slaughtered people and their families is appropriate.  The comment here may be inappropriate at this point.  That's to be decided by readers but getting out what few facts and observations that we do know seems fair.

With friends and family in the air many nights, who can imagine the depth of distress of those impacted by this.

Wednesday, July 16, 2014

Second quarter earnings have few surprises of note; comments on JPM, YHOO, and BAC.

As second quarter earnings continue to be announced, the season so far has been unremarkable overall.  There have been some disappointments and positive surprises as always but there has been nothing earthshaking one way or the other.  There are three companies followed here closely that were of interest.

JPMorgan Chase had a solid quarter, and one that was encouraging for the economy as a whole.  From reading the media reports and listening to the news blatherers and professional pundits at first, a casual listener would have thought that the quarter was a big disappointment.  It was not.  The one area with the big drop in revenues was trading related, not outright risk taking trading but trading to facilitate trades in foreign exchange, derivatives, stocks, and bonds.  Market activity was down, so revenues were going to be down.  Dunderheads thought that this was a big negative.  It was not, and the stock went up.

The issue forever with trading businesses is that when a company does well some securities analysts  will say that they are not going to put any multiple on that because it is not a reliable revenue stream.  Then when trading is weak, they say what a big disappointment and penalize the company.  Fortunately most investors who know how to make money can see through that.  The good news in the quarter was that small business loans were up significantly, 43% I think, and large corporate loans were up as well, 11%.  JPMorgan is a, or the, market leader and does not need to take added risk to get business.  That they are putting on these loans means that both they and their customers are now seeing good opportunities to invest.  That is the best economic news to come out of this earnings season to date.

Yahoo had a so so quarter.  The ongoing focus on Alibaba was ongoing, repetition intended, but if one person said it a hundred did, "the underlying business is still weak and under pressure".  It is always interesting when almost every commentator and analyst says the exact same thing about a company.  Rarely is such unanimity entirely accurate.  Here the thought has been that CEO Marissa Mayer had a huge job ahead of her when she took over two years ago and it would not be easy or quick.  Revenues have been slow to show the results of her efforts so far, but there is still faith here.  She still has the client eyeballs reach of Yahoo globally, but apparently not the attention and focus of quality advertisers.  She still is behind in mobile.  The belief here has been that there will be a change in that, but that belief has been shaken here recently.

Since a timely entry into the stock two year's ago, for research and observation purposes Yahoo's home page became the default page on the internet when logged into on my desktop.  I had been seeing significant progress in both news choices and to some extent advertising until recently, but it now seems to have stagnated or even regressed.  Over the last four days for instance, among the top six news items, almost all of the time, on the home page has been a Michelle Wie putting exercise, a Tom Watson comment on Tiger, and details of Johnny Manziel's summer.  Why?  Are these getting lots of attention from their base and therefore are viewed as popular.  If they are listening to their base they are making a big mistake. If this is meant to be tailored to interests here, they better check their algorithms. They need to expand and build an attractive client base, and they need to be creative and fresh with their stories.  I have no idea what is happening there now and but I am not giving up on a belief in Mayer's efforts, so will hold onto the gains here for now but will not step up for more despite the recent decline.

Bank of America continues to get creamed by regulators for their mortgage business based on both events that happened five to eight years ago and based on some failed efforts to work through the recovery and foreclosure issues related to their existing retained mortgage book from that period.  Brian Moynihan, the CEO, has done everything its seems to accommodate and be cooperative with the government short of serving Eric Holder's tea in the morning.  Over and over again the regulators come back for more.  This time the number may be huge.  If BofA has offered $13 billion, one can guess that it will be more.  For the quarter this most explicitly showed up in legal costs of $4 billion, much higher than expected.  Otherwise the quarter was decent with no surprises, but not up to the standard set by JPM  for 2Q.

More to come as the news will continue to come in this week and next. 

Tuesday, July 15, 2014

Long Island Rail Road, on the brink of a strike

The Long Island Rail Road and the Metropolitan Transit Authority have shut down negotiations.  Members of Congress have said that the Federal Government will not step in.  Mayor DiBlasio of New York City is ignoring the issue completely, not wanting to do anything to alienate his left wing base.  The only politician who might try to step in now with some magic is Governor Andrew Cuomo.

Cuomo is by most accounts an effective governor and good manager who somehow often engineers compromises when necessary.  In fact, it seems that it is what he loves best about his job, those times when he can tackle an urgent issue and get it resolved.  It doesn't always work, and sometimes he ducks fights, but he is the only one left who can make the effort to stop this debacle from occurring.
Now we wait to see if he shows up.  There is no speculation or mention in the media that he will, but  here I wonder.

The LIRR union is most famous for historically having 97% of those who retire from the railroad doing so on disability, and that's on a railroad with one of the best safety records in the country.  Not an expert here on the details of the issues surrounding this strike deadlock, despite reading the newspapers thoroughly, the union and the transit authority have been at loggerheads for several years at least.  Without any new agreement, average union worker pay is already around $85,000 a year plus having a defined benefit retirement program that is generous, and unheard of in private industry today, and a first class healthcare plan for which employees currently pay nothing.  What they already have is better than most comparable systems in the country and compares well to any from what has been read here, but there seem to be no writers taking on the real facts of this case, and neither the MTA's nor the Union's numbers can necessarily be trusted.  The MTA could have administrative costs that could be trimmed, but there is no information here on that.

The railroad has approximately 300,000 riders every weekday.  On summer weekends it is a prime route to east end beaches and resort towns.  The real strength of the union is that this is an island.  There are no bridges or tunnels on the east end of this approximately 140 mile island or any in the middle.  On the west end there are five bridges and one tunnel for car, commerical truck, and commercial bus traffic going into Manhattan and two bridges going north into Westchester County.  That's it.  The Long Island Rail Road Union has a monopoly on a necessity.

On May 23rd, a comment, "Gridlock City", was written here about driving into and out of Manhattan  from our Long Island area on a normal day.  With the last strike having been in 1994 and not being pleasant, this would be something that is hard to imagine.  There is no comparison to the congestion on the main traffic arteries into Manhattan and in Manhattan itself today to what existed 20 years ago.  It's not even close.  This strike would cause great distress to many workers and businesses, who knows what that the number is but somewhere around 300,000 people is a logical staring point, maybe 50,000 or less somehow, who knows.  This all would be to benefit 5,400 well paid union workers.

Not there a new contract shouldn't be agreed to and the union workers should deserve a pay raise over time. There should be a new contract.  They seem to be down to whether it an aggregate 17% pay raise over six or seven years and whether existing workers would be required to pay 2% of their pay in health care costs, that's just 2%.  New hires would be required to pay 4% of their health care costs and that outrages the union.  One might ask why.  The answer, there is rampant nepotism and patronage in the LIRR union with its minimally diverse workforce.  DiBlasio being missing in action and not making any constructive comment becomes more dismally political and hypocritical when that fact is considered.

There are of course many other issues in a union contract which only those in the midst of it are aware of, and reporters rarely get into the details.  These union contracts are certainly not anything in complexity like bills coming out of Congress, but one could bet that, though much much smaller, they bear some resemblance.

Governor Cuomo,  please give it a try.  There will not be a good outcome to this if the strike occurs.  In fact, after maybe a week or two of efforts at goodwill, it will degenerate into economic chaos.  

Monday, July 14, 2014

John Kerry's stamina

As Secretary of State, John Kerry has become more and more impressive, not so much for his few successes but for his ability to stay focused on an arduous job that offers constant aggravation and little chance for great success, and little chance for rest.  Until recently I was not much of a fan of Kerry.  His beliefs I could agree with for the most part, broadly speaking, but he had a way of entitled attention seeking that was annoying over the years.  Then, his campaign for President in 2004 was awkward, and while that may be the fault of his advisers and due to the less than enthusiastic support for him by the Clinton's and others who were "Hillary hoping" for 2008, it was still awkward.  His campaign will forever be defined here by that picture of him in full camouflage hunting gear, walking through a field, broken shotgun over his shoulder, one of the worst ever arranged political photo-ops.

Now he is a different John Kerry.  He seems to  seek no real credit or major face time, while he is following Obama foreign policy dictates that one can sure he does not fully agree with.  Hillary Clinton's time as Secretary of State was incredibly busy as well, but much of her visits to over 100 countries had to do with normal diplomatic missions and women's rights issues, plus Bubba liked to tag along for the cushy travel, the attention, and shopping at times.  She certainly had her share of crises, but Kerry's plate is full of 100% crisis.  Dealing with the Russians, the Ukrainians, the Afghans, the Iraqis, Syria, Egypt, Iran --- what has been left out here, it's overwhelming.  He soldiers on, making those totally discredited Karl Rove orchestrated "Swift Boat" attacks in 2004 seem all the more heinous, despicable, what is the right word.

We hope here that his latest work on Afghanistan's flawed election process and reworking its Constitution to give more power sharing to the ultimate government leaders is successful.  We need a success and he needs a success.  Maybe Obama will even share some credit with him if this current Afghan effort works out as a successful compromise.


Sunday, July 13, 2014

A film of heartbreak, stupidity, and yet, hope, and a book focusing on dysfunction, pained reflection, and, yet, somehow elegance

Those were the two artistic exposures of consequence here in recent days.  They don't sound too perky do they.  In their own way they actually are.  Sometimes it takes some tenacity to continue on, but the reward is there.

"What Maisie Knew" is a 2013 film based on an 1897 book by Henry James.  Before this week both were completely unknown here, so I can only say that this is obviously a current day film version of James' book.  Maisie is a six year old being raised by completely self obsessed Manhattan parents who use her as a tool to fight each other with in their completely collapsed marriage.  This becomes increasingly unpleasant to watch. Caretakers, part time sitters,  bartenders, hotel doormen, and a restaurant hostess, among others, fill some of the void but not completely   The child actor that plays Maisie is exceptional.  The film is unequivocally well done.  It was just watching it that was not always easy, but at other times a joy.

"Bark", Lorrie Moore's new book of short stories, has its many dark and painful moments.  It is blunt to a fault about what it sees in many of the characters.  Moore does not try to charm readers in any overt way, and, like most collections of short stories, there are a couple here that just are not appealing to this reader.  Her writing is precise, her observation is penetrating, and her humor at times is so understated that it could be missed.  Each story is for the most part entirely different. "Wings" was the one seen as most exceptional here.  There are others that leave a lasting impression, but how could that possibly be known now.   The real test of this book for me was that when it was finished I wished for more.  Why just nine stories?         

Friday, July 04, 2014

Should I get a tat

Since watching "Broken Circle Breakdown" I've been wondering about this, even well before.  Who cares now.  Who sees me now in any full body pose over and over again at home with door closed from others, the beach or gym, at a doctor's office, wherever,  and who cares where, once again I say who cares.  But what would one say on a tat that might need to be removed later, or might be just hopelessly sentimental.

It occurs to me that this is the attraction of symbols, that they mean something to a large enough group of people to not be too specific but for marking one's line in the sand. One could say that for the Christian cross, the Nazi swastika, the Star of Judaism, the peace symbol that began in the 1960's, and maybe the Zen stacks of rocks.  I hate, hate, to mentions the swastika but that it is now being revived in Greek and Hungarian political parties, and used as a verbal assault to some extent by the Russians, as in Putin or course, attacking the Ukraine(Ukraine government is not Nazi, the prime minister is Jewish for God's sake), and now it can't be ignored. But the question is, as with words, do they tie one's body to a point of view.  Maybe that's great for some, maybe not so great for others, especially young people.

A former compulsively accomodative and gregariously talented Kentucky friend of mine (whose daughter I keep in touch with from time to time because I enjoyed helping to raise her when she was really young, taught her how to ride a bike etc.), has lived with his second and apparently devoted wife in New Zealand for at least 15 years(have not seen him in maybe 20 years) and is apparently an aficionado of tats. Who knows what this somewhat renegade but genetically dedicated and capable Episcopal minister would do.  Maybe he has children name's tats, or maybe car names, or then again intricate artistic designs.  Who knows, but I guess the word is that he is tatted and I am almost certain that it would be in style and well done, and give the impression of a deep thinker.  I played and enjoyed immensely tons of basketball games and tennis doubles matches with him, but never saw him crack a book or rarely read a newspaper.  Oh well, he was a really good man, and both of us were not always so by conventional standards.

As to the beginning of this the question was, should I get a tat.  I see a couple of relatively small, tasteful, and thoughtful ones in open places on younger daughter and don't want to know any more.

I would need a lightening strike and an immediate bolt of brilliance or stupidity to decide.  Maybe never, or maybe some life changing or ending events, who knows what, but a tat is unlikely to be in my future.  Just an unlikely thought brought on by the film, but not impossible.

"The Broken Circle Breakdown", a compelling film from Belgium

Last night we watched this film that was not known to us but somehow Netflix had suggested it our way.  It was among the most sad great films that has ever been seen here.  The music influenced this comment in a major way, if in the unlikely event that any film anals want to understand why I am overstepping their territory.

Within the first few minutes of this film produced and directed in Belgium,  "The Broken Circle Breakdown", has a mention of Tony Rice, something that experienced country music lovers may relate to, as well as folks who know his home, in the Piedmont area on the middle of the Virginia and North Carolina border.  Hey, I was from Danville, VA in the  middle of that area and did not know who the not so widely known Tony Rice was until friends in Texas and North Carolina sent CD's in the early 2000's.  With the  mention of his name at the start pf this film from Belgium, that  alerted me that, "something special is going on here."

The film's location is in a rural area of the French speaking Gent, not too far from Antwerp. English is spoken some of the time, and French at other times with subtitles.

Rice was a major influence on country western and especially bluegrass music, but he was not  recognized for that except by other musicians  He preferred staying in the background .  To hear his name at the start of this film focused me.  What the heck?

The music here is just plainspoken bluegrass played in Belgium, good bluegrass it seems to me.  The players, husband, a bluegrass prodigy and devotee, and the wife, a tattoo artist and appealing country singing free spirit, meet and the romance begins.  A beautiful child is born, named Maybelle, as in Carter.  No spoilers here, but music is a part of almost every scene, and empathy is more expressly felt by this viewer through the music than anything I can remember(at this point that may not be saying much).

In the end, with their new names Alabama and Monroe tats on her legs, the film ends.  Is this film following a well worn path of lives lost through fate or intensity or is it something more powerful.  More powerful I say, much more.  The film has more than enough heartthrob moments, but it is in its totality a picture of real life, lived the right way, with optimism, with tragedy, and with music.

What an unusual film this is.

Thursday, July 03, 2014

Amazon's image issue, one that is beginning to be tarnished

As we learn more about how Amazon is handling its relationships with publishers, especially with the media coverage of its disagreements with Hachette Book Group and more importantly Amazon's aggressive retaliation, this is beginning to be a cause for concern.  For a company that trades at a P/E of 400% to 500%, there is not much room for credibility destroying events despite their incredible revenue growth.  AMZN is now down to $338 from its $408 all time high in January.  As a point of interest, I do not own the stock and to my obvious dismay never have.

We are prime users of Amazon.  I am the major culprit as reading is a default mechanism for my time, enjoyment, and relaxation, and filling every corner of the house with books, and at times giving the non essential ones away in batches to thrifts stores or used book stores, seems to be a mission in my life.  The prices on Amazon are exceptional, the delivery speed and tracking are almost perfect, and any errors(only one with us in maybe 10 years or more) are quickly remedied.

It is now startling to learn that their recommendations for books for "John Borden" are based as much or more on their contractual relationships with publishers as they are on any algorithm that analyzes my reading preferences, reading habits, and whatever they pick up from the netherworld of internet information about me.  Their recommendations at this point now could seem to be fake, as if they are treating their clients as naive people to take advantage of.  It must be said that I often find their recommendations ludicrous and that rarely are their recommendations followed here, but some do catch my eye, I research them, and sometimes they are helpful, as with Katherine Boo's exceptional "Behind the Beautiful Forevers" alerted to at Amazon.  Still, this exclusionary policy that they are following now, one that is based on economic disagreements, disagreements that affect customers, and affect writers and their creativity as well as their ability to make enough money to follow their chosen path, for Amazon to continue with their current approach is wrong.  This action by Amazon is INSULTING to clients.

Many in the informed minority of the media are onto this issue.  As reported in the New York Times today, Stephen Colbert has attacked Amazon "for discouraging customers from buying titles from his publisher, Hachette Book Group."  A little self serving of course, but Colbert then picked a debut novel from an almost unknown author, Edan Lepucki, to use as an example of the impact of an Amazon exclusion on a Hachette published writer, first printing of only 12,000 books.  With the impetus from Colbert, her book "California" is now receiving pre-orders from independent bookstores.  Checked today, there are no pre-orders available on Amazon.

Personally speaking, it is not at all clear that "California" would be appealing here.  Another book on the Amazon black list, because it is under the Hachette umbrella, that really appeals to me, that I would order in a heartbeat, is also reviewed in the NYT today.  That is "Factory Man", written by a veteran reporter in southside Virginia, Beth Macy, for whom this is her first book. It focuses on the struggle for survival by Bassett Furniture as an unrelenting American made furniture company based in an old style company town, notably Bassett, Virginia.  The book sounds as if it may be a bit offbeat, which may make it even more interesting than it already sounds.  This is especially interesting here as we have several wonderful products of Bassett furniture in our house, including my large main desk and the large Shaker style dresser in the main bedroom, all amidst the hand me downs, Ikea stuff, quality purchased sofas and beds, and antiques from Virginia and North Carolina.

Then there is the local connection.  Bassett is maybe 60 miles west of hometown Danville.  It is west for sure but it does not qualify as being in the Appalachian mountains as suggested by the NYT reporter.  That entire area around Bassett and Martinsville has been exceptionally hard hit by a recent long term recession and even more than my hometown has not been at all prosperous for a couple of decades.

I would really like to have this book.  It is highly unlikely to be purchased by our local library in the New York suburbs.  It is not available in any way on Amazon, pre-order or whatever at this point.  Given my obvious interest in and purchase of books related to this area, Amazon has still not in any way alerted me to its imminent publishing date of July 15.

Amazon is opening itself up to be seen as a monopoly that should by law eventually be broken up.  I do not have any informed opinion on whether this should or would happen, but I think Bezos is being really stupid and shortsighted in the way he is handling his relationships with publishers, almost like an economic gangster.

More flexibility and integrity will come from Amazon, one could hope, and that should be intuitive to them.  Hubris always waits in the wings for those on the stage of great success.  We like the darn company and want it to have continuity, but not as arrogant monopolists.      

Tuesday, July 01, 2014

Eagerly anticipated arrival tomorrow morning

Younger daughter returns to JFK tomorrow morning at 7am after spending five months in Asia.  Four months were based in Beijing but with class program sponsored trips to Kunming and Yunnan Provinces and independent trips with her classmates or once on her own during weekends and on spring break to Xi'an, Shanghai, Guilin, Chengdu, Leshan, Jinshanling, and Quigdao  She then spent the next three weeks with college friends in New Delhi, Jaipur, Agra, and Amrit Sar, in India and five days of that time in Bangkok as well.  The latest two weeks have not been well documented so we will learn more soon.

What a trip, and what a traveler she has become.  There has been the sense that she has enjoyed it all immensely, but here that has been combined with occasional normal bits of parental anxiety.  We look forward to seeing her, and really seeing a somewhat changed, more experienced and more confident person, and adjusting to those changes as we learn more about her now .

There have been changes here as well that she is unaware of but which she will unfortunately realize soon.  Over time, you can't hide health issues.

Excitement and worry, those two can keep one up at night.