It's been awhile since I last posted here and I'm due for an update. Here goes with 10 Things I Think. Of course, this type of a list is likely to change daily, but I won't update it daily. Without further ado, here goes....
1. March Madness is just around the corner and there is no better time of the year.
2. This coming on the heels of one of the best Super Bowls ever. 2008 was a great year for sports, and 2009 might eclipse it.
3. Is there a more arrogant and clueless group of people than Wall Street executives? $1 million to redecorate an office? Are you f*cking kidding me?
4. Speaking of Wall Street genuises, just how big is this mess they've got us into? If you spent $1 million per day, every day, since the time of Jesus Christ, you would have spent an amount of money equal to about 1/3 of the money Tim Geithner says we need to bail out the banks.
5. Speaking of which, Treasury Secretary Tim Geithner is clearly in over his head.
6. Is there a more poisonous politician today than Nancy Pelosi? I think she's in a race with Mr. Geithner to see who can sink Mr. Obama's presidency first. This woman clearly doesn't deserve to be anywhere near a leadership position.
7. Strange as this sounds, the best Mexican food I have ever eaten was in Chicago, the best barbeque was in a gas station and the best steak was in Las Vegas.
8. I am not surprised that Alex Rodriguez used steroids. My question is why did he stop taking them every October?
9. The Economist is the best magazine in the world. Period.
10. It's 5 o'clock somewhere.
Thursday, February 12, 2009
Tuesday, January 13, 2009
Come On ESPN, Show Us The Real Heroes
Today came news that Myron Rolle, a safety on the Florida State football team and Rhodes scholarship winner, will forego the NFL for a year to study medical anthropology. This is a headline story that gets about 6 paragraphs in the newspaper. I could not help but contrast this to the coverage that Adam Jones, released by the Dallas Cowboys last week, received. ESPN covered the story ad nausem, even featuring program devoted to some dramatic charges against Mr. Jones.
The disappointing aspect of this to me was ESPN bombarding the airwaves with the Adam Jones story. The message that was delivered was simple: If you want to get on TV, engage in questionable behavior. My young sons, and kids everywhere, are receiving the message that doing the right thing will not get you noticed, but revealing bad character will make you a national celebrity. This is not confined to athletics, but is true in all walks of life. We get bombarded by aberrant behavior from Hollywood actors and actresses all the time. Even CNBC is in on the act covering the Bernie Madoff story at the expense of all else.
In my opinion, ESPN needs to devote more time to covering Myron Rolle and less time covering Adam Jones. Rolle, generally projected to be a second round NFL draft pick this spring, earned his undergraduate degree in pre-med in two and a half years, then earned a Rhodes scholarship. He becomes the highest profile athlete since former Senator Bill Bradley in 1965 to win a Rhodes scholarship. Mr. Rolle still hopes to play in the NFL after completing his studies at Oxford, then after playing days he wants to open a clinic for the needy in the Bahamas. Mr. Rolle's story offers up to young people everywhere the importance of education. Mr. Rolle was able to parlay his outstanding athletic ability into something more meaningful. Kids everywhere need to be shown that excellence in education, not just athletics, is the path to opportunity.
No child ever grows up dreaming of being a junkie. No child grows up dreaming that one day he may murder someone with whom he/she argues. Or sexually abusing a young child. But these things happen, largely because so many of these children grow up in a situation where they have no hope. Inner city kids do not see that education is the path to an opportunity to lead a better life. They see drugs as the path to escape, they seek shelter in the protection gangs offer, they see law enforcement as the enemy and they see the Adam Jones's of the world as heroes. Why would Adam Jones be a hero to these kids? Because ESPN bombards them with his image. However, Mr. Rolle is the hero. Come on ESPN, show the kids a better way.
The disappointing aspect of this to me was ESPN bombarding the airwaves with the Adam Jones story. The message that was delivered was simple: If you want to get on TV, engage in questionable behavior. My young sons, and kids everywhere, are receiving the message that doing the right thing will not get you noticed, but revealing bad character will make you a national celebrity. This is not confined to athletics, but is true in all walks of life. We get bombarded by aberrant behavior from Hollywood actors and actresses all the time. Even CNBC is in on the act covering the Bernie Madoff story at the expense of all else.
In my opinion, ESPN needs to devote more time to covering Myron Rolle and less time covering Adam Jones. Rolle, generally projected to be a second round NFL draft pick this spring, earned his undergraduate degree in pre-med in two and a half years, then earned a Rhodes scholarship. He becomes the highest profile athlete since former Senator Bill Bradley in 1965 to win a Rhodes scholarship. Mr. Rolle still hopes to play in the NFL after completing his studies at Oxford, then after playing days he wants to open a clinic for the needy in the Bahamas. Mr. Rolle's story offers up to young people everywhere the importance of education. Mr. Rolle was able to parlay his outstanding athletic ability into something more meaningful. Kids everywhere need to be shown that excellence in education, not just athletics, is the path to opportunity.
No child ever grows up dreaming of being a junkie. No child grows up dreaming that one day he may murder someone with whom he/she argues. Or sexually abusing a young child. But these things happen, largely because so many of these children grow up in a situation where they have no hope. Inner city kids do not see that education is the path to an opportunity to lead a better life. They see drugs as the path to escape, they seek shelter in the protection gangs offer, they see law enforcement as the enemy and they see the Adam Jones's of the world as heroes. Why would Adam Jones be a hero to these kids? Because ESPN bombards them with his image. However, Mr. Rolle is the hero. Come on ESPN, show the kids a better way.
Sunday, January 11, 2009
It Is NOT God's Will
Why do bad things happen? I believe this is the hardest question that life throws at us. All of us encounter tragedy at some point in our life. Unbelievable tragedy sometimes occurs. For me, this was my wife's death in 1999 at the tender age of 31. She left behind two sons, 2 and 1. Why would a loving and merciful God take such a beautiful, loving woman, Mom, wife and daughter so young and leave her kids without a Mom and the rest of us to ponder a life cut woefully short? I do not know the answer to this question. I will never know the answer to this question in my lifetime.
Adam Hamilton, Senior Pastor at the United Methodist Church of the Resurrection in Leawood, Kansas is the best preacher I have ever heard. The man's sermons continually amaze me and cause me to think about my own faith and how to make it better. His sermon today addressed this very difficult question: Why do bad things happen?
First, let's question the question, if that makes sense. Does God allow bad things to happen? The assumption behind this question is that God is in control. And I believe that to a certain extent He is. However, if He is in total control, why is the Bible full of stories about His people constantly NOT doing as He commanded them to do? The Bible is full of stories about God picking up the pieces. If God were in full control would Adam and Eve have partaken of the forbidden fruit in the Garden of Eden and introduced sin into the world? But can God prevent bad things from happening? Intellectually, it makes sense that God wrote the laws of nature, in a creation period version of a software program (Laws of Nature 1.0?). This says the Laws of Nature that God programmed will never be broken. Yet we hear stories of miracles occuring today. The deathly ill person who recovers. The person who survives a terribly tragic event buried under the rubble. So the Laws of Nature do not appear absolute. Yet these events are so few and far between that we still wonder. And we still ask ourselves, why would we worship a God that would even fathom these terrible tragedies?
Even today, I have no answer to this question. I know that God is. God is mysterious. He loves us and yet he allows us to suffer. The text of Pastor Hamilton's sermon was the book of Job. Job is a righteous man who suffers many bad things as Satan makes every attempt to get Job to turn away from God. What this book of the Bible becomes about is the advice of Job's friends. Job's friends tell him he must have sinned against God and that Job suffering is the Lord's retribution. The modern day equivalent is "this must have been God's will." Throughout the book, Job counters that he does not know what he has done to deserve all the suffering he endures. And many of us today feel the same way. So, why would I worship a God who let a terrible tragedy happen to me? I have spent many days being angry at God. I still get angry at God. Yet a friend once told me "God is still listening." And He has sent me people to help me deal with it.
What does this tell us today? First, that tragedy is going to happen. Tragedy is a part of life and we cannot control it. What can we control? Our response to tragedy. We should be beacons of hope, strength and courage. I remember the day my wife died in that tragic car accident. The accident occured just outside Chattanooga, Tennessee, many miles from my home. One of the things the hospital did for me was call a couple of local churches. One church sent down lay people from their church to come and be with the kids and help me in my darkest hour. The pastor's wife from one church went to Wal-Mart and bought diapers for the boys and a change of clothes for all us, since our suitcases were in the car that was in the salvage yard that was closed for the evening. The generosity of these people will never be forgotten. No one told me "this was God's will." No one told me this was punishment or judgement for sin in my life, or in Angie's life. They came, they comforted, they provided hope.
Adam Hamilton, Senior Pastor at the United Methodist Church of the Resurrection in Leawood, Kansas is the best preacher I have ever heard. The man's sermons continually amaze me and cause me to think about my own faith and how to make it better. His sermon today addressed this very difficult question: Why do bad things happen?
First, let's question the question, if that makes sense. Does God allow bad things to happen? The assumption behind this question is that God is in control. And I believe that to a certain extent He is. However, if He is in total control, why is the Bible full of stories about His people constantly NOT doing as He commanded them to do? The Bible is full of stories about God picking up the pieces. If God were in full control would Adam and Eve have partaken of the forbidden fruit in the Garden of Eden and introduced sin into the world? But can God prevent bad things from happening? Intellectually, it makes sense that God wrote the laws of nature, in a creation period version of a software program (Laws of Nature 1.0?). This says the Laws of Nature that God programmed will never be broken. Yet we hear stories of miracles occuring today. The deathly ill person who recovers. The person who survives a terribly tragic event buried under the rubble. So the Laws of Nature do not appear absolute. Yet these events are so few and far between that we still wonder. And we still ask ourselves, why would we worship a God that would even fathom these terrible tragedies?
Even today, I have no answer to this question. I know that God is. God is mysterious. He loves us and yet he allows us to suffer. The text of Pastor Hamilton's sermon was the book of Job. Job is a righteous man who suffers many bad things as Satan makes every attempt to get Job to turn away from God. What this book of the Bible becomes about is the advice of Job's friends. Job's friends tell him he must have sinned against God and that Job suffering is the Lord's retribution. The modern day equivalent is "this must have been God's will." Throughout the book, Job counters that he does not know what he has done to deserve all the suffering he endures. And many of us today feel the same way. So, why would I worship a God who let a terrible tragedy happen to me? I have spent many days being angry at God. I still get angry at God. Yet a friend once told me "God is still listening." And He has sent me people to help me deal with it.
What does this tell us today? First, that tragedy is going to happen. Tragedy is a part of life and we cannot control it. What can we control? Our response to tragedy. We should be beacons of hope, strength and courage. I remember the day my wife died in that tragic car accident. The accident occured just outside Chattanooga, Tennessee, many miles from my home. One of the things the hospital did for me was call a couple of local churches. One church sent down lay people from their church to come and be with the kids and help me in my darkest hour. The pastor's wife from one church went to Wal-Mart and bought diapers for the boys and a change of clothes for all us, since our suitcases were in the car that was in the salvage yard that was closed for the evening. The generosity of these people will never be forgotten. No one told me "this was God's will." No one told me this was punishment or judgement for sin in my life, or in Angie's life. They came, they comforted, they provided hope.
Wednesday, January 7, 2009
A Message of Hope Amidst the Turmoil
Hope n. expectation of fulfillment or success
"Where there is no vision, the people perish." Proverbs 29:18
Where's the hope? The ADP jobs report came out today and again, we are reminded of the troubling times in which we currently live. According to ADP, the private sector lost 693,000 jobs in December. This is an astouding figure for a full year, much less one month. It also marks the largest monthly job loss since ADP began tracking private sector job changes. On top of that, we see daily images of Bernie Madoff, the man who ran the biggest Ponzi scheme of all time. One of his investors, a Frenchman who had lost $1.5 billion, committed suicide. German billionaire Adolf Merckle also committed suicide rather than watch his business empire crumble. The chairman of Satym Computer Services Ltd resigned today after saying he had falsified assets and earnings of the company for several years. Ironically Satym in sanskrit means "truth." The headlines, in short, remain full of despair.
Why do we hope? First, we humans are relentlessly and endlessly optimistic. Hope gets us out of bed in the morning. We wake up believing that today will be a good day. We hope our favorite team will have a successful upcoming season. We believe our company's sales will grow this year, or that our investments will all perform well. We believe that next date will be with The One. Our hope breeds action. We are more likely to take action when we believe a positive outcome will result. We hope because, as the definition says above, we seek fulfillment. Hope gives us the opportunity to dream of fulfillment. Another way of saying this is that hope gives us vision. Hope gives us possibilities. Finally, hope gives us life. What sort of world would we live in if we could not hope that tomorrow will be better than today?
Why do we place our hope where we do? Why do we place our hope in people who are fallible, or we place it in money, which can be here today and gone tomorrow? Why do we place our hope in a financial system that is only as good as the people who are running it? In other words, we keep placing our hope in people and things that constantly fail us? My answer is that these things are tangible. It is easy to think "If only I have a little more of this thing, then I will be happy." Or we say "If only I had someone to share my life with then I will be happy." We place our hope, and bet our happiness, on people and things that are bound to fail us. It is much easier than placing our hope on something intangible.
After 2008, we need a reason to hope. What do we hope for? Certainly, we hope for happiness, for peace and contentment. We hope that good things will happen to us. We hope we will see and experience something truly amazing. But the hope is not going to rest in someone else. The hope is not going to lie in something, no matter what its value. The hope that our tomorrow will be better than today lies within us. Each of us possesses the ability to make our own piece of this world a better place. Hope begins with a Spirit endowed to us by our God, is breathed into us and allows us to hope. A Spirit that allows us to give and receive love, a Spirit that allows us to stand up to wrong and hope for the triumph of right. We want to believe, we want to hope. I find it best to place hope in the God that gave us the ability to hope in the first place. And then to believe that He gave me the gift of hope to make my world, and the bigger world around me, a better place.
"Where there is no vision, the people perish." Proverbs 29:18
Where's the hope? The ADP jobs report came out today and again, we are reminded of the troubling times in which we currently live. According to ADP, the private sector lost 693,000 jobs in December. This is an astouding figure for a full year, much less one month. It also marks the largest monthly job loss since ADP began tracking private sector job changes. On top of that, we see daily images of Bernie Madoff, the man who ran the biggest Ponzi scheme of all time. One of his investors, a Frenchman who had lost $1.5 billion, committed suicide. German billionaire Adolf Merckle also committed suicide rather than watch his business empire crumble. The chairman of Satym Computer Services Ltd resigned today after saying he had falsified assets and earnings of the company for several years. Ironically Satym in sanskrit means "truth." The headlines, in short, remain full of despair.
Why do we hope? First, we humans are relentlessly and endlessly optimistic. Hope gets us out of bed in the morning. We wake up believing that today will be a good day. We hope our favorite team will have a successful upcoming season. We believe our company's sales will grow this year, or that our investments will all perform well. We believe that next date will be with The One. Our hope breeds action. We are more likely to take action when we believe a positive outcome will result. We hope because, as the definition says above, we seek fulfillment. Hope gives us the opportunity to dream of fulfillment. Another way of saying this is that hope gives us vision. Hope gives us possibilities. Finally, hope gives us life. What sort of world would we live in if we could not hope that tomorrow will be better than today?
Why do we place our hope where we do? Why do we place our hope in people who are fallible, or we place it in money, which can be here today and gone tomorrow? Why do we place our hope in a financial system that is only as good as the people who are running it? In other words, we keep placing our hope in people and things that constantly fail us? My answer is that these things are tangible. It is easy to think "If only I have a little more of this thing, then I will be happy." Or we say "If only I had someone to share my life with then I will be happy." We place our hope, and bet our happiness, on people and things that are bound to fail us. It is much easier than placing our hope on something intangible.
After 2008, we need a reason to hope. What do we hope for? Certainly, we hope for happiness, for peace and contentment. We hope that good things will happen to us. We hope we will see and experience something truly amazing. But the hope is not going to rest in someone else. The hope is not going to lie in something, no matter what its value. The hope that our tomorrow will be better than today lies within us. Each of us possesses the ability to make our own piece of this world a better place. Hope begins with a Spirit endowed to us by our God, is breathed into us and allows us to hope. A Spirit that allows us to give and receive love, a Spirit that allows us to stand up to wrong and hope for the triumph of right. We want to believe, we want to hope. I find it best to place hope in the God that gave us the ability to hope in the first place. And then to believe that He gave me the gift of hope to make my world, and the bigger world around me, a better place.
Wednesday, December 17, 2008
The Great Unwinding
The party is over and the Great Unwinding has come. David Rosenberg, North American Economist at Merrill Lynch, wrote an interesting piece entitled "The Frugal Future." While this is his outlook for 2009, it really paints a picture of changing secular trends. His outlook is rather gloomy, as he tends to consistently have bearish analysis. However, I think this piece makes good points and I agree with many of the points he makes.
Rosenberg believes that the US economy will be in recession throughout 2009 and into early 2010 before recovering. This is a consumer-led recession. The consumer accounts for 70% of US GDP and 20% of the global economy. He backs up and notes that the average of the 10 US recession since WWII has lasted 10 months, but the average of the 32 US recessions since the Civil War has lasted 18 months. The reason that recent recessions were milder by comparison was due to two things: favorable demographics (baby boomers) and an expanding credit cycle. He argues both are done now. He spends most of his time on why credit will not expand going forward.
The current recession started largely due to a speculative bubble in housing prices that came unwound with excessive defaults in subprime mortgages. This recession will be prolonged by falling household assets, long-term consumer debt paydown, and deflation. I believe the real story here is the Great Unwinding - consumers are paying down debt. I think we will see this last for several years, not just several quarters. With consumers directing dollars to paying down debt, instead of increasing consumption, we are in for an economic malaise that will last a long time. During the third quarter, households had a net debt paydown of $29 billion.
Household assets are also declining, which is not surprising given what has happened to real estate values. Remember, homes are the largest source of net worth for the average American. Many economists are looking for a near-term bottoming in housing prices, at which point they believe prices will rebound. This analysis misses the bigger picture. The bigger picture is that there is no pent-up demand for houses and no amount of interest rate easing will create demand. Home ownership is still at a near record level, and well above historical averages. Further, we still have a near record amount of housing inventory, which now stands at 11 months. And the housing inventory is holding steady in spite of the fact that housing starts have dropped 65% from peak levels over the past couple of years. Finally, the marginal new home buyer is not credit worthy. People with foreclosures on their credit history will be unable to purchase a new home. With unemployment trending higher (6.7% now, could be going to double digits!), I do not see a catalyst for demand. While I look for the government to do all it can to stimulate demand, there is simply no pent-up demand. The government will merely be pushing on a string.
Deflation will also weigh down the economy over several years. And I see the economy in a deflationary mode. CPI fell 1.7% y/y in November. OPEC announced its largest cut in production ever today - and the price of oil FELL to a 4-year low. Normally, production cuts induce oil price increases. The price of gas has fallen from $4/gallon to about $1.75/gallon today. This is the equivalent of a $325 billion annual tax cut. Twice as much as the "rebate" checks we received earlier this year. Yet, with all this stimulus, what is GDP expected to do in the fourth quarter? Many economists call for GDP to fall 5-6% this quarter.
Ultimately, we are seeing a secular shift in consumer behavior. We have our cars, we have our HDTV's, we have our computers, our cell phones. We also have the debt to go with it. I believe we, as a collective society, will be paying down debt for awhile. I do not think we will revisit the Great Depression, nor do I see us revisiting a Japanese-style stagnation of the 1990's. But, what we do have is the Great Unwinding. What do I advise doing in this environment? Pay down debt. What if you have already done this? Buy long-term US Treasury bonds and long-term high grade corporate bonds. Buy equities that pay consistent dividends and have a history of raising their dividends.
Rosenberg believes that the US economy will be in recession throughout 2009 and into early 2010 before recovering. This is a consumer-led recession. The consumer accounts for 70% of US GDP and 20% of the global economy. He backs up and notes that the average of the 10 US recession since WWII has lasted 10 months, but the average of the 32 US recessions since the Civil War has lasted 18 months. The reason that recent recessions were milder by comparison was due to two things: favorable demographics (baby boomers) and an expanding credit cycle. He argues both are done now. He spends most of his time on why credit will not expand going forward.
The current recession started largely due to a speculative bubble in housing prices that came unwound with excessive defaults in subprime mortgages. This recession will be prolonged by falling household assets, long-term consumer debt paydown, and deflation. I believe the real story here is the Great Unwinding - consumers are paying down debt. I think we will see this last for several years, not just several quarters. With consumers directing dollars to paying down debt, instead of increasing consumption, we are in for an economic malaise that will last a long time. During the third quarter, households had a net debt paydown of $29 billion.
Household assets are also declining, which is not surprising given what has happened to real estate values. Remember, homes are the largest source of net worth for the average American. Many economists are looking for a near-term bottoming in housing prices, at which point they believe prices will rebound. This analysis misses the bigger picture. The bigger picture is that there is no pent-up demand for houses and no amount of interest rate easing will create demand. Home ownership is still at a near record level, and well above historical averages. Further, we still have a near record amount of housing inventory, which now stands at 11 months. And the housing inventory is holding steady in spite of the fact that housing starts have dropped 65% from peak levels over the past couple of years. Finally, the marginal new home buyer is not credit worthy. People with foreclosures on their credit history will be unable to purchase a new home. With unemployment trending higher (6.7% now, could be going to double digits!), I do not see a catalyst for demand. While I look for the government to do all it can to stimulate demand, there is simply no pent-up demand. The government will merely be pushing on a string.
Deflation will also weigh down the economy over several years. And I see the economy in a deflationary mode. CPI fell 1.7% y/y in November. OPEC announced its largest cut in production ever today - and the price of oil FELL to a 4-year low. Normally, production cuts induce oil price increases. The price of gas has fallen from $4/gallon to about $1.75/gallon today. This is the equivalent of a $325 billion annual tax cut. Twice as much as the "rebate" checks we received earlier this year. Yet, with all this stimulus, what is GDP expected to do in the fourth quarter? Many economists call for GDP to fall 5-6% this quarter.
Ultimately, we are seeing a secular shift in consumer behavior. We have our cars, we have our HDTV's, we have our computers, our cell phones. We also have the debt to go with it. I believe we, as a collective society, will be paying down debt for awhile. I do not think we will revisit the Great Depression, nor do I see us revisiting a Japanese-style stagnation of the 1990's. But, what we do have is the Great Unwinding. What do I advise doing in this environment? Pay down debt. What if you have already done this? Buy long-term US Treasury bonds and long-term high grade corporate bonds. Buy equities that pay consistent dividends and have a history of raising their dividends.
Monday, December 15, 2008
Top 10 Surprises For 2009
Former Morgan Stanley strategist Byron Wien puts out his Top 10 surprises for the upcoming year about this time of the year, which always makes for fun reading this time of the year for the Wall Street crowd. Mr. Wien bases his surprises on events that are outside the consensus thinking at the time, but ones he believes have a better than 50-50 chance of happening. Looking back, it’s amazing how some of his out-of-the-consensus calls turn out to be correct. To see Mr. Wien’s Top 10 Surprises for 2008, go to the following link: (http://www.portfolio.com/views/blogs/daily-brief/2008/01/02/byron-wiens-10-surprises-coming-in-2008). His calls focus almost exclusively on the economy and financial markets. Mine are more inclusive. However, I do not claim that any of these have a better than 50-50 chance of happening. Some will even require a miracle of biblical proportions in order to happen.
1. The credit crisis gets worse, not better. Despite over $1 trillion in rescue and bailout money, housing defaults continue to rise throughout the year. The government essentially becomes powerless to stop the tide of foreclosures. Housing prices continue to tumble throughout the year.
2. Interest rates continue to go lower. The 10-year US Treasury note, now trading at 2.55% as I write this, will drop below 2% in 2009. The possibility of an inverted yield curve starts to come into play, which is amazing considering the fed funds rate is below 1% and the 2-year T-Note is trading below 1%.
3. The price of oil will stabilize at $70/barrel. Oil current trades at $49/barrel, and many analysts expect the price of oil to go lower as the world economies sink into a recession. However, OPEC will actually cut its production so that oil prices may rise.
4. Unemployment reaches double digits. There have been whispers of double digit unemployment in the investment community, but no one wants to admit that this may actually happen.
5. Consumers will actually de-leverage their own balance sheets. In fact, I think this could be a defining event for several years, as consumption is reduced and debt payment increased.
6. Entertainment will be marked by the “Year of the Comeback.” Who will lead the way? Britney Spears. I wouldn’t be surprised to see a wiser, more mature Britney. Then again, she is still capable of the Trainwreck Britney of 2007.
7. At least 5 congressmen will get caught up in a scandal involving financial or sexual impropriety. Do these people ever learn?
8. A breakthrough hybrid car will be announced by either GM or Ford that promises to get at least 100mpg. The car will be promised by 2015. We will never see the car.
9. Oklahoma will win the BCS championship game, UConn will win the NCAA men’s basketball championship, Pittsburgh will win the Super Bowl, the LA Lakers will win the NBA championship, and New York will win the World Series…the Mets, that is.
10. I will get married. That would be the biggest surprise of all.
1. The credit crisis gets worse, not better. Despite over $1 trillion in rescue and bailout money, housing defaults continue to rise throughout the year. The government essentially becomes powerless to stop the tide of foreclosures. Housing prices continue to tumble throughout the year.
2. Interest rates continue to go lower. The 10-year US Treasury note, now trading at 2.55% as I write this, will drop below 2% in 2009. The possibility of an inverted yield curve starts to come into play, which is amazing considering the fed funds rate is below 1% and the 2-year T-Note is trading below 1%.
3. The price of oil will stabilize at $70/barrel. Oil current trades at $49/barrel, and many analysts expect the price of oil to go lower as the world economies sink into a recession. However, OPEC will actually cut its production so that oil prices may rise.
4. Unemployment reaches double digits. There have been whispers of double digit unemployment in the investment community, but no one wants to admit that this may actually happen.
5. Consumers will actually de-leverage their own balance sheets. In fact, I think this could be a defining event for several years, as consumption is reduced and debt payment increased.
6. Entertainment will be marked by the “Year of the Comeback.” Who will lead the way? Britney Spears. I wouldn’t be surprised to see a wiser, more mature Britney. Then again, she is still capable of the Trainwreck Britney of 2007.
7. At least 5 congressmen will get caught up in a scandal involving financial or sexual impropriety. Do these people ever learn?
8. A breakthrough hybrid car will be announced by either GM or Ford that promises to get at least 100mpg. The car will be promised by 2015. We will never see the car.
9. Oklahoma will win the BCS championship game, UConn will win the NCAA men’s basketball championship, Pittsburgh will win the Super Bowl, the LA Lakers will win the NBA championship, and New York will win the World Series…the Mets, that is.
10. I will get married. That would be the biggest surprise of all.
For The Love of Money
“For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.” I Timothy 6:10
“Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God." Matthew 19:24
The two Bible verses above really stuck with me as I read an article about preacher Joel Osteen entitled “God Wants Me to Be Rich” (http://www.portfolio.com/executives/features/2008/07/16/Megachurch-Preacher-Joel-Osteen). I have this feeling the two verses above never make it into Mr. Osteen’s sermons. The curmudgeon in me has a hard time embracing the “prosperity gospel”, as it is sometimes called, because it conjures up images of God wanting me to have a multi-million dollar house and a multi-million dollar bank account. While I admit these would be nice, I do not believe for one minute that God wants me to have these things. He may choose to bless me with these things as a result of my ability to work hard and work smart. What I believe God wants from me is to worship Him. Part of that worship entails stewardship of the money with which I am blessed.
Mr. Osteen is the minister at the country’s largest church. His church claims 45,000 members and generates $76 million in annual revenue, and carries $45 million in debt. Mr. Osteen does not draw a salary from his church, nor has he since 2005. However, all book royalties go to Mr. Osteen. He gives much of this back to the church. Still, at the end of the day, Mr. Osteen takes home quite a haul, perhaps justified given the size of the operation he oversees. I have no problem with the size of Mr. Osteen’s church, nor do I have any problem with any amount of money he may take home. But, as I contrast Mr. Osteen’s message with that of my own senior pastor (I belong to a church with 15,000 members and the pastor earns a comfortable salary), I come away with a sense that the prosperity gospel is not what Jesus preached. Does this mean that we should be poor? No! However, the accumulation of wealth for the sake of accumulating wealth and lavishing ourselves with only the most expensive items is not what God intended either.
My message in this is simple. Work hard, work smart. Work with passion, and work with pride. Invest wisely. If you make a ton of money, more power to you. I am not against making money. Nor do I believe in giving away so much that you become a charity case too. But give back to the community that has richly blessed you. Help those less fortunate. God does not want your outward signs of material wealth. He wants your heart and soul.
“Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God." Matthew 19:24
The two Bible verses above really stuck with me as I read an article about preacher Joel Osteen entitled “God Wants Me to Be Rich” (http://www.portfolio.com/executives/features/2008/07/16/Megachurch-Preacher-Joel-Osteen). I have this feeling the two verses above never make it into Mr. Osteen’s sermons. The curmudgeon in me has a hard time embracing the “prosperity gospel”, as it is sometimes called, because it conjures up images of God wanting me to have a multi-million dollar house and a multi-million dollar bank account. While I admit these would be nice, I do not believe for one minute that God wants me to have these things. He may choose to bless me with these things as a result of my ability to work hard and work smart. What I believe God wants from me is to worship Him. Part of that worship entails stewardship of the money with which I am blessed.
Mr. Osteen is the minister at the country’s largest church. His church claims 45,000 members and generates $76 million in annual revenue, and carries $45 million in debt. Mr. Osteen does not draw a salary from his church, nor has he since 2005. However, all book royalties go to Mr. Osteen. He gives much of this back to the church. Still, at the end of the day, Mr. Osteen takes home quite a haul, perhaps justified given the size of the operation he oversees. I have no problem with the size of Mr. Osteen’s church, nor do I have any problem with any amount of money he may take home. But, as I contrast Mr. Osteen’s message with that of my own senior pastor (I belong to a church with 15,000 members and the pastor earns a comfortable salary), I come away with a sense that the prosperity gospel is not what Jesus preached. Does this mean that we should be poor? No! However, the accumulation of wealth for the sake of accumulating wealth and lavishing ourselves with only the most expensive items is not what God intended either.
My message in this is simple. Work hard, work smart. Work with passion, and work with pride. Invest wisely. If you make a ton of money, more power to you. I am not against making money. Nor do I believe in giving away so much that you become a charity case too. But give back to the community that has richly blessed you. Help those less fortunate. God does not want your outward signs of material wealth. He wants your heart and soul.
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