With all the talk about scams and frauds and new government regulations, it is disturbing to me that there are still “credit counselors” and mortgage lenders out there preying on the desperate. Many of, if not most of, the credit counselors who offer to get people out of credit card debt are predatory lenders. Some are affiliated with the credit card companies and operate to discourage consumers to declare bankruptcy, even when that financial option might be the best available. Some of these “counselors” often do nothing more than take a fifteen year debt and convert it to a thirty year debt. Yes, the result is “lower monthly costs”, but the overall cost is criminal, and do nothing for the borrower except offer a band-aid for a gunshot wound.
The credit card companies are just as bad. Their slick advertising campaigns mask usurious rates that would have been illegal a few years ago, and quite frankly, I don’t know why they’re not illegal now. They can change rates “at any time, for any reason” provided they notify the card holder of the change. There is a bill pending, the so called “Credit Card Reform Act of 2008” that may attempt to address some of these ills, but there is no mention of limiting rates credit card companies can charge. There is an attempt to end the ubiquitous “double cycle” billing method which averages out the balance from two previous bills, so the consumer gets billed for retroactive interest even if they paid off the balance. (www.money.cnn.com/2008/07/21/pf/consumer) Even though the banking industry is opposed to the changes that this act will attempt to address, most consumer advocates complain that the proposed changes barely scratch the surface of what is needed.
There are still mortgage companies offering 97% mortgages and other financial options that got us into this mess to begin with. It is probably wishful thinking to believe that government can cure these ills. As long as there are people desperate enough, or uneducated enough to borrow money under punitive conditions, there will be lenders available to them. I want to, in the very least, add my voice against such practices. To me, the practices that are currently the norm in the credit card industry are nothing more than a legal scam, as wrong and as damaging as the illegal scams that grab the headlines.
By Myron Gushlak
Monday, March 9, 2009
Monday, March 2, 2009
Scam or Charity?
It is a scam if we give someone something and get nothing in return. But not always. Sometimes we give something away with no expectation of return, and that is called charity, and not a scam at all. So where does the billions of dollars of aid that the United States gives to Africa fit into that equation? There has been a re-examination of that aid due to the massive amount of attention received by Dambisa Moyo, often referred to as the “anti-Bono.” Moyo is a leading economist and policy maker in the United States and served as the head of Economic Research and Strategy for Sub-Saharan Africa. (www.brookings.edu/articles) She is the author of Dead Aid, hence her comparison to Bono.
She argues in her book that Western aid to Africa, a pet topic of mine over the past year, has not only perpetuated poverty but also worsened it. She points to China to support her argument where there are 3.1 billion people. Forty years ago, China was poorer than many African countries. Today they have money that they earned from what they built, working hard to create a system where they were not dependent on aid. China now lends money to the United States. She believes that aid to Africa has held it back. “You get corruption-historically, leaders have stolen money without penalty- and you get dependency, which kills entrepreneurship. You also disenfranchise African citizens, because the government is beholden to foreign donors and not accountable to its own people” Moyo argues. (www.NYTimes/Questionsfor)
What she recommends in lieu of charity is to microfinance – to give people jobs. That resonated particularly with me because she cites Kiva (www.Kiva.org) as a suitable place to begin to truly help Africa. Kiva has been targeted in the past year by my own charitable foundation, (www.MyronGushlakFoundation.com)
Anyone who has spent any time parenting knows that this is a central dilemma. When to help and when to stand by and let your child fall. At some point, the offer of aid becomes a weapon creating a dependency that will guarantee compliance with what the giver wants to get in return. Aid can “buy” political compliance, as well as pave the way for favorable trade terms for the giver. So the original question stands, is it charity or is it a scam?
By Myron Gushlak
She argues in her book that Western aid to Africa, a pet topic of mine over the past year, has not only perpetuated poverty but also worsened it. She points to China to support her argument where there are 3.1 billion people. Forty years ago, China was poorer than many African countries. Today they have money that they earned from what they built, working hard to create a system where they were not dependent on aid. China now lends money to the United States. She believes that aid to Africa has held it back. “You get corruption-historically, leaders have stolen money without penalty- and you get dependency, which kills entrepreneurship. You also disenfranchise African citizens, because the government is beholden to foreign donors and not accountable to its own people” Moyo argues. (www.NYTimes/Questionsfor)
What she recommends in lieu of charity is to microfinance – to give people jobs. That resonated particularly with me because she cites Kiva (www.Kiva.org) as a suitable place to begin to truly help Africa. Kiva has been targeted in the past year by my own charitable foundation, (www.MyronGushlakFoundation.com)
Anyone who has spent any time parenting knows that this is a central dilemma. When to help and when to stand by and let your child fall. At some point, the offer of aid becomes a weapon creating a dependency that will guarantee compliance with what the giver wants to get in return. Aid can “buy” political compliance, as well as pave the way for favorable trade terms for the giver. So the original question stands, is it charity or is it a scam?
By Myron Gushlak
The Perfect Scam
Add Steven Speilberg, John Malkovich and Mets owner, Fred Wilpon to the list of thousands of people or groups who were victimized by Bernard Madoff’s Ponzi scheme. (s.wsj.net/public/resources/documents/st_madoff_victims) The list is international in scope and public knowledge of the victims is added to daily as people join in on lawsuits trying to recover lost funds. The prurient details of actual amounts of money lost isn’t always available, but probably no one’s losses will exceed the seven billion dollars of the Fairfield Greenwich Advisors group who lost half of their fourteen billion dollars in assets.
More names will undoubtedly be added to the list as individuals and corporations seek to recover lost funds. Many of the more public names will find there way to Entertainment Tonight, but I think I think Phyllis Molchatsky’s reaction to her losses was the most interesting of any I’ve read about. She is suing the SEC alleging negligence in their failure to detect Madoff’s scam.
As I mentioned recently, even if Madoff bought estates or artwork every day for the past ten years, those real assets are around somewhere. Finding those assets may be the new century’s version of searching for sunken pirate treasure depending on how shrewd Madoff was in hiding his ill-gotten gains. I haven’t read anywhere whether or not he plans to cooperate with authorities in locating the lost empire’s wealth. But this story is just beginning.
During the last century, film director Alfred Hitchcock was a guest on the Johnny Carson version of The Tonight Show. Johnny asked the reigning king of crime and horror movies whether he thought that anyone ever committed the perfect crime. Hitchcock’s response, in his unique breathless delivery, was that he was certain that perfect crimes were committed every day. They were never uncovered, never even recognized as crimes. That’s what made them perfect.
Which of course makes me wonder, has there ever been a perfect Ponzi scheme? Has anyone ever bilked billions or even millions from investors, and then slowly and systematically lost money so that those investors never even knew they were never actually invested in anything? Probably not, at least not with that amount of money. But I wonder on a small scale if little Ponzi schemes aren’t taking place every day, never to be discovered. It’s only a perfect crime if you don’t get caught.
By Myron Gushlak
More names will undoubtedly be added to the list as individuals and corporations seek to recover lost funds. Many of the more public names will find there way to Entertainment Tonight, but I think I think Phyllis Molchatsky’s reaction to her losses was the most interesting of any I’ve read about. She is suing the SEC alleging negligence in their failure to detect Madoff’s scam.
As I mentioned recently, even if Madoff bought estates or artwork every day for the past ten years, those real assets are around somewhere. Finding those assets may be the new century’s version of searching for sunken pirate treasure depending on how shrewd Madoff was in hiding his ill-gotten gains. I haven’t read anywhere whether or not he plans to cooperate with authorities in locating the lost empire’s wealth. But this story is just beginning.
During the last century, film director Alfred Hitchcock was a guest on the Johnny Carson version of The Tonight Show. Johnny asked the reigning king of crime and horror movies whether he thought that anyone ever committed the perfect crime. Hitchcock’s response, in his unique breathless delivery, was that he was certain that perfect crimes were committed every day. They were never uncovered, never even recognized as crimes. That’s what made them perfect.
Which of course makes me wonder, has there ever been a perfect Ponzi scheme? Has anyone ever bilked billions or even millions from investors, and then slowly and systematically lost money so that those investors never even knew they were never actually invested in anything? Probably not, at least not with that amount of money. But I wonder on a small scale if little Ponzi schemes aren’t taking place every day, never to be discovered. It’s only a perfect crime if you don’t get caught.
By Myron Gushlak
Friday, January 30, 2009
Scams
The down time at BlueWater Partners (http://bluewater.ky/) is always interesting. I don’t think that would be too surprising to many people. When men work in high pressure jobs, handling large sums of money, things tend to get a little unpredictable during the breaks. Bond traders are notorious for this sort of behavior. A bond trader will work at warp speeds for hours at a time manning several telephone lines and computer screens simultaneously, and then bam, everything stops, and traders find themselves staring at one another in a minor daze. I knew of one bond trader in New York who caught mice and threw them out the window after making little parachutes for them during the down time. Things get weird. Conversations are often unrepeatable.
The talk the other day centered around the Bernard Madoff scam. It’s hard not to talk about Madoff, or “made-off” as I’ve heard him called recently, as in “he ‘made-off’ with all the money.” We started by talking about other scams, the original pyramid scheme of Charles Ponzi in the 1920’s to the Nigerian money laundering scheme that still surfaces every now and again. Madoff seems to have the biggest scam to date, at least in terms of dollars. The Albanian pyramid scheme of 1997 was the hands down biggest in terms of the numbers of people involved. It was estimated that two-thirds of that country’s entire population and government were caught up in it. Riots ensued when the whole thing collapsed, and the country still hasn’t fully recovered. But in terms of dollars, Madoff seems to have won a rather dubious prize.
Which led to the main topic of discussion – “Where is the money?”
If the totals that are being thrown around in the newspapers are remotely accurate, Madoff took hundreds of millions, and possibly billions of dollars. Think about that. In these days of billion dollar buyouts numbers get thrown around and lose their meaning. But he may have taken billions of dollars. A million dollars is a lot of money. If you spent a dollar a day for a million days you would have had to begin in the fifth century BC to be broke today. (without interest, of course.)
It was the esteemed consensus of BWP that a single man cannot spend that much money in his lifetime, never mind the forty or fifty years Madoff may have been at it. There just isn’t enough time in the day. It would take a foundation with many employees to spend at a fast enough rate. It’s a funny idea, not being able to spend a fixed amount of money, a Brewster’s Millions sort of fantasy, but think about it. If you stole one billion dollars, you would have to spend ten million dollars a day to make it disappear in a couple of decades. Now think about how much work it would be to spend ten million dollars a day every day for a couple of decades. If you gave it away in huge allotments. far too much attention would be drawn to you. Did he buy an estate a day for a year? A roomful of Picassos? Where are they? What a dilemma! So the question remains, where is the money?
I was reminded of a story I read many years ago. A man in France stole what is the equivalent to one million dollars in quarters. Do you know how much space you need to store a million dollars in quarters? What are you going to do with them? Sell them each for a nickel to neighborhood children? Go to quarter casino machines every day for eight hours? You would draw so much attention to yourself that you would be caught in weeks, which leads me to the what the police chief in charge of the case was quoted as saying, “Stealing this much money is its own punishment.”
By Myron Gushlak
The talk the other day centered around the Bernard Madoff scam. It’s hard not to talk about Madoff, or “made-off” as I’ve heard him called recently, as in “he ‘made-off’ with all the money.” We started by talking about other scams, the original pyramid scheme of Charles Ponzi in the 1920’s to the Nigerian money laundering scheme that still surfaces every now and again. Madoff seems to have the biggest scam to date, at least in terms of dollars. The Albanian pyramid scheme of 1997 was the hands down biggest in terms of the numbers of people involved. It was estimated that two-thirds of that country’s entire population and government were caught up in it. Riots ensued when the whole thing collapsed, and the country still hasn’t fully recovered. But in terms of dollars, Madoff seems to have won a rather dubious prize.
Which led to the main topic of discussion – “Where is the money?”
If the totals that are being thrown around in the newspapers are remotely accurate, Madoff took hundreds of millions, and possibly billions of dollars. Think about that. In these days of billion dollar buyouts numbers get thrown around and lose their meaning. But he may have taken billions of dollars. A million dollars is a lot of money. If you spent a dollar a day for a million days you would have had to begin in the fifth century BC to be broke today. (without interest, of course.)
It was the esteemed consensus of BWP that a single man cannot spend that much money in his lifetime, never mind the forty or fifty years Madoff may have been at it. There just isn’t enough time in the day. It would take a foundation with many employees to spend at a fast enough rate. It’s a funny idea, not being able to spend a fixed amount of money, a Brewster’s Millions sort of fantasy, but think about it. If you stole one billion dollars, you would have to spend ten million dollars a day to make it disappear in a couple of decades. Now think about how much work it would be to spend ten million dollars a day every day for a couple of decades. If you gave it away in huge allotments. far too much attention would be drawn to you. Did he buy an estate a day for a year? A roomful of Picassos? Where are they? What a dilemma! So the question remains, where is the money?
I was reminded of a story I read many years ago. A man in France stole what is the equivalent to one million dollars in quarters. Do you know how much space you need to store a million dollars in quarters? What are you going to do with them? Sell them each for a nickel to neighborhood children? Go to quarter casino machines every day for eight hours? You would draw so much attention to yourself that you would be caught in weeks, which leads me to the what the police chief in charge of the case was quoted as saying, “Stealing this much money is its own punishment.”
By Myron Gushlak
Saturday, January 17, 2009
Dead Cat Bounce
I thought it might be fun to go back a year ago trying to find egregiously wrong financial forecasts for the year 2008, soon to be put out of its misery. I didn’t find any. Just about everybody was predicting dire consequences for the year just ended. If someone thought that forecast was overly pessimistic, I couldn’t find any evidence of it. The prospects for a good financial 2009 are also rarer than BMW’s in a trailer park. The only issue for debate seems to be how long things will stay bad. It was a bit surprising to me to read in multiple sources that most end of the year forecasts had the beginning of the recession as having already started in December, 2007, even though the US government didn’t “officially” put us in one until eleven months later in November.
Mark Lanler’s New York Times article of December 10, 2008, seems to echo the cries of doom and gloom that dominate the media and the internet for 2009. (www.nytimes.com/2008/12/10/business/worldbusiness/10global.html) His opinion is particularly disturbing because he cites the lack of an obvious engine to drive a recovery. The latest “buzzword” seems to be infrastructure investment as a way out of the woods, but the term is thrown around so frequently that it becomes like the emperor’s new clothes, true because we all say it’s true and we all want it to be true.
The late December stock market mini-rallies can be attributed to “a dead cat bounce”. We at Blue Water Partners (www.bluewaterpartners.com) “borrowed” that line several years ago with little apology to the originator of the term. An unnamed Singapore broker cited in The Financial Times, coined the phrase after a precipitous market plunge on Monday was followed by a modest recovery on Tuesday. His rather macabre observation was “that even a dead cat will bounce if dropped hard enough from high enough.” (www.thelede.blogs.nytimes.com/2007/03/01)
The term never fails to bring a smile to our faces, though the sentiment is hardly worth smiling about. Our hopes for 2009 is that the year as a whole will not (in retrospect) be anything more than a dead cat bounce from the plunge of 2008. Money will, of course, be made in 2009. Money is always being made somewhere. Buyers are making acquisitions. It’s a good time to have your financial people on speed dial, especially those who know how to drive value.
By Myron Gushlak
Mark Lanler’s New York Times article of December 10, 2008, seems to echo the cries of doom and gloom that dominate the media and the internet for 2009. (www.nytimes.com/2008/12/10/business/worldbusiness/10global.html) His opinion is particularly disturbing because he cites the lack of an obvious engine to drive a recovery. The latest “buzzword” seems to be infrastructure investment as a way out of the woods, but the term is thrown around so frequently that it becomes like the emperor’s new clothes, true because we all say it’s true and we all want it to be true.
The late December stock market mini-rallies can be attributed to “a dead cat bounce”. We at Blue Water Partners (www.bluewaterpartners.com) “borrowed” that line several years ago with little apology to the originator of the term. An unnamed Singapore broker cited in The Financial Times, coined the phrase after a precipitous market plunge on Monday was followed by a modest recovery on Tuesday. His rather macabre observation was “that even a dead cat will bounce if dropped hard enough from high enough.” (www.thelede.blogs.nytimes.com/2007/03/01)
The term never fails to bring a smile to our faces, though the sentiment is hardly worth smiling about. Our hopes for 2009 is that the year as a whole will not (in retrospect) be anything more than a dead cat bounce from the plunge of 2008. Money will, of course, be made in 2009. Money is always being made somewhere. Buyers are making acquisitions. It’s a good time to have your financial people on speed dial, especially those who know how to drive value.
By Myron Gushlak
Fashion
An article in this month’s Vanity Fair on George Bush caught my eye. Actually the cover photo of actress Cate Blanchett caught my eye, but why quibble? I was surprised that Vanity Fair would write about Bush or about anything that doesn’t carry a designer label, but I was quickly drawn into the article. Nothing in the piece was particularly new or surprising. The article is a composite of brief historical information, juxtaposed with comments by the people on the periphery of those events. The mosaic that evolves is anything but complementary to Bush 43. I’d read much of the same in Bob Woodward’s “State of Denial” and the excellent Cheney biography, “Angler” by Barton Gellman, but it occurred to me half way through that I was reading “Vanity Fair”.In a Marshall McCluhan moment I realized it is , literally, now fashionable to bash George Bush.
Perhaps it is my training in investment baking (www.Bluewaterpartners.com) but when I see everyone swimming upstream, I tend to want to see what’s going on in the other direction. When everyone’s pulling out of the market, it is often the best time to wade in. With that in mind, I tried to envision a favorable historic treatment of W. If the Middle East miraculously stabilizes and follows Iraq’s “democratic” lead, I suppose Bush will be seen as being ahead of his time. Perhaps the mortgage meltdown will be laid at the feet of former President, Bill Clinton’s decision to make housing more available to the poor of this country, and, even though Bush continued the Clinton program, the blame may get shifted there. People who travel extensively will tell you that the perception of America has drastically deteriorated in the past eight years. I don’t know how history will treat that. I realized quickly that I was swimming upstream just to get the point where I could make a case that he was merely an average president. Lawrence Wilkerson, top aide and later chief of staff to Colin Powell called him a “Sarah Palin-like president.” That comment would be considered a positive comment when compared to the other descriptions in the article.
The surprise to me when I read that Bush has a 29% approval rating is that almost one out of every three people do approve of his performance. Who are these people? And what are they wearing?
By Myron Gushlak
Perhaps it is my training in investment baking (www.Bluewaterpartners.com) but when I see everyone swimming upstream, I tend to want to see what’s going on in the other direction. When everyone’s pulling out of the market, it is often the best time to wade in. With that in mind, I tried to envision a favorable historic treatment of W. If the Middle East miraculously stabilizes and follows Iraq’s “democratic” lead, I suppose Bush will be seen as being ahead of his time. Perhaps the mortgage meltdown will be laid at the feet of former President, Bill Clinton’s decision to make housing more available to the poor of this country, and, even though Bush continued the Clinton program, the blame may get shifted there. People who travel extensively will tell you that the perception of America has drastically deteriorated in the past eight years. I don’t know how history will treat that. I realized quickly that I was swimming upstream just to get the point where I could make a case that he was merely an average president. Lawrence Wilkerson, top aide and later chief of staff to Colin Powell called him a “Sarah Palin-like president.” That comment would be considered a positive comment when compared to the other descriptions in the article.
The surprise to me when I read that Bush has a 29% approval rating is that almost one out of every three people do approve of his performance. Who are these people? And what are they wearing?
By Myron Gushlak
Wednesday, December 17, 2008
Martha
I wonder what Martha Stuart was thinking this week when the $50 billion Ponzi scheme of former Nasdaq chairman Bernard Madoff came undone. (www.time.com/time/business/article/0,8599,1866680,00.html)
The SEC was intent on making an example of Martha Stewart when they sentenced her in 2004 for alleged “insider trading.” This, in hindsight, would have been three years after the suspicious investments of Mr. Madoff were originally investigated by that same SEC. I picture a harried investigator at the SEC getting a call from his boss to drop everything and get on this Martha Stewart case! “But I’m in the middle of an investigation of Madoff,” the harried worker protests. “He’s posted a suspiciously consistent profit of one or two percent almost every month for the past three years. We’re talking billions here!”
This would be, of course, the same SEC who failed to detect anything amiss at Bear Sterns, Lehman Brothers, etc, etc. But they got Martha Stewart. What amount of money were we talking about back there in the idyllic financial days of 2004? Oh yeah, it was 4,000 shares at $60 a share. Wow. Almost a quarter of a million dollars. That’s right Two hundred and fifty thousand big ones! Today the market doesn’t even react if a company announces a twenty million dollar loss. Any loss that starts with an “M” instead of a “B” doesn’t even register.
I don’t really want to kick a man when he’s down. The SEC isn’t the only culprit here. Moody’s Investors Service, who were ostensibly paid to rate investors for the public good had Countrywide Securities highly rated six months before their irregularities started coming to light. They also missed the Enron debacle until it was too late. An article in The New York Times raises relevant questions about the people who are supposed to be watching the shop. (www.nytimes.com/2008/12/07/business/07rating.html?_r=1&scp=2&sq=Moody's&st=cse) They quote an anonymous Moody’s managing director in September, 2007: “These errors make us look either incompetent at credit analysis or like we sold our soul to the devil for revenue, or a little bit of both.” He left out the words “criminally negligent”. The Times article paints a picture that Moody’s is involved in, at best what could be called a “conflict of interest.” The SEC is right there along side of them. But at least the SEC nailed that threat to society – the heartless arch-criminal, Martha Stewart.
By Myron Gushlak
The SEC was intent on making an example of Martha Stewart when they sentenced her in 2004 for alleged “insider trading.” This, in hindsight, would have been three years after the suspicious investments of Mr. Madoff were originally investigated by that same SEC. I picture a harried investigator at the SEC getting a call from his boss to drop everything and get on this Martha Stewart case! “But I’m in the middle of an investigation of Madoff,” the harried worker protests. “He’s posted a suspiciously consistent profit of one or two percent almost every month for the past three years. We’re talking billions here!”
This would be, of course, the same SEC who failed to detect anything amiss at Bear Sterns, Lehman Brothers, etc, etc. But they got Martha Stewart. What amount of money were we talking about back there in the idyllic financial days of 2004? Oh yeah, it was 4,000 shares at $60 a share. Wow. Almost a quarter of a million dollars. That’s right Two hundred and fifty thousand big ones! Today the market doesn’t even react if a company announces a twenty million dollar loss. Any loss that starts with an “M” instead of a “B” doesn’t even register.
I don’t really want to kick a man when he’s down. The SEC isn’t the only culprit here. Moody’s Investors Service, who were ostensibly paid to rate investors for the public good had Countrywide Securities highly rated six months before their irregularities started coming to light. They also missed the Enron debacle until it was too late. An article in The New York Times raises relevant questions about the people who are supposed to be watching the shop. (www.nytimes.com/2008/12/07/business/07rating.html?_r=1&scp=2&sq=Moody's&st=cse) They quote an anonymous Moody’s managing director in September, 2007: “These errors make us look either incompetent at credit analysis or like we sold our soul to the devil for revenue, or a little bit of both.” He left out the words “criminally negligent”. The Times article paints a picture that Moody’s is involved in, at best what could be called a “conflict of interest.” The SEC is right there along side of them. But at least the SEC nailed that threat to society – the heartless arch-criminal, Martha Stewart.
By Myron Gushlak
Friday, December 5, 2008
Salt
I’m reading Mark Kurlansky’s book, Salt: A World History http://www.randomhouse.co.uk/salt/home.htm. I know that must sound incredibly dull. It is. Very much so. That’s not to say that the book doesn’t have its moments though. Did you know that humans cannot live without salt, but that the body does not make any of it? That sort of fascinating fact jumps out at you every ten or twelve pages. There’s more, of course, but I’ve only reached page 179, so nothing else comes to mind.
Why would I spend what seems like hundreds of hours reading such a scholarly work? Because there is no mention anywhere within its binding of Barack Obama, Senator Pelosi, George Bush, possible cabinet appointments, white house dogs, financial buy outs, the stock market, bail outs for the auto industry, consumer confidence, congress, recessions or unemployment
These days, I can hardly think of anything better to recommend a good book. Never mind that Samuel Johnson’s line comes to mind every twenty or thirty pages. “He is not only dull himself,” Johnson said though I do not remember who he was talking about, “he is the cause of dullness in others.” Sorry, Mark. I’m only telling you what many others are thinking.
Salt was the oil of early civilizations. The strongest, richest countries had the most access to it. That’s the type of thing that Kurlansky can run with for a hundred pages or more. His research is stellar. It must have taken years to write. It’s taking almost that long to read. After nodding out a time or two, I sometimes regress and turn on CNN, but after one or two stories about any of the above, I rush back to this literary sedative, finding great comfort and relief in the endless parade of words. I know I can’t keep on this path for much longer. My business is finance, after all. People rely on me and Blue Water Partners http://bluewater.ky for my expertise in investment banking. But I’m not ready quite yet to dive back into this whirlpool of financial and political information that we are all in the midst of. Soon, though. Soon. Or maybe when I’m finished Salt, I might first sneak a peek at Mark’s other book, Cod: A Biography of the Fish that Changed the World.
By Myron Gushlak
Why would I spend what seems like hundreds of hours reading such a scholarly work? Because there is no mention anywhere within its binding of Barack Obama, Senator Pelosi, George Bush, possible cabinet appointments, white house dogs, financial buy outs, the stock market, bail outs for the auto industry, consumer confidence, congress, recessions or unemployment
These days, I can hardly think of anything better to recommend a good book. Never mind that Samuel Johnson’s line comes to mind every twenty or thirty pages. “He is not only dull himself,” Johnson said though I do not remember who he was talking about, “he is the cause of dullness in others.” Sorry, Mark. I’m only telling you what many others are thinking.
Salt was the oil of early civilizations. The strongest, richest countries had the most access to it. That’s the type of thing that Kurlansky can run with for a hundred pages or more. His research is stellar. It must have taken years to write. It’s taking almost that long to read. After nodding out a time or two, I sometimes regress and turn on CNN, but after one or two stories about any of the above, I rush back to this literary sedative, finding great comfort and relief in the endless parade of words. I know I can’t keep on this path for much longer. My business is finance, after all. People rely on me and Blue Water Partners http://bluewater.ky for my expertise in investment banking. But I’m not ready quite yet to dive back into this whirlpool of financial and political information that we are all in the midst of. Soon, though. Soon. Or maybe when I’m finished Salt, I might first sneak a peek at Mark’s other book, Cod: A Biography of the Fish that Changed the World.
By Myron Gushlak
Thursday, November 13, 2008
Stock market
“The difference between playing the stock market and the horses is that one of the horses must win.” This was the lament of a BlueWaters lunch last week. Some of the most humorous things I’ve ever heard were about money. Perhaps it is because, as Voltaire said, “when it comes to money, everybody is of the same religion.” Perhaps it is because sometimes all a man can do is laugh. The stock market, as “the experts” tell us, is still trying to find a bottom. Meanwhile, the government announced last week that it would sell $55 billion in bonds next week as part of the massive borrowing plan to pay for its financial rescue packages. Some say that figure might have to expand to over $300 billion by the first quarter of 2009. And that does not include any possible life preserver thrown to the US auto industry. Clearly the bottom has not yet been reached.
I’ve given my opinion several times over the past year about the possible dangers of other countries buying our bonds as part of their Sovereign Wealth Funds, and using the influence that investment provides as political leverage in the future. I’d feel a little bit better about the proposed sale of stocks if the US government released some sort of statement that might indicate that they are at least aware of the possibility of such a conflict of interests in the future. I haven’t heard a word about it. And maybe that is to be expected. A drowning man doesn’t much care who is throwing him a rope. I (still) would like to think that someone at the upper levels of government has their eye on this sort of thing, and a contingency plan for the future exists should the United States suddenly find itself leveraged into decisions it would not otherwise make.
I admit to being snowed under by all the negative economic news on the heels of the exhaustive (and exhausting) presidential campaign. I look back nostalgically to the pre-crisis and pre-election days when Janet Jackson’s exposed breast might be the most compelling story of the day. Today she could run naked through the stock market and all anyone would want to know was what she was buying or selling.
By Myron Gushlak
I’ve given my opinion several times over the past year about the possible dangers of other countries buying our bonds as part of their Sovereign Wealth Funds, and using the influence that investment provides as political leverage in the future. I’d feel a little bit better about the proposed sale of stocks if the US government released some sort of statement that might indicate that they are at least aware of the possibility of such a conflict of interests in the future. I haven’t heard a word about it. And maybe that is to be expected. A drowning man doesn’t much care who is throwing him a rope. I (still) would like to think that someone at the upper levels of government has their eye on this sort of thing, and a contingency plan for the future exists should the United States suddenly find itself leveraged into decisions it would not otherwise make.
I admit to being snowed under by all the negative economic news on the heels of the exhaustive (and exhausting) presidential campaign. I look back nostalgically to the pre-crisis and pre-election days when Janet Jackson’s exposed breast might be the most compelling story of the day. Today she could run naked through the stock market and all anyone would want to know was what she was buying or selling.
By Myron Gushlak
Tuesday, November 4, 2008
Blame Game
The Blame Game has started in earnest trying to pin the blame to a specific face (or faces) for the world wide financial crisis. This past week, the New York Times nominated Henry Cisneros, Bill Clinton’s top housing official as a partial culprit. All Cisneros did (as well as the former President) was to try to bring the American dream of home ownership to a wider portion of the population. Borrowing eligibility standards were lowered. In fact, they were practically dispensed with altogether.
A couple of months ago I wrote about well intentioned people trying to help others. I referred to the Dooling novel, White Man’s Grave, while discussing the Myanmar refusal to allow charitable aid into their country after a devastating earthquake. I was merely pointing out that help isn’t always received in the way it was intended. Things sometimes go inexplicably wrong in the charitable transaction, no matter how well intentioned. Many thought my words were misanthropic, at best, and “disgustingly anti-social” at worst. I was accused of using logic to rationalize being un-charitable. In my defense, the Myron Gushlak Foundation says otherwise (), but I did not choose to argue (if I could have). Andrew Carnegie, one of the twentieth century’s most prolific philanthropists said “One of the serious obstacles to the improvement of our race is indiscriminate charity.” One assumes he was serious.
I’m not saying that people should not try to help their neighbor. That would be anti-Christian and politically insensitive. And even though I’m not running for anything, I still would never suggest such a thing. I’m just saying that whenever someone offers to help me, I instinctively put my hand to my pocket to make sure my wallet is safe. “Home ownership for everyone!” much like “a chicken in every pot!” never seems to work out as nicely as it sounds. Somewhere, somehow, there is always some poor cattle rancher going out of business because no one’s buying beef anymore as the pots get filled with chickens. All I’m saying is that the housing market was moving along quite nicely with an almost incessant steady though non-spectacular growth year after year, decade after decade. It wasn’t broke. For sixty years or more, people bought houses, made money slowly and incrementally. Why did anyone feel the need to fix what wasn’t broke?
By Myron Gushlak
A couple of months ago I wrote about well intentioned people trying to help others. I referred to the Dooling novel, White Man’s Grave, while discussing the Myanmar refusal to allow charitable aid into their country after a devastating earthquake. I was merely pointing out that help isn’t always received in the way it was intended. Things sometimes go inexplicably wrong in the charitable transaction, no matter how well intentioned. Many thought my words were misanthropic, at best, and “disgustingly anti-social” at worst. I was accused of using logic to rationalize being un-charitable. In my defense, the Myron Gushlak Foundation says otherwise (), but I did not choose to argue (if I could have). Andrew Carnegie, one of the twentieth century’s most prolific philanthropists said “One of the serious obstacles to the improvement of our race is indiscriminate charity.” One assumes he was serious.
I’m not saying that people should not try to help their neighbor. That would be anti-Christian and politically insensitive. And even though I’m not running for anything, I still would never suggest such a thing. I’m just saying that whenever someone offers to help me, I instinctively put my hand to my pocket to make sure my wallet is safe. “Home ownership for everyone!” much like “a chicken in every pot!” never seems to work out as nicely as it sounds. Somewhere, somehow, there is always some poor cattle rancher going out of business because no one’s buying beef anymore as the pots get filled with chickens. All I’m saying is that the housing market was moving along quite nicely with an almost incessant steady though non-spectacular growth year after year, decade after decade. It wasn’t broke. For sixty years or more, people bought houses, made money slowly and incrementally. Why did anyone feel the need to fix what wasn’t broke?
By Myron Gushlak
Thursday, September 25, 2008
Financial Musings
My head is spinning. Freddie Mac, Fannie Mae, Bear Stearns, Lehman Brothers, AIG. Federal bailouts seem imminent for most of them. I cannot calculate how many people have asked me in the past week for my opinion about these historic events. Uncertainty and financial markets mix like oil and water, and this time around is no exception. I would like to add a calming voice to the current situation. There is a history of this sort of thing, and the financial world did not end. Most people do not realize that in the Savings and Loan bailout of the 1980’s, the government was able to recoup most or all of its investment, as I mentioned many blogs ago. I do not want to minimize what has happened either. The Federal government has taken on debt that some estimate may be as much as half a trillion dollars. That sort of thing will have far reaching repercussions. We are in uncharted waters, I think, but the ship is sound.
I am fascinated by the mass psychology of tumultuous financial events such as the one we are currently in. I get impatient to know how it will all turn out, wishing I could fast forward to a more stable point in the future. Not just for the financial gain I would have by knowing the future (though if I’m daydreaming, there is no reason to leave out those sort of fantasies) but just to see who steps forward, who was right, who was dreadfully wrong. You can say a lot of things about the twenty-first century so far, but you can never call it boring. I am also fascinated by the history of such events. The decision of this government to bail out these institutions makes me wonder if the entire Great Depression might have been avoided if the government came in and supported the banks in 1929. That is the most fascinating thing about all this. Did we just avert the second Great Depression, or did we just guarantee its arrival?
By Myron Gushlak
I am fascinated by the mass psychology of tumultuous financial events such as the one we are currently in. I get impatient to know how it will all turn out, wishing I could fast forward to a more stable point in the future. Not just for the financial gain I would have by knowing the future (though if I’m daydreaming, there is no reason to leave out those sort of fantasies) but just to see who steps forward, who was right, who was dreadfully wrong. You can say a lot of things about the twenty-first century so far, but you can never call it boring. I am also fascinated by the history of such events. The decision of this government to bail out these institutions makes me wonder if the entire Great Depression might have been avoided if the government came in and supported the banks in 1929. That is the most fascinating thing about all this. Did we just avert the second Great Depression, or did we just guarantee its arrival?
By Myron Gushlak
Wednesday, September 17, 2008
Non-conventional
There is no shortage of things to say about the recently concluded Democratic and Republican conventions in the United States. As a “foreigner”, perhaps my take might be a little different from the standard CNN/Fox News fare. As I’ve stated in the past, one of the perks of my investment banking business, Blue Water Partners, is the opportunity I have to confer with people of almost every nationality from countries spanning the globe.
It has escaped no one’s attention that the United States has nominated a black man for its highest leadership position. While not quite as shocking as the possibility of the Germans nominating a Jew, it has definitely caught the world’s eye. Some of the non-European people I do business with are quite euphoric. There is skepticism about the willingness of the United States to actually elect him, however, especially in the southern states where racism is assumed to be alive and well. But the possibility has garnered plenty of attention.
McCain and Obama could not be more different in their personalities and speaking styles. And as the cable and network talking heads point out ad nauseum in their attempt to be even-handed, both are coming to the party with their own unique talents. A couple of things strike me as a non-American, however. One is the insistence on referring to the next president as the “leader of the free world”. If that is the case, shouldn’t we Canadians (or Europeans) get a vote, or a half vote? It brings to my mind the baseball World Series, which if I’m not mistaken has been won by an American team every year it has been played. But I can shrug that off as normal American hubris.
The Democratic convention was a remarkable display of passion. The Republican convention- not so much, except for the reception given the Vice Presidential nominee, Governor Sarah Palin. Apparently you Americans are big on the Hollywood ending – “virtual unknown PTO mom rises to become the supreme commander of the world” scenario. Life imitating art, for certain! It raised a few eyebrows in the lunch I had with several European businessmen last week. Only in America.
But even that unlikely script did not cause as much of a discussion as the Republican speaker who stated (and I’m paraphrasing) that Obama was ready to turn his back on Iraq while McCain was committed to stay until the war was won. Everyone I’ve spoken to was surprised that that notion was not challenged by the “political experts” after the speech. The consensus among people I’ve met was “what will the Americans have won?” The war has thrown trillions of dollars of debt onto this and future generations. It has cost thousands of American lives, and many more thousands of wounded veterans are returning home requiring medical attention for years to come. The price of gas has almost doubled in the US since the war began, their economy is in shambles, and certainly it would be difficult to defend the argument that the Middle East (and the world by extension) is safer today than in 2001. So what is it that Americans, or at least McCain Republicans think they are on the verge of winning?
At any rate, the open window on the American way of selecting its leaders is always entertaining. It is also helped immeasurably by such American inventions as Tivo and the fast-forward button.
By Myron Gushlak
It has escaped no one’s attention that the United States has nominated a black man for its highest leadership position. While not quite as shocking as the possibility of the Germans nominating a Jew, it has definitely caught the world’s eye. Some of the non-European people I do business with are quite euphoric. There is skepticism about the willingness of the United States to actually elect him, however, especially in the southern states where racism is assumed to be alive and well. But the possibility has garnered plenty of attention.
McCain and Obama could not be more different in their personalities and speaking styles. And as the cable and network talking heads point out ad nauseum in their attempt to be even-handed, both are coming to the party with their own unique talents. A couple of things strike me as a non-American, however. One is the insistence on referring to the next president as the “leader of the free world”. If that is the case, shouldn’t we Canadians (or Europeans) get a vote, or a half vote? It brings to my mind the baseball World Series, which if I’m not mistaken has been won by an American team every year it has been played. But I can shrug that off as normal American hubris.
The Democratic convention was a remarkable display of passion. The Republican convention- not so much, except for the reception given the Vice Presidential nominee, Governor Sarah Palin. Apparently you Americans are big on the Hollywood ending – “virtual unknown PTO mom rises to become the supreme commander of the world” scenario. Life imitating art, for certain! It raised a few eyebrows in the lunch I had with several European businessmen last week. Only in America.
But even that unlikely script did not cause as much of a discussion as the Republican speaker who stated (and I’m paraphrasing) that Obama was ready to turn his back on Iraq while McCain was committed to stay until the war was won. Everyone I’ve spoken to was surprised that that notion was not challenged by the “political experts” after the speech. The consensus among people I’ve met was “what will the Americans have won?” The war has thrown trillions of dollars of debt onto this and future generations. It has cost thousands of American lives, and many more thousands of wounded veterans are returning home requiring medical attention for years to come. The price of gas has almost doubled in the US since the war began, their economy is in shambles, and certainly it would be difficult to defend the argument that the Middle East (and the world by extension) is safer today than in 2001. So what is it that Americans, or at least McCain Republicans think they are on the verge of winning?
At any rate, the open window on the American way of selecting its leaders is always entertaining. It is also helped immeasurably by such American inventions as Tivo and the fast-forward button.
By Myron Gushlak
Monday, September 8, 2008
Education Revolution
Have you noticed what is happening in New Orleans? In the wake of Hurricane Katrina, there is an excitement brewing about education, of all things. Most of the existing pre-Katrina school system was washed away by the hurricane, both literally and figuratively. Even before the hurricane, the system was failing miserably. Statewide, Louisiana ranked as low as 46th out of the fifty United States in student achievement rankings. Instead of rebuilding a broken system, New Orleans decided to become a laboratory for charter schools. More than half of New Orleans’s public-school students are now in charter schools. Early successes have caught the attention of educators nationwide, as well as local governments still unsure about the viability of the charter school concept.
Charter schools are publicly financed, but are run privately. The individual school has much more latitude about the students it accepts and the curriculum it chooses to follow. Paul Vallas, the former head of the school systems in both Chicago and Philadelphia is the superintendent behind this mass experiment. Thus far, the experiment is successful beyond most reasonable expectation. We hear about the failures of New Orleans all the time. It is truly uplifting to hear about the occasional phoenix that every now and then rises from (very wet) ashes.
Robert M. Hutchins has said “We have not had the three R’s in America, we have had the six R’s: remedial readin’, remedial ‘ritin’ and remedial ‘rithmetic.” Perhaps out of the misery of Katrina, something may actually change for the better. Before Katrina, New Orleans and education went together as well as McDonalds and good nutrition. Don’t look now, but the times, they are ‘a changin.
By Myron Gushlak
Charter schools are publicly financed, but are run privately. The individual school has much more latitude about the students it accepts and the curriculum it chooses to follow. Paul Vallas, the former head of the school systems in both Chicago and Philadelphia is the superintendent behind this mass experiment. Thus far, the experiment is successful beyond most reasonable expectation. We hear about the failures of New Orleans all the time. It is truly uplifting to hear about the occasional phoenix that every now and then rises from (very wet) ashes.
Robert M. Hutchins has said “We have not had the three R’s in America, we have had the six R’s: remedial readin’, remedial ‘ritin’ and remedial ‘rithmetic.” Perhaps out of the misery of Katrina, something may actually change for the better. Before Katrina, New Orleans and education went together as well as McDonalds and good nutrition. Don’t look now, but the times, they are ‘a changin.
By Myron Gushlak
Tuesday, August 26, 2008
There’re People in Those Countries
One of the benefits of my relationship with BlueWater Partners is the interesting and diverse people I meet. Last week, I had the opportunity to spend some time speaking with a young lady from the Czech Republic. She is from a modestly wealthy Czech family and her take on the Russia/Georgia issue was interesting. The Czechs are still just getting used to a return to private, non-government ownership of property after the Russians left last time. Her own family has re-taken ownership of property that was controlled by the Russians for over thirty years. She feels that every bite taken by Russia only increases their appetite for further acquisition.
She said the governments of the former USSR countries (as well as other countries with a history of being taken over, like Poland) are eager to have United States military bases or missile sites on their land, but the people aren’t so sure. The governments feel the United States presence will deter possible takeover attempts. The people remain unconvinced. Many feel it is just the beginning of yet another powerful country posturing to take control of their smaller sovereign nations. As a Canadian, I often fail to consider what it must be like to live in a country so tenuously situated in the world. I also sometimes forget that every time a country like Russia moves into a country like Georgia, millions of lives are disrupted. It’s not just the casualties of the fighting who suffer. It is the thousands of people who went to bed owning a family home, with all the history inherent in such a home, and waking up to find that a remote government has decided that the family property would be of better use to the state if it was owned by the government. It should have been obvious to me, perhaps, but the conversation was enlightening. These people are just like you and I. It’s easy to lose sight of that.
By Myron Gushlak
She said the governments of the former USSR countries (as well as other countries with a history of being taken over, like Poland) are eager to have United States military bases or missile sites on their land, but the people aren’t so sure. The governments feel the United States presence will deter possible takeover attempts. The people remain unconvinced. Many feel it is just the beginning of yet another powerful country posturing to take control of their smaller sovereign nations. As a Canadian, I often fail to consider what it must be like to live in a country so tenuously situated in the world. I also sometimes forget that every time a country like Russia moves into a country like Georgia, millions of lives are disrupted. It’s not just the casualties of the fighting who suffer. It is the thousands of people who went to bed owning a family home, with all the history inherent in such a home, and waking up to find that a remote government has decided that the family property would be of better use to the state if it was owned by the government. It should have been obvious to me, perhaps, but the conversation was enlightening. These people are just like you and I. It’s easy to lose sight of that.
By Myron Gushlak
Monday, August 4, 2008
A Nation of Whiners
I love Phil Gramm. He’s from that generation that calls a spade a spade. Today, if someone calls a spade a spade, he needs to apologize to those who might prefer shovels, give a token nod of the head to the other garden tools, and follow that immediately with an emphatic clarification that the spade in question is a hand tool and not a derogatory term, and a further explanation that the speaker in no way is referring to a card suit and has never been a proponent of gambling. I don’t agree with Gramm. I think things are pretty seriously out of whack at the moment. I’m reminded of an old saying, it sounds like it might be from Will Rogers, but I’m not sure, that went “When your neighbor loses his job, it is a recession, and when you lose yours, it is a depression.” In Grammland, everything is obviously just fine.
Senator Gramm was an economics professor at one time, so I’m sure he knows of what he speaks. Or in the very least, he has the credentials to voice an opinion. I don’t see why he needs to apologize for or “clarify” his remarks. And I certainly don’t see why he needs to resign from the McCain campaign. What is everyone so afraid of? Does Gramm calling us a nation of whiners make us whiners or diminish us in some way? Are we so fragile that we cannot look at ourselves and possibly admit, yes, maybe we do whine a little bit now and again. Even if McCain said we were whiners, which I hasten to clarify, he did not, so what? If my mother called me a whiner. I'd still love her. I would probably still vote for her if she was running for something and I was going to vote for her before she called me a whiner, and I’m fairly confident that I came away from that experience relatively un-scarred. I do not point to that moment as the source of my personal shortcomings.
Did anyone call in to work the day after Gramm’s original remarks and beg to take a sick day because of the trauma inflicted by Gramm’s opinion? Did thousands of people fall prostrate from the verbal lashing? Hundreds? Tens,even? No, I don’t get the whole tumult. Much ado about nothing, in my mind. I wouldn’t even care if Obama’s minister called me a whiner. In fact, I don’t think I would care if McCain called me personally on the telephone and said that I and I alone was a whiner. Though if that were the case, I’d probably whine about it in a blog.
By Myron Gushlak
Senator Gramm was an economics professor at one time, so I’m sure he knows of what he speaks. Or in the very least, he has the credentials to voice an opinion. I don’t see why he needs to apologize for or “clarify” his remarks. And I certainly don’t see why he needs to resign from the McCain campaign. What is everyone so afraid of? Does Gramm calling us a nation of whiners make us whiners or diminish us in some way? Are we so fragile that we cannot look at ourselves and possibly admit, yes, maybe we do whine a little bit now and again. Even if McCain said we were whiners, which I hasten to clarify, he did not, so what? If my mother called me a whiner. I'd still love her. I would probably still vote for her if she was running for something and I was going to vote for her before she called me a whiner, and I’m fairly confident that I came away from that experience relatively un-scarred. I do not point to that moment as the source of my personal shortcomings.
Did anyone call in to work the day after Gramm’s original remarks and beg to take a sick day because of the trauma inflicted by Gramm’s opinion? Did thousands of people fall prostrate from the verbal lashing? Hundreds? Tens,even? No, I don’t get the whole tumult. Much ado about nothing, in my mind. I wouldn’t even care if Obama’s minister called me a whiner. In fact, I don’t think I would care if McCain called me personally on the telephone and said that I and I alone was a whiner. Though if that were the case, I’d probably whine about it in a blog.
By Myron Gushlak
Monday, July 21, 2008
Offshore Drilling
President George Bush was busy managing his legacy again. He is expected to overturn the executive order banning off shore drilling. The ban was originally signed, ironically enough, by his father. Wouldn’t you love to be a fly on the wall at the Bush’s, by the way? Wouldn’t you love to hear what George senior says to Mrs Bush before they turn out the lights at night about their son? Anyway, I digress. The move would be largely ceremonial because there is still a federal law on the books banning such activity. What I find interesting is the comment by Fadel Gheit, oil and gas analyst with Oppenheimer & Co. Equity Capital Markets Division who said, “If we were to drill today, realistically speaking, we should not expect a barrel of oil coming out of this new resource for three years, maybe even five years, so let's not kid ourselves."
I realize that the current state of politics in America does not allow for any vision more far reaching than the end of a political term, but has that attitude spread to the financial sector as well? Is the only motivating force the effect on the next quarter’s numbers? That was the way it was in the ‘70’s with auto makers. No long term investments were initiated that would adversely affect the short tem price of stock. The result was catastrophic for the US auto makers. They never recovered from that hit, and in fact, have duplicated that “strategy” with their heavy reliance on SUVs and small trucks this decade. Are the financial institutions of this country following the same dubious blueprint?
I’m not sure how I feel about the off shore drilling question. I could be swayed either way at this point as I gather information from both sides of the fence. I was just sidetracked by the idea that the time it will take to have an effect is the motivating force. What is five years in the large scheme of things? Five years ago, gas was $1.90 a gallon or so. Bush still had supporters, and a reasonable though modest approval rating from the American people. Offshore drilling would almost certainly be profitable. Candida Scott, an oil industry researcher at Cambridge Research Associates, said oil needs to be priced at $60 a barrel or more to justify deep-shelf drilling. With oil now selling for $145 a barrel, companies are almost assured of profiting from offshore drilling, Scott said. Shouldn’t any discussion start with that? Then an analysis of the possible environmental impacts, with a history of current drilling rigs safety. What are cost construction costs of such initiatives? Who pays? Does the federal government continue to subsidize the cost with huge tax breaks to the oil companies? These are the questions, it seems to me. The time it will take to accomplish the goal is incidental. And as to Mr. Bush’s support – haven’t we reached the point where his support for anything triggers a negative response from most Americans?
By Myron Gushlak
I realize that the current state of politics in America does not allow for any vision more far reaching than the end of a political term, but has that attitude spread to the financial sector as well? Is the only motivating force the effect on the next quarter’s numbers? That was the way it was in the ‘70’s with auto makers. No long term investments were initiated that would adversely affect the short tem price of stock. The result was catastrophic for the US auto makers. They never recovered from that hit, and in fact, have duplicated that “strategy” with their heavy reliance on SUVs and small trucks this decade. Are the financial institutions of this country following the same dubious blueprint?
I’m not sure how I feel about the off shore drilling question. I could be swayed either way at this point as I gather information from both sides of the fence. I was just sidetracked by the idea that the time it will take to have an effect is the motivating force. What is five years in the large scheme of things? Five years ago, gas was $1.90 a gallon or so. Bush still had supporters, and a reasonable though modest approval rating from the American people. Offshore drilling would almost certainly be profitable. Candida Scott, an oil industry researcher at Cambridge Research Associates, said oil needs to be priced at $60 a barrel or more to justify deep-shelf drilling. With oil now selling for $145 a barrel, companies are almost assured of profiting from offshore drilling, Scott said. Shouldn’t any discussion start with that? Then an analysis of the possible environmental impacts, with a history of current drilling rigs safety. What are cost construction costs of such initiatives? Who pays? Does the federal government continue to subsidize the cost with huge tax breaks to the oil companies? These are the questions, it seems to me. The time it will take to accomplish the goal is incidental. And as to Mr. Bush’s support – haven’t we reached the point where his support for anything triggers a negative response from most Americans?
By Myron Gushlak
Friday, June 13, 2008
Lawyers
What do you have when a lawyer is buried up to his neck in sand? You’ve probably heard that one. Or one like it. I don’t think there is any one occupation that spawns more jokes than lawyers, but what’s happening in Pakistan is ruining the bad name of lawyers everywhere. Pakistani Prime Minister Pervez Musharraf demanded the resignation of Supreme Court chief justice Iftikhar Muhammed Chaudhry last March, and when Chaudhry refused, Musharraf declared martial law putting thousands of lawyers into prison or placing them under house arrest. Aitzaz Ahsan has led a movement of protesting lawyers throughout Pakistan speaking out for the primacy of constitutional law.
The response has been extraordinary. Ahsan and Chaudhry recently drove from Islamabad to Lahore, a twenty-six hour, 150 mile trip. Tens of thousands of people lined the streets in support and the entire thing was broadcast on television. I cannot think of a more unlikely event occurring in the free world. Would attorneys in America leave golf courses in droves in support of a dethroned Supreme Court justice in this country? I can’t picture it, but I would probably watch it on tv. It is always shocking to me when people stand up for what is right. Maybe it happens all the time and I’m just unaware of it. I applaud the Pakistanis. Their country is a mere fifty-one years old, and they are fighting for its basic principles with a tenacity that is as fierce as it is surprising. Future generations of Pakistani children might not get it when they hear the answer to my original question. “Not enough sand? What does that mean, ‘not enough sand’?”
By Myron Gushlak
The response has been extraordinary. Ahsan and Chaudhry recently drove from Islamabad to Lahore, a twenty-six hour, 150 mile trip. Tens of thousands of people lined the streets in support and the entire thing was broadcast on television. I cannot think of a more unlikely event occurring in the free world. Would attorneys in America leave golf courses in droves in support of a dethroned Supreme Court justice in this country? I can’t picture it, but I would probably watch it on tv. It is always shocking to me when people stand up for what is right. Maybe it happens all the time and I’m just unaware of it. I applaud the Pakistanis. Their country is a mere fifty-one years old, and they are fighting for its basic principles with a tenacity that is as fierce as it is surprising. Future generations of Pakistani children might not get it when they hear the answer to my original question. “Not enough sand? What does that mean, ‘not enough sand’?”
By Myron Gushlak
Thursday, May 29, 2008
The Arcade Fire
Voltaire called Canada “a few acres of snow.” It is that sort of dismissive comment that has made us Canadians particularly proud of our musical heritage. Joni Mitchell, Leonard Cohen and Neil Young, all rock icons, hail from Canada. You might be asking yourself, what does Myron Gushlak know about music? and why should I be listening to an investment banker about what is any good? While the association with the formation of EMusic has given me cache in the financial world, it is probably not enough to get a job at Rolling Stone. So it was with no little skepticism that I listened to the Canadian group, “The Arcade Fire”.
Let me tell you, this man knows his music. Though not a particularly new group, (they have been around for almost five years with two best selling cd’s under their belt) they are relatively unknown outside of the Indie music scene. This is unfortunate. Not for them. They’re doing quite well thank you, but for the masses of people who have yet to hear them. Led by Win Butler and his wife Regine Chassagine they are a vibrant tour de force of music. Besides the usual drums, guitar and bass, they incorporate such un-rock-like instruments as the accordion and the harp. Their music fills a room. I was fortunate enough to see them at Radio City Music Hall in New York, so obviously they are not unknown. Their stage act seems to incorporate a small army of versatile musicians. Violins, brass, percussion, fantastic harmonies and stunning lyrics make them a banquet both audibly and visually. I did not necessarily intend this to be a commercial for the band, but once you see them, you’ll understand why I’m so enthusiastic about them. Their 2008 tour is over after 122 shows in 75 cities in 19 countries, so your best bet at seeing them is U-Tube. Check out the one where they’re all playing in an elevator.
And to make it all too sweet for words, they’re Canadian!!!
http://www.youtube.com/watch?v=NNfWC4Sgkcs
By Myron Gushlak
Let me tell you, this man knows his music. Though not a particularly new group, (they have been around for almost five years with two best selling cd’s under their belt) they are relatively unknown outside of the Indie music scene. This is unfortunate. Not for them. They’re doing quite well thank you, but for the masses of people who have yet to hear them. Led by Win Butler and his wife Regine Chassagine they are a vibrant tour de force of music. Besides the usual drums, guitar and bass, they incorporate such un-rock-like instruments as the accordion and the harp. Their music fills a room. I was fortunate enough to see them at Radio City Music Hall in New York, so obviously they are not unknown. Their stage act seems to incorporate a small army of versatile musicians. Violins, brass, percussion, fantastic harmonies and stunning lyrics make them a banquet both audibly and visually. I did not necessarily intend this to be a commercial for the band, but once you see them, you’ll understand why I’m so enthusiastic about them. Their 2008 tour is over after 122 shows in 75 cities in 19 countries, so your best bet at seeing them is U-Tube. Check out the one where they’re all playing in an elevator.
And to make it all too sweet for words, they’re Canadian!!!
http://www.youtube.com/watch?v=NNfWC4Sgkcs
By Myron Gushlak
Wednesday, May 21, 2008
Media
Two months ago I wrote about Eliot Spitzer’s highly publicized sex scandal. I did it light heartedly, because to be frank, I didn’t really care all that much . Now just this past week, another New York politician, republican congressman Vito Fossella was the headline darling after it was discovered he had a “love child” from an extra-marital affair. I don’t really care about that too much either, and no, I’m not going to try to make a joke of the family value spokesman’s fall from grace as I did with Spitzer – it’s too damn easy. No, what I want to comment on is how quickly this news story disappeared from the scrutiny of the press. I defy you to find a paragraph about Fossella anywhere.
I understand that the Chinese earthquake or the Myanmar cyclone were more newsworthy, but that still does not explain how quickly Fossella fell off the media earth. It raises interesting questions. Somebody somewhere seemed to have decided that an out of wedlock baby was far below an expensive call girl relationship on some sort of scandal rating index. Can we deduce that it was “society” that made this “ruling”? Did you and I by some sort of secret society tabulation decide that its newsworthiness was a weak step sister to Spitzer’s hooker? Was the disappearance related to internet hits? Letters to the editor? John Stewart or Letterman references? I find it more fascinating than the actual scandals how it is decided what is reported and how, and as in this case, for how long.
What is said about Fossella is far less interesting to me than who makes the decision to say anything or to not say anything. I picture a harried Perry White type of editor checking an Einsteinian formula to determine how many inches needs be devoted to: congressman/sex scandal/New York/Blue state/ Italian American/Republican/DUI.
If e equals excess, well, never mind, you get the point. If not deciding ultimately becomes a decision, then choosing not to comment becomes a very loud editorial comment. I wish Marshall McCluhan was still alive. I’d pay great sums of money to hear his take on media in the 21st century.
By Myron Gushlak
I understand that the Chinese earthquake or the Myanmar cyclone were more newsworthy, but that still does not explain how quickly Fossella fell off the media earth. It raises interesting questions. Somebody somewhere seemed to have decided that an out of wedlock baby was far below an expensive call girl relationship on some sort of scandal rating index. Can we deduce that it was “society” that made this “ruling”? Did you and I by some sort of secret society tabulation decide that its newsworthiness was a weak step sister to Spitzer’s hooker? Was the disappearance related to internet hits? Letters to the editor? John Stewart or Letterman references? I find it more fascinating than the actual scandals how it is decided what is reported and how, and as in this case, for how long.
What is said about Fossella is far less interesting to me than who makes the decision to say anything or to not say anything. I picture a harried Perry White type of editor checking an Einsteinian formula to determine how many inches needs be devoted to: congressman/sex scandal/New York/Blue state/ Italian American/Republican/DUI.
If e equals excess, well, never mind, you get the point. If not deciding ultimately becomes a decision, then choosing not to comment becomes a very loud editorial comment. I wish Marshall McCluhan was still alive. I’d pay great sums of money to hear his take on media in the 21st century.
By Myron Gushlak
Tuesday, May 6, 2008
Helping the Economy
The name of Milton Friedman is probably heard more today than when he was alive. The New York Times called him the godfather of the credo that “prosperity springs from markets free of all government management.” The investment banker Myron Gushlak captures the essence of Friedman when he paraphrases, “If the government ran the Sahara desert, we’d run out of sand in five years.” In these days of public clamoring for government intervention into the economy, Friedman stands alone, metaphorically, of course; he died in 2006. His principles, once embraced by Ronald Reagan, have fallen into disfavor.
The wonderful novel, White Man’s Grave, comes to mind every time I hear someone stand and call for intervention into the free market system. With apologies to the author, Richard Dooling, part of that novel is about a corporate lawyer who in gratitude to an African village for helping to locate his missing Peace Corps son, sends over tons of grain (I think it was rice, but I don’t remember) to help feed the starving inhabitants. Half of the “gift” went immediately to corrupt village officials. The remainder caused a flood in the grain market, dropping the price precipitously, and resulted in the bankruptcy of the few legitimate farmers in the area. The lawyer, back home in Chicago and unaware of the negative consequences of his generosity, was smugly self congratulatory with his largesse.
Whether or not to help is a fundamental human dilemma. When your child falls, should you help him up or let him struggle to his feet on his own? The economy has fallen. I watch it struggling, unsure of what might be the best thing to do. I wish I had a little more faith that our leaders had a better idea than I.
By Myron Gushlak
The wonderful novel, White Man’s Grave, comes to mind every time I hear someone stand and call for intervention into the free market system. With apologies to the author, Richard Dooling, part of that novel is about a corporate lawyer who in gratitude to an African village for helping to locate his missing Peace Corps son, sends over tons of grain (I think it was rice, but I don’t remember) to help feed the starving inhabitants. Half of the “gift” went immediately to corrupt village officials. The remainder caused a flood in the grain market, dropping the price precipitously, and resulted in the bankruptcy of the few legitimate farmers in the area. The lawyer, back home in Chicago and unaware of the negative consequences of his generosity, was smugly self congratulatory with his largesse.
Whether or not to help is a fundamental human dilemma. When your child falls, should you help him up or let him struggle to his feet on his own? The economy has fallen. I watch it struggling, unsure of what might be the best thing to do. I wish I had a little more faith that our leaders had a better idea than I.
By Myron Gushlak
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