Archive for December, 2009

Welcome New Decade

Posted: December 31, 2009 in Technology and Business
My mom taught me if I can’t say anything nice about a decade, don’t say anything at all.
 
That about sums up the 00’s.
 
With two HUGE exceptions: 
 
My daughter was born in the 00’s… and she is the BEST thing ever. 
 
And, whatever I did during the decade, I believe I did it with passion, integrity, and courage.
 
Goodbye 00’s… and welcome 10’s… may you be a decade full of laughter and happiness for the entire world. 
 
We could all use one.
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Healthcare Gone Haywire

Posted: December 18, 2009 in Technology and Business
When Obama first started talking about a health plan, it was to use the government’s buying power — since the government is already a massively large health customer — to lower the high cost of health.
 
That sounded like good common sense to me.
 
Fast forward to the details about the health plan being debated now.
 
That sounds like good common sense just went out the window.
 
Worse, it sounds nothing like what was originally proposed.  That is very discouraging to me.

Missed It By That Much

Posted: December 13, 2009 in Technology and Business
I remember my first jaw-dropping Chinese stat many years back:  That China had more cell phones than the U.S. had people.  That was my signal that China was going to be the future economic force.

I just read another such stat: 

Two years ago, researcher J.D. Power predicted China would pass the U.S. in auto sales in 2025.

Scratch that… they’re doing it this year… estimated 12.7 million cars and trucks will be sold in China in 2009 compared to 10.3 million in the U.S.

That’s a helluva research miss, eh?

Like Oil and Water… ?

Posted: December 10, 2009 in Technology and Business
Not sure anyone noticed but oil has gotten whacked over the last few weeks (actually touched the 60’s today)… while the Dow has hung in there… meaning the weird relationship between the price of oil and the Dow has gotten, well, a little less weird.
 
I may be the only one in the country, but I think lower oil prices means people have more money to spend… and that fuels corporate earnings (not just for the U.S. but abroad, too, since we’re the world’s best customer)… and that drives stock prices higher.

I’ve said it before and I’ll say it again:  Lots of measures are important… but nothing trumps the price of oil… it affects everything… for example, with short-term oil coming down, watch consumer sentiment magically improve in the following month or two.

The U.S. dollar has been getting hammered against the euro this year.
 
Some people say this has to do with rising oil prices… which I don’t get, since oil isn’t moving on any kind of demand fundamentals.
 
Smarter people say it has to be with the growth story… which I don’t get, either, since the real growth story is in emerging markets, not in the U.S. or Europe.
 
Even smarter people say this has to do with America’s out-of-control debt… which I also don’t get… at least measuring external debt as a percentage of GDP… here’s the pertinent Top 20 rankings in the world:
 
External Debt As A Percentage of GDP:
#20:    U.S.              at       94%
#14:    Germany      at      178%
#10:    Hong Kong  at      206% (Not a euro country but a lot of Chinese business gets transacted there)
  #8:    France         at      236%
  #3:    U.K.             at      408% (Not a euro country but in the thick of Europe nonetheless)
  #1:    Ireland        at    1,267%
 
So… why should the euro be stronger than the dollar?
 
It shouldn’t be.

Here was yesterday’s AIG headline:

     "AIG reduces government borrowings by $25 billion"

Sounds great, eh?

Not so fast. 

AIG isn’t  paying us back (like a lot of other banks have/are).  Rather, they are spinning off two units and preparing to take them public. 

For this, we (the U.S. taxpayer) gets $25 billion in preferred stock.

Here’s the problem:  We already own 80% of AIG… which means we already own 80% of these two spin-offs… but, percentage-wise, AIG is giving us (the U.S. taxpayer) far less than our actual ownership stake.

I mentioned this once before here.  Go figure this quote:

     "AIG continues to make good on its commitment to pay the American people back," AIG CEO Robert Benmosche said in a statement.

Bull shit.  Is anyone watching this guy

P.S.  How does this math work?!?

     "As of Sept. 30, AIG had tapped $122.31 billion of the aid package and owed the government $85.66 billion in loans. Tuesday’s separation of AIA and Alico would reduce the outstanding aid package to $97.31 billion and the amount owed in loans to $60.66 billion."

Looks like they’re reducing what they owe by $50 billion, not $25 billion… !