The Money Minute Weekly™

OPEC Despotism

2009-07-11T08:33:00.013-04:00

OPEC must be destroyed in (an economic sense), said Donald Trump:

Also, we agree with Mr. Trump, the banks must start lending. In our lifetimes, we've never seen such a crisis in liquidity and it really is a problem which must be fixed. The question is will seismic policy shifts provide sufficient incentive for the private sector to act and by the same token should they step in granted current market uncertainties? Only time will tell.

Going Political: An Editor's Note

2009-07-05T05:40:00.004-04:00

Please note, this is not primarily a political blog. That being said, we need your input, should it be? And the reason we ask is to speak intelligently about some financial matters, current topics, and various other economic positions it is sometimes necessary to bring up the matter of policy-making or politics (more specifically lawmaking). Speaking candidly, while the editors do have their personal opinions, they lack firm political affiliation of any type and are open to a wide array of perspectives. As we noted, it seemed we lost some folks with the climate change post. Well, if you don't like something which is said at the Money Minute Weekly, please say something about it! Our content depends on you. We are here for our readers, but let's at least discuss business and economic policy in an honest way, a way we can all be proud of. More specifically, in our last post, it was by far the strongest worded of them all, but like we said our position on climate change came into question recently (namely that of absolute certainty to cautious skepticism), and we seem to have lost some folks by stating what we thought on the matter.

And as another note, some of our content must not always be taken seriously. But again, let us know what your comfortable with. While some post may be completely serious, others may be more tongue-and-cheek and either choose to make fun of something observed or be so "over the top," so as to as in the words of Camus, "make fun of the absurd." Either way, let us know! Thank you and keep reading.

Climate Change Hustle

2009-07-03T21:40:00.008-04:00

Our Twitter dialog (i.e. debate) prompts us, on the cusp of broad reaching cap-n-trade legislation, to address the issue of so-called "climate change," but far from what the mainstream media reports, it's not a forgone conclusion, there are two sides to this debate. This is not over, in fact it is only beginning. And personally speaking, our staff have transformed into climate change skeptics. Only now is it coming out even those within the EPA are having their reports buried by their respective organizations, that is to say the environment may actually be cooling.

Again, none of this is heard within most major media outlets. Why? Most likely, a calm, rational debate will not boost corporate earnings. And guess who could stand to profit from cap-n-trade? Yep, General Electric, the same company whose Investor Relations page claims they made no "risky" consumer loans--balderdash! What of "corporate integrity?" Oh, that's right Sarbanes-Oxley was the panacea. In sum, give us a break! More to come, what do you think?

Stay Informed: The Easy Way

2009-07-01T16:25:00.000-04:00

Please stay informed with our blog. An easy way to accomplish this is to subscribe to our RSS feeds, please see the upper-right toolbar, "Subscribe to this blog," also be sure to follow us on Twitter and Facebook and by all means please feel free to comment on the Money Minute's solid copy. You come, you read, now it's time to get interactive, join the community, and participate!

Retail Sweatshop Cyborgs Needed

2009-06-28T18:13:00.016-04:00

Have you ever wondered the inter-workings of your favorite brick-and-mortar stores? Well folks, America's sweatshops are alive and well in the 21st century. Numerous examples come to mind, primarily Wal-Mart, Staples, Office Depot, Circuit City, and Best Buy. Any of these establishments in your neighborhood? If so, you should probably be cognizant of the working conditions many, if not all, of the typically abysmally paid employees endure on a daily basis. At Staples for instance, the typical work day ranges from about 8-10 hours on one's feet, managing demanding, emotional, aggressive, and frequently rude customers, heavy manual labor, and overall general (and often extreme multitasking) and poor working conditions in terms of pay and treatment of employees.

Staples, a national office supply store, entry-level employee pay is marginal at best, averaging little over the minimum required by federal (and in many cases) state law. In the meantime, associates (the name given to at-will company employees) are often expected to carry the workload of several people while simultaneously being ready to "drop everything" should the stray, omnipotent, and allegedly Godly (i.e. "always right") customer is ready to spar at the drop of a hat.

Now, that being said, it's the Money Minute Weekly's contention that "one person's capitalism is another's slavery." For instance, it is common, and often politically expedient for large retail corporations to offer so-called "comprehensive benefit packages," and while this at first seems appealing the devil is indeed in the details. For instance, typical health insurance carried by these companies usually cover little in preventative care, high deductibles, and low annual and lifetime benefits. Also, another common ploy is to offer the "coveted" 401k plans. Now, what these retail firms don't tell employees up front is "yes" we'll grant you a 401k plan and a company match, but by the way your salary is so pathetically low as to render the benefit benign and impotent--therefore no money to fill the empty shell benefit.

Lastly, the most underhanded tactic used by some (not all) retail companies is to conceal or outright mislead employees to think they're getting a square deal when they're in fact ripe to be taken advantage of.

So what are the end implications of the majority of the (above-mentioned) retail malfeasance? Well, for most, employees burn out, are fired, or quit. For others, they remain, but for some of the remaining (e.g. Circuit City) poor executive decision-making led to mass layoffs and the eventually collapse of the second largest and at one time leader in the consumer electronics industry.

So what's the end game? Well folks, if you know of, or personally have a friendships (or family member) who works in retail encourage them to learn an in-demand skill and leave, the sooner the better. Granted, there will be "ditches" to dig, but it's better for someone else to do it, if not yours, theirs. In the meantime, check out the competition, which boasts better employee (and investor) stewardship, namely firms like Costco (for example) and try to patronage them as much as possible. Now, such companies work their employees extremely hard, but they pay a "living wage" with solid advancement opportunities and that's the important thing.

America Weirder

2009-06-23T14:52:00.007-04:00

We're starting a new (perhaps occasional) segment on the Money Minute Weekly, random observations, some tied to finance, others not. That being said, here's our "two cents." America is getting weirder, we can't prove it, and you may ask "What do you mean by that?" Well, it's a general feeling on the streets. Of course, we could come up with a thousand different measurements or "studies" to measure what we're talking about, but that would take a long time. Here's a start, be among the public for significant periods of time each day and mentally take note of the behavior of others around you. What seems out of the ordinary or different? In our view a lot. We think some of this has to do with globalization, but much more so we hypothesize it's due to the chasm which developed between old and young in terms of technology usage.

We think emerging technologies are making people actually think differently and in some ways it's to our detriment as a society. Just think of this per se, there have been segments on television in the last few years where American families (the ones who actually do still have dinner together) will text message one another (with cell phones) at the table instead of actually having a direct conversation! In other instances, we hear the "F-bomb" used as the common vernacular between parent and child, sometimes in both directions. We could go on with a myriad of other examples, but America is getting weird--this is only the beginning. Which are you? Sane or weird?

Palm Pre or Apple iPhone?

2009-06-17T21:17:00.020-04:00

Recently, there's been much speculation regarding the new release of the Palm Pre versus its competitor the Apple iPhone. Our contention is Palm does indeed make good products, however Apple by far possesses dominant market share and while Palm was at one time considered a pioneer in portable digital devices such as PDAs, it no longer shares its once enviable competitive advantage--that goes to Apple. That being said, the question remains which company is selling the better product and will it (i.e. the better one) win in the market? Some technology critics seem to think Palm (whose Pre was almost universally panned) might claim the prize.

In truth, as both sources suggest, only time will tell as to which company wins the "wireless war" but if the past is any predictor of the future, the smart money is on Apple.

Big Tobacco Bogeymen

2009-06-17T05:09:00.016-04:00

Well folks, we've already documented several instances of proposed government consumption regulation into our daily lives. The question we posit regards big tobacco. In brief, although we have no firm position in the matter, the question of regulating the tobacco industry on its face seems like a good idea. Indeed, we would like to see less people smoking, but question the true motives of Congress and the executive for their underhanded (proxy) regulation of nicotine products vis-à-vis the FDA. In sum, such restrictions are in indeed a "gateway," to less benign products such as sugar drinks (e.g. soda, fruit juice etc.), candy, and so on. We think one has to overlook our personal tobacco displeasure and evaluate the president’s proposed regulation and the new federal taxation in terms of its legal precedent (and hence spillover effects) into other less harmful industries. For instance, the root cause of obesity in the U.S. is not actually primarily linked to soda (or even moderate fatty food consumption), but the overall lack of physical activity by the American people. Therefore, regulation of (the so-called sin industries) are symptomatic and (in the long-term) deleterious to individual liberty, personal responsibility, and the solid foundation of free enterprise inherit to our way of life. In sum, we opine the long-term detriment to the free market (and abridgment of individual rights) far exceed the short-term gains engendered by restricting (or making more difficult) access to economic discretionary consumption of goods and services which some may deem abhorrent, while others find a necessary staple of their daily lives--for whatever reason--the choice should be theirs.

Food Czar Needed?

2009-06-13T17:59:00.011-04:00

Well folks, we just got finished eating dinner. Problem is it took awhile--we had to call the FDA. Now, you may be asking, "What the Hell are you talking about?" As it turns out, we had to seek prior government approval. In brief, we needed to know what and how much to consume. Yep, we're talking the ""Food Czar." We're dead serious folks, the big government oral fixations continue; just ask "big tobacco." Which all goes to say, "smoke 'em if you got 'em," but wait, isn't there a Czar for that too? Better think fast, government bureaucrats are moving into our every orifice...

Stay Informed: The Easy Way

2009-06-11T07:24:00.003-04:00

U.S. Economic Expatriates

2009-06-08T22:47:00.016-04:00

As the regulatory and taxation landscape continues to evolve (i.e. from mixed market to socialistic), will Americans begin to leave? Fact of the matter is, those of economics means have done so for years. But will the Obama administration expedite capital flight--in a word--definitely. It's already happening and is really the "untold story" in the U.S. media. And like we said, this has been occurring for years due to America's lack of a consistent, cohesive taxation policy. Also, like individuals, many corporations are finding there are "riper"fruits to be had abroad in terms of less regulations (and corporate taxation rates). Only in the United States does corporate income tax stand at a whopping 35% rate! What would you do if you were these companies? Take the hit to the bottom-line? Of course not, you'd as the words of esteemed economist Walter Williams once said, you'd "part company," or exercise your Constitutionally-protected freedom of association rights. Just as in human relationships, like-minded, fiscally conservative companies seek to freely associate with the benevolence engendered by other freedom-loving capitalists. In sum, what the Money Minute consistently opines as a pundit on the Green Faucet--what goes for General Electric goes for the federal government as well—no más , no pas! Get ready, the producers will revolt. Already, they are leaving.

The History of the U.S. National Debt

2009-05-28T21:55:00.009-04:00

Enclosed is the history of the United States national debt, according to Wikipedia--we've been screwed for a very long time. Get used to it, it's about to get a lot worse. Hold on to your wallets, examples too numerous to list at this time--stay tuned.

Federal Sin Taxes

2009-05-22T16:08:00.009-04:00

This was the beginning, now a federal soda tax is being proposed in the U.S. Senate. How much money will be taken from us? What else will the federal government seek to control the consumption of (among other things)? Allegedly, there's also a proposed federal beer tax upcoming--a hefty one at that. See we told you! Dealing with big government can be a very taxing experience. All you recreational soda and beer drinkers pay up because not only can you not smoke; looks like the food Nazis' have other oral fixations as well...

Worthless Fiat Money

2009-05-16T12:18:00.026-04:00

In the midst of the global recession much attention came in terms of reexamining current U.S. monetary policy. For those of you unfamiliar with the concept of "fiat money," it basically refers to (paper) money which has no intrinsic value, but is deemed valuable by declaration of the federal government. While, the concept is nothing new (the U.S. abandoned the gold standard decades earlier), it merits closer examination based upon the current economic crisis and most likely hyper-inflation to come. The Money staff thinks one of the main problems with fiat money is it encourages currency manipulation to the detriment of at-will employees and those with less resources to hedge in the market. Arguably, it also leads to more inflation than is necessary to grow an economy. And while to many economists the argument for a precious-metal based currency (gold or otherwise) is largely "old school" hocus-pocus, admittedly we lack (extensive) expertise in this area. Regardless, there ought to be greater and more widespread debate regarding current U.S. monetary policy.

That being said, we also think the knee-jerk reaction to hoard gold in physical form is by far extreme and should be reserved largely to the federal government, nevertheless we think it should be legal to privately own gold commodities. Again, in most instances such a practice is unnecessary (although individual financial circumstances vary and we explicitly do not advise regarding them).

The truth of the matter is, for the average American, we live in a mixed-market Franken-economy which contains copious ass backwards economic policies. Instead of freeing markets, we enslave people and to a lesser extent corporations’ large and small--this must end. It's time to promote personal as well as financial liberty. Unfortunately, today, the opposite seems to be the case.

Indeed, historically speaking remember, Confederate currency, used by roughly half the United States after the (American) Civil War was worthless. If you don't think it can happen sometime in the future, think again. Indeed, arguably it's already happening, but to embrace the Euro for all purposes would be highly erroneous as the underlying economic fundamentals of the countries it engenders are not sound. Moreover, they are quite the opposite--slow growth bureaucratic welfare states. What free market economist Walter E. Williams coined, "basket case" economies. Could the Adam Smith's "invisible hand," be the panacea to the (above-mentioned) wrong-headed (economic) policies? Only time will tell--free markets and free people--always a resilience of the American marketplace.

Ludwig Von Mises Books

2009-05-10T05:58:00.009-04:00

In the future, the Money Minute staff may choose to include a list of suggested readings. Currently, on deck is the following: "The Anti-capitalistic Mentality," by Ludwig von Mises, the great Austrian scholar. We think this short text is particular relevant in terms of today's regulatory environment, where free markets and Capitalism are under assault as never before. We encourage you to pick up a copy of the book as soon as you can as its thesis is highly relevant and may serve an "intellectual" self-defense kit against socialist or "big government" types and their ilk. Protect you precious liberty and economic freedoms!

Veronique de Rugy on France

2009-05-07T20:36:00.007-04:00

La vie économique française, just say "non!"

The New Media Manifesto

2009-05-02T21:49:00.012-04:00

We thought we would take a brief reprieve from the finance world and reflect on the current state of media. Often, scholars and other more pedestrian observers comment on the difference between "old" and "new" media. In brief, these terms are somewhat polysemous, but in this particular context let's compare newspapers vs. Internet mediated-communication. As many in private industry know, the vast majority of national newspapers are losing money--rapidly. This in turn produced a ripple effect of cutting "hard copy" content and in many cases smaller / more regional newspapers are either facing bankruptcy or have disappeared altogether. And while the Money staff sympathizes with the plight of news staff, this seismic shift was long overdue. Ideally, content-production should be a free market. In the past, this was not the case. The corporate gatekeepers decided "who" could publish and "what" they could write as well. Then, the Internet arrived and many disparate voices resonated loud and clear. The Money Minute thinks these developments have been and continue to be largely positive as many of the best and brightest writers found new audiences previously untapped and unregulated. In brief, the time for "new media" is now. Gone are the days of the media monopoly's stranglehold on the American information consumer. Behold, this is a new era and our numbers are growing and expanding even further to every corner of the globe. We will not be silenced by heavy-handed news editors peering down their pedigreed noses. This is our ethos--hence our manifesto.

No Pass for AIG?

2009-04-25T08:40:00.011-04:00

Michael Douglas to AIG: You got your money, you got your bailout, you got your bonuses, now get to work!

AIG Board of Directors: Gecko, did you happen to see the gathering (AIG) lynch mob?

Gecko: Yep.

Board of Directors: Yeah, well because of it a few people resigned. Now, we have some open positions.

Gecko: So? Call up the government.

Board of Directors: Okay, we’ll do it.

Dept. of Treasury: This is "Tiny Tim" Geithner speaking, what's up? Open positions? Oh, you need more bailout money for new hires? Sure thing, Paulson authorized it, remember, if the press asks, this is all on "W." Anyway, no problem, (in the background) start those printing presses, boys!

Board of Directors: Anything else? Any strings attached to TARP?

Geithner: Well, there might be a few, (mumbling) Yep, be sure to run TurboTax for your books. (whisper) and just remember it's open season for executive bonuses, make 'em big and fat, just like I like them.

Board of Directors: (nodding to one another), see I told you the government would give us a "blank check," big bailout = bigger bonus. (smiling from ear to ear). First we cash in; then we check out!

A Montage of Monetary Maggots

2009-04-25T08:25:00.013-04:00

Advice of Our Founding Fathers

2009-01-22T07:08:00.005-05:00

As Benjamin Franklin once said,

"A penny saved is a penny earned."

We need to become a nation of savers, not spenders, what do you think? Let's heed the founders' vision well and return to fundamentals.

Big Bailout, Bigger Failure?

2008-12-07T02:23:00.005-05:00

It's been awhile since our last post. It's getting bad out there. Let's get real people. None, of these so-called "bailouts," (read: corporate giveaways) will work. Detriot should fail. As we told others, silicon valley VC's should take this baby over with excessive (new) cash. Then, we could re-train many of the legacy employees with cutting-edge technology at higher rates, with less obscene benefits, and produce better cars--it's that simple. We need to innovate, not regulate.

On Recession

2007-12-12T09:26:00.001-05:00

Do you think the U.S. is headed for recession? Why or why not? What signs may point to future-looking economic forecasts? We are interested to hear your point of view.

On Sarbanes-Oxley

2007-12-05T09:47:00.001-05:00

Do you think Sarbanes-Oxley was a necessary reform in 2002, why or why not? Do you think it helped restore integrity to the market or make companies more palpable to the business community? What do you think are the long and short-term effects of the legislation?

Big Oil or Big Energy?

2007-11-26T08:06:00.001-05:00

With the price is gasoline hitting record highs, how long do you think it will be until the United States seeks alternate sources of energy in earnest? How long do you think it will be until we achieve energy independence? Which companies / company will lead the way? To what extent do you think we will be dependent on foreign oil (e.g. 10 years, 20 years, indefinitely)?

Top Executive Pay

2007-11-15T11:31:00.001-05:00

Recently, a newspaper article in the Washington Post or USA Today (we can't recall) stated that top executive pay was now something like over 400 times greater than the average pay in their companies as opposed to something like 23 times greater in the early 80s. Do you think executives should be payed as much as they can earn by performance or do you think there should be a cap to how much they can make? If so, who should set the cap, the shareholders, the company, or the federal government?