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Wednesday, January 02, 2008

New Directions

SEARCH BLOG: CHANGE

(2:00 am the following morning... just before going to bed) I'm recovering from clearing out 10" of wet snow from our driveway and front walk. I worked up quite a sweat, but for a guy in his 60s, I handled it pretty well. Hard work has never been a problem or a threat to me. Besides, judicious use of Advil prevents regrets later.

My neighbor was kind enough to help with a portion of it, but the job still took about 2 hours with my 20+ year old snow blower. Now everything is turning rock hard as the temperature heads toward 20° F tonight and then 10° by tomorrow night. It appears that the missing Arctic ice has been found in Michigan.

The street out front still hasn't been cleared as most city crews were off for the holiday and even major roads were left untouched by plows. For most people, this was a good day for a storm because they had time to clear the snow and not worry about going to work.

I suspect that I will find a large mound of street snow and ice at the end of my driveway sometime tomorrow once the city plows make it this far.
I wrote sometime back that I might shut down my small business because the state could not get it's act together regarding the service tax that was signed into law [and then repealed just as it was to go into effect]. Given that prospect looming along with a Michigan economy that was getting as cold as the outdoors, I decided this was a good time to cash in my chips and retire. I was fortunate to find a buyer for the business and will spend awhile helping with the transition. Then, it will be time to focus on retirement.

I started working when I was 12. My father had a small carpet and furniture cleaning business, so I helped out after school and on weekends. Lifting all of those wet rugs and heavy furniture for the next 9 years built me up physically and convinced me that I would be the first in my family to graduate from college. The experience and the decision have both served me well.
But it's been more than 50 years since I began that first job and I don't feel at all guilty about changing my lifestyle and spending some time not working.
Perhaps I'm mistaken, but I don't think many 12-year olds have the opportunity to experience that level of hard work these days unless they live on a farm or a ranch. Sure, paper routes are okay, but even those seem to be taken over by adults in many areas.
Kids are "protected" from hard physical work. Instead, they participate in sports (I wrestled) or in some school activity or just "hang."
Hard physical work isn't necessarily going to motivate a child to go to college or start their own business or learn a skill or craft.
But I sense that there are far too many children who really have no sense of what work is and what alternative forms it might take. Consequently, there are far too many who are not ready for the working world when their time comes.

And from what I can see, there are far fewer opportunities for children to experience real work and understand the impact of their decisions to leave school or "hang" instead of expending effort to improve themselves.
All I know is that my early exposure to hard work did not hurt me physically, emotionally, mentally or professionally... but a failure to experience hard work might have held me back.
Maybe I'll get restless and have to get involved in something again. But for now, I'm looking forward to this change.
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There is always an easy solution to every human problem—neat, plausible, and wrong.
Henry Louis Mencken (1880–1956)
“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
It was beautiful and simple, as truly great swindles are.
- O. Henry
... The Government is on course for an embarrassing showdown with the European Union, business groups and environmental charities after refusing to guarantee that billions of pounds of revenue it stands to earn from carbon-permit trading will be spent on combating climate change.
The Independent (UK)

Tracking Interest Rates

Tracking Interest Rates

FEDERAL RESERVE & HOUSING

SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

February 3, 2006 Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
November 28, 2007 FED VICE CHAIRMAN DONALD KOHN
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."
http://www.reuters.com/

December 11, 2007 Somehow the Fed misses the obvious.
fed_rate_moves_425_small.gif
[Image from: CNNMoney.com]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's Economy.com. "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.”
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

About Me

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)