It's Tuesday evening and Janett's out, so I'm listening to the Clancy Brothers and Tommy Makem.
My thought was to share with you some recent experience. I do accounting temporary work. My last three assignments provide an interesting perspective on the state of our economic society.
1) A developer/manufacturer of acoustic devices. Probably started out 40 years ago making hearing aids. Now sells a couple hundred million dollars worth of miniature devices to fit in headphones, but a lot of high tech stuff. The founder died 8 or 9 years ago and his wife inherited. She tried to manage the business in accordance with his wishes but found it beyond her abilities and (perhaps influenced by the fact that she'd walk away with a lot on money) sold the firm to a British investment company which is in the final stages of shipping the whole business (there were three plants originally employing maybe a thousand people) to the Peoples Republic of China.
2) An E-commerce business selling sports/entertainment tickets grossing maybe a hundred million a year, employing a couple hundred including a lot of programmers and software development people. Recently they leased a third office site to hold the overflow from the first two sites; meanwhile they're building a three-story home office building. The employees are probably hoping the boss takes the company public and offers them options.
3) Just started - an importer/wholesaler of consumer products. The owner is an idea man with a Chinese surname who develops product concepts, then contracts with plants in China to produce the goods which the company markets to retailers in the US, including you-know-who. This company has grown about five-fold in the last seven years.
OK, it's just one guy's experience, anecdotal in nature to be sure. But as for me, I think I see a pattern here and it doesn't look good.
Tuesday, February 28, 2006
Saturday, February 25, 2006
How time flies
That last post was supposed to be much longer. I saved the long version as a draft, then when I opened it again the last half was gone. I got discouraged. I wanted to finish on that topic but haven't felt like rewriting it. OK, so here's a brief of what I wrote, then I can get on to other things.
At the start of his first term, facing the great depression, F D Roosevelt made it illegal for individuals to hold gold, and confiscated private holdings reimbursing the holders at the old price of $20 per ounce. He then revalued the gold owned by the treasury at $35 per ounce. Since individuals couldn't own gold the revaluation was about the exchange rate between countries. It was like holding a 40% off sale to try to promote the sale of American stuff to other countries in order to keep Americans working. Foreigners could now buy $35 worth of American stuff for one ounce of gold when the day before they could only get $20 worth of American stuff for the same ounce of gold. Of course all the other countries wanted to sell more of their stuff and keep their people working so they all devalued their currencies too. Some would argue that competetive currency devaluations and protective tarrifs (the other tool the governments used to try to insure markets for their national output) hurt everybody ands made the depression worse.
The depression didn't really end until World War II put everyone back to work. At
the end of World War II, the US was in a position to implement the golden rule in trying to reestablish world economic order, promote trade and reinvestment in Europe which had been devastated by the war. You know, "He who has the gold makes the rules". The results were the IMF, the World Bank, and the Bretton Woods agreement.
More on this fascinating topic later.
My writers bloc after the loss of the previous post has kept me from being in touch regarding a lot thats been happening. Going to see Noah and Lauren in New York before Noah leaves for Afghanistan was a big deal. Noah loves me and I love him.
We've had bad news, then maybe better news about Crystal and Scott's little girl Emily's health. They've probably got a better connection to Our Father than I due to their faithful devotion, but we can all pray and every prayer counts.
My mother(Mommo) at age 92 grows smaller and weaker as time passes, but continues to radiate love and grace. From an Email from my brother Joahn, "Mom is a little like the Cheshire cat, and I think she is fading away until nothing will be left but a smile. I only wish I had or will have that grace."
Love to all.
At the start of his first term, facing the great depression, F D Roosevelt made it illegal for individuals to hold gold, and confiscated private holdings reimbursing the holders at the old price of $20 per ounce. He then revalued the gold owned by the treasury at $35 per ounce. Since individuals couldn't own gold the revaluation was about the exchange rate between countries. It was like holding a 40% off sale to try to promote the sale of American stuff to other countries in order to keep Americans working. Foreigners could now buy $35 worth of American stuff for one ounce of gold when the day before they could only get $20 worth of American stuff for the same ounce of gold. Of course all the other countries wanted to sell more of their stuff and keep their people working so they all devalued their currencies too. Some would argue that competetive currency devaluations and protective tarrifs (the other tool the governments used to try to insure markets for their national output) hurt everybody ands made the depression worse.
The depression didn't really end until World War II put everyone back to work. At
the end of World War II, the US was in a position to implement the golden rule in trying to reestablish world economic order, promote trade and reinvestment in Europe which had been devastated by the war. You know, "He who has the gold makes the rules". The results were the IMF, the World Bank, and the Bretton Woods agreement.
More on this fascinating topic later.
My writers bloc after the loss of the previous post has kept me from being in touch regarding a lot thats been happening. Going to see Noah and Lauren in New York before Noah leaves for Afghanistan was a big deal. Noah loves me and I love him.
We've had bad news, then maybe better news about Crystal and Scott's little girl Emily's health. They've probably got a better connection to Our Father than I due to their faithful devotion, but we can all pray and every prayer counts.
My mother(Mommo) at age 92 grows smaller and weaker as time passes, but continues to radiate love and grace. From an Email from my brother Joahn, "Mom is a little like the Cheshire cat, and I think she is fading away until nothing will be left but a smile. I only wish I had or will have that grace."
Love to all.
Sunday, January 29, 2006
I'm a little disappointed when I go to someone's blog site and they haven't posted for a week. So apologies to all.
When I wrote about gold I said I'd explain about my concerns for the US dollar. It's pretty simple actually. The dollar has no intrinsic or fixed value. It's worth whatever you can get for it.
Originally, money was gold (or seashells or beads) - something desirable and rare. Using money was the practical alternative to a barter economy. Minting coins from gold has been done for thousands of years, and was a necessary step in developing economic systems. Governments reserved the privilege and responsibilty for minting coins to themselves, and insured a standard weight of gold for their coinage.
During the late middle ages as trade expanded banking houses would accept deposits from merchants and write IOUs for the amount of gold deposited which the merchant could use to make purchases further away than it was convenient to physically move the gold. The selling merchant would accept the IOU and take it to a local affilliate of the issuing bank to get the gold he was due. The bankers also came to realize that they till the IOUs were presented for payment they had gold on hand which they could lend out for the borrower's IOU. (This is essentially what we now call the multiplier effect - the same gold being used to make a purchase far away was being loaned out at home The banker could be in trouble if someone defaulted, which I guess is why Shylock was so upset.)
Then a couple hundred years ago governments started printing currency. Like the bankers IOU the currency represented gold stored in the treasury, and could be redeemed at the treasury for an predefined amount of gold. (For a long time it was $20 for an ounce of gold). One nice thing for the government was they could print currency in excess of the amount of gold they had on hand. I mean not everyone was going to show up all at once and ask to have their currency exchanged for gold. By printing more currency the government could facilitate greater economic activity and greater national wealth.
I wrote a lot more but then I saved a draft and when I reopened t this was all ther was, I'll have "to be continued"
When I wrote about gold I said I'd explain about my concerns for the US dollar. It's pretty simple actually. The dollar has no intrinsic or fixed value. It's worth whatever you can get for it.
Originally, money was gold (or seashells or beads) - something desirable and rare. Using money was the practical alternative to a barter economy. Minting coins from gold has been done for thousands of years, and was a necessary step in developing economic systems. Governments reserved the privilege and responsibilty for minting coins to themselves, and insured a standard weight of gold for their coinage.
During the late middle ages as trade expanded banking houses would accept deposits from merchants and write IOUs for the amount of gold deposited which the merchant could use to make purchases further away than it was convenient to physically move the gold. The selling merchant would accept the IOU and take it to a local affilliate of the issuing bank to get the gold he was due. The bankers also came to realize that they till the IOUs were presented for payment they had gold on hand which they could lend out for the borrower's IOU. (This is essentially what we now call the multiplier effect - the same gold being used to make a purchase far away was being loaned out at home The banker could be in trouble if someone defaulted, which I guess is why Shylock was so upset.)
Then a couple hundred years ago governments started printing currency. Like the bankers IOU the currency represented gold stored in the treasury, and could be redeemed at the treasury for an predefined amount of gold. (For a long time it was $20 for an ounce of gold). One nice thing for the government was they could print currency in excess of the amount of gold they had on hand. I mean not everyone was going to show up all at once and ask to have their currency exchanged for gold. By printing more currency the government could facilitate greater economic activity and greater national wealth.
I wrote a lot more but then I saved a draft and when I reopened t this was all ther was, I'll have "to be continued"
Sunday, January 15, 2006
Sunday morning
Mellow, thats the mood this morning. I have the new Neil Diamond CD that Santa brought Janett for Christmas on the cd player, and sun's coming through the blinds. I pan fried a small steak for breakfast, and cut up a little bit of it for the cat, Angel, who's a little disoriented since Janett's out of town. I mean, I don't know how this cat going to get by-she's accustomed to getting stroked and cuddled about twelve hours a day.
I get to bring Lou his truck back today. When I borrowed it I didn't plan on keeping it for two months, but that's how long it took Joel to get my Nissan running. Not his fault really, it didn't start one cold morning so I left it sitting in the garage for a couple of years. The bill came to around nine hundred. He said he burnt through seven distributors before he rigged one that worked. When I got the bill, I told him I appreciated his not charging me storage. He said "No, I wouldn't do that." I don't know much about the Mexican sense of humor, so I just figure Joel had a lot on his mind that morning. Oh, and the nine hundred included the tow in, a tire, an oil change, a battery, and some front end work. I guess the new springs were the most expensive thing on the bill.
The Bears are playing today. I'll watch the game at Lou's when I drop his truck off. Mark is going too. That way he can watch the game with the guys instead of with Steffy and Kim, and then he can give me a ride home. Sounds like a plan. The thing is I have to go wash Lou's truck first. I think I can find one of those places where you pull into the bay and use a "wand", but as I sit here I keep thinking how long the line is going to be on a sunny Sunday morning before a Bears game. I'd better hit it. See Ya
I get to bring Lou his truck back today. When I borrowed it I didn't plan on keeping it for two months, but that's how long it took Joel to get my Nissan running. Not his fault really, it didn't start one cold morning so I left it sitting in the garage for a couple of years. The bill came to around nine hundred. He said he burnt through seven distributors before he rigged one that worked. When I got the bill, I told him I appreciated his not charging me storage. He said "No, I wouldn't do that." I don't know much about the Mexican sense of humor, so I just figure Joel had a lot on his mind that morning. Oh, and the nine hundred included the tow in, a tire, an oil change, a battery, and some front end work. I guess the new springs were the most expensive thing on the bill.
The Bears are playing today. I'll watch the game at Lou's when I drop his truck off. Mark is going too. That way he can watch the game with the guys instead of with Steffy and Kim, and then he can give me a ride home. Sounds like a plan. The thing is I have to go wash Lou's truck first. I think I can find one of those places where you pull into the bay and use a "wand", but as I sit here I keep thinking how long the line is going to be on a sunny Sunday morning before a Bears game. I'd better hit it. See Ya
Saturday, January 07, 2006
About fifteen years ago I was invited to be my friend Terry’s best man. I’ve been to weddings and heard the best man tell funny stories about the groom, but I didn’t have any funny stories about Terry. Besides they had an M of C who did that.
I said some nice things about Terry and his bride and said their relationship was characterized by their courage and kindness, and that was my toast – to their courage and kindness. In the years since I’ve thought of how important those attributes are.
A couple of years ago I saw a TV show and they had done a survey and announced the most important ingredients in a successful relationship are compatibility and a shared dream. Isn’t that precious? Give me courage and kindness every time.
It takes courage to decide whether to buy groceries or get the brakes fixed, courage to go to work when you messed up and the boss isn’t happy, courage to sign on the bottom line for a mortgage or business loan, courage to go to the doctor when you don’t want to hear what he has to say. And always kindness. Because kindness preserves and enhances the dignity of both. Our beloved cannot be what we want them to be without our kindness, to appreciate, to sympathize, to encourage.
So always practice courage and kindness, and good luck
I said some nice things about Terry and his bride and said their relationship was characterized by their courage and kindness, and that was my toast – to their courage and kindness. In the years since I’ve thought of how important those attributes are.
A couple of years ago I saw a TV show and they had done a survey and announced the most important ingredients in a successful relationship are compatibility and a shared dream. Isn’t that precious? Give me courage and kindness every time.
It takes courage to decide whether to buy groceries or get the brakes fixed, courage to go to work when you messed up and the boss isn’t happy, courage to sign on the bottom line for a mortgage or business loan, courage to go to the doctor when you don’t want to hear what he has to say. And always kindness. Because kindness preserves and enhances the dignity of both. Our beloved cannot be what we want them to be without our kindness, to appreciate, to sympathize, to encourage.
So always practice courage and kindness, and good luck
Sunday, January 01, 2006
Fiesta Bowl
So, tomorrow's a big day.
The Fighting Irish of Notre Dame meet the Buckeyes of The Ohio State University. The Irish are currently ranked number 5 in the country, Ohio number 4. A match-up of traditional powerhouses, but the two teams have only met four times. Some folks suggest that in the 1920's the coaches at Michigan and Ohio State appealed to the anti-Catholic prejudices of other Big 10 schools to block Rockne's efforts to get ND into the Big 10. Whatever, there must have been some bad feelings - Notre Dame didn't play Michigan or Oho State for almost 50 years.
This will be Ohio States third Fiesta Bowl in four years, and who could forget that double overtime win over Miami for the National Championship in 2003? Oh, by the way, did you hear Maurice Clarett, star running back of that 2002 Ohio State team is wanted by the Columbus OH police for an armed robbery outside a bar last night? (Notre Dame fans can't help mentioning "character issues" relating to other teams players and former players.) Meanwhile Notre Dame hasn't won a bowl game in twelve years. Irish fans hope they've turned the corner with Charlie Weis in the head coaching position.
We're going to watch the game at Steffy and Mark's house, and hope to have a small crowd in attendance. I got to select the menu, so its smoked butt sandwiches and suusages and sauerkraut. Maybe some on the ladies will provide more delicate fare.
I figure Coach Weis will try to play some ball control offense to keep the Irish offense on the field since the Irish defense lost a lot of starters last year and has been vulnerable in 2005. He'll want to keep the good Buckeye linebackers away from his QB, Brady Quinn. So maybe screens, and reverses. I don't know. They say Weis is successful in part because he's so hard to predict.
But don't underestmate the Irish D. The new kids are experienced now, and may want ot prove that they're not the team's weakness. Ruck Mintner is a good defensive coordinator and coached D for Lou Holtz at Notre Dame, (though, I think, Holtz's best defenses were Barry Alvarez's squads.)
Hmmmm, lets say ND 31 OSU 24 GO IRISH!
The Fighting Irish of Notre Dame meet the Buckeyes of The Ohio State University. The Irish are currently ranked number 5 in the country, Ohio number 4. A match-up of traditional powerhouses, but the two teams have only met four times. Some folks suggest that in the 1920's the coaches at Michigan and Ohio State appealed to the anti-Catholic prejudices of other Big 10 schools to block Rockne's efforts to get ND into the Big 10. Whatever, there must have been some bad feelings - Notre Dame didn't play Michigan or Oho State for almost 50 years.
This will be Ohio States third Fiesta Bowl in four years, and who could forget that double overtime win over Miami for the National Championship in 2003? Oh, by the way, did you hear Maurice Clarett, star running back of that 2002 Ohio State team is wanted by the Columbus OH police for an armed robbery outside a bar last night? (Notre Dame fans can't help mentioning "character issues" relating to other teams players and former players.) Meanwhile Notre Dame hasn't won a bowl game in twelve years. Irish fans hope they've turned the corner with Charlie Weis in the head coaching position.
We're going to watch the game at Steffy and Mark's house, and hope to have a small crowd in attendance. I got to select the menu, so its smoked butt sandwiches and suusages and sauerkraut. Maybe some on the ladies will provide more delicate fare.
I figure Coach Weis will try to play some ball control offense to keep the Irish offense on the field since the Irish defense lost a lot of starters last year and has been vulnerable in 2005. He'll want to keep the good Buckeye linebackers away from his QB, Brady Quinn. So maybe screens, and reverses. I don't know. They say Weis is successful in part because he's so hard to predict.
But don't underestmate the Irish D. The new kids are experienced now, and may want ot prove that they're not the team's weakness. Ruck Mintner is a good defensive coordinator and coached D for Lou Holtz at Notre Dame, (though, I think, Holtz's best defenses were Barry Alvarez's squads.)
Hmmmm, lets say ND 31 OSU 24 GO IRISH!
Saturday, December 31, 2005
Gold
My friend Lou and I brought a gold future contract about 10 days ago. Actually we didn't buy anything, we just entered into a contract that said we would buy 100 oz of gold from the person on the other side of the contract for $493 per ounce at the end of February, and we had to put up about $2,300 in margin reqirement. We sold out of our contract Wednesday at $513 per ounce. So we made $20 per oz on 100 ounces or $2000, and our margin deposit was returned to us.
Lou and I make an interesting team because Lou favors a technical approach, discerning patterns in the market activity and timing sales and purchase according to these patterns.
I on the other hand just think gold is going to increase substantially in value over the next couple of years (to $1,000 maybe $1,500 per ounce)
If I'm correct, I might buy four ounces of gold for $2,300 and hold if for a year and then I'd have
$4,000 or $5,000 dollars worth of gold. But we made the same profit in just over a week by using the futures market. This is because the future market provides substantial leverage.
We locked up $50,000 worth of gold for $2,300. We didn't own the gold but we earned the
the profit when the current market price went up from $490 to $511.
Because of this leverage, futures trading can be risky. If the price of gold had gone down $20
per ounce it would have eaten up or margin deposit and we would have been closed out of our contract and would have lost our "deposit". Just like in telling a joke, "timing is everything."
Gold had recently run up from around $470 to around $540 per ounce, but we didn't want to buy at the top of the range. We hoped the price would come down some to where we could buy it, and then go up again. Lou did some figuring (mostly with historic ranges and Fibonacci numbers) and came up with $492 as a good support level for the February contract, so we put in our buy order at $493. Worked like a charm, the price per the Febuary gold contract came down to $492.5, and started back up. We were in like a couple of burglars.
We had a target price of $520. The Feb contract price had reached $519, then started trading down and Wednesday morning dropped $3 an ounce from $516 to $513, and we sold out.
Darned if the price for the Feb contract didn't bottom out at $513, where we sold and go back to $519.5 at the close on Friday. No regrets on the sale...sometimes big traders with a whole lot of resources will start selling future contracts driving the price down to where stop loss orders are triggered and the price takes on a downward momentum. ("When elephants fight, mice get trampled") We were also cautious because the price had closed higher four days in a row, and even in a good market you don't expect the market to close higher more than five days in a row.
Now we have to figure out where to buy in again.
The other reason I don't feel bad about selling out on Thursday is that Wednesday we went short the Dow Jones Industrials with a mini contract where you make (or lose) $5 for every dollar the Dow Jones Industrial Index goes down (or up) and the index dropped 112 ponts Friday. We went short because a Fibonacci series indicated there woud be a trend change on December 27th or 28th. Then the "yield curve inverted" on Wednesday, usually bad new for the stock markets. So we made enough there to compensate us for missed profits on gold
PS
The reason I'm confident gold is going to go up in price has to do with the nature of money.
I'll explain more about that later.
Andy
Lou and I make an interesting team because Lou favors a technical approach, discerning patterns in the market activity and timing sales and purchase according to these patterns.
I on the other hand just think gold is going to increase substantially in value over the next couple of years (to $1,000 maybe $1,500 per ounce)
If I'm correct, I might buy four ounces of gold for $2,300 and hold if for a year and then I'd have
$4,000 or $5,000 dollars worth of gold. But we made the same profit in just over a week by using the futures market. This is because the future market provides substantial leverage.
We locked up $50,000 worth of gold for $2,300. We didn't own the gold but we earned the
the profit when the current market price went up from $490 to $511.
Because of this leverage, futures trading can be risky. If the price of gold had gone down $20
per ounce it would have eaten up or margin deposit and we would have been closed out of our contract and would have lost our "deposit". Just like in telling a joke, "timing is everything."
Gold had recently run up from around $470 to around $540 per ounce, but we didn't want to buy at the top of the range. We hoped the price would come down some to where we could buy it, and then go up again. Lou did some figuring (mostly with historic ranges and Fibonacci numbers) and came up with $492 as a good support level for the February contract, so we put in our buy order at $493. Worked like a charm, the price per the Febuary gold contract came down to $492.5, and started back up. We were in like a couple of burglars.
We had a target price of $520. The Feb contract price had reached $519, then started trading down and Wednesday morning dropped $3 an ounce from $516 to $513, and we sold out.
Darned if the price for the Feb contract didn't bottom out at $513, where we sold and go back to $519.5 at the close on Friday. No regrets on the sale...sometimes big traders with a whole lot of resources will start selling future contracts driving the price down to where stop loss orders are triggered and the price takes on a downward momentum. ("When elephants fight, mice get trampled") We were also cautious because the price had closed higher four days in a row, and even in a good market you don't expect the market to close higher more than five days in a row.
Now we have to figure out where to buy in again.
The other reason I don't feel bad about selling out on Thursday is that Wednesday we went short the Dow Jones Industrials with a mini contract where you make (or lose) $5 for every dollar the Dow Jones Industrial Index goes down (or up) and the index dropped 112 ponts Friday. We went short because a Fibonacci series indicated there woud be a trend change on December 27th or 28th. Then the "yield curve inverted" on Wednesday, usually bad new for the stock markets. So we made enough there to compensate us for missed profits on gold
PS
The reason I'm confident gold is going to go up in price has to do with the nature of money.
I'll explain more about that later.
Andy
Sunday, December 25, 2005
Merry Christmas
It's been a few weeks since I set up this blog, and I haven't posted anything yet.
I still intend to add pictures and links to informative publications and sights, but now it's Christmas, too important a day to go unremarked upon.
I haven't felt the joy of Christmas as I typically have in recent years. I'm more self absorbed, and less able to open my heart to the new born Christ child - maybe because people have been getting sick and dying around me in the last few months.
I think I have to shift my thoughts from the newborn in the manger to the Infant of Prague.
Christ as a child, but wearing a crown and royal robes, holding the globe of the earth in his left hand, right hand raised in a blessing.
'The Little King has been enthroned as the Great King of the world to assist His subjects in their trials, difficulties, and crosses. He Who Himself has suffered so much desires to assist those who come to Him. He wishes to attract all hearts to His own through the attractiveness and simplicity of His Divine Infancy.'
I'm starting to feel better already. More later.
I still intend to add pictures and links to informative publications and sights, but now it's Christmas, too important a day to go unremarked upon.
I haven't felt the joy of Christmas as I typically have in recent years. I'm more self absorbed, and less able to open my heart to the new born Christ child - maybe because people have been getting sick and dying around me in the last few months.
I think I have to shift my thoughts from the newborn in the manger to the Infant of Prague.
Christ as a child, but wearing a crown and royal robes, holding the globe of the earth in his left hand, right hand raised in a blessing.
'The Little King has been enthroned as the Great King of the world to assist His subjects in their trials, difficulties, and crosses. He Who Himself has suffered so much desires to assist those who come to Him. He wishes to attract all hearts to His own through the attractiveness and simplicity of His Divine Infancy.'
I'm starting to feel better already. More later.
Thursday, December 08, 2005
Hi everybody
I'm gonna get some help dressing this blog up. I look forward to letting you all know what I'm thinking about, but I want the added credibility the enhanced appearance will provide.
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