Wednesday, April 27, 2011

Federal Reserve Chairman Bernanke's Top 10 Comments

Today, Federal Reserve Chairman Ben Bernanke met with the media today and answered several questions. The main points of his speech and responses were the following:

  1. He believes that oil and commodity price inflation that we are currently experiencing is "transitory." In other words, he expects it to peak and turn around and settle back down.
  2. He said that the FOMC has a dual mandate. One is to promote economic growth and the other is to keep inflation low.
  3. He reiterated that he was not as concerned with short term inflation as he was with medium term and longer term inflation.
  4. He said basically that when conditions warrant, he fully expects to act to keep inflation in check by raising interest rates.
  5. Further, he did not believe the impact of the Federal Reserve stopping their Quantitative Easing (QE2) strategy of buying long term securities from the market would have much of an impact on the financial markets. His reasoning was that the fact that they are ending QE2 is well known and generally already factored into the financial markets.
  6. He felt that the efforts that have been undertaken to date since the crisis began, have had a positive effect on the unemployment rate decline. However, he noted that the Federal Reserve is not the be all and end all to fixing unemployment.
  7. He further stated that the policy of the Fed was for a strong dollar and a strong U.S. economy which he believes is good for the world economy.
  8. Chairman Bernanke expressed his support for our leaders in Congress and the President's Administration to work together and get our fiscal debt under control in the long term. He said it was a long term problem and it will take cooperation from both groups to achieve consensus.
  9. There were other issues discussed such as how the Japanese tragedy might affect our economy and the current problems in the Middle East and North Africa. He assured us that the Fed was on top of these issues and in discussions with other leaders.
  10. He said that although S&P putting U.S. Government debt on Negative Credit Watch was indeed historic, he felt it was not a surprise. He again reiterated the need at some point to get this debt problem under control and he mentioned that it was unsustainable.
I think Chairman Ben Bernanke did a good job with this historic press conference today. However, I am not certain that he truly knows what will happen when QE2 is stopped. He did say that they would reinvest maturing securities into new securities. This means that effectively, the $600 Billion that they have put on the Fed balance sheet would stay at $600 Billion. When they see the economic recovery that they are anticipating, then they will slowly allow maturing securities to fall off the Fed balance sheet. So, his view is that they will still be buying long term securities, but only when the ones currently in their portfolio mature. Therefore, I believe this is why he holds the view that any market impact after QE2 ends will not be a major shock to the market. The truth is that this is an educated guess on his part, since we have never had a QE2 like this one before. Let's hope he is right. I suspect we will see a blimp up in June when QE2 expires, but when the short speculators do not get want they want right away, they usually capitulate fairly quickly.

The Fed was able to do something similar to what they are doing today back in the decade of the 1940's. They can keep interest rates low for an extended period of time. I think we are good until at least the 4th quarter of this year on the discount rate.

Almost all the bullets in the Fed's gun have been used. We are still creeping along with this recovery. I reason that tax reform is the biggest thing that should be done to help this economy grow at a faster pace. However, it does not appear that this will happen as long as President Obama is in office. He is more intent on raising taxes. One thing is for sure, putting our faith in the politicians in Washington D.C. is a futile effort. We the people have to create the new jobs and grow this economy in spite of what the people in Washington D.C. do "for us".

Friday, April 22, 2011

My Marketing Brochure

Brian Tracy, the highly successful author, speaker and trainer wrote in one of his books that "you are only as strong as your weakest link." The thought process was to look at your weakest link and spend your time improving that skill. If your other skills are strong, then once you bring up your weakest link and make it stronger, then you will be well on your way to becoming more successful.

My weakest link is probably not having a marketing brochure to show new clients what makes me different. Instead of trying to create one on my own, I have hired a really talented graphic designer to put one together for me.

A book that I read, entitled, The Answer by John Assaraf & Murray Smith tells you about marketing. In it, they describe the critical factors for a brochure to be successful. These factors are:

  1. Grab
  2. Engage
  3. Inform
  4. Offer
Therefore, this marketing brochure that I wrote, but will be designed by Cheryl Mayo of Mayo Media in Jacksonville, Florida will have these four critical factors.

It is still a work in progress, but in order to "Grab" people's attention, on the front we will have several people, but the one in the middle will be a shadow with the question..."The Right Financial Adviser?"

When you open the brochure, the shadow will be replaced with my picture with the captions..."The Right Answer. The Right Financial Adviser."

Then, on the back, I will have my vision, why it is not about me and the reasons why I do what I do which should "Engage" the reader.

The "Inform" part of the story will be where I give the reader four choices for "The Right Answer. The Right Financial Adviser." These choices are:

  1. A financial advisor who works for a bank.
  2. A financial advisor who works for a Wall Street firm.
  3. A financial advisor who works primarily for an insurance company.
  4. A financial adviser who works at a Registered Investment Adviser firm.
After giving the reader these four choices, I will "Inform" them of "The Right Answer. The Right Financial Adviser."

To meet the "Offer" portion of the marketing brochure, I will showcase my book, Keep Your Assets. Take My Advice. It is Easier to Climb Out of a Shallow Hole. There will be an offer to purchase the book in the marketing brochure. The purpose is to also attract enough interest for prospective clients to go to our web site to see what we are all about then, pick up the phone and give me a call.

We are getting close to completion of my marketing brochure. Once it is completed, then I will publish it here on my blog. It will be strikingly different than anything you could ever imagine. Once you see it, then I am sure you will agree.

I would like to thank the many people involved in the making of the brochure.

Nancy and Steve Bennett at Living Image Photography in Jacksonville, FL who made me look as good as I can be made to look.
Cheryl Mayo at Mayo Media in Jacksonville, FL for her incredible design skills.
Brian Tracy for his great advice in trying to make you to be the best that you can possibly be.
John Assaraf & Murray Smith for the ideas in their book, The Answer, revolving around marketing.
Bob Veres, the author of Inside Information for inspiration and leadership of our investment adviser community.
Dewitt Jones, a National Geographic Photographer for his superb and inspiring words.
Jesus Christ, for his gift to me.

Happy Easter!

Friday, April 15, 2011

$10,000,000. Really? Was It Worth It?

I read that the cost of the trial against Barry Bonds was $10,000,000 give or take. This is taxpayer highway robbery whether you agree or disagree with the outcome. Since we are on the subject of shrinking government, then I have a suggestion. We need a third party taxpayer advocate who will stop these needless and extremely expensive lawsuits from occurring.

Even if you are a baseball purist who believes strongly that Barry Bonds tarnished Major League Baseball, do you really and I mean really believe that spending $10,000,000 in this economy was worth the price? As my friends at ESPN say..."Come on, Man!"

Why do these cases every make it to trial? Because there is an inherent conflict of interest built into the judicial system. Forget about the Barry Bonds case. I am just being general here.

Lawyers become the judges who decide whether the case has enough merits to proceed. Judges at one time were attorneys. They in turn protect their own. You think there might be a wee bit of a conflict of interest inherent in this process? I for one do.

A judge who does not throw out a case that is going to cost the taxpayers millions of dollars over perjury, ought not to be allowed to make this decision. It is a $10,000,000 decision! Do you get that? Instead, I propose that a taxpayer advocate who weighs the harm to the community, the harm to taxpayers and the harm to victims and most importantly, the cost to the taxpayers are the ones who should make these decisions. Prosecutors and defense attorneys should present a preliminary case to the taxpayer advocate for a final determination as to whether or not a case can go forward. Of course lawyers would be totally against this, because they would no longer be able to control their own destiny. The taxpayer advocates should be people from the local community who can easily determine whether a case has merits. Yes, it is hard to believe, but there are some people out there who are smarter than attorneys.

Who is looking out for the taxpayers in the Barry Bonds case? No one. Nada. These lawyers can bring these frivolous cases any time they feel like it and we taxpayers have to foot the bill. It is not justice to the taxpayer! Forget the guilt or innocence issue. What about the monetary concerns?

How many people could have been helped with putting that $10,000,000 of taxpayer money to better use? You will never convince me that spending $10,000,000 trying to put a baseball player in prison is a good use of taxpayer dollars. For God's sake, he was a baseball player. He's not a member of the Mafia!

On the way in to work today, I was listening to The Dan Patrick Show. Apparently, Bob Costas was fuming over the Barry Bonds outcome. I did not hear what Bob Costas had to say about the Barry Bonds case, but I already know where he stands on it. He thinks he is a fan of baseball, but in my opinion, he is just a guy with a bad attitude. He thinks he is on a one man crusade to destroy the reputations of anyone and everyone who ever used steroids. Such a worthy goal, isn't it?

Bob Costas is precisely the person that raises enough of a stink, because he has the bully pulpit, that causes prosecutors to go after Barry Bonds. These are the kinds of people that demand justice. Hey Bob, was the $10,000,000 worth it to satisfy your bad attitude? I do not think so. Otherwise, you would not be calling in to The Dan Patrick Show asking to spew your opinion on the subject.

The true miscarriage of justice in this case is not whether or not Barry Bonds perjured himself. The true miscarriage of justice is that there ever was a trial in the first place that cost the taxpayers, in this economy no less, $10,000,000.

Really? Come on, Man!

Wednesday, April 6, 2011

Not Enough Said

Microsoft does it again. More daily frustration. When will it end?

I cannot imagine how a company like Microsoft can make so much money on products that do not work.

There ought to be a law.