My dogs gave me an ultimatum and would not leave me alone.
Either I grant their resolutions or they will summon Zombie Dogs.
Here are my dogs’ resolutions for me.
What should I do?
Zombie Dogs or Resolutions
Reply
December Caption Contest – Citigroup Moves
Here is the entry that I submitted to USA Today opinion caption contest.
Enjoy!
Leveraged Loans Predict 2015 Crash
Multiple charts exist which predict another recession soon!
Normally I am a very positive person. But recently I found not one but two charts which show we could have a repeat of the recent Great Recession.
The first chart above shows how the Federal Reserve and Quantitative Easing have allowed financial institutions to run wild again. In summary, leveraged lending is out of control. For two years, leveraged loans have risen as fast and to a greater level than 2007, the year before the Great Recession.
The New York Times reports that leveraged lending is greater and the associated rules more lax than in 2007. Here is a portion of a news report.
What can’t be denied, however, is that standards in the leveraged loan market have become much looser in recent years. The companies that have taken out the loans are on average much more indebted than in recent years. Companies that have done deals this year have debt that is 4.9 times as large as their annual cash flows, measured using earnings before subtracting expenses like interest, taxes and depreciation, according to data from Standard & Poor’s Capital IQ. That multiple is up from 3.9 times in 2011 — and it is the same as the number for 2007, when the last boom in leveraged loans peaked.
This time around, however, one aspect of leveraged lending is much more aggressive. The special provisions within loan agreements that were once thought crucial for protecting creditors are fast disappearing. So far this year, 63 percent of leveraged loan deals lack such provisions, far higher than 25 percent in 2007, according to data from S.&P. Capital IQ. “Contractually, things are really at their weakest,” said Christina Padgett of Moody’s Investors Service.
You can read more details at one of these websites:
http://dealbook.nytimes.com/2014/11/04/a-recent-surge-of-leveraged-loans-rattles-regulators/?_r=0
http://www.zerohedge.com/news/2015-04-09/oil-hedges#comment-5977321
http://www.bloomberg.com/news/2015-01-06/private-equity-deals-spur-leveraged-loan-surge.html
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A second chart shows that recent Dow Jones record increases also occurred in 2008.
http://en.wikipedia.org/wiki/List_of_largest_daily_changes_in_the_Dow_Jones_Industrial_Average
Unfortunately 10 out of 20 increases of 400 or more of the Dow occurred in 2008, the year of the last recession
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Can another Great Recession be stopped? No. Apparently the Federal Reserve did not act fast enough nor aggressive enough in 2014 to stop the out of control leveraged loans.
To protect yourself, read this website:
https://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Thanks for reading this.
Holiday Wish List
1. Find CHOPSTICKS that work. For food, not flies.
2. Start an internet casting site dedicated to COMEDY films, tv shows and radio programs. Call it COMEDYCATION. Get it? A commingling of the words comedy, communication, and medication. Because humor is the best medicine.
3. Learn how to JUGGLE.
4. Pass some kind of US CONSTITUTIONAL AMENDMENT to a.) limit and expose campaign financing, b.) limit human rights to humans not corporations, or c.) both.
5. Invent GUM that won’t stick to desks.
6. Start the AMERICAN MAJORITY PARTY that votes based on the results of at least 2 national polls.
7. Go BUNGEE JUMPING off a bridge over water.
Maybe next year.
HAPPY HOLIDAYS!
Citigroup to Move HQ into Congress Bldg
“Citigroup executives can be right on the floor with them, handing them legislation and telling them how to vote.”
No joke. Makes me kind of sad.
The banking giant Citigroup announced on Friday that it would move its headquarters from New York to the U.S. Capitol Building, in Washington, D.C., in early 2015.
Tracy Klugian, a spokesperson for Citi, said that the company had leased thirty thousand square feet of prime real estate on the floor of the House of Representatives and would be interviewing “world-class architects” to redesign the space to suit its needs.
Explaining the rationale behind the move, Klugian told reporters, “Instead of constantly flying out from New York to give members of Congress their marching orders, Citigroup executives can be right on the floor with them, handing them legislation and telling them how to vote. This is going to result in tremendous cost savings going forward.”
Not only did the big banks grease enough palms so Congress repealed portions of Dodd Frank designed to prevent another recession, they managed to increase the donation limitation from $32,400 to $324,000. Hmmmmmm…..
For more info, see
http://www.zerohedge.com/news/2014-12-16/are-you-really-ready-world-be-ruled-bankers
Zombie Dogs
Have you seen these dogs?
I can tell these are Zombie Dogs because:
1. Their eyes are glazed over
2. Dogs can’t drive and
3. Their cancelled visas.
Let me know if you see them.
What Is Wrong With Capitalism?
Sure capitalism is not perfect. Is anything? Let’s examine the problems.
THE FIRST PROBLEM
As long as the minimum wage is below the poverty level, our society will be amoral.
The poverty level is defined as annual wages below $28,450 for a family of 4. Divided by 2,000 hours in a year, you get a poverty level hourly wage of $14.225 per hour (or less) for a family of 4.
Currently the national minimum wage is $7.25 and has not changed since 2009.
People trying to claw their way out of poverty will become pickpockets, blame co-workers for mistakes, cheat on time cards and steal supplies at work. Is that the kind of society we want to live in?
THE FIRST SOLUTION
Raising the minimum wage would help $27.8 million people.
Here is why we should raise the minimum wage according to a small business owner.
Spoiler alert: He thinks it will grow his business.
THE SECOND PROBLEM
This problem involves cheating on taxes and tax loopholes. In other words, giving priority to me, myself and I. As long as the tax system is overly complicated, humans are going to try to get away with something to get ahead of their neighbors. This mess, of course, was created by Congress.
THE SECOND SOLUTION
What can we do? We can plug the tax loopholes as proposed by Eric Schmidt. Google’s Chairman told angry British politicians last year: “plug the holes if you want more tax revenues”.
The result will be a reduction of our $18 trillion national debt.
THE THIRD PROBLEM
As long as you allow average national CEO pay to increase many times faster than inflation, you will have an amoral society. Average national CEO pay increased to $15.2 million in 2013.
The CEO to worker compensation ratio is 296 to 1 today versus 20 to 1 in 1965.
The result is the current wage inequality.
In order to keep up their fast rising salaries, CEOs and executives of financial institutions and other companies are taking huge risks with company and customer stock under the guise of pro-growth mergers and acquisitions using huge sums of leveraged loans.
Richard Baker, chief executive, along with his investment firm, NRDC Equity Partners, relied heavily on borrowed money. Of the $1.2 billion that it paid for Lord & Taylor, only $25 million came in the form of equity [2%], with the remainder made up of debt financing, secured by the department store estate. [The New York Times]
When was the last time you bought something with only a 2% down payment?
THE THIRD SOLUTION
Create annual Top Ten lists of Most Narcissistic CEOs and Highest Paid CEOs.
Maybe this will get us back to a more equitable ratio. 1965 was a pretty good year even though the ratio was only 20 to 1.
CONCLUSION
Capitalism is fraught with greed but it doesn’t have to be.
As the Google IPO started out saying, “Don’t be evil.” Better than that, let’s not be amoral. Thus reform needs to start with each of us.
We should be thinking more about the people around us or, even better, the world around us. The Mormons pledge 10% of their income. So why shouldn’t everyone, that can afford it, give just 1%?
Google stated in its “Letter from the Founders” as part of its original IPO paperwork, “We intend to contribute significant resources to the [Google] foundation, including employee time and approximately 1% of Google’s equity and profits in some form.”
In addition, let’s raise the minimum wage and try to close the gap between workers and CEOs.
Here are 7 suggestions to close the gap.
~~~~o~~~~
WHAT IS AMORALITY
Here is a great article about Silicon Valley Amorality. But amorality can be found everywhere there is capitalism.
AMORAL APP
There is an app to see how corrupt aka amoral you are. At least in Indonesia.
http://www.usatoday.com/story/tech/2014/11/25/corruption-indonesia-app/70086430/?csp=tech
LEVERAGED LOANS COULD CAUSE CRASH
https://michaelekelley.com/2014/12/20/leveraged-loans-predict-crash/
Thanks. Have a great day.
When Dogs Are Like People
We all want 5 minutes of fame.
We discover humility.
Have you noticed any other similarities between dogs and people?
Republicans Consider Unfriending Obama on Facebook
What is the social networking world coming to?
[The following is reprinted from The Washington Post as written by Dana Milbank.]
Among the many ways Republican members of Congress are contemplating to punish President Obama for his executive actions on immigration is a proposal of elegant simplicity: They would refuse to invite him to the Capitol to give his State of the Union address.
Yes, that should do the job. And if this doesn’t force Obama to back down from his executive orders, Republican lawmakers can escalate by unfriending him on Facebook and unfollowing him on Twitter. If even this fails, they can take the extreme step of having their Christmas cards from the Obamas returned to sender. Surely, the president then would have no choice but to relent.
For the complete editorial, visit this website.
Who’s Been Messin’ With My Workstation?
We all love our workstations. Even if our employer bought them and put a label on them. We would hate to have someone move or change it. Here is one such story.
Upon visiting a customer site to perform a software upgrade, the three of us engineers couldn’t help but notice the Post-it notes all over the edge of the console. There was so many notes that there was little room for one more.
The main operator’s name was Mike just like mine. He was a really big guy like a former football player who had retired from the game and put on a few pounds.
When Mike went to lunch, one of our engineers decided to put one more Post-it note on his workstation. He wrote “Call your mother” on one and stuck it near the center top rim amongst the many others. We all wondered if Mike would notice the new note with so many others covering the edge.
When Mike came back from lunch, a mere 5 minutes went by when Mike asked in a deep angry voice, “Who’s been messin’ with my workstation?”
The three of us engineers cracked up and laughed hysterically. When we finally calmed down, the engineer that put the last Post-it-note on the workstation confessed.
Mike too had calmed down and understood it was a simple joke.
But this simple joke could have gone seriously wrong. What if Mike’s mother had passed away? Then the joke would have been a tragic reminder of a missed loved one.
So the moral of this story is always watch what you say. Anything you say may come back to haunt you.
Michael E Kelley 