Walk in the Rain

My fellow Portlanders & Oregonians will vouch that cloudy days like for example today in PDX won't last forever and it will be eventually be Sunny again. By the way, did you know that Pittsburgh (PA), Rochester (NY), Burlington (VT), Cleveland(OH), Grand Rapids (MI), Hilo(Hawaai) all have less number of sunny days than Portland, OR which gets 68 days of sunshine in a year. So stop bashing Portland as the land of rain !

We in Portland ofcourse enjoy Sun better than anyone else ..well, except the Seattle folks, may be. Why, because we understand the value of it ! and don't take it for granted like those sweaty Californians or Texans ! ! So as you can imagine, no lunch hour discussion or quick chat with another Portlander would be complete without the reference to the current weather and better tomorrow.

Now that teaches few important things to Portlanders .. "hope", that things will be always better tomorrow, even though today might suck !, also to "be realistic" that there are things that are not in your control, and "learn to adapt" - have always a plan for fun rain or shine. Of course, lastly we understand that everything is cyclical !

Now let's put that in to the context of current gloom and doom economy show that we all seem to be dragged into... lot of folks are wondering where does this lead to ? a tragedy or happy ending ? and panicking what to do when the world comes to an end. First thing, take a queue from my fellow Portlanders and relax ! these days of gloom and doom shall too pass, and Sunny days will be here again !

But if you are still not sure .. here's my own rendition of how the current times too follow the classic cyclical nature of markets around the world.

• Increase in consumerism --> Surge in Demand of all products-->
• Booming markets & Rosy outlook by companies --> Stock markets go up ->
• Increased Capital spending -> Employment & Salary growth -> Boom stories !
• Rise in asset prices with no correlation to real value (aka Infaltion)->
• Govt initiatives & tax incentives keep the bubble growing ->
• Banks & lenders go big guns, Credit rules !! -> Asset prices & stock markets rocket higher ->
• Net worth increased -> Party time !!
• Reckless spending - wants vs needs ->
• Significant expansions/initiatives w/no correlation to true demand ->
• Excessive supply in market -> Aggressive marketing tactics & Risky lending pracitces ->
• Increased dependence on debt overall -> Demand slows down & Signs of Losses for Real estate ->
• Sprialing costs and cost of debt -> Tighened lending terms -> Asset values significant drop ->
• Bad debts increase as they couldn't afford it in first place -> Finally some has to pay up !!
• Lenders losses mount & Financial stocks crash -> Liquidity freeze ->
• Stock markets show signs of weakness -> Cautious future outlook by Corporations ->
• Lack of demand for raw materials/energy -> Investors withdraw ->
• Big companies take hit -> Stocks keep going down -> Consumer gets hit & Economy in news ->
• Wide spread panic & Stock markets crash Investors flee -> Government initiatives ->
• All-around spending freeze & Less jobs -> Unemployment rate spikes up -->
• Salaries go down -> Party over !!
• Consumer spending hit --> Cosumer-oriented & value stocks get hit ->
• Recession declared -> Home & asset prices drop further ->
• Net worth drops as Savings & retirement funds lose value ->
• Government dumps new money into circulation ->
• Burnt once, investors forget market ->
• Slow,long recovery while everyone get used to Pain -> Bargain hunters enter !!
• Real estate and asset prices show signs of recovery -> Stock markets flat ->
• Corporations start growth initiatives -> New bubbles (how about renewable energy ?) ->
• Venture capital flows -> New Growth companies ->
• Govt Initiatives to boost economy -> Hmmm.. how about war with Venezuela?
• New capital projects > Stock prices up in growth sectors ->
• Financial companies & Investors initiate buying -> Stock markets signs of growth ->
• Newer markets in Emerging countries open up ->Markets & Growth stories in news ->
• Increased consumer confidence -> Employment rates up ->
• Everyone wants to join the band-wagon -> It's boom time baby ! back to consumerism !!!

Of course it's cyclical and only question is how long will this bad spell last, and how well we all rideout these down days and comeout shining on the sunny side. Ofcourse we have new Uncle Sam in town to bail the average Joe Plumber out !

Only caution is it appears the duration of these cycles of boom and bust in markets seems to be getting shorter and shorter, very similar to the number of sunny days per year in Portland which seems to keep going down over time !!!

I guess there is a long term equivalent of global warming coming to financial markets which ofcourse is not good for all.. but who cares, it's time to enjoy my walk in the rain ...

Lighten up !!

We need a refreshing rain from the sweltering economic heat ..

Bailout song

Then and Now

October 24 1929: Then People gather on the sub-treasury building steps across from the New York Stock Exchange on Black Thursday. Thousands of investors lost their savings in the stock market crash after a five-day frenzy of heavy trading. Too much speculation with borrowed money had inflated market values unrealistically.







Oct 9, 2008 : Now The TV news media attract onlookers in front of same building now known as Federal Hall, while broadcasting coverage of nearby New York Stock Exchange as Dow Jones drops another 670 Pts to breach 9000 level after a five day frenzy of 2000 Pts loss. Only billions watch this story unfold world-wide in their Pajamas.

Sign of the Times: National Debt Clock Runs Out of Digits

The clock has run out on the national debt. The National Debt Clock, the unofficial tracker of the federal deficit maintained by the Durst Organization in New York, has reached its limits (the ever-familiar Number range issue in IT). Last month, as the national debt exceeded $10 trillion for the first time, the clock ran out of digits to record the number. The dollar sign in the clock had to be deleted and replaced with a one to record the massive number. The clock’s owners say a new model — with space for two extra digits — will be in place early next year. Now the debt clock will be able to reach the quadrillions. Hopefully, that’s not a level that will be breached any time soon...

Don't believe there is a crisis ?

Not to cause panic, but to elevate your awareness of what's going on with the news about economy now-a-days.. watch this video as it hits home the extent of the current crisis as it unfolds..

Foreclosure Crisis

And while this is unfolding, would you not want to know what if any US government was or is doing and if they have this under control, check this out

Then and Now

Last October, citing Internal Revenue Service data, the Wall Street Journal reported that the top 1 percent of Americans earned 21.2 percent of all income in 2005. That's the highest measure of income inequality since, you guessed it, before the Great Depression.

Meltdown

On Monday, the largest bankruptcy filing in U.S. history was made by Lehman Brothers. It had over $600 billion in assets and 25,000 employees. (The largest previous filing was WorldCom, whose assets just prior to bankruptcy were just over $100 billion.)

On Tuesday, the Federal Reserve made a bridge loan to A.I.G., the largest insurance company in the world to keep it from going under; AIG perhaps best known to most of the world as the shirt sponsor of Manchester United soccer club, has assets of over $1 trillion and over 100,000 employees worldwide.

On Friday morning, the economists at Lehman Brothers sent out their usual weekly roundup of the news, but it came this time with a short, italicized note, explaining that the report would be the final one to appear under the Lehman banner. That bit of understatement preceded some more: “This episode of financial crisis,” Lehman’s economists explained, “appears to be much deeper and more serious than we and most observers thought it likely to be. And it is by no means clear that it is over.”

Some Interesting reads as you walk through historic turmoil in financial markets and US economy in making... and wondering what the heck ? how or why all this is happening ? where would this lead us ?

The F.A.Q.’s of Lehman and A.I.G. upheavals

What risky Real Estate deals busted Lehman ?

How Merrill Was Saved and Lehman Was Lost

Minimizing Your Own Exposure to Risks

It was a gunshot heard across a subcontinent.

India got it's first individual gold .. time to celebrate, esp as we all know how pathetic job Indian Government does in encouraging sports ! Mr. Bindra has been lucky that his father is an industrialist who has dipped into his personal wealth to support his son. He built a shooting range for his son in his farmhouse in Punjab, and made sure he never ran out of ammunition, which is not made in India and has to be imported.

As the WSJ article points out, may be it is right that countries like India should stop spending on sports, and hope people as they get rich will find their ways & means to win world recognition !! Hasn't India done this with IT ? less the government interferes better the outcome.

Not a bad idea, rather than become a nappy nation. I am sure you’ve heard about the 900 Chinese soldiers who had to wear nappies during the opening ceremonies

California Becomes the First State to Ban Trans Fats

Is Government reaching too far? see some comments (not mine!) posted on web both for and against, a good debate topic !

Some think it's great... This is good news. Since people won't take responsibility for their health yet expect Medicare to pay for years of poor, unheathy diets causing diabetes, heart disease and obesity, then its time government stepped in to manage what is available. People make bad choices hence the success of fast food restaurants. This is not controlling, this is visionary. If we are ever going to get good, affordable health care, then the first step is to eliminate the bad choices some people make by removing options. If you really wanted to 'control' people, the government would prevent obese people from eating at 'all you can eat buffet restaurants'. We're not there yet and I don't expect we will, but we can control what is on the buffet. Thanks New York and California for leading the way.

For others it's just Bull ....Just wonderful, yet another shining example of government trying to tell me what I can and can't do. Those of you that support this need to stay out of other peoples business. Only California would do something so stupid, support legalizing marijuana, but try to ban something in food. If I want to eat a ton of red meat while drinking gallons of beer smoking cigarettes covered in butter that's my business, no one has the right to tell me what I can eat or can't eat. Just remember this as more and more of your personal freedoms are taken away from you "For your own good". I mean after all, some people aren't capable of handling the effects of abortion, lets outlaw that. Meat is bad for you and cruel to the animals so lets outlaw that. You really can't seem to pick good movies so let the government decide what to watch. Obviously people can't be trusted to pick the right books so we should let the government decide that as well. People also can't seem to plan families right so let the government decide for you. And you have been picking websites that well are a little objectionable and needs to be banned...you know like they do in China.

Hmmmmmmmmmmm ... now you decide where you stand !!

"The Post-American World" by Fareed Zakaria

After its publication last month, it immediately shot to the top of the bestseller lists. It became downright trendy after Barack Obama was photographed carrying a copy while travelling on the campaign trail; maybe, the pundits speculated, this book will be a major influence on the next president’s thinking.

Seems an interesting read... but also seem quite controversial too, esp on overplaying the global impact of growth in BRIC economies.

By ‘post-American world’, Zakaria refers to the erosion of US pre-eminence as the sole superpower. The end of the Cold War and the ‘bipolar duopoly’ of the US and the Soviet Union led to an ‘American imperium, a unique unipolar world’. However, with the recent emergence of China, India and others – what Zakaria calls ‘the rise of the rest’ – the situation is now changing: ‘At the politico-military level, we remain in a single-superpower world. But in every other dimension – industrial, financial, educational, social, cultural – the distribution of power is shifting, moving away from American dominance.’

A sign of declining American influence, he writes, is how the rising countries pay less attention to the US: ‘The world is moving from anger to indifference, from anti-Americanism to post-Americanism.’

...his central point: that a focus on conflicts in the Middle East and elsewhere has meant we have missed the real story – the economic rise of the BRIC (Brazil, Russia, India, China) and other emerging markets. These countries now account for more than half of the world’s economic growth since 1990, and represent over 40 per cent of the world economy (measured at purchasing power parity). In 2006 and 2007, 124 countries grew at a rate of four per cent or more, including more than 30 countries in Africa.

...he goes on to claim that this is the third of ‘three tectonic power shifts’ over the past 500 years. According to Zakaria, the first was the rise of the Western world, from the fifteenth century to the late eighteenth century; the second was the rise of the US, from the late nineteenth century until about 1990; and the third is the ‘rise of the rest’ over the past two decades.

Zakaria points out that economic prosperity has brought real benefits. For example, in China alone growth has lifted more than 400 million people out of poverty. But he is quick to point out that this growth is also problematic. One expression is how increased demand from China and India has increased oil prices generally. This price rise has also filled the coffers of America’s oil-state foes, such as Iran and Venezuela. But, as Zakaria notes, ‘the most acute problem of plenty is the impact of global growth on natural resources and the environment’. He cites water shortages and climate change, among other issues.

In viewing growth as problematic and potentially destructive, Zakaria raises a common theme of our time, the longer-term consequences of economic growth upon geopolitical stability and environment.

Till the time you get a chance to read, enjoy some of video & print reviews posted below

Author's Interview Washington Post Spiked Review

What is the most likely future diet for a more-crowded planet ?

Here are some excerpts from an interesting article, on the impacts of changing diets on food scarcity.

A growing world population has more buying power. The newly affluent eat more meat. A rising share of the world’s agricultural output goes to animals. While grain supplies are more than adequate to feed everyone now, say experts, the current price spike shows that even an adequate supply doesn’t preclude hunger for the world’s poor. And in the future, a day may come when there isn’t enough grain for both humans and livestock – at least not at the US consumption rate. Add to this the environmental impacts of modern industrial-scale meat production, and many wonder: With a predicted world population of 9.5 billion by midcentury, are we all destined to be vegetarians?

Most of us are not aware of the inefficiency of converting grain to meat. A pound of beef takes 7 pounds of feed to produce. For pork, the ratio is 1 to 3; and for chicken, 1 to 2. (Cold-blooded fish, which don’t need energy to maintain body temperature, are farmed more efficiently.)

So, let's look what will happen to the way if the world start doing what we in America does :

An average American consumes about 275 pounds of meat per year, which translates to 1,765 pounds of grain. So If everyone consumed grain at this rate..... today’s 2 billion-ton world grain harvest would feed only 2.5 billion people – only 40% of the world population.

If the world ate the way Italians do – 882 pounds of grain per person yearly – we’d feed 5 billion people.

And if we all ate the way largely vegetarian India does (11-1/2 pounds of meat per person yearly, or 440 pounds of grain), our grain supply could feed 10 billion...

not sure what will happen to McDonald's ... may be Maharaja Veggie Burgers !

Check the full article here :
http://features.csmonitor.com/environment/2008/07/18/diet-for-a-more-crowded-planet-plants/

Economic Development over Environmental Protection -

Another developing nation, Brazil's struggle to keep the growth initiatives going while balancing the impact on Amazon Rain Forests.

Top 10 needs of Humanity over next 50 years

Found something interesting on CNBC's Mad Money show with Jim Cramer, who by the way does lot of non-sense with his booh yah theatrics. But what caught my eye was that he was using today a theme of "Top 10 needs of Humanity for the next 50 years" to identify stocks/sectors that will do well for the future by creating new technology products/services...which led me to do some more digging to find the source from where this list came from.

"Top 10 needs of Humanity" for next 50 years

1. Energy
2. Food
3. Water
4. Environment
5. Poverty
6. Terrorism/War
7. Disease
8. Education
9. Democracy
10. Population

This was originally published by Dr. Richard.E.Smalley, Rice University at MIT Enterprise Forum. If you have time, you should take time to read this excellent presentation to understand the dynamics of energy crisis (will we ever get back to $2 gas ?), and in general the longterm implication of the current world growth.

Transcript Presentation slides

“WITH grain in our hands there is no need to panic,”

Costco and Sam's clubs across the country are limiting the bags of flour and rice that you could buy ! Unbelievable, but harsh truth !!

In the current modern world, we would never think we would live to see a famine.. so where did this sudden shortage of food come from ? Some really interesting articles on the net

The silent sunami, economist.. some excerpts below !!

.. Roughly a billion people live on $1 a day. If, on a conservative estimate, the cost of their food rises 20% (and in some places, it has risen a lot more), 100m people could be forced back to this level, the common measure of absolute poverty. In some countries, that would undo all the gains in poverty reduction they have made during the past decade of growth. ...

some interesting comments on root causes and analysis of this mess (not my own, but publicised feedback to this article)
1. For years, the US and some EU countries, in an attempt to maintain food self-sufficiency, supported the cost of farming through various subsidies. Because of this, food was dumped on the world market for less than it cost to grow. This destroyed the livelihood of farmers all over the world, from Canada to Brazil, Africa to, well, everywhere. The last few rounds of World Trade talks were beset by farmers protesting against these subsidies.
2. It seems obvious that the problem is simply and solely -- too many people.....Malthus reminds us that this is a self-correcting problem, via famine, disease and wars. It would be preferable to manage a reduction in numbers of people ourselves, but society hardly seems likely to embrace this as a direction we are likely to take.
3. Perhaps this is the issue that will test the merits and demerits (and/or phoniness) of globalization which did, and does, benefit considerably the WEST commercially. It could also test the West's ability, and will, to rein in the avarice and plain heartlessness of the so called (but predominantly Western) multinationals who, inter alia, favor and amply recompense, the plantation of coffee beans in Africa for export over corn and wheat for daily sustenance). That, reining in the multinationals and whatever is done by the rich and over abundantly endowed WEST, if substantial at all would be , however , NO act or acts of charity. It could turn out to be the historically preordained due repayment for resources past plundered from the non WEST!
4. There is no shortage of food, at least not yet. The problem is that there are too many poor people that can't afford to buy it. Farmers grow enough food, but they can't afford to sell it for less than it costs to grow. The US and Europe used to subsidise food production and this forced down the price for all farmers while, inadvertently, making food affordable to the world's poor. Now, with ethanol, those subsidies are gone; food is being sold for what it costs to produce. That's a good thing, except that now a lot of people can't afford to buy it.

Finally... this comment nails it " Capitalism doesn't work when 1/6th of the world doesn't have enough capital to participate. That's the problem, and there's no easy solution".

Outsourced Wombs : $444 Million Industry Opportunity - you don't want to miss !!

Why is it Ok to buy lot of cheap life-less products from overseas, where as it is not OK to buy live products (aka Babies).

For all the wall-street economists, global enterpreneurs, and possible movie makers too (remember Chicken run!) out there, here seems a NY Times story line with a 444 million dollar industry burgeoning that will show the true strength of globalization !!

I as an Indian-born American enterpeneuer, see a golden once-in-a-life-time opportunity here, and can't believe it's so similar to IT success stories. I surely needs to get in before those Chinese get their hands in to the pot here. Here is business plan (don't copy it!!), but will be glad to join hands with any venture capital firms (Hello, Palo Alto!)

1. Open my company, BABYSYS immediately

2. Do a massive recruiting drive in India

Basic qualifications, simple ! will have be to be a woman of 20-40 yrs with an empty womb (last time we counted there are atleast close to 100 million out there so poor and bored wondering how to make money - so we don't see any supply shortages!).

3. They will be assigned projects of 12 months-duration, 9 month active (on-womb) at our location & 3 months bench period (off-womb) back at their home, before they comeback for next project.

Our consultants will meet the overseas client's most stringent requirements (for eg foods, activity, type of hollywood movies to watch etc..) to ensure the final deliverable, aka a bouncing baby, meets their expectations above & beyond delivered on-time.

4. Our Unique selling proposition (USP) will be that we will provide ut-most level5 quality product.

Some of the key initiatives will be for example, exceeding multi-vitmamin nourishment standards as recommended by FDA, on-site random inspections by specialist medical teams. Consultants will have incentive strucuture that pay for performance, eg deliver twins etc. they get paid bonuses, where as if they miscarry, they're fired !

5. Client service : will be our motto !

all overseas clients will be submitted with glossy portfolios of available consultants prior to the engagement we commit to product delivery on-time, monthly online status and project progress reports, and ofcourse a fine bubbling deliverable that comes certified at the end of the project duration.

6. We could also offer additional Premium features

- Silver clients will get fancy color charts of ultra-sounds, access to web-site that shows live video, audio & vital signals ; Gold client will be arranged face-to-face session with consultant during engagement ; Platinum clients will get unlimited visitation rights, and consultant will travel overseas to meet face-to-face prior to engagement. We could also plan post delivery support in terms of child & health care at a very nominal annual fee for next 2o yrs.

7. Competition : I can see soon on same model competition from

US-mulination corps like all-familiar BBM, BDS, Banture etc., and ofcourse the ubiquitous Chinese, Russians etc.. but I do think there is enough of pie out there for every one of us, especially looking at the projections of infertility trends in US and other G-7 countries.

Don't you see another great global trade success story !

BTW with regards to morality in this, c'mon folks does anyone any more care ?

We, the collective world, in the name of development, world trade, globalization have come sofar down this slippery slope that we don't and can't even want to think about moral issues.

Materialism and brutal capitalism at any cost will only seem to win... there seems to be a price for everthing including mother's love, and morality of course, will always be good to discuss on blogs or discussion boards. (Sorry for being cynical !)

"When a man dwells in his mind on the object of sense, attachment to them is produced. From attachment springs desire and from desire comes anger. From anger arises bewilderment, from bewilderment loss of memory; and from loss of memory, the destruction of intelligence and from the destruction of intelligence he perishes" - Bhagavad Gita

2008 - the tipping point ??

Let's get started in new year with some excerpts from an excellent article "How much is $38 Billion ??" recently published by Eric Fry from "The Rude Awakening" Newsletter.

Facts :

• As we end year 2007, Wall Street's five largest brokerage firms will dole out a new-record $38 billion in year-end bonuses.
• "Shareholders in the securities industry are having their worst year since 2002," Bloomberg News observes, "losing $74 billion of their equity."

  Check the stock performance of these companies to see how they well (or worse !) they did (GS, MER, MS, LEH, BSC) . Now you decide what in the world would deserve such a bonus payout !!

• As recently as ten years ago, the bonus pool for New York City's finance-company employees totaled less than 90% of the net income of NYSE brokerage firms. Today, the relative size of the bonus pool has doubled to about 180% of net income....

Now you know where to find a job for yourself, or if you are too old (like me!) to start a new career, at least you know where to look for putting your Kids to work !

Ok, let's see "How much is $38 billion?" in real perspective..

1. $38 billion is three times more money than the entire world spent on humanitarian aid last year.
2. $38 billion is twice the sum necessary to provide basic health care to every child in the world, and three times the sum necessary to provide clean drinking water to every child in the world.
3. $38 billion is seven times more than the annual budget of the National Cancer Institute (NCI), America's principal agency for cancer research.
4. And here is the kicker .. it is more money than Wall Street's five largest brokerage firms – combined – earned during the last 12 months. $38 billion is also more than the combined earnings of these five firms during all of 2004 AND 2005.

On the same token, let's compare it to some of annual world expenditures.

Did you know the world spends every year..

• $59 billion on golf ,
• $118 billion on wine,
• $794 billion either waging war or preparing to wage war.

"The world in arms is not spending money alone. It is spending the sweat of its labourers, the genius of its scientists, the hopes of its children...this is not a way of life at all in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of fire." - quote from President Dwight Eisenhower

Finally as Eric Fry puts it beautifully... The stewards of public companies do not deserve mega-million bonuses. Not once, not twice, not ever. They are the EMPLOYEES of public companies that are OWNED by the shareholders. They are not the lords of their domain with the right to tax the productivity of the shareholder/serfs. The era of the overpaid corporate stewards is corrupting and crippling American dynamism. Excessive compensation schemes like this only help to legitimize extreme socio-economic disparities. As such, these schemes work to squander the nation's collective "sweat," "genius," and "hopes"...just like warfare.

Kudos Wallstreet, I like where we are going .. Happy new year 2008 !!

Signinig off...