Excessive Spending - Investment Exceeds Earnings

The American Petroleum Institute has run a full page ad showing a graph that compares oil industry investment versus "earnings" since 1992.

This ad shows that investments exceeded "earnings" in most years... except for 2004. 2005 is not shown.

The basic question here is what is meant by the term "earnings". Is that gross revenue, gross profit, net profit... what? Most people may not know that the term means:

The net income of a company during a specific period. Generally, but not necessarily, referring to after-tax income.

Notes:

Earnings are perhaps the single most studied number in a company's financial statements. They show how profitable a company is.

See also: Bottom Line, Core Earnings, Earnings Estimate, Earnings Surprises, EBITDA, Earnings Per Share (EPS), Net Income

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So, it is not surprising that "earnings" are less than investment. In fact, it is astounding that "earnings" exceed investment. The automobile industry invests billions of dollars to earn millions. So the oil industry seems pretty lucrative by comparison.

Exxon's return on investment (ROI) is about 32%; GM and Ford are about 0%; Toyota is about 5-1/4%. THAT should put things into a little better perspective. (Source: www.money.cnn.com).

ROI=((Benefits-Costs)/Costs)*100%
for example: Earnings of 500, Cost of 5000 gives a 10% return

Excessive Spending - Cost of Gasoline

Back on September 21, 2005 (and a few other times) I wrote about the issue of the state sales tax on gasoline and how the State of Michigan really had no incentive to see the price of gasoline decrease.

In The Detroit News today, there was an editorial about the subject:

Fuel prices rise and fall according to supply and demand. There's not a shred of evidence that price increases reflect anything other than that age-old dynamic.

But if state lawmakers want to give Michigan motorists a break, they have the power to do so by suspending, modifying or eliminating the state sales tax on gasoline.

We're generally not in favor of tinkering with taxes in reaction to commodity prices because the chase becomes an endless game. But if lawmakers are worried, they have options beyond petitioning Washington, a tinker-toy scheme proposed by the governor.

The femeral artery is cut... get the iodine!

Come on guys, nothing has changed since September when I wrote:

Let's see, here's the math:

• 15 gallons @ $3.00 per gallon is $45.00
• eliminate the sales tax and save $2.70
• eliminate the poor signal progression and make that 15-gallon purchase a 12 gallon purchase for the same distance traveled and save $9.00

Okay, let's not solve the problem; let's cut tax revenue for schools.

Gosh, and I thought our government didn't understand.

Okay, maybe it doesn't....

Happy Easter

Christians will celebrate the resurrection of Jesus from the dead today. Some truly believe that; others believe something happened, but they are not sure; still others don't really believe Jesus physically rose from the dead, but his spirit lives on in his followers. Despite the differences, the impact of Jesus' life continues to be profound for both believers and non-believers.

Easter may be secularized with chocolate bunnies and egg hunts, but the message is clear: the human spirit, the soul, is unbounded by death. Love does not die, but lives on.

Happy Passover

My youngest son is celebrating his first Passover Seder dinner with the family of his girl friend.

He was raised in a non-religious family but with many of the Christian traditions, so this is a new experience for him. I hope all goes well. He read up on the Passover so that he could be a good guest and show respect. I'm proud of his effort.

Ethnic Divisiveness - Power or Prayer?

Several times, I have commented that Islam (as practiced in some countries) is not too dissimilar from Christianity as practiced in Europe about 700 years ago. My son made the same observation recently. It's as if there is a natural progression regarding mass belief systems:

1. Revelation - a "new truth" is revealed to a "prophet"
   
2. Conversion - new followers spread the "new truth"
   
3. Persecution - existing powers are threatened by the growth of the "new truth" and attempt to eliminate the followers causing the followers to rally around their "new truth"
   
4. Adoption - the old powers reach an accommodation with the "new truth" by adopting it and adapting it
   
5. Growth - rapid expansion of the "new truth"; however, many followers are in name only
   
6. Corruption - the "new truth" becomes secularized and gains ascendency in political power which it focuses on rather than the original message of the "new truth"
7. Regrouping - the followers of the "new truth" become so fragmented that political power is disrupted and lost, forcing the followers back to a formalized approximation of the original followers
8. Secularization - the "new truth" becomes the "tradition" of the secular society, but without most of the original energy or importance to the followers; there is a "place" for the "new truth" in ritualized gatherings, but the secular society is the focus of the followers.
   

Islam is somewhere between stage 6 and 7. Christianity is well into stage 8. Judaism achieved a much more restricted period of power and a small geography because it was sandwiched between the Egyptians and Romans. It has jumped back and forth between stages 3 and 8 and that may be why it has endured as both a faith and social structure so long.

Ethnic Divisiveness - Law or Lawless?

Thousands demonstrate in support of ... I'm not sure.

From GIOVANNA DELL'ORTO, Associated Press Writer

"People of the world, we have come to say this is our moment," said Rev. James Orange of the Georgia Coalition for the People's Agenda in Atlanta, where police estimated that at least 50,000 people marched Monday morning.

At the Mississippi Capitol, 500 demonstrators sang "We Shall Overcome" in Spanish. In Pittsburgh, protesters gathered outside Sen. Arlen Specter (news, bio, voting record)'s office to make their voices heard as Congress considers immigration reforms.

Groups in North Carolina and Dallas called for an economic boycott by immigrants to show their financial impact.

So what's this about?

• Unfair immigration laws that make immigrants actually go through a legal process?
• Borders... you know, their existence?
• Deportations for those who don't follow immigration law?
• Not having the right to vote because you're an illegal alien?
• Not being eligible for free social services?
  

Does this apply to Canadians? (of course not)

West Wing Ending

Now that the final season of West Wing is drawing to a close, do you wonder if NBC will attempt a spin-off?

How about Southwest Wing?

Excessive Spending - The Big Picture

Reserve Chairman, Ben Bernanke, is focusing on the big picture as he raising the prime interest rates. That, despite the concerns that some have expressed.

Well, Mr. Chairman, sometimes the economy that is growing too fast which you see in the "big picture"

















Isn't what you see on closer inspection.

Excessive Spending - Down and Out

In response to yesterday's post regarding interest rates and the economy in Michigan, one of my friends suggested reading this article.

In response to that article, I suggest that all read this article.

As I have told my sons, "Nothing is ever as simple as it first seems."

When the rich are regrouping, imaging what is happening to the rest of the people in the area. Mr. Bernanke? Mr. Poole?

Letter sent to the Federal Reserve

As a 33-year resident of Michigan, I have seen economic cycles come and go. This one is different. There is a structural dislocation occurring in Michigan (and probably Ohio) that is being exacerbated by the actions of the Federal Reserve.

Ben Bernanke is focusing on how he has to take action to keep inflation in check. Rather than raise the prime rate and make everything more expensive here, Michigan businesses need to have a lowered borrowing rate. It's time to declare Michigan a disaster area and treated as such by the Federal Reserve.

One size does not fit all. I suggest that the members of the board re-acquaint themselves with the basic economic data of Michigan before dismissing this suggestion. Inflation is not the concern here; survival is.

Fake Fossil Used by Evolutionists

The New York Times reported that a fish fossil has been discovered that is supposed to be the long- sought "missing link" between sea and land animals.

Well....

It's obvious that this so-called "fossil" is a fake. These so-called "scientists" took a crocodile head and front legs and stuck them on the body of a catfish and called it a "missing link." Well... anybody can do that. A bunch of kids I knew once made a "pig that flew" by sticking a pig's head on a goose's body. Man, that didn't fly!

It's time these liberal, commie newspapers stopped trying to undermine the traditional values of our society. We need to repeal the 1st Amendment! It's time we have Biblical Law!!! Stone the bastards.

Excessive Spending - One Size Fits All

The Federal Reserve is a good example of the government's one-size-fits-all approach to governing:

• All women's shoes must be size 6 narrow; all men's size 10 EEEE
• All infections must be treated with aspirin and penicillin; all cuts require stitches
• All children must take music education; all children must play the piano
• All sectors of the economy must be treated as equal; the prime lending rate must be the same, nationally.

Michigan Unemployment Rate (Seasonally Adjusted)
February 2006	6.6 %

Florida unemployment rate of 3.3 percent lowest in 30 years (fastest job growth, too)
NJOnline ^ | Jan. 20, 2006 | AP

National Unemployment Rate:
4.8% in Feb 2006

Michigan:

• buy womens' size 6 narrow and mens' size 10 EEEE shoes in bulk to get better prices;
• take two aspirins and get the wounded employment stitched up;
  
• have all of your children play happy music on paper piano keys (no real pianos needed); and
  
• get in line to help fight an overheated economy by paying higher interest rates.

Ethnic Divisiveness - A Good Christian is a Dead Christian

Apparently that's the thinking in Afghanistan where a man who converted to Christianity from Islam about 16 years ago is now facing beheading as is proper under Islamic code.

So American Christians can die for Afghan Muslims' freedom and Afghan Christians can just die.

Tell me again about Islam being a tolerant and peaceful religion... no, really, tell me again.

Environmental Extremism - The "Idles" of March

A little play on words to recognize the doldrums of mid-March in Michigan.

Winter is getting old and the warm weekend only made going back into the 30s a real downer. Windy, cold, grey, blah. A forecast of a week or so below average temperatures. Of course, that's just what I need for that bathroom fix-up project. Nothing like a really crummy day outside to make scraping old caulk seem like a worthwhile endeavor.

I finally got my taxes done... another benefit of crummy weather. Overpaid the estimated taxes because the business was down a bit... nothing like $3.00 gasoline to shut down RV rentals... so the governement can give me back the money I didn't earn.

My wife really cleaned up the house... another benefit of crummy weather. Amazing how those dust bunnies can multiply.

Maybe we're not so idle after all. Maybe we're just bored with what we're doing. I keep looking at the golf courses, but they aren't looking back yet. Hey, April is almost here.

Oh, yeah, that's when yard work begins.

American Taliban Attacks Ford

Read more

An open letter to Congressman Knollenberg

Congressman Knollenberg:

As you know, Michigan is in a unique situation relative to the rest of the U.S. economy. As I walked around the neighborhood today, I saw homes for sale that have been standing vacant for months, even years... and this is a good, middle-class neighborhood.

One only needs to read the headlines to understand that this is not a temporary situation for Michigan. Nevertheless, Michigan is lumped together with the rest of the nation when it comes to economic policies, particularly that of the Federal Reserve.

In the past, when disaster struck other parts of the nation, Michigan was quick to respond with aid... both financial and volunteers. Michigan is not a physical disaster area, but it is rapidly becoming a financial disaster zone; especially southeastern Michigan.

As the auto manufacturers, suppliers and support industries lay off thousands of people, the Federal government continues to proclaim the strength of the economy. These statements are akin to a doctor saying you are in perfect health so enjoy life... while your hand is gangrenous.

Michigan business and the state's economy has been struck by a convergence of forces that threaten a malaise for the next decade. Part of the problem lies in the history of union excess and poor business management. Another contributor has been the foundering of Detroit and it's weighing down economic growth in the area. Still another part is the government's willingness to let Japan and China manipulate their currencies to the benefit of their exporters and the detriment of our producers... a particularly vexing problem for the auto industry.

Perhaps it is time for our economic policies to reflect the disaster that Michigan faces. For example, rather than penalize Michigan for the inflationary pressure of the Florida real estate prices, perhaps Michigan should be given a lower prime rate to at least stabilize its business and housing situation. Applying the same prime rate to Michigan as Florida is creating a depression, not just a recession. That's just an example. The federal government has always treated disaster areas with a different set of rules than the rest of the nation. Perhaps it is time to apply those different rules to Michigan until the state is whole again.

Best regards.

Ethnic Divisiveness - What's Really Happening?

Received this in an email and found it appeared in the New York Post:

March 5, 2006 -- BAGHDAD

I'M trying. I've been trying all week. The other day, I drove another 30 miles or so on the streets and alleys of Baghdad. I'm looking for the civil war that The New York Times declared. And I just can't find it.

Maybe actually being on the ground in Iraq prevents me from seeing it. Perhaps the view's clearer from Manhattan. It could be that my background as an intelligence officer didn't give me the right skills.

And riding around with the U.S. Army, looking at things first-hand, is certainly a technique to which The New York Times wouldn't stoop in such an hour of crisis.

Let me tell you what I saw anyway. Rolling with the "instant Infantry" gunners of the 1st Platoon of Bravo Battery, 4-320 Field Artillery, I saw children and teenagers in a Shia slum jumping up and down and cheering our troops as they drove by. Cheering our troops.

All day - and it was a long day - we drove through Shia and Sunni neighborhoods. Everywhere, the reception was warm. No violence. None.

And no hostility toward our troops. Iraqis went out of their way to tell us we were welcome.

Instead of a civil war, something very different happened because of the bombing of the Golden Mosque in Samarra. The fanatic attempt to stir up Sunni-vs.-Shia strife, and the subsequent spate of violent attacks, caused popular support for the U.S. presence to spike upward.

Think Abu Musab al-Zarqawi intended that?

In place of the civil war that elements in our media declared, I saw full streets, open shops, traffic jams, donkey carts, Muslim holiday flags - and children everywhere, waving as our Humvees passed. Even the clouds of dust we stirred up didn't deter them. And the presence of children in the streets is the best possible indicator of a low threat level.

Southeast Baghdad, at least, was happy to see our troops.

And we didn't just drive past them. First Lt. Clenn Frost, the platoon leader, took every opportunity to dismount and mingle with the people. Women brought their children out of their compound gates to say hello. A local sheik spontaneously invited us into his garden for colas and sesame biscuits.

It wasn't the Age of Aquarius. The people had serious concerns. And security was No. 1. They wanted the Americans to crack down harder on the foreign terrorists and to disarm the local militias. Iraqis don't like and don't support the militias, Shia or Sunni, which are nothing more than armed gangs.

Help's on the way, if slowly. The Iraqi Army has confounded its Western critics, performing extremely well last week. And the people trust their new army to an encouraging degree. The Iraqi police aren't all the way there yet, and the population doesn't yet have much confidence in them. But all of this takes time.

And even the police are making progress. We took a team of them with us so they could train beside our troops. We visited a Public Order Battalion - a gendarmerie outfit - that reeked of sloth and carelessness. But the regular Iraqi Police outfit down the road proved surprisingly enthusiastic and professional. It's just an uneven, difficult, frustrating process.

So what did I learn from a day in the dust and muck of Baghdad's less-desirable boroughs? As the long winter twilight faded into haze and the fires of the busy shawarma stands blazed in the fresh night, I felt that Iraq was headed, however awkwardly, in the right direction.

The country may still see a civil war one day. But not just yet, thanks. Violence continues. A roadside bomb was found in the next sector to the west. There will be more deaths, including some of our own troops. But Baghdad's vibrant life has not been killed. And the people of Iraq just might surprise us all.

So why were we told that Iraq was irreversibly in the throes of civil war when it wasn't remotely true? I think the answers are straightforward. First, of course, some parties in the West are anxious to believe the worst about Iraq. They've staked their reputations on Iraq's failure.

But there's no way we can let irresponsible journalists off the hook - or their parent organizations. Many journalists are, indeed, brave and conscientious; yet some in Baghdad - working for "prestigious" publications - aren't out on the city streets the way they pretend to be.

They're safe in their enclaves, protected by hired guns, complaining that it's too dangerous out on the streets. They're only in Baghdad for the byline, and they might as well let their Iraqi employees phone it in to the States. Whenever you see a column filed from Baghdad by a semi-celeb journalist with a "contribution" by a local Iraqi, it means this: The Iraqi went out and got the story, while the journalist stayed in his or her room.

And the Iraqi stringers have cracked the code: The Americans don't pay for good news. So they exaggerate the bad.

And some of them have agendas of their own.

A few days ago, a wild claim that the Baghdad morgue held 1,300 bodies was treated as Gospel truth. Yet Iraqis exaggerate madly and often have partisan interests. Did any Western reporter go to that morgue and count the bodies - a rough count would have done it - before telling the world the news?

I doubt it.

If reporters really care, it's easy to get out on the streets of Baghdad. The 506th Infantry Regiment - and other great military units - will take journalists on their patrols virtually anywhere in the city. Our troops are great to work with. (Of course, there's the danger of becoming infected with patriot- ism . . .)

I'm just afraid that some of our journalists don't want to know the truth anymore.

For me, though, memories of Baghdad will be the cannoneers of the 1st Platoon walking the dusty, reeking alleys of Baghdad. I'll recall 1st Lt. Frost conducting diplomacy with the locals and leading his men through a date-palm grove in a search for insurgent mortar sites.

I'll remember that lieutenant investigating the murder of a Sunni mullah during last week's disturbances, cracking down on black-marketers, checking up on sewer construction, reassuring citizens - and generally doing the job of a lieutenant-colonel in peacetime.

Oh, and I'll remember those "radical Shias" cheering our patrol as we passed by.

Ralph Peters is reporting from Forward Operating Base Loyalty, where he's been riding with the 506th Infantry Regiment, 101st Airborne Division.

Excessive Spending - Ignore the Man Behind the Curtain

I have written about currency manipulation several times... last May and most recently in January.

Today's Detroit Free Press has another article regarding the debate about currency manipulation and the benefits it bestows on foreign competitors doing business in the U.S.

The "free traders" at Cafe Hayek and elsewhere, think it's a good thing that prices are kept low... even if it kills U.S. based businesses... as long as consumers reap the benefits. The question is: how long will artificially low prices continue when U.S. businesses aren't there to compete with the manipulators?

But there are doubters that the currency manipulators exist. Yes, there are doubters that Jews were slaughtered by Nazis.

Excessive Spending - Prices Don't Compute 2nd Verse

After my post last Wednesday regarding gasoline prices, The Detroit News followed up today with an even larger article.

It just takes a large organization a little longer to get the news out.

Environmental Extremism - Get The Lead Out

Recently, manufacturers of paint containing lead lost a lawsuit brought by the state of Rhode Island, but the state was denied punitive damages. The manufacturers, however, must removed all of their paint that was used.

Before all of you computer users get all sanctimonious about the results, you need to think this through. The paint was manufactured and used during a time when it was legal and the paint was deemed superior because of its durability and color stability. It is now being judged by a different set of standards and laws ... ex post facto.

Well, somebody has to pay!

Okay, remember that when Intel and IBM and Dell and every other chip and computer manufacturer has to go to every landfill in the U.S. and remove all of the electronic junk that was dumped there. Remember than when the television and component manufacturers have to do the same thing.

Yeah, they all used lead-base solder which can leach into the environment and potentially poison our drinking water.

Hey, lead is lead. Of course, all of the computer users might object to having all of their computer manufacturers go bankrupt cleaning up their mess. But, those manufacturers know the facts and are choosing to ignore them. So let's litigate! We can go back to using calculators and telephones.

Oh, wait! We can't! Those have lead circuits, too!

Hey, let's just pick on the paint manufacturers. Nobody really cares about them.