Well, it seems the media is catching on, and it’s not just the Fox News folks that are starting to question the transparency of the big show.

Even Helen Thomas got riled up over this…

Check it out.

While its frustrating to me to watch a character like Al Franken be elected to the Senate to take a seat next to all the other clowns we already have in Washington (both Republican and Democrat), the drama that’s played out over the last several months reveals one thing to me.

The system we have in place to cast and count votes is broken!

And I don’t just say this because Franken won.

As the voting public, we have this inherent expectation that when we vote, the votes will be counted accurately and the winner will be declared with a high amount of certainty.  Ideally, a recount of the votes would return the exact same results as the initial count, and it’s clear that this doesn’t happen.  Remember, Coleman was declared the winner of a tight race until Franken legitimately demanded a recount that resulted in a very different outcome.

In an age where I can order merchandise over a secure website, access my bank account from anywhere in the world with a feeling of security, it bothers me that many places in our country are still using paper ballots to cast votes and human beings to count them.

In the end, I think Minnesota got the Senate representative they deserve, and maybe Franken will step in and shed some light on how comedic and corrupt our government is.

The only thing we can do now is watch the fallout and hope that technology will lend a hand in our political system.

I feel that LED lights aren’t too far away from replacing incandescent and mercury containing CFL bulbs, and that products are already showing up on local store shelves, although prices have yet to come in at an economic range.

I’ve been perusing the companies 2008 annual report over the last couple days, and studied the financial numbers from the last several years.

Annual Revenue

As of the end of June, 2008, total revenues were on the rise to a level just shy of $500 million, with a 33.6% gross margin on revenues.

LED products (LED chips, components and lighting solutions) made up a total of 84% of total revenues, materials (SiC wafers, etc) made up just under 6% and power and RF products (power and RF switches) made up 4%.  The rest of the revenues came in the form of contracts with government agencies.

At the end of FY08, the company had $371 million in cash and marketable securities on hand and $408 million in working capital.

Diluted incomer per share was $0.36 at the end of FY08, which was down considerably from previous years, the high of which came in 2005 at $1.38 per share.

The company continued its streak of zero debt, a statistic maintained since as far back as 2004 or earlier.

The Most Recent Quarter

Naturally a lot has changed since the end of FY08 (nearly a year ago) and a FY09 report is due out in the next few months.

For Q3 ‘09, revenues of $131 million were 5% higher than the same quarter of 2008, but not surprisingly, down 11% compared to Q2 ‘09.

Operating cash flow for the third quarter came in at $49.9 million and the company generated $40.5 million of free cash flow.

The company built upon its cash reserves, increasing cash and investments to $404.9 million, and has maintained zero debt through the third quarter of fiscal 2009.

Recent News

On May 26th of this year, CREE announced that they are raising their financial targets for the fourth quarter of 2009, which is a pleasant headline to be reading in this economic environment.

The company says that the increase in targets is due to stronger LED component bookings for lighting-related applications such as laptops, displays, etc.

The company forecasts LED product sales to continue to grow into FY 2010 and will continue to spend money on R&D to make that forecast come true.

Corner Office Comments

I am more intrigued with this company the more I read.  The financial numbers look strong, and revenues have been maintained at healthy levels even in a down economy.  This could be a function of the company offering products that equate to energy savings with long product life cycles, making their products attractive to cities and municipalities (among other entities) trying to cut operating expenses when budgets are shrinking.

The zero debt is a major selling point, and the fact that the company has over $400 million in cash to work with makes the deal even sweeter.

I think this is a strong company with a promising product line.  They already market their LR6 downlight product that will replace 65 Watt flood-type recessed lights in your everyday residential application, and I suspect a replacement for traditional round incandescent bulbs is right around the corner.

I see prices coming down as LED lights gain traction in the market (LED’s have already replaced filament type Christmas lights) and CREE should be well positioned to take advantage of the next big technology shift in such a widely used market as home and business lighting applications.

The stock price has been fluctuating for the last several months, but the trend has been overwhelming positive since the beginning of 2009.

I’ll start buying some shares on the next downswing and I think the long term prospects for the stock is very promising.

It’s always available and it’s been years since I’ve had a dropped call.  It even worked in the Caribbean when I was there on business early last year; so there is something to be said for “the network”.

The only complaint I have is the cost of the service itself in relation to the features provided.  For $59.99 per month (plus the $20 in taxes and fees) I get 550 minutes between my wife and I.  As I’ve mentioned before, we don’t even come close to using those minutes.

I suppose you could say I’m eager to see how these down economic times will shape not just technology, but pricing in the very near future.

I’d love to have something like a Blackberry, and Verizon would practically give me a device for free.  But the $70+ service is really driving me away, and that doesn’t include the additional money for the traditional cell phone service for my wife.

In a fairly recent issue of BusinessWeek, the big three in wireless service here in the United States are seeing competition accelerate as buyers of pricey services and phones have tightened their belts.

The article mentioned that the battle is heating up in wireless data service, and the desire to grow the market while bringing down prices.  AT&T (VZ: chart, web, Y!) for instance has an 8.6% share in wireless data, compared to 16.4% for Sprint (S: chart, web, Y!) and Verizon’s 10.9%.

Verizon tends to be a bit hamstrung by 45% stakeholder Vodafone (VOD: chart, web, Y!)  (popular in Europe) and Sprint has been facing a recurring challenge in attracting and retaining customers.  Service has been spotty, customer support lacking, and product lines have been thin.

AT&T on the other hand holds a 100% stake in wireless and has its fingers in a lot of different telecom markets (a la AT&T UVerse).  They’ve got a decent amount of cash and low capital requirements to maintain their infrastructure.

The Apple (AAPL: chart, web, Y!)  iPhone has almost reached cult status, and I have to admit, I’m not much of an Apple guy, but I love the idea of an iPhone (again, besides the service price) and own a iPod.

I’m going to continue watching how the AT&T vs. Verizon vs. Sprint battle plays out, but I think if prices start coming down and consumer spending starts going up, it may be worth buying some shares of AT&T.

I can’t use CFL’s in cases where I want to use a dimmer, like over the vanity in our master bathroom, and in the basement where we dim some lights for good movie viewing.

CFL’s are also a bit inconvenient in that you can’t just throw them out with the rest of the garbage due to the fact that they contain mercury.  And that’s another major point; they contain mercury.  If you break a CFL bulb, you have to ventilate the room, scoop up the debris and put it in an air tight container.

Some people will argue that there isn’t enough mercury in each bulb to really harm you, but my position is that if there’s too much mercury to throw out in the trash, there’s too much mercury in them, period.

Another alternative?

LED lights.  These things are amazing, and they’re showing up everywhere.  From big screen TV’s to laptops (they’ve been around in laptops for a while), to the red lights in stop lights…  They’re solid state bulbs with no moving parts and no volatile or poisonous gases.  Most of them will last as many as 20,000 hours or so, which means I’d have to replace them when my 5 month old son graduates from high school.

The one drawback is that they’re still pricey, and the traditional 40 to 60 Watt replacements haven’t matured quite yet, although you can already buy the “flood” type bulbs at Home Depot.

An investment of two types…

If LED lights can last as long as advertised and can come down in price quite a ways, I’d certainly entertain the thought of replacing my CFL’s and incandescents with straight LED’s.  I look at is an investment with a return of lower energy costs, both in the form of direct electrical consumption and thermal savings (did I mention LED’s don’t produce much heat?).

In addition, I could also make an investment in the company that develops LED’s as well.  A company like CREE (CREE: chart, web, Y!)) would be a good bet, and they’re making advances in LED technology nearly as fast as prices on technology are dropping.

I’ll be researching CREE over the next several days, as I think this could be a company worth investing in that produces a product that’s worth buying.

Spark plugs and wires have been changed in the recent past, and a local shop even replaced a computer they said was faulty, along with an ignition coil.  That seemed to fix the problem for about a week, and then the misfire came back.

So today was truck fix’n day.

Some guys on a Ford F150 forum suggested that I check the heater hoses that carry hot coolant out of the heater core.  If those hoses had a leak, it could drip right down onto the #4 spark plug and cause a short in the plug well.

So today I checked that.  No drips from the hoses, and considering the temperature outside, the hoses weren’t even perspiring; I wish I could say the same for myself.

As a last ditch effort, I pulled the #4 spark plug out and replaced it with a spare I had sitting on the shelf.  Voila that seemed to fix it.

A good test drive down the highway revealed no evidence of a misfire, so I’m slightly relieved.  If I can go several days without a problem, I’ll just assume it was a bad plug.

Money Saved?

I vowed that if I couldn’t find the problem today, I’d make an appointment at Ford for a quality diagnosis.  I’ve taken the truck to my local mechanic, and while I thought he fixed the problem, it showed back up less than a week later.  That was after he spent nearly $700 in parts (the computer, plugs, wires, etc) to fix the problem.

The local Ford dealer will charge me at least $75 for a diagnosis (refundable if I have them do the work to fix the problem) and while I have a high level of confidence they’d find the problem and fix it, it will surely cost me a fortune!

So the fix really cost me about $8 for the spare spark plug I already had, and a half days worth of my time.

Not bad for being a tightwad, do-it-yourselfer…

Perhaps if my current career hits the skids, I could go on to be a mechanic… but only if truck driving school doesn’t work out!

I must say, they were pretty good tenants.  Sure, I had some phone calls fairly late at night with a broken thermostat and an extinguished pilot light on the water heater, but that is to be expected.  Stuff doesn’t last forever.  Then there was the major plumbing problem in the basement, but my buddy the plumber knocked out that problem fairly quickly.

There was a case where all three of them locked themselves out of the house on Easter Sunday, just as I was sitting down to eat with the family.  But if that’s my biggest problem, I’ll take it.

The current tenants move out July 31st, and I’ve managed to land some new students who move in August 10th.  I don’t expect any major repairs between tenants, but I thought I’d give myself a good week in case anything major needs to be done.  I suspect I’ll need some paint on the interior, a carpet cleaning, and a good old fashioned wipe down.  But we’ll see.

To top it all off, their rail infrastructure is almost completely electric.  No diesel is sacrificed as it is here in the United States.

So why can’t we do that?

In the Midwest, there are light rail proposals being thrown around annually, gaining marginal traction with taxpayers. The problem typically revolves around ‘who ends up paying how much for what’.  And I can see the point.

I surely don’t want to pay for a local rail system I don’t use and can’t foresee any return on.

In my opinion, we need a national high speed rail system implemented from coast to coast, boarder to boarder.  Unfortunately the government would have to get involved to help define the standards (you don’t want one system on one gauge of track and another on a different gauge).  Ideally though, the infrastructure would be privately developed with government subsidies.

Think about it, going from New York to Chicago, or Chicago to Dallas via Kansas City or St. Louis.  Make that a day trip!

I believe that once such a system is defined, more local, light rail systems can take shape with much less risk to the bottom line.

If you live in a city with light rail, or even a country with high speed rail, do you see the system as an asset?

How relaxing.

This waiter, in his very broken English, with every word carefully chosen, explained to my father and I that he dreams to go to America to talk with someone about some ideas he has.  He wanted nothing more than to supply someone with money and ability nothing more than four or five entrepreneurial possibilities he’s dreamed up.

Upon further explanation, he revealed that it is common knowledge in Greece that there are ultimately 5 families that control all the money in the country.  They also control businesses, government and ultimately the people of his country.

It is those families that dictate who starts a business, who benefits from the risk of sticking your neck out and who succeeds in financial and entrepreneurial endeavors.

If one were to set out and independently form his own business, the families would step in and by way of taxes bankrupt the company.  Hence, the desire to make his pitch to someone, anyone, in the United States.

To any extent possible he wanted to make his own way, and more apparent, get away from pouring coffee in that beach side cafe in Greece.

I must say, the beaches of Athens are exquisite.  But it is these experiences gained while traveling in foreign lands that make the otherwise desolate plains of the United States look so much more beautiful than any painting the sunset over the mountains of Greece could ever inspire.

Our government here in the United States is as corrupt as ever. Never before has money has such a visible influence in politics, and yesterday on the beach I realized that despite all that, living in the United States is still pretty damned… good.

I can’t recall if I’ve written about this before, but I can’t help but notice the change in attire on passengers at the airport over the last 10 years or so. I suppose I haven’t yet accepted the true power of competition in the airline industry, but I can’t help but wonder how some people can afford a plane ticket.

Any more, business suits, button down shirts and dresses have given way to short shorts, tank tops and flip flops.  In fact, the two-piece suit is now the minority in the terminal building.

I’m not sure why I’m bothered by this, perhaps its a lack of respect for the industry, lack of leadership in the industry as a whole, or maybe I’m completely out of touch with the real world.

Two years ago, I was in Miami when an American Airlines 767 rolled in from New York, and you’d think a Greyhound buss had become lost and pulled into the gate.  What’s tragic is that a bus ticket was more expensive than a ride on a jet.

My how times have changed.

It’s a nice perk to be issued a company laptop, and from the looks of it, fairly common place these days.

A subtle ping of my coworkers reveals that the cross-utilize their company issued laptops for personal use at home as well.  And while that can seem like an indirect perk all together, I wonder if the move is all that wise.

The equipment is in fact, company property, and given the economic climate today it’s not out of the question to be relieved of ones duties at a moments notice, with or without cause.

Which should segue into the rhetorical question, is it smart to use your company computer for personal use?

Sure, answering web-based email may seem transparent enough, although you should be aware that even that data technically belongs to your company.

Banking, storing personal documents, family photos, music and contacts of the personal and business sort may leave you wishing you hadn’t when your IT department puts your account on lock down.

Typically when an employee is excused from their job, the first thing that happens is a complete wipe out of their computer. In a sales or marketing based position, emails may be retained for legal reasons, but other than that, the ones are flipped to zeros without any regard to what those bits and bytes really represent. 

It is, after all, the companies data.

A couple suggestions for those who use a company laptop for personal use:

Save everything you don’t want to lose to a flash drive. Memory is cheap these days, and music files, contact lists and photos can easily be backed up onto portable media.

Clip that thumb drive to your key chain so you can’t leave work without it.  You never know, this Friday might be your last.

Think about what data you could live without.  Bank statements, phone lists, family photos probably should be secured outside of your companies network.  At least make a copy every couple weeks.

Laptops are cheap and getting cheaper.  Get one.

I love airports. Mostly because I’m a pilot and I’m at home around airplanes, but partly because airports are a great place to watch people.  Passing through, going home, setting out on vacation; an airport receives all kinds.

If you’re a frequent traveler, you see people you know, either from real life or the fantasy land of television.

Just today, I had a quick chat with Kansas City Chiefs ex-General Manager Carl Peterson. Seems like a nice guy, and while some believe and relent that Peterson was run out of town, you can tell that up front, he’s a business man.  He understands.

Most fascinating though, are those in uniform. A segment of the Armed Cavalry division is heading home for an extended weekend with their families, which is pretty cool.

You have to get deep into a conversation with any one of them to find out they’re heading back to Afghanistan in 6 to 12 months. It’s not at the forefront of their life right now, and let’s face it; they’re going home.  Little else matters now.

I always try and show some appreciation for a soldiers service anytime I run into them, and the regard seems much appreciated.  I also selfishly try to gain a bit of information from them in our closing remarks.

How are things going over there?

Let’s face it, if you want the truth about how our soldiers are doing overseas, you go straight to the horses mouth.

What’s interesting is that a recurring theme with any one of them is that I shouldn’t be getting my information from the news.

Completely unprovoked, Major Chaparral told me not to listen to the news. In fact, he loves his work, because “we’re doing great things over there”.

Sitting next to me at the boarding gate, Major Dixon told me that while the work in Afghanistan is hard due to the terrain (primarily in the Southern part of the country), he says it’s worth it and actually looks forward to going back.  Again, he urged me not to believe everything you hear on T.V.

That’s frustrating, as it’s as though our guys in the sand aren’t getting a fair shake.

With that, the Major’s cell phone rang, and from the context of the conversation, it was his wife.

I quickly excused myself, because let’s face it, that conversation would be far more important than any he could have with me.

I’ll spare you the details of the givaway, as MJ has them lined out here.

Effectively, these bags are similar to the ones you’d buy at the grocery store instead of using paper or plastic bags that jam up our landfills.  They’re made from burlap bags used in the coffee industry.  They’re completely biodegradable, so there’s really little effect on the environment.

Tune in for MJ’s 9 Days of Dyslexic Research’s Guide to Green and get yourself some free swag!

I’ve always wondered how an industry that sells products with a lifespan measured in decades or hundreds of thousands of miles could have such a saturating physical presence.  It’s a bit like having a Walmart every three blocks.   Scratch that, I go to Walmart every couple weeks, so convenience is more of a factor.

Don’t get me wrong, it sucks that so many people will lose their jobs when those 3,000 dealerships close their doors, but did anyone ever question the need for two GM dealers within 10 miles of each other?

This is surely the pull back I’ve been waiting for, just not the reason.  In this environment it’s far better, in my opinion, to go to the shareholders for liquidity than the Federal Government.

Shares dropped below the $4.75 offering price only briefly today before closing out at $4.96.  I suspect more downside in the next few days as more pressure is applied by overall market sentiment.  I’ll put my finger back on the trigger at $4.50 if the trend dictates.  This is the first flinch we’ve seen from the “best of the worst” in quite some time, and it will be interesting to see how the markets react in the next several days.

Long term, I still like Ford, but am not willing to buy and hold.

So I set up a checking account and several different savings accounts at USAA to replicate the banking structure I had at BoA, and signed up for their USAA World Mastercard as well with the Total Rewards program.  My existing card is held through Citi, who happens to also need another boatload of cash to continue its business.  Since I don’t keep a balance on any of my cards, there’s really nothing to transfer, and I just need to change all of my automatic payments over to the new card.

I’ll probably continue to keep the Citi card active just in case, but I don’t anticipate using it.

No more going to the bank for me!

The other cool thing about USAA banking is the Deposit@Home feature, where you simply scan your deposits directly from your scanner via a Java applet on the website.  The funds are deposited directly to your account and are available immediately.  Kind of cool, and despite the a slight hiccup at first with the Java program, the system works pretty well.

The rewards program is a little different.

As for the rewards program with the Total Rewards card, there are a few differences compared to my Citi Dividend Platinum card.  The first being that you earn one point for every dollar you spend on the card, and one point for every two dollars you spend on your USAA debit card.  You can redeem these points for merchandise, gift cards, charitable contributions, or my favorite, cold hard cash.

With the Citi card, we had a limit of $300 in dividends per year, and by charging all our utilities to that card, plus everyday purchases, we achieved that $300 limit fairly quickly.

The USAA Total Rewards card doesn’t have such a limit, however the program isn’t quite as lucrative as the Citi program.  The Total Rewards program breaks down the rewards in a tiered fashion where you get more cash back the more you spend.  For instance, the first 20,000 points only returns you 0.83% in cash, but after that, you earn 1% cash back.  So the key is to wait until you have accrued more than 20,000 points to redeem for cash back.

Some highlights for the quarter:

- Unitholder distributions in the first quarter of 2009 were $0.21 per unit resulting in a payout ratio of 65 percent, compared to the 70 percent payout in the first quarter of 2008 when Provident distributed $0.36 per unit.

- Provident maintained its financial flexibility during the first quarter with senior bank debt of $496 million (47 percent credit facility utilization), while total net debt was $749 million (including subordinated convertible debentures and net working capital), resulting in a net debt to trailing four quarters funds flow from continuing operations ratio of 1.6 times.

- Provident Midstream sold approximately 141,700 barrels per day (bpd) of natural gas liquids (NGL) in the first quarter of 2009, an increase of 4 percent from approximately 136,300 bpd in the first quarter of 2008 due primarily to the growing demand for condensate in the Redwater West business.

- Provident Midstream generated earnings before interest, taxes, depletion, depreciation, accretion and other non-cash items (EBITDA) of $70 million in the first quarter of 2009, down 8 percent from $76 million in the first quarter of 2008 due to lower NGL sale prices partially offset by lower feedstock prices, higher sales volumes and an $11 million realized gain from the commodity price risk management program.

- Provident Upstream produced approximately 24,600 barrels of oil equivalent per day (boed) in the first quarter of 2009, down 11 percent from 27,600 boed in the first quarter of 2008 due to naturally occurring production declines and the impact of the reduced 2009 capital program with spending focused on long term initiatives.

- Provident Upstream generated funds flow from operations of $23 million, down 68 percent from $71 million in the same quarter of 2008. This decline is due to lower production volumes and lower field operating netbacks (reflecting a substantial drop in oil and natural gas prices), partially offset by a $9 million realized gain from the commodity price risk management program.  -Source

On the downside, funds flow from operations was down 35% compared to Q1 of 2008.  Naturally, commodity prices have a lot to do with that, so it’s not necessarily indicative of faltering company strategy.

Corner Office Comments

I’m fairly pleased with the results of the first quarter operations, and I think natural gas prices, along with crude will start to strengthen into the summer, bolstering these numbers a bit more.

The payout ratio is starting to come back down a bit, which in this environment isn’t a bad thing.  The distribution cut is frustrating, but it’s one you’d have to expect when commodities are on the lamb.

The share price is starting to head back up hill, and I’ve started buying more shares below $6 to help average my overall cost down.  As the price continues to rise, I’ll sell off some shares in an effort to diversify out of the energy sector.

Friday seemed to kick me in the groin like a rough Monday usually would.  Not having any motivation to pack my lunch like I usually do, I made my way to the local Arby’s for a French Dip sandwich.  Unbeknown to me, the server put the “dip” portion of the meal (I think they call it a-jus) in a cardboard container, upside down in the to-go bag.  The fact that the container had a hole in the cover should pretty much finish off the story for me.

A jus all over the carpet of my vehicle, and nothing to “dip” my “French” in for lunch.  Bummer.

Then, I get chewed out by a co-worker for not filling out a form before working on a project.  He’s the team lead of another group in our building, so I don’t work for him, but he decided to “chew my a$$” for not filling out the form because my boss “chewed his a$$” for his guys not filling out the same form.

Rather than stir the pot, I vehemently admitted that I should have filled out the form, despite the fact that I really didn’t need one, and he would have known that if he would have asked a few questions prior to commencing the “chewing”.

This guy is former military, where jumping down someones throat seems to lead to results, but those tactics generally don’t work in the civilian world.  Further, it shines of poor leadership skills to “chew someone’s a$$” just because someone else chewed on yours.

For the trifecta, the weather is beautiful this weekend and I’m stuck inside with Sudafed head and a sore throat.

On the bright side, the market was up this week, and despite some bad employment numbers that were better than expected, things might be off to a good start on Monday.

Affordable.  Isn’t that a relative term?

You see, I always thought it was up to me to determine what I can afford, and what I can’t.  I never imagined that someone else could have the insight to tell me I could afford their products.

I may be able to afford a $20,000 new car, but my next door neighbor may only be able to afford a $10,00o version.  In effect, it’s all relative to our own financial situation; earning power, savings, cash flow, investments, job security…  All of that influences what each of us can afford to pay for a product.

“Affordable” health care.  Another example.

On a daily basis, there is some talking head on T.V. telling us we need “affordable” health care for everyone.  The Obama administration has even taken that effort up as a primary goal for his first term.  But what does “affordable” health care really mean?

I may have the extra income to facilitate paying $300 per month for health care, but my neighbor may not.  Maybe he only has an extra $100 he can part with on a monthly basis.  Or to an even greater extreme, maybe he doesn’t have any extra money to shell out for health care.  So affordable to me is not affordable to him.

So really, to make health care affordable to everyone in our country, it has to be free to everyone in our country.  And isn’t that socialism? Sounds like it.

In our capitalistic economy, it is up to the consumer to tell the supplier what is “affordable” and what isn’t.  Everyday Joe’s will tell car dealerships with 500 copies of a cheap sports car that they can’t afford a $50,000 sports car in this economy.  They may tell that same dealership they can afford a  $15,000 sedan that gets good gas mileage and is built well.  The dealership will adjust inventory accordingly.

So let’s get this out there in the clear right now.  No one tells me what is affordable and what isn’t; affordability is the most relative of terms.