I had a good debate last night about how irrational the market is currently acting during the financial turmoil. There is no doubt that the balance sheets of financial institutions are still in flux until the government decides the valuation of these distressed assets. However, other blue-chip and growth companies are also getting hammered to historically low P/E ratios. Sure, macroeconomic conditions will influence their short-term earnings, but most economists would agree that long-term growth projections have not changed much.
I was making the argument that the long-term investor has disappeared and that all investors have significantly reduced their time horizon for sufficient returns. The debate turned to the positives and negatives of day trading (liquidity versus volatility and potential to alter management's strategic planning). That is a discussion for an entire entry.
In the near-term, we see these investors are acting in a herd mentality and basically making a run on these firms. However, I can't really do true justice to this topic so I will simply direct you to one of the best pieces on this topic from The New Yorker.
Thursday, October 9, 2008
Sunday, October 5, 2008
Lessons Learned
So much of this year's election has been made about the "tipping point" of our country and the statement that this is the most important election in the lifetime of a majority of current voters. Intuitively we've all read about this so-called "extra importance" and heard the pundits reinforce this issue. More substantively we have witnessed a significant increase in voter registration across the country. This is most likely a combination of the outrageous money generated by both campaigns in pushing the "get out and vote" initiatives, as well as citizens becoming more active in the democratic process.
Now intuitively this seems to be a positive trend to have a more active electorate. But I have a few questions about the ramifications of this implication. First, will voters actually become more informed of the critical issues (which must exist if this is such an important election)? And second, will this have any impact on the outcome of the election? These questions are obviously related and should be addressed simultaneously.
On the micro-level, voter participation will impact the election if one party is more effective of registering their core base of voters. But controlling for this factor, I'm hesitant to think more voters will make any difference. According to Wikipedia, slightly more than 50 percent of registered voters tend to vote democratic, compared with only 38 percent favoring republicans. So it makes sense to believe more voters is better for Obama. But thanks to the electoral college, that won't directly translate into this logical result.
As I sit here in southern California I feel very little need to vote in this "historic" election. I know that my vote really doesn't matter because the state of California will undoubted yield 55 electoral votes for Obama (it hasn't gone for the Republican party since George H.W. Bush in 1988, when the then-VP won in a complete landslide over Michael Dukakis). Similarly, my sister living in Chicago doesn't have to go to the polls either since the race in Obama's home state of Illinois is already over. In fact, the vast majority of states have little chance of switching their results from 2004 in the next election.
Looking back on the differences from the 2000 race to 2004, only three states shifted from one party to another (In 2004 Kerry gained New Hampshire, but lost New Mexico and Iowa - two states Gore carried in 2000). How many states will shift this year? Three factors explain this answer: First, Obama's strong candidacy has brought a few independent-minded states into play for the democrats, such as Colorado and Minnesota. Second, changing demographics also will allow a shift, such as the population boom of educated families and individuals in northern Virginia. Finally, a select number of states are truly toss-up states, such as Ohio and Florida.
So the question really is, why does nearly 3/4 of the country yield the same election results, regardless of candidates, and therefore make it unnecessary for citizens of those states to actually get out and vote (NOTE: this discounts the notion that some statistic experts put forth that it would have been irrational even for voters to participate in elections as close as the 2000 election)? The answer may seem obvious, but it is actually becoming more pronounced and important. We decide to live with and surround ourselves with others who share our political views.
You only need to go on to Amazon to see the books and publications that explain why certain parts of the country vote a certain way. For example, Thomas Frank looks at how the Republicans took control of middle American despite its blue collar roots. The think about that for a minute...a political party was able to capture the state of Kansas. It must be then, that most of Kansas thinks the same way. Other books have made this point, but we not only live in and around people that look like us (hence the race-divided cities and neighborhoods) we also live in and around people that THINK like us too. It makes us comfortable and easier to follow social cues rather than having to actually proactively do the thinking on our own.
There is debate about how divided our country actually is along the political spectrum. Some experts argue the country focuses on narrow issues and the 50/50 split of the last two presidential elections shows this ambivalence. But this misses the point that the majority of cities, counties, and even states are highly entrenched in one side of the line or the other. I can even say from personal experience that I've lived in suburbia Ohio, Chicago, DC/Northern Virginia, and Los Angeles. I can say without hesitation it is a safe generalization to state that my peers in Ohio were not politically compatible with those other places I've lived.
The implications of current US demographics explains the entrenched political landscape and minimizes potential changes of viewpoints. Everyday, citizens reinforce their own set of beliefs. It has become nearly impossible to reach out to others and engage an honest and meaningful dialogue. I'm amazed by the quantity of political books each year (except that I know the money is there) because they don't change anyone's opinion. No Democrat is going to read Bill O'Reilly's new book, "A Bold Fresh Face of Humanity," and no Republican is going to read Paul Krugman's column in the NY Times. Keith Olberman isn't creating value by yelling about President Bush on MSNBC because his viewers in NYC and San Francisco already hate the President.
It amazes me at how much people avoid anything that counters their personal views. It's almost like personal criticism or something. And smart people can talk themselves into anything. Liberal economists consistently allow Democratic candidates to promote protectionist platforms to secure union jobs in the US. More striking are conservatives who have somehow talked themselves into the fact that Sarah Palin is ready to be President. David Brooks is a very smart man, but really? He thinks her showing the VP debate proves her ability to lead this country through this all important "tipping point."? She is capable of handing foreign policy issues with the growing powers of China and Russia? She can steer us through the current financial situation? (All of this is predicated on McCain's acturial data of having a 1 in 6 chance of not living out his term).
We need to open up our minds and create forums for transparent conversation across parties to ensure we do not continue to divide ourselves further apart and end up with election results that don't work out and congressional leaders who can't work together. Just as we attempted to integrate races (which is far from a completed process) we need to integrate those who "think" differently and not stereotype into macro-buckets. Just because John Smith is pro-life, doesn't necessarily mean he is free-market, and just because Huang Park wants universal health care, doesn't necessarily mean he is against oil drilling.
I'm not advocating anyone should simply change their views or lose sight of what they believe. But we have all seen over the past eight years what can happen when you simply hold on to convictions without a deep rationale and refuse to adjust to new information. Let's engage the other side of the aisle and see what effect that can have on both parties.
Otherwise, I'll stay home on November 4th and the electoral map won't change and the country will continue to divide itself when it needs to come together to maintain its world leadership.
Now intuitively this seems to be a positive trend to have a more active electorate. But I have a few questions about the ramifications of this implication. First, will voters actually become more informed of the critical issues (which must exist if this is such an important election)? And second, will this have any impact on the outcome of the election? These questions are obviously related and should be addressed simultaneously.
On the micro-level, voter participation will impact the election if one party is more effective of registering their core base of voters. But controlling for this factor, I'm hesitant to think more voters will make any difference. According to Wikipedia, slightly more than 50 percent of registered voters tend to vote democratic, compared with only 38 percent favoring republicans. So it makes sense to believe more voters is better for Obama. But thanks to the electoral college, that won't directly translate into this logical result.
As I sit here in southern California I feel very little need to vote in this "historic" election. I know that my vote really doesn't matter because the state of California will undoubted yield 55 electoral votes for Obama (it hasn't gone for the Republican party since George H.W. Bush in 1988, when the then-VP won in a complete landslide over Michael Dukakis). Similarly, my sister living in Chicago doesn't have to go to the polls either since the race in Obama's home state of Illinois is already over. In fact, the vast majority of states have little chance of switching their results from 2004 in the next election.
Looking back on the differences from the 2000 race to 2004, only three states shifted from one party to another (In 2004 Kerry gained New Hampshire, but lost New Mexico and Iowa - two states Gore carried in 2000). How many states will shift this year? Three factors explain this answer: First, Obama's strong candidacy has brought a few independent-minded states into play for the democrats, such as Colorado and Minnesota. Second, changing demographics also will allow a shift, such as the population boom of educated families and individuals in northern Virginia. Finally, a select number of states are truly toss-up states, such as Ohio and Florida.
So the question really is, why does nearly 3/4 of the country yield the same election results, regardless of candidates, and therefore make it unnecessary for citizens of those states to actually get out and vote (NOTE: this discounts the notion that some statistic experts put forth that it would have been irrational even for voters to participate in elections as close as the 2000 election)? The answer may seem obvious, but it is actually becoming more pronounced and important. We decide to live with and surround ourselves with others who share our political views.
You only need to go on to Amazon to see the books and publications that explain why certain parts of the country vote a certain way. For example, Thomas Frank looks at how the Republicans took control of middle American despite its blue collar roots. The think about that for a minute...a political party was able to capture the state of Kansas. It must be then, that most of Kansas thinks the same way. Other books have made this point, but we not only live in and around people that look like us (hence the race-divided cities and neighborhoods) we also live in and around people that THINK like us too. It makes us comfortable and easier to follow social cues rather than having to actually proactively do the thinking on our own.
There is debate about how divided our country actually is along the political spectrum. Some experts argue the country focuses on narrow issues and the 50/50 split of the last two presidential elections shows this ambivalence. But this misses the point that the majority of cities, counties, and even states are highly entrenched in one side of the line or the other. I can even say from personal experience that I've lived in suburbia Ohio, Chicago, DC/Northern Virginia, and Los Angeles. I can say without hesitation it is a safe generalization to state that my peers in Ohio were not politically compatible with those other places I've lived.
The implications of current US demographics explains the entrenched political landscape and minimizes potential changes of viewpoints. Everyday, citizens reinforce their own set of beliefs. It has become nearly impossible to reach out to others and engage an honest and meaningful dialogue. I'm amazed by the quantity of political books each year (except that I know the money is there) because they don't change anyone's opinion. No Democrat is going to read Bill O'Reilly's new book, "A Bold Fresh Face of Humanity," and no Republican is going to read Paul Krugman's column in the NY Times. Keith Olberman isn't creating value by yelling about President Bush on MSNBC because his viewers in NYC and San Francisco already hate the President.
It amazes me at how much people avoid anything that counters their personal views. It's almost like personal criticism or something. And smart people can talk themselves into anything. Liberal economists consistently allow Democratic candidates to promote protectionist platforms to secure union jobs in the US. More striking are conservatives who have somehow talked themselves into the fact that Sarah Palin is ready to be President. David Brooks is a very smart man, but really? He thinks her showing the VP debate proves her ability to lead this country through this all important "tipping point."? She is capable of handing foreign policy issues with the growing powers of China and Russia? She can steer us through the current financial situation? (All of this is predicated on McCain's acturial data of having a 1 in 6 chance of not living out his term).
We need to open up our minds and create forums for transparent conversation across parties to ensure we do not continue to divide ourselves further apart and end up with election results that don't work out and congressional leaders who can't work together. Just as we attempted to integrate races (which is far from a completed process) we need to integrate those who "think" differently and not stereotype into macro-buckets. Just because John Smith is pro-life, doesn't necessarily mean he is free-market, and just because Huang Park wants universal health care, doesn't necessarily mean he is against oil drilling.
I'm not advocating anyone should simply change their views or lose sight of what they believe. But we have all seen over the past eight years what can happen when you simply hold on to convictions without a deep rationale and refuse to adjust to new information. Let's engage the other side of the aisle and see what effect that can have on both parties.
Otherwise, I'll stay home on November 4th and the electoral map won't change and the country will continue to divide itself when it needs to come together to maintain its world leadership.
Tuesday, September 30, 2008
Accountability
In June, Goldman Sachs, the most highly acclaimed brokerage firm and investment bank (which has since become a commercial bank), predicted that oil prices could rise to $200/barrel by the end of 2008. One month later in July, the bank reduced its oil prediction to $150/barrel.
Well since this time, the economy has continued to weaken with the potential of lower demand for oil and consumers are beginning to reduce their consumption given high gasoline prices, thus reducing oil prices from their high earlier this year. In response, the noble Goldman Sachs has revised their estimate and now predict oil prices will only average $123 in 2009.
Now one can make the argument that it was nearly impossible to see the full impact the mortgage crisis would have on financial institutions, rendering their balance sheets essentially worthless, which has reduced the economic demand for oil. But that's exactly my point - it IS nearly impossible to make accurate predictions. So why do the so-called experts insist on making such claims. This goes back to "The Black Swan" idea from a book worth reading. The scariest people are those who think they can foresee the future.
A few arguments against my viewpoint. First, these experts may offer advise or predictions that exceed the value of any other sources (it's better than nothing). This may be true, but it goes the same debate between active vs. passive investment. Sure some fund managers will beat the market, and a smaller percentage on a regular basis. Is this successfull investing or simply the law of statistics that someone will be on the tail-end of the normal curve?
Second, if these experts don't offer valuable information, then a free-market advocate would argue that the market will no longer listen to these sources and they will become obsolete. So if they are as inaccurate as I believe them to be, then why does the market continue to place such a high stake in their word? And yes, the market does listen to these sources. Some argue the current meltdown was perpetrated by the bond ratings agencies, Moody's and S&P, as they degraded the credit rating (albeit too late) of the financial institutions they follow. Institutions and individuals rely on these agencies to make investment decisions.
These sources and other investment analysts constantly provide their "target price" or "portfolio strategy" for stock choices. Often less-savvy investors use these reports as a crutch, but even sophesticated investors will review these reports. Now, as a free-market advocate, there is no way to prevent companies from producing this data and analysis (free speech is the first amendment after all), which to some extent can produce a significant amount of value. No, the change needs to come on the demand side.
Goldman and other banks have built a prominent brand and garnered the respect of the market with their insight. But what other options exist? How can any new or small entrants, even with all the information on the Internet, create a name to compete with these guys? Well one solution might be complete transparency and easy-to-compare results.
I've always wanted to create a website along these same lines in the sports industry. How many of us have followed the expertise (and big hair) of Mel Kiper Jr. during the NFL draft? Do we know how his predictions panned out five years later? Or any of the other so-called experts who grade team performances of a draft, the day after? This extends down to picks of individuals games. I mean we might be listening to Kirk Herbstreit pick college football winners every Saturday, when his percentage is less than the majority of fans (I don't mean to single out Herbstreit who is actually one of my favorite ESPN commentators). So create a website that illustrates all expert results side-by-side in a very clear format. (In the not so serious world of sports would this reduce the supply of picks as more experts fear their potential record, or would it increase competition?).
Well I think we could have similar solution in the financial world. If we created a transparent set of results of all analysts in a centralized site, it might provide the information investors need to allow the market to function efficiently in how to best leverage available target prices and reports. After all, the only reason markets are perfectly efficient is that we really don't have all the information we need. Any way to increase objective information and improve the communication of this information would be positive for the rational functioning of the market.
It would also begin to flatten the playing field for all participants and allow the "best" experts to float to the top of the list for most investors. Alternatively, it may also demonstrate that it is nearly impossible to truely predict the future beyond simple company/commodity analysis. Either way, let's just get some accountability from financial experts. After all, anyone influencing our finances should be held to the same standard as the government experts influencing our policies.
Again, I'm in a position to suggest all analysis isn't helpful or passive investment is by far the better option. I'm suggesting it's possible.
Well since this time, the economy has continued to weaken with the potential of lower demand for oil and consumers are beginning to reduce their consumption given high gasoline prices, thus reducing oil prices from their high earlier this year. In response, the noble Goldman Sachs has revised their estimate and now predict oil prices will only average $123 in 2009.
Now one can make the argument that it was nearly impossible to see the full impact the mortgage crisis would have on financial institutions, rendering their balance sheets essentially worthless, which has reduced the economic demand for oil. But that's exactly my point - it IS nearly impossible to make accurate predictions. So why do the so-called experts insist on making such claims. This goes back to "The Black Swan" idea from a book worth reading. The scariest people are those who think they can foresee the future.
A few arguments against my viewpoint. First, these experts may offer advise or predictions that exceed the value of any other sources (it's better than nothing). This may be true, but it goes the same debate between active vs. passive investment. Sure some fund managers will beat the market, and a smaller percentage on a regular basis. Is this successfull investing or simply the law of statistics that someone will be on the tail-end of the normal curve?
Second, if these experts don't offer valuable information, then a free-market advocate would argue that the market will no longer listen to these sources and they will become obsolete. So if they are as inaccurate as I believe them to be, then why does the market continue to place such a high stake in their word? And yes, the market does listen to these sources. Some argue the current meltdown was perpetrated by the bond ratings agencies, Moody's and S&P, as they degraded the credit rating (albeit too late) of the financial institutions they follow. Institutions and individuals rely on these agencies to make investment decisions.
These sources and other investment analysts constantly provide their "target price" or "portfolio strategy" for stock choices. Often less-savvy investors use these reports as a crutch, but even sophesticated investors will review these reports. Now, as a free-market advocate, there is no way to prevent companies from producing this data and analysis (free speech is the first amendment after all), which to some extent can produce a significant amount of value. No, the change needs to come on the demand side.
Goldman and other banks have built a prominent brand and garnered the respect of the market with their insight. But what other options exist? How can any new or small entrants, even with all the information on the Internet, create a name to compete with these guys? Well one solution might be complete transparency and easy-to-compare results.
I've always wanted to create a website along these same lines in the sports industry. How many of us have followed the expertise (and big hair) of Mel Kiper Jr. during the NFL draft? Do we know how his predictions panned out five years later? Or any of the other so-called experts who grade team performances of a draft, the day after? This extends down to picks of individuals games. I mean we might be listening to Kirk Herbstreit pick college football winners every Saturday, when his percentage is less than the majority of fans (I don't mean to single out Herbstreit who is actually one of my favorite ESPN commentators). So create a website that illustrates all expert results side-by-side in a very clear format. (In the not so serious world of sports would this reduce the supply of picks as more experts fear their potential record, or would it increase competition?).
Well I think we could have similar solution in the financial world. If we created a transparent set of results of all analysts in a centralized site, it might provide the information investors need to allow the market to function efficiently in how to best leverage available target prices and reports. After all, the only reason markets are perfectly efficient is that we really don't have all the information we need. Any way to increase objective information and improve the communication of this information would be positive for the rational functioning of the market.
It would also begin to flatten the playing field for all participants and allow the "best" experts to float to the top of the list for most investors. Alternatively, it may also demonstrate that it is nearly impossible to truely predict the future beyond simple company/commodity analysis. Either way, let's just get some accountability from financial experts. After all, anyone influencing our finances should be held to the same standard as the government experts influencing our policies.
Again, I'm in a position to suggest all analysis isn't helpful or passive investment is by far the better option. I'm suggesting it's possible.
Monday, September 29, 2008
Smartest Guys in the Room
For the past few decades the term "elitist" has become almost as dirty as "liberal." Americans don't want some pompus, know-it-all to lead this country. Rather they want men and women to whom they can relate, empathize, and even enjoy a cold brew. W won with the good ole' boy image that Kerry was out of touch with the average voter and didn't understand middle America. The current presidential election is taking on the same form. (Nevermind that the candidate being accused of being "elitist" was raised in humble conditions with a single parent and worked on the south side of Chicago, while McCain married into one of the richest families in the country).
The current financial crisis has fully demonstrated that this trend has extended beyond the presidency into congressional elections. During the house vote on the government bailout plan, congressional members repeatedly said on CNBC that they had the least information they had regarding any bill since the decision to go to war with Iraq in 2003. So while Fed Chair Bernanke and Secretary Paulson were working out the final details of the bailout plan, what exactly were members of congress doing? Having a beer with their constituents?
Now some members of congress will argue that they were actually listening to their constituents, which in reality is their job, to not vote for the bill. But these government leaders have so much more information than Joe Smith, that they should be making the case for why they did or did not vote for the bill using qualified economic reasoning...not simply to ensure they get re-elected. Unfortunately, there are most likely very few congressmen and women capable of making such a strong argument due to their innate lack of financial and economic expertise. The Jim Bunning questioning during the senate hearing epitomizes this lack of understanding.
Further, Rep. John Boehner (from my esteemed state of Ohio), said that at least a dozen Republicans may have voted for the bill if it wasn't for the partisan speech by Nancy Pelosi. So you're telling me that these government "leaders" believed it was best for the country to inject the money for a bailout, but decided not to because they didn't like the way it was becoming partisan?? Now, I'm not condoning Pelosi for playing politics here, which is the exact reason Americans distrust and dislike the government. However, when representatives change their vote based on a single speech (a political speech, not informative policy speech), then it demonstrates either their true lack of understanding of the importance of this measure, or god forbid their personal ethics.
Now, I'm not even advocating here for the bailout. I do believe the injection of the funds is necessary to re-open the credit markets between banks and instill confidence around the world to prevent further market deterioration and potential runs on regional banks in the U.S. But regardless of how you feel (after the biggest one day point loss in the market's history), don't want your congressman or woman to lean on experts, data, and economic analysis, instead of phone calls from Bob or getting back at the girl in the sandbox?
Now I like to enjoy an ice, cold beer as much as anyone (being in b-school, probably more than most), but I already have people to share that beer (hopefully while watching the Cubs win a few playoff games). I don't need to have a beer with the president or my representative. I don't want to hear about the best economic solutions from my classmates or my professors. I want to hear them from my leaders. I want to be in awe of their innate intelligence, their ability to digest hordes of information, their way to communicate their objectives, and their ability to deliver the right results for the country.
Regardless of your political views or your party affiliation, it is time to change the debate on elitism and bring back the need to elect and appoint the most qualified candidates. This doesn't mean academics with the inability to connect with constituents, or Richy-rich who really doesn't understand the trials of the middle and lower class. No, it means those people who have lived through these trials and lived the American dream through a world-class education and are now driven to give back to the system that allowed them to succeed. We need the best and brightest leading us right now.
Otherwise we'll be paying $10 a gallon for gas-powered cars, investing our entire IRA in foreign markets, hoping to one day send our kids to India to get a decent college education. But at least everyone will have someone to have beer with when they visit Washington.
The current financial crisis has fully demonstrated that this trend has extended beyond the presidency into congressional elections. During the house vote on the government bailout plan, congressional members repeatedly said on CNBC that they had the least information they had regarding any bill since the decision to go to war with Iraq in 2003. So while Fed Chair Bernanke and Secretary Paulson were working out the final details of the bailout plan, what exactly were members of congress doing? Having a beer with their constituents?
Now some members of congress will argue that they were actually listening to their constituents, which in reality is their job, to not vote for the bill. But these government leaders have so much more information than Joe Smith, that they should be making the case for why they did or did not vote for the bill using qualified economic reasoning...not simply to ensure they get re-elected. Unfortunately, there are most likely very few congressmen and women capable of making such a strong argument due to their innate lack of financial and economic expertise. The Jim Bunning questioning during the senate hearing epitomizes this lack of understanding.
Further, Rep. John Boehner (from my esteemed state of Ohio), said that at least a dozen Republicans may have voted for the bill if it wasn't for the partisan speech by Nancy Pelosi. So you're telling me that these government "leaders" believed it was best for the country to inject the money for a bailout, but decided not to because they didn't like the way it was becoming partisan?? Now, I'm not condoning Pelosi for playing politics here, which is the exact reason Americans distrust and dislike the government. However, when representatives change their vote based on a single speech (a political speech, not informative policy speech), then it demonstrates either their true lack of understanding of the importance of this measure, or god forbid their personal ethics.
Now, I'm not even advocating here for the bailout. I do believe the injection of the funds is necessary to re-open the credit markets between banks and instill confidence around the world to prevent further market deterioration and potential runs on regional banks in the U.S. But regardless of how you feel (after the biggest one day point loss in the market's history), don't want your congressman or woman to lean on experts, data, and economic analysis, instead of phone calls from Bob or getting back at the girl in the sandbox?
Now I like to enjoy an ice, cold beer as much as anyone (being in b-school, probably more than most), but I already have people to share that beer (hopefully while watching the Cubs win a few playoff games). I don't need to have a beer with the president or my representative. I don't want to hear about the best economic solutions from my classmates or my professors. I want to hear them from my leaders. I want to be in awe of their innate intelligence, their ability to digest hordes of information, their way to communicate their objectives, and their ability to deliver the right results for the country.
Regardless of your political views or your party affiliation, it is time to change the debate on elitism and bring back the need to elect and appoint the most qualified candidates. This doesn't mean academics with the inability to connect with constituents, or Richy-rich who really doesn't understand the trials of the middle and lower class. No, it means those people who have lived through these trials and lived the American dream through a world-class education and are now driven to give back to the system that allowed them to succeed. We need the best and brightest leading us right now.
Otherwise we'll be paying $10 a gallon for gas-powered cars, investing our entire IRA in foreign markets, hoping to one day send our kids to India to get a decent college education. But at least everyone will have someone to have beer with when they visit Washington.
Sunday, September 28, 2008
Tribute to Paul Newman
As a huge fan, I just have to give a tribute to Paul Newman (a Cleveland native by the way). I'm not a huge old movie buff, but Newman managed to transcend generations with movies like "The Sting", "Butch Cassidy", and "Cool Hand Luke."
But beyond being a stud actor, Newman was one of the great philanthropists donating over $250 million from proceeds of his Newman's Own spaghetti sauce and salad dressing.
As a little tribute here are some of his best lines:
Newman (on cheating on his wife): "When I have a steak at home, why go out for a hamburger?"
Butch Cassidy: What happened to the old bank? It was beautiful.
Guard: People kept robbing it.
Butch Cassidy: Small price to pay for beauty.
Butch Cassidy: How many are following us?
Sundance Kid: All of 'em.
Butch Cassidy: All of 'em? What's the matter with those guys?
Butch Cassidy: I have vision, and the rest of the world wears bifocals.
Butch Cassidy: If he'd just pay me what he's spending to make me stop robbing him, I'd stop robbing him.
Butch Cassidy: I couldn't do that. Could you do that? Why can they do it? Who are those guys?
Johnny Hooker: He's not as tough as he thinks.
Henry Gondorff: Neither are we.
Luke: Sometimes nothing can be a pretty cool hand.
But beyond being a stud actor, Newman was one of the great philanthropists donating over $250 million from proceeds of his Newman's Own spaghetti sauce and salad dressing.
As a little tribute here are some of his best lines:
Newman (on cheating on his wife): "When I have a steak at home, why go out for a hamburger?"
Butch Cassidy: What happened to the old bank? It was beautiful.
Guard: People kept robbing it.
Butch Cassidy: Small price to pay for beauty.
Butch Cassidy: How many are following us?
Sundance Kid: All of 'em.
Butch Cassidy: All of 'em? What's the matter with those guys?
Butch Cassidy: I have vision, and the rest of the world wears bifocals.
Butch Cassidy: If he'd just pay me what he's spending to make me stop robbing him, I'd stop robbing him.
Butch Cassidy: I couldn't do that. Could you do that? Why can they do it? Who are those guys?
Johnny Hooker: He's not as tough as he thinks.
Henry Gondorff: Neither are we.
Luke: Sometimes nothing can be a pretty cool hand.
The Debate - I Missed What is Important
Friday night's debate demonstrated the true problem with our political system...even when millions of Americans tune in to the most highly anticipated debate of this campaign, even when Jim Lehrer of PBS attempted to push the envelope with tough questions, and even when the public more than ever demands to see where each candidate stands on critical issues...we simply can't get a dialogue about what matters most for long-term success for our great nation. (And don't even get me started about the post-debate review...please, please whatever you do, do not watch the cable news analysis of the debate. Unless you find it important, as Harold Ford noted on MSNBC, that Obama should lean forward more to give the appearance of leadership).
The debate focused on foreign policy (after 40 minutes of each candidate bumbling through their thoughts on the current financial bailout). So what did we learn? Well John McCain believes it is imperative that we win in Iraq. We cannot let our soldiers come home without "victory." I'm pretty sure this was already clear, but we still didn't learn what victory actually entails or how we will get there. Likewise, Obama wants to transfer troops over to Afghanistan (also without an Iraq solution...he was so "backward-looking" on Iraq being the wrong decision that was mishandled, which all U.S. citizens now know...let's become "solution-oriented).
But will this just lead to another Iraq? How will this endeavor be different? There are differences, to be sure, but this initiative will still need support of NATO allies and reconstruction in a country with basically no educational system and an economy supported primarily by an illegal poppy trade. What have we done on the international scene that supports the claim we are ready to take on this challenge? (Maybe the new civilian researve corps??)
The rest of the conversation focused primarily on how to handle relations with rogue nations, such as Pakistan and Iran. Don't get me wrong, I am not belittling the threat of terrorism or the impact it has on our economy and national security. But 20 percent of our federal budget goes to national defense and the agenda will continue ensure we have ample national security (how these funds are utililzed is a different matter - I agree with Obama there must be greater focus on high risk areas such as ports). Further, the candidates fought bitterly about whether or not to talk directly with the Iranian leader. How about we consider how to best leverage our economic standing, possibly remove our need, and the need of other coutries, for Iranian oil to boost our bargaining power with Iran, rather than bicker about where to sit at the table?
These issues affect the families of our military and anyone who has been affected by an act of terrorism. But for the millions of Americans, what really matters will be how the U.S. maintains its standing as the dominant world economy. The candidates only gave lip service to how to handle relations with Russia, and barely mentioned countries like China (Obama did in his closing remark) and India.
John McCain, to his credit, did at least mention the importance of Russia's standing as an energy power, both with its oil and natural gas reserves. It it now working to become energy partners with Venezuela through a joint venture. We've already seen the rise of world oil prices. Our economy is not only supporting OPEC and Saudi Arabia, but also the rise of dictators in these growing world powers. Until we innovate and significant reduce our oil consumption we will be held captive by these powers economically, which will no doubt reduce our standard of living at home.
Further, China has $1.4 trillion of our debt (great article in the Atlantic Monthly). What will their investments in our financial institutions, treasury bills, and Fortune1000 companies mean to you and me? What will our continued trade deficit (growing by $1 billion a day) mean for jobs in specific industries? What will happen if the Chinese pull money out of our institutions as they become more and more concerned about the current credit crunch? These aren't easy questions, but will have a fundamental impact on all of us. Let's start putting plans in place to fight this risk (or at least acknowledge the situation).
So the solution to all of this is to educate and innovate, right? If we can stave ourselves off of oil and keep while collar jobs at home, then all will be ok. But while this was the case just a decade ago, the world doesn't see the U.S. as the only outlet for educational expertise. In fact, India is turning out millions of technically-savvy engineers and colleage graduates every year. They are not simply taking "outsourced" jobs, but they are outsourcing their own talent across the world to lead the next wave of innovation.
It was easy to change the international standing of the U.S. in the post-cold war (we went from a bi-polar world to becoming the sole super power). It is much more difficult to adjust to a world with multiple world powers, all with their own competitive advantage (energy reserves, unlimited supplies of labor, etc.). The debate should be more about how we will engage the world in this new order. McCain wants a League of Democracies (Russia has nearly shut-down the UN with their veto power), while Obama understands this group would be meaningless without including non-democratic powers. This is the debate we need to be having.
The question for the next president and beyond will be how to maintain our economic standing, which now supercedes military standing. (For a full overview of State Power, check out this paper by RAND). This will dictate if you will still have a job, or if you will be able to one day buy a home.
The debate focused on foreign policy (after 40 minutes of each candidate bumbling through their thoughts on the current financial bailout). So what did we learn? Well John McCain believes it is imperative that we win in Iraq. We cannot let our soldiers come home without "victory." I'm pretty sure this was already clear, but we still didn't learn what victory actually entails or how we will get there. Likewise, Obama wants to transfer troops over to Afghanistan (also without an Iraq solution...he was so "backward-looking" on Iraq being the wrong decision that was mishandled, which all U.S. citizens now know...let's become "solution-oriented).
But will this just lead to another Iraq? How will this endeavor be different? There are differences, to be sure, but this initiative will still need support of NATO allies and reconstruction in a country with basically no educational system and an economy supported primarily by an illegal poppy trade. What have we done on the international scene that supports the claim we are ready to take on this challenge? (Maybe the new civilian researve corps??)
The rest of the conversation focused primarily on how to handle relations with rogue nations, such as Pakistan and Iran. Don't get me wrong, I am not belittling the threat of terrorism or the impact it has on our economy and national security. But 20 percent of our federal budget goes to national defense and the agenda will continue ensure we have ample national security (how these funds are utililzed is a different matter - I agree with Obama there must be greater focus on high risk areas such as ports). Further, the candidates fought bitterly about whether or not to talk directly with the Iranian leader. How about we consider how to best leverage our economic standing, possibly remove our need, and the need of other coutries, for Iranian oil to boost our bargaining power with Iran, rather than bicker about where to sit at the table?
These issues affect the families of our military and anyone who has been affected by an act of terrorism. But for the millions of Americans, what really matters will be how the U.S. maintains its standing as the dominant world economy. The candidates only gave lip service to how to handle relations with Russia, and barely mentioned countries like China (Obama did in his closing remark) and India.
John McCain, to his credit, did at least mention the importance of Russia's standing as an energy power, both with its oil and natural gas reserves. It it now working to become energy partners with Venezuela through a joint venture. We've already seen the rise of world oil prices. Our economy is not only supporting OPEC and Saudi Arabia, but also the rise of dictators in these growing world powers. Until we innovate and significant reduce our oil consumption we will be held captive by these powers economically, which will no doubt reduce our standard of living at home.
Further, China has $1.4 trillion of our debt (great article in the Atlantic Monthly). What will their investments in our financial institutions, treasury bills, and Fortune1000 companies mean to you and me? What will our continued trade deficit (growing by $1 billion a day) mean for jobs in specific industries? What will happen if the Chinese pull money out of our institutions as they become more and more concerned about the current credit crunch? These aren't easy questions, but will have a fundamental impact on all of us. Let's start putting plans in place to fight this risk (or at least acknowledge the situation).
So the solution to all of this is to educate and innovate, right? If we can stave ourselves off of oil and keep while collar jobs at home, then all will be ok. But while this was the case just a decade ago, the world doesn't see the U.S. as the only outlet for educational expertise. In fact, India is turning out millions of technically-savvy engineers and colleage graduates every year. They are not simply taking "outsourced" jobs, but they are outsourcing their own talent across the world to lead the next wave of innovation.
It was easy to change the international standing of the U.S. in the post-cold war (we went from a bi-polar world to becoming the sole super power). It is much more difficult to adjust to a world with multiple world powers, all with their own competitive advantage (energy reserves, unlimited supplies of labor, etc.). The debate should be more about how we will engage the world in this new order. McCain wants a League of Democracies (Russia has nearly shut-down the UN with their veto power), while Obama understands this group would be meaningless without including non-democratic powers. This is the debate we need to be having.
The question for the next president and beyond will be how to maintain our economic standing, which now supercedes military standing. (For a full overview of State Power, check out this paper by RAND). This will dictate if you will still have a job, or if you will be able to one day buy a home.
Friday, September 26, 2008
New Civilian Response Corps
My first few posts seemed to have a negative tone and I thought, there are a lot of positives going on that deserve attention too. As proposed by Walter Isaacson, President of the Aspen Institute and author of the Einstein biography, the Civilian Response Corps was officially launch by the state department in July.
This corps will consist of federal employees who are trained as engineers, lawyers, city planners, doctors, and others to help with the reconstruction of disaster-struck areas, such as Afganhistan, Indonesia from the tsunami, and New Orleans after Katrina. As we've seen over the past few years, reconstruction represents a significant challenge, both from natural disaster and from war.
I think the corps should be expanded to include private sector employees who are responsible to check in for one weekend ever two months, similar to national guard, both for training or possibly helping devastated areas that are in constant need of such assistance due to lack of formally-educated professionals, whether they are domestic or abroad. This would enable poverty-stricken areas to receive more consistent aid that is focused on building new leaders and infrastructure for long-term impact (instead of throwing aid money), and train a team to react cohesively when a true disaster occurs in the future.
By extending the program into the private sector, it must allow for companies to willingly allow employees to donate their time when necessary, but enable them tobuild their brand by associating with the corps. As we've seen over the past five years, this is essential marketing both for attracting customers as well as acquring/retaining employees. (which by the way, is one of the reasons you see companies like P&G donating diapers after disasters. Again, this is necessary, but let's think bigger!).
You might think...companies already allow employees to volunteer and some even offer additional perks for employees who volunteer so many hours or donate so many dollars. This is true, but I've gone to volunteer opportunities that have more than enough people helping and only offer manual labor. Don't get me wrong these are necessary initiatives, but when you have white collar workers with significant strategic and project management skills, combined with the desire to help, it makes sense to leverage these skills and create a more comprehensive program for change, rather than ad hoc volunteering on random Saturday mornings.
Kudos for Walter Isaacson for pushing this forward and the Bush Administration, and Sec. of State Rice for making the initial steps a reality. Let's see how far this can go with even more participants and the addition of corporate funding.
This corps will consist of federal employees who are trained as engineers, lawyers, city planners, doctors, and others to help with the reconstruction of disaster-struck areas, such as Afganhistan, Indonesia from the tsunami, and New Orleans after Katrina. As we've seen over the past few years, reconstruction represents a significant challenge, both from natural disaster and from war.
I think the corps should be expanded to include private sector employees who are responsible to check in for one weekend ever two months, similar to national guard, both for training or possibly helping devastated areas that are in constant need of such assistance due to lack of formally-educated professionals, whether they are domestic or abroad. This would enable poverty-stricken areas to receive more consistent aid that is focused on building new leaders and infrastructure for long-term impact (instead of throwing aid money), and train a team to react cohesively when a true disaster occurs in the future.
By extending the program into the private sector, it must allow for companies to willingly allow employees to donate their time when necessary, but enable them tobuild their brand by associating with the corps. As we've seen over the past five years, this is essential marketing both for attracting customers as well as acquring/retaining employees. (which by the way, is one of the reasons you see companies like P&G donating diapers after disasters. Again, this is necessary, but let's think bigger!).
You might think...companies already allow employees to volunteer and some even offer additional perks for employees who volunteer so many hours or donate so many dollars. This is true, but I've gone to volunteer opportunities that have more than enough people helping and only offer manual labor. Don't get me wrong these are necessary initiatives, but when you have white collar workers with significant strategic and project management skills, combined with the desire to help, it makes sense to leverage these skills and create a more comprehensive program for change, rather than ad hoc volunteering on random Saturday mornings.
Kudos for Walter Isaacson for pushing this forward and the Bush Administration, and Sec. of State Rice for making the initial steps a reality. Let's see how far this can go with even more participants and the addition of corporate funding.
New Definition of Competency
If this is how we measure ability to lead, then I guess I'm probably qualified to be ambassador to Canada since I lived right across Lake Erie in Cleveland, OH.
Palin Interview with Katie Couric
Palin Interview with Katie Couric
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