Three airlines have gone out of business, or at least declared bankruptcy and stopped flying which is the same from the customer’s point of view, in the last week or two. Skybus was the latest on Friday. But you’d never know it looking at the NYTimes. If you search, you can find a couple 1-paragraph items from the AP, but nothing written by staff. I thought maybe that meant they were preparing some big article, maybe for the Sunday magazine, but no. So what gives? NYTimes, are these just airlines flown by the little people? If they had first class sections you would mention them?
Airline Woes
April 6th, 2008Just another case of the Man keeping the Man down
April 4th, 2008Slate has an article comparing the underclass to the overclass, basically saying the super-rich and poor are very similar. It’s an amusing read, although I think they’re stretching some things to make it fit the story.
In the underclass, unmarried, young fathers don’t take responsibility for their children. In the overclass, twice-married, middle-aged Wall Street daddies don’t own up to the consequences of their insane financial miscues. Wall Street titans are almost incapable of seeing the problem with taking nine-figure payouts in years in which their stocks plummet.
[...]
In his book The Age of Abundance
, libertarian author Brink Lindsey boils down the difference between the desperately poor and the blissfully rich to an ability to focus on the long term. “Members of the underclass operate within such narrow time horizons and circles of trust that their lives are plagued by chronic chaos and dysfunction,” he says. By contrast, elites are well-organized long-term thinkers. Riiiiight. “Modern Wall Street is a system,” says Charles Morris—a former Chase banker and author of The Trillion Dollar Meltdown
Critics point to a pervasive sense of victimhood in the underclass. But listen to what Bear Stearns CEO Alan Schwartz told the troops after his firm succumbed to wounds that were almost entirely self-inflicted. “We here are a collective victim of violence,” he said. Yep, just another case of the Man keeping the Man down.
Paul O’Neill got out just in time
April 4th, 2008The NYTimes has an interview with Paul O’Neill, former treasury secretary. Worth reading just for the tone. I did have to check that it wasn’t an April Fool’s joke.
Do you think it was appropriate for the Federal Reserve to lend a helping hand to Bear Stearns and save a private investment company from its own bad decisions? I would say they didn’t save Bear Stearns. They saved the financial system from a panic collapse. I reject the notion that they helped Bear Stearns. Bear Stearns was destroyed.
No it wasn’t. It was purchased by JPMorgan, which will keep it alive. They’re going to keep the book alive. But the institution of Bear Stearns has been destroyed. They’ve gone from $158 to $2 of equity. It’s wallpaper. It’s not even good wallpaper. It’s butcher paper.
He has a great analogy explaining why no one can get a mortgage when only a small percentage are defaulting.
If you have 10 bottles of water, and one bottle had poison in it, and you didn’t know which one, you probably wouldn’t drink out of any of the 10 bottles; that’s basically what we’ve got there.
And that about sums up the whole crisis.
Q1 Goals roundup
April 3rd, 2008I didn’t set good goals this year (search the web for S.M.A.R.T. to see what good goals might look like). But I can still evaluate myself on them (good, okay, fail) and firm some of them up for the rest of the year.
Health: Okay. I’ve gotten my checkup, my cholesterol is good, and I’m getting enough protien and fiber. But I’m not exercising or loosing weight.
Financial: Good. I’m living within my means and saving. Other than investments in the market (401k) my networth is trending up. I’m contributing the amount I set in January to my retirement funds. It’s on autopilot since I haven’t changed jobs. Which brings me to…
New Job: Fail. I’ve got some things I need to do to even get to “okay”. Obviously “good” would be actually having a new job.
Finishing House: Okay. I’ve got a plumber in doing work, and the first set of inspections are done. I’ve made some decisions that need to be made to proceed with several projects. But I haven’t gotten as far as I wanted to.
Secondary Income: Fail. I haven’t been posting regularly. I haven’t looked into a couple of other things I meant to look at. I did finally set up the Amazon associates link, so if you click on a book in the sidebar (and then buy it) I’ll get a tiny cut of the total. But I have to reccomend buying books used (even though I don’t get a cut of that), so I suspect that won’t be a major source of income.
Time
April 3rd, 2008There’s an interesting article in the NYTimes today: For Entrepreneurs, It’s All About Time. It talks about prioritizing:
It sounds simple, he says, but most people don’t do it, deciding to complete tasks that are easier to do, but not necessarily the most important.
I think that’s one of my big weaknesses, though sometimes starting with one easily finished task gets some momentum going. Sometimes you have to stop what you’re doing for a second and ask yourself “is this the most important thing I could be doing right now?”
I get easily distracted, and there are tasks I don’t like to do, but making a list, prioritizing it, and doing the items in order does make a big difference on days I can stick with it.
They also recommend several books that might help, assuming you’re not just reading them to procrastinate.
BusinessWeek: The Entrepreneurship Myth
April 2nd, 2008BusinessWeek has an interesting interview called the Entrepreneurship Myth. In it author Scott Shane talks about popular myths about startups.
Shane’s book reveals a bleak picture of entrepreneurship in the U.S. It shows the average new venture will fail within five years, and even successful founders usually earn 35% less over 10 years than they would working for others.
This is probably true, but there are things you can do to make that number better. I suggest reading The 4-Hour Workweek
At the individual level, the core fact here is the typical, median, right-smack-in-the-middle entrepreneur is a failure. The cost is everything associated with that. So if you start a business and the business dies, you could have been working for somebody else. You could have been making a salary. You could have had the stability—you wouldn’t have had that kind of stress that comes from the up and down of running that business.
So there’s the personal costs. From an individual level, the myth is that somehow if you manage to hit the average or hit the median, you’re going to be fine. The reality is that the distribution is so skewed you have to hit the top for it to matter, and in fact, you have to hit the top 10% to have income as an entrepreneur better than what you would have gotten working for other people.
Here’s a link to his book (amazon, and I get a cut if you buy it through here): The Illusions of Entrepreneurship
April Fools
April 1st, 2008Wouldn’t it be really funny if we found out something major (like the Bear Stearns buyout) was a hoax? I’d laugh. And then maybe punch someone.
NYTimes: Inquiry Assails Accounting Firm in Lender’s Fall
March 28th, 2008Inquiry Assails Accounting Firm in Lender’s Fall
A sweeping five-month investigation into the collapse of one of the nation’s largest subprime lenders points a finger at a possible new culprit in the mortgage mess: the accountants.
Yeah, because accountants are just such edgy law breakers. I suspect the finger (in all senses of the phrase) goes to the boss of the accountants.
There are so many people who did things wrong here, it’s hard to pick just one. In this case, the auditors signed off on some things they shouldn’t have. But they didn’t make the decisions, just agreed they were okay. And that makes them a total failure as auditors, but not exactly the main culprit.
Imagine you’re driving down the road as the sun is going down with your headlights off and you pass a cop. Now the cop really should pull you over, but if he doesn’t and you crash into a tree when the road curves, it’s still your fault. You can blame it on him but you’re the one driving in the dark.
New Century made a whole series of bad choices, some of which may turn out to be illegal. KPMG audited them, and didn’t catch everything. So while KPMG should have caught the problems, it was New Century that created those problems.
I suspect this is far from the last article that will compare this mortgage mess to Enron.
ABCNews: Small Businesses Feeling the Squeeze
March 27th, 2008ABC News has an article Small Businesses Feeling the Squeeze. I think these folks are going to end up somewhere they don’t want to be. They claim that they’re keeping an eye on the bottom line, but in an economy like this they need to be pretty proactive.
They have cheaper competitors in China, they are having trouble getting paid by buyers, heating costs are going up, it doesn’t look good. They’ve got to economize and adapt, or close. They’re dipping into personal savings right now.
“With the recent pay cut that we both just took at the business, I’m concerned that by now our outgo is more than our income and that means it would only get worse, not better,” Diane says. “If it should come to another round of layoffs, my son is next on the list. And that would break my heart.”
I understand that she feels bad, but maybe your son should take a look at what it’s doing to you and go get a different job.
Diane says she is constantly assessing what she calls “the point of no return” for the company and she says she is determined not to let things get so bad they would face insolvency. But some weeks now — to stay afloat and make payroll — they dip into their personal savings.
While that takes the pressure off at work, it adds to the stress at home. The Dearings are more than $100,000 over budget and wondering how to make a dent in that debt.
“The business is in difficult straits,” Diane says. “We are overextended personally because there is no profit to bring home.”
Sounds like they’ve got some difficult choices to make.
NYTimes: Stop Those Checks
March 27th, 2008The NYTimes has an Op-Ed Stop Those Checks. The premise is that economists don’t think the checks will solve the problem, so we shouldn’t give them out. That’s great, but you can’t tell people they’ll get a check and then not give it to them. Maybe the checks are a bad idea (I kind of think that myself) but once you announce them you need to follow through.
The Op-Ed suggests using the money instead to clean up the mortgage mess.
My gut tells me that the vast majority of Americans would happily give up their rebate if they knew that the money would be used instead to help families in need and start the process of cleaning up the bad debts in the housing sector. Everyone knows that we will have to spend the money eventually and that the sooner the financial sector goes through detox the better it will be for everyone.
If he’s so sure, why doesn’t he just set up a non-profit to do that and ask people to sign their checks over to it? It should be fully funded pretty quickly, right? I suspect he’s on crack, most people have already spent their refund in their head. Now you’d be taking away “their money” and they won’t thank you for it.
Sure the money could be better used shoring up the financial system or creating government jobs (either directly or by starting projects that hire outside contractors) but it’s a little late to make that decision.