“It is useless to attempt to reason a man out of a thing he was never reasoned into”

Jonathan Swift
"The Democrats have moved to the right, and the right has moved into a mental hospital." - Bill Maher
"The city is crowded my friends are away and I'm on my own
It's too hot to handle so I gotta get up and go

It's a cruel ... cruel summer"

Monday, February 23, 2009

Gas, Liquor, and Ammo

Geithner as Spock?

This is an economic post, so I wanted to make you laugh first, 'cause it's bleak. And after talking with a bunch of analysts, whom I trust implicitly to give me info to base my own families future hopes on, I gotta be honest . . .

I got pink-slipped last Thursday.
Out on my ass in the worst economy in 25 years. In an industry that is on life-support. More in a minute . . .

First, I believe that life is about keeping our promises, and I made promises to my family . . . that my wife and I would retire with dignity. A promise to help my kids with their undergrad. Wedding for my daughter? Gratis. All of this was based upon the fact that for the last 80 years or so, the markets went generally up. The most plain vanilla mutual fund, left alone, grew around 11% for the last 25 years before fees. Bond funds around 6%. Market timers generally made 3%.

Until last year.

All correlations that I can get technical research on have been reset to zero. I have been reading until late just about every night. This is a meltdown where we have to find a new way, 'cause we are in a dark alley. You know this already . . .

As a good little capitalist-American, I bought the "social security won't be there" argument, that business needs some oversight, but that smart people start companies that make it, and investment banks propel the economy forward through smart loans as a result of serious due diligence, and not a handshake.

I also had faith that regulators in the financial world were not as revolving door as I thought. I was wrong.

I was wrong about so much . . . why shouldn't hedge funds be allowed to make $$ on the way down as well as up through short sells? Why shouldn't seeking alpha (or greater than average returns) be the holy grail?

Hedge funds manipulated market research, brokerage firms became the largest oil companies in the world through futures, banks made up highly complex fiction, and rating agencies who get paid by said banks put an "Aaa" stamp of approval on that fiction. All lies.

Back to my prospects. . .

I am luckier than others, because the family is healthy, and I have a few months salary in a money market. Three months, by our budget. Many, many, many, many others are dealing with choosing between meds and food. Or a house and food. I can use my industry knowledge to buy temporary high deductible health insurance rather than rip-off COBRA, and that will help some.

But here is the thing . . . I was kicking ass for for my company. Me and one other guy represented 50% of all departmental sales out of 10 people. I added $1.6 MM in yearly recurring revenues to the firms bottom line in a failing economy. Budgets have to be cut in bad times, Prodigal Son, C U.

Being a great performing, loyal, w2 employee does not mean anything anymore other than you are one day away from being shit-canned. These at-will work laws, union suppression, the total belief in unfettered free markets that police themselves. . . brother and sisters, there has to be another way.

I have one, and will post it later . . . but now, please excuse me. I am going to go wrestle around with the kids, kiss them, and get them ready for bed.

One last thought . . . in the end, a house is a house, car is just a car, but is a promise made to our kids for a better life than their folks, and then broken when they are too young to understand just one of life's hard lessons?

-Prodigal Son