MasterPo says: This blog is about topics and issues that are of importance to me. I am not one of the countless blogging lemmings that are tripping over each other scurrying down the hill and off the cliff of blogging oblivion trying to write the greatest blog on the latest topic de'jour. Your comments are welcome.

May 27, 2010

Y2K Has NOTHING To Do With the Coming Stock Market and Social Crash!

Throw MasterPo in the bus – or under the bus, it doesn’t matter – along with the rest of the doom&gloomers.

MasterPo does believe there is a major financial markets crash coming in the near future. And an accompanying social upheaval.

How much?

MasterPo isn’t going to predict. The usual talking heads and other pundits can handle that level of minor detail. And it is minor because it won’t matter how much or when/where it will happen. Just that it will happen and will be severe.

This is one case MasterPo hopes to be wrong. But MasterPo’s gut is saying otherwise.

With all that said, the rest of this article is to the nay-sayers. The ones that say people like MasterPo are just fear mongering and spreading unrest.

These people often cite the Y2K hurdle as an example of similar fear mongering and nothing happened. Y2K came and went with little more than a hangover from the party.

This is a false comparison!

Y2K was a very tangible problem with a very tangible solution that everyone involved knew – Fix the software. And it had a clear, unquestionable due date – Fix it by December 31, 1999.

MasterPo is an IT worker and was heavily involved in Y2K testing and fixing for years the date.
So where thousands of other IT (and non-IT) workers through out private and government entities.
With Y2K people knew exactly what the problem was, how to find it, how to fix it, and how to confirm the fix was correct. Even if not all the bugs were found by midnight 1999, any problems that surfaced in the days/weeks/months after the flip of the calendar were relatively easy to find and repair.

There definitely was great potential for problems. But the fact that so few issue with Y2K did come up afterwards is a testament to how much effort beforehand was put in to avoid the problem in the first place!

Now contrast that with the current state of the financial markets, economy, and government’s policy on the subject.

We currently have an administration printing money like water from the tap. That just can’t last forever. Yes, physically they can print money until the cows come home. But sooner or later – likely sooner – world financial markets will get worried and take action. As they appear to be doing now.

The Healthcare bill will raise taxes tremendously! That, along with the promise of allowing the Bush tax cuts to expire at the end of 2010, and the effort to pass Cap&Trade (which, by President Obama’s own words will quote “necessarily cause energy costs to sky rocket”) will be like a sledgehammer on an egg shell.

Major companies like AT&T, Verizon, 3M and Caterpillar have already said these actions will cost them billions$$ – and neither the President or Congress seems to care!

Meanwhile we are being told we have turned the corner and are coming out of the worst economy since the great one of 1929. Never mind that no jobs are being created and wages are stagnant at best. Unemployment is 9.9% 9 (as of writing this) and the U6 rate is 18%!!

All hale the great job-less recovery!

Be honest: If that is true we are coming out of such a deeeeeeep economic funk does anyone really think raising taxes so much and so soon is a good thing for a weak economy?

Then there’s the world…

Europe seems to be collapsing after the great EU experiment has failed. And the European answer? Have one bankrupt country guarantee the debt of another bankrupt country!!

Policies from the Twilight Zone.

You’ve seen the rioting in Greece. No need to rehash that coverage.

All this and yet there is still a cadre of pundits saying it’s no different than other big scares like Y2K that just fizzled into nothing.

This current mess is nothing like Y2K. The opinions of the cause, the opinions of the cure, even the opinions of whether or not it is in fact a crisis prove by the sheer number of opinions (including MasterPo’s) any hope of a focused, surgical-like plan to resolve the problems (if such a resolution even exists). Which is also unlike Y2K in that for Y2K there was no question (at least among IT and systems people) the problem was real. But now even among financial “experts” and politicians there is great differences of opinion (at least publically) whether or not there even is a crisis, much less how that crisis is likely to present itself and when.

It is for these reasons that MasterPo is now confident to say this simply can not end well.

As in previous articles on this subject, MasterPo will not speculate details. Anything and everything across the spectrum is a possibility.

But the apex of the crisis is coming and coming soon.

How will you deal with it?

May 23, 2010

Big Businesses Are Employers Too!

There is no doubt that, collectively, small and medium size businesses employ more people than large/big businesses. That is simple common sense (which, as the vaunted Bernard “Lefty” Kreh, et al says “Common sense isn’t too common these days”). There are far more small businesses than large businesses, just like there are far more small fish in the sea than really big ones.

But that doesn’t make the big fish any less important to the health of the ocean.In terms of business and employment, with all the rhetoric lately about helping small businesses and small businesses being the “engine” of the economy to spur job growth big business has been ignored. Big business has been put into the same category of thinking as “the rich” and taxation – i.e. doesn’t matter what happens to “the rich” they will always be “rich” to tax the hell out of them.

Same with big business.The thinking is that big businesses will always be strong employers so it doesn’t matter what the environment is like for them. Small business need help more.

And that just is not true.

While the sheer number of people employed by smaller business is greater than larger business for the reasons listed above, the reality is that when you compare as a group employees of small businesses and big businesses those that work for big business generally get paid more, have better pay and benefits (health, insurance, retirement, vacation etc) than those working at small business. This is again just common sense. A larger business is larger because they have more sales, more income, more profit and can therefore better afford to offer employees more in the way of compensation than a small business.

MasterPo isn’t going to argue small vs. large. Over the course of MasterPo’s [so-called] career MasterPo has worked for both small (sometimes micro!) business and large/huge businesses. There were advantages and disadvantages to both. But the reality was that on the whole the larger businesses offered greater options and possibilities for an employee than the smaller ones.

So while small business may be the first line in the economy for generating new jobs as a whole, it is the bigger businesses that advance the standard of living and the value of work by offering the better compensation and bennies (as a whole).

No country every achieved economic strength by thinking small.

May 18, 2010

If I Had A Million

MasterPo read recently, in response to an article on Yahoo Finance’s Tech Ticker regarding the housing industry, a poster saying quote:

The only real way to resurrect the vital residential construction industry is to take from the rich Jabba's (and there's a hell of alot of them these days and they're five times as rich as they where 50 years ago in inflation adjusted terms), and give to the bottom 90% in one way or another.”

This poster isn’t saying anything totally new. Indeed, President Obama himself has stated his policy is to take from those who have succeeded and give it to others:

The morals and ethics of taking the hard earned money from Peter and giving it to Paul is shocking. But not without historical precedence in terms of the concept at least (as well as the attempt – all failed!).

Nevertheless, regardless of the moral/ethical discussion there is a hard and cold truth about people and money:

The overwhelming vast majority of people who never had money and are suddenly given a large sum (defined however you want) generally tend to squander it!

If you do the research on lottery winners, for example, you will find that a H-U-G-E number (more than half) that have won $1 million or more are bankrupt, or at least back to where they started, in 5 years or less. They ended up spending it on truly stupid and frivolous things.

One can forgive (maybe) some bad investments or poor business dealings. But most of these people blew the money on:

- New cars for them and their friends.
- Trips for them and their friends to Mexico and Bahamas.
- Junkets to Las Vegas.
- Rolexes for everyone!
- Fancy shmancy dinners at the highest end eateries.

Now MasterPo doesn’t have a problem with any of these things per se. And surely if MasterPo won a big lottery pot there would be a little self-indulgences to be enjoyed (MasterPo isn’t a complete stick-in-the-mud). It’s their money. They can spend it (or waste it) as they wish.

And that’s the point.

The Yahoo Finance user (as well as other who parrot the same concept) fall into the same trap as all social engineers especially in government positions: Throw money at the problem and that will magically fix it.

MasterPo guarantees that if the U.S. government issued $1,000,000 checks to people making under some arbitrary level within a year at least half those people would be impoverished again.
It’s one thing to give money to someone who used to have it and lost it somehow. Hopefully they learned their lesson (if the loss was entirely their own fault). But it’s totally another to give it blindly to people who never had it before and expect them to act responsibly.

Money given and money earned are valued totally differently.

“Free” money is worthless.
Earned money is precious.

May 14, 2010

Austerity Indeed.

As of writing this Greece has been “bailed out”.



Just kicking the preverbal can down the preverbal road a little bit more.

However, supposedly, this “bail out” comes complete with a laundry list of austere changes Greece must make. Not sure what the punishment is if Greece fails to implement these austere changes. It isn’t like the bail out money will be taken back nor will the world not step up again to help Greece (and they will need help again, you can bank on that!). So the “bail out” is really not much more than a gift with a prayer attached.

MasterPo isn’t going to delve too much into this so-called bailout. That’s being beaten up on too many other blogs. Nothing to see here. Move along.

But this does lead to our own shores and our own gargantuan national debt ($13 TRILLION as of writing this!).

In true liberal style the answers being proposed are obvious: Raise taxes!

That was so obvious you can boil a 3 minute egg by it.

But what about our “austere” cuts in public services?

The usual suspects will be put on the chopping block:

Road/bridge repair
Military (including boarder patrol and customs)

But how about:

Food stamps?
Saving the spotted owl?
Turtle tunnels?

And so on.

These are the kinds expenditures that are bankrupting the country, not police/fire/ambulance/teachers/military.

Are we now to say that police protection, emergency medical support and educating our children are “luxuries”?!

In Heaven’s name: What is the function of a organized society if not to provide protection for its citizens, infrastructure development and repair, and education for the next generation?

Do society’s form just of the purpose of saving whales and seals?
Providing endless payments to those who refuse to do at least some level of work for the society?

To be clear (as our President says), all these are pleasant concepts that we might be able to indulge in if we could afford them. But now more and more we can’t anymore. Just like your own spending, when you have more costs than income something gets cut.

Do you cut your food or your Xbox?
Do you cut your electric usage or your bar tab?
Do you cut your medicines or your lattes?

If any of MasterPo’s readers can point to an example of a successful society in human history organized around these principles please post it.

Until then – buy gold.

May 11, 2010

Gold: All That Glitters…

Nations come and go.
But gold remains.

That's a fact.

The gold minted by the Aztecs and Babylonians (among others) thousands of years ago is still highly prized and valuable today. Even if all the art was melted down the base metal still has value.

MasterPo isn't going to speculate one way or another on the investment angle of gold ownership.

Certainly the recent rise in gold (and silver) is astonishing, even when you do take into account that gold typically does rise during Democrat administrations and falls (or at least remains more or less level) during Republican administrations.

There are plenty of websites and blogs that discuss why you should own (physically) some gold (or silver or platinum) if you want to read them.

Whether we are in fact in a "gold bubble" is the topic de jure` on most financial sites and news shows. Probably we are. MasterPo isn't necessarily a gold bug. Speculating on commodities is a whole other thing.

But the fact is people still see gold as a safe place in times of economic and political uncertainty.

And Heaven knows we have no lack of that these days!

In a totally collapsed world, a true Mad Max/Road Warrior society, gold probably wouldn't do you much good. But MasterPo doesn't see that as a likely happening. Social and even civil unrest brought on by economic strife is much more a chance, though certainly also not definite (as of writing this anyway).

Are we in a gold bubble? Time will tell.

Yet even if we are, there are much worse things than owning overpriced gold.

May 8, 2010

Anyone Have Change for a $20??

Futurists may finally be correct. At least in part.

In that we are living in a “cashless” society. At least more and more.

This was penitently dramatized for MasterPo recently when MasterPo needed to get change for a $20. A pair of $10’s would have been great, four $5’s good too, or any combination thereof.

MasterPo asked over a dozen people for change and no one had the cash!

(Nor does MasterPo think it’s because the people asked just didn’t have money period.)

MasterPo has to admit that he too is using credit and debit to pay for even small, routine transactions more and more then with cash. It is easier AND more convenient than always having to run to an ATM for cash. And the record keeping is easier too.

Cash won’t die. Not any time soon.

But the ol’ greenback may already be going the way of the buggy whip.

MasterPo wonders: Will this change the way “cash&carry” works?

Something to ponder.

May 5, 2010

To Follow in Your Father's Foot Steps?

One of the many responsibilities of a parent is to guide your children as to their path in life. While it's true that ultimately children will grow to find their own way in life, a parent can't simply say "I birthed them so now sink or swim, it's up to them." At least not caring parents.

Work/job/career however you wish to put it is even more vital today than ever before. And choosing a career path is even harder then ever before because everything that used to be considered solid and certain (if not secure) seems to be turned on its side.

It's easy, even traditional, for parents to encourage or even expect their kids to go into the same kind of work they have done (and maybe even their parents have done). Especially in the professional field, who wouldn't like to say their kid isn't also following in their career path?

But is that really such a great idea?

If you are an auto worker, do you really see a great employment future for the industry?
If you are a coal miner, do you really see a great employment future for the industry?
And yes, even if you are a doctor do you really see a great employment future for the industry?

There may always be a job for a given field of work. But is it something you would bank your future on?

The old saying "It was good enough for me, it's good enough for you" just isn't good enough any more!

While no one can see the future (who would ever have thought aspiring to be a doctor was a highly risky profession career wise?!) in MasterPo's opinion it is the function of a parent provide such guidance and not leave it to pure chance.

Follow in your father's (or mother's) foot steps can lead you right off a cliff too.

May 1, 2010

Was Rush Right?

For much of this year (and the latter part of last year) MasterPo has discussed the possibility of a major American economic collapse. Not a bump or a burp or a stumble but a full on collapse that would make the Great Depression look like the morning after some wild fraternity party.

MasterPo is not alone in this concern.

A recent Foxnews/Opinion Dynamics poll shows a whopping 75% of a Americans believe the U.S. economy could collapse! Although it does need to be kept in mind the definition of "collapse" may mean different things to different people. Nevertheless, by any definition, that many people thinking the nation is near falling off the proverbial cliff should alarm anyone, if for no other reason than often peoples' beliefs can make an idea into a reality.

On this blog MasterPo has frequently discussed this possibility and pontificated over possible measures individuals can do to try to make some kind of preparation for it. MasterPo is not expecting a collapse into "Road Warrior" living (though anything is possible, wouldn't be the first time in human history a major civilization fell apart like that).

But in the interests of fairness and rational thinking it has to be explored the real likelihood of something horrific happening. Anything is possible but just how likely is it? You can't find any decent consensus opinion from the supposed 'financial experts' (like that's anything new!). Depending on the day they will say the market is set for new record highs, or, the bottom has fallen out. And usually these comments are made when the reality is apparent even to a blind man. Thank you Mr. Obvious for nothing.

So what does all this have to do with Rush Limbaugh?

MasterPo has long been a listener (and watcher when on TV) of Rush Limbaugh. Never hid that.

Why should MasterPo?

Rush says he is "proven" to be correct 99.6% of the time. While MasterPo has not done the statistical calculations to confirm that claim, MasterPo does agree with ol' Rush at least 99% of the time.

Rush (along with Beck, Hannity, Levin and some others) have been sounding the alarm for months about a coming economic Armageddon. With a national debt about to pass $13 TRILLION (as of writing this) and still climbing, unemployment hovering at 10% for months, interest rates set to rise, and Washington seemingly obliviously happy to heap more and more taxes on an already crippled economy it isn't hard to make such a case.

Rush and the others don't hold themselves out of financial gurus or tea leaf readers, rarely giving any specific financial advise. But all have been saying to "prepare" for the coming collapse (though they don't say exactly how they recommend to go about this preparation).

But, while the evidence as listed above is pretty damming to the idea that happy days are here again, there is that .4% error factor to contend with.

Specifically, MasterPo listened to Rush pretty steadily all throughout the 90's and the Clinton Presidency years. MasterPo recalls how Rush railed against Clinton almost daily for what Rush termed quote "The two biggest peace-time tax increased in American history!" Many people also don't remember that President Clinton passed a sweeping EPA legislation package that included many mandates for cleaner air and pollution controls, yet like President Obama claimed it would create thousands upon thousands of new jobs in the pollution control industry.

Rush too railed against that for heaping yet more burdens on American business, hurting not helping jobs and American industrial competitiveness around the world. After all, how many people do you know started their career in the "pollution control" industry in the 90's?

And here is where that .4% error margin might be coming into play.

While MasterPo has no doubts whatsoever that these taxes and regulations did cost Americans a lot of money (directly and indirectly) and did little to help promote American industry, goods and services world wide, from MasterPo's perspective in MasterPo's little corner of the world life wasn't so bad in the 90's. In fact, it was pretty darn good!

In the 90's MasterPo always had a job at good pay.
MasterPo always was able to find a new job when necessary and usually at higher pay.
MasterPo's investments did well along with the stock market overall (up until the tech/dot com bubble at least).

MasterPo does not doubt for a moment Clinton's taxes and regulation did have some negative impacts on the country (MasterPo's personal taxes went up too!). But it's impossible to say what would have happened without those taxes and regulations.

Overall however it seemed MasterPo and the rest of America did quite well in the 90's in spite (not because!) of the Clinton tax increases, regulation increases, etc.

And now President Obama is also enacting huge taxes, regulations etc. and Rush is again railing against those. Not a surprise. And truth be told, Rush et al do make some extremely good arguments as to why these things will seriously hurt America.

So the question now is:

How can Rush and we the listeners be so sure that President Obama's taxes, regulations etc will be all that destructive to the nation when he (and probably others at the time) said pretty much the same things about President Clinton's taxes and policies yet the 90's turned out to be pretty good?
MasterPo is not questioning the data (the evidence of the state of the nation and economic is clear for anyone willing to listen more than 10 seconds). And there are no historical precedence's for the success of enacting such taxation and sweeping social legislation at a time of weak economic status and highly unstable outlooks nationally and internationally (but there is ample evidence of the failure of such approaches!).

The issue at hand is: Is the conclusion of Rush Limbaugh et al now correct when he doesn't seem to have been before in the 90's under similar political circumstances? To put it another way, why should Rush be taken at face value this time when his prediction of doom and gloom in the 90's and Clinton era didn't pan out that way?

Predictions of great change are rarely as extreme as proponents always portray them as being (either bad or good changes). At the risk of sounding wishy-washy, the reality of events is usually in between the two extremes, though a clear tilt towards one side or the other is usually (rarely right in the middle).

This article is not about criticizing Rush Limbaugh or other conservative commentators. As MasterPo has discussed in prior articles, the quest is to find a clearer picture of what the future holds without using a crystal ball. Perhaps there is no clear picture of the future until you're standing on it. But by then preparation is too late.

The quest continues…