I just came across this article in the NYT.  Great thoughts about what the Government should do with GM.  Sorkin does a great job summarizing the situation with GM and why Chapter 11 is a better job.  Check it out.

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So I’ve been reading on CNBC about the big three automakers and their visit to Congress in an attempt to get a $25 billion bailout.  Next, they are talking about the Homebuilders potentially looking for a bailout.  The government has bailed out financial institutions, mortgage companies, everyone.  This is infuriating and ridiculous.  I have gradually watched as individuals in society abdicate more and more of their responsibility to other, to the government, to anyone but where it belongs…with themselves.  They do this through lawsuits (What?  My coffee was hot?  it could burn me?  I’m suing) to looking to the government to bail them out of bad choices.  However, I really didn’t expect to see businesses start to go to the government and expect money because they made bad choices.  Business has been and always will be about spending as little money has possible while planting and cultivating an idea, and then turning around and selling that idea for as much money as possible.  That requires sound decision making, intelligent choices, sometimes doing without…in fine, WORK.  Now, we see these CEOs who make way too much money for the hole they have dug, begging the government for a handout and threatening that the auto industry will never be the same.

Well, I can’t help but wonder if that isn’t the idea.  Yes, it would suck for all those people to lose their jobs, and yes, it would suck for the economy for a time.  However, doesn’t anyone believe in innovation and business cycles any longer.  The industry for the cotton gin dried up eventually.  I don’t see much of a demand for typewriters any longer.  When was the last time you saw a commercial for a new and innovative VCR?  Come on…get real!  I’m not saying that cars and trucks are past us, rather that you either innovate or die.  How can these companies expect that the same thing they were doing 10 or 20 years ago still works today.  Make cuts, change marketing, develop better product, stay in front of the curve rather than riding the back side.  And for heaven’s sake, grow a set and face the fact that you made wrong decisions and fix it.

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Regardless of who you plan to vote for today, just get out and do it.  It isn’t just a right, it is a responsibility to step up and voice your opinion of who you think best will lead our country, state, community.  The more the citizens neglect their duty, the more we move to a country run by special interest groups who have their own agenda.  Get out an vote!

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I’m typically not an angry or cynical person.  However, this economic crisis is really starting to piss me off.  The most recent set of events that angers me is the idea that we need to save the mortgages of people who got into homes they never should have, and that they can’t afford.  Now, I’m not advocating that people get kicked out of their homes and onto the street, but the fact that they and their mortgage broker got into a home they couldn’t afford after their ARM kicked in shouldn’t turn into my tax burden. 

The reality is that the housing market is still overpriced in many areas.  And that for the median housing price to come in line with the median household income, prices still need to fall in many areas.  This, as painful as it is, comes about by foreclosures and flooding the market with available homes and a lack of buyers.  Simple supply and demand. 

Here are two interesting articles about this.  First, Diana Olick on CNBC.com states in her piece here
the following:

“Let’s say you take all the people who claim to be in trouble on their mortgages. Take those mortgages away, lower the value of the house to the current market price, and calculate the monthly payment based on the current interest rate on the 30-year fixed (and I mean conforming, not jumbo) which is around 6.35 percent. Oh, and by the way the historical average on the 30-year fixed over the last 25 years happens to be 7.89 percent, so I’m offering a deal. How many of those folks could still afford the home? My guess is that some could, but many more could not.

What I’m getting at here is that no matter how far we go in modifying, restructuring, writing down principal on loans in order to stop foreclosures, the bottom line is that most of the borrowers in trouble had no business being in the homes they bought in the first place. You can modify their loans for five years, but they will probably lose the home anyway.”

Very true statement.  Buy rushing in to save these mortgages that shouldn’t be saved you are simply delaying the inevitable as well as hurting me, the taxpayer, that didn’t jump into a home when I shouldn’t have or that I couldn’t afford.

The other interesting article is written by Barry Ritholtz on his blog The Big Picture.  He talks about the Moral Hazard of the Coming Mortgage Bailout.  Check it out here. He leads with this quote:

“Why am I being punished for having bought a house I could afford? I am beginning to think I would have rocks in my head if I keep paying my mortgage.”

-Todd Lawrence, Norwich, CT homeowner with a traditional 30-year mortgage

I love that quote.  He has a great chart showing how the price of homes is still elevated.  He also calls that you only want to save the homes where there is a reasonable justification for a mortgage workout. 

These are two excellent articles and really show why the mad scramble to save mortgages could actually hurt the economy and extend this recession more than help.  The US needs to understand that we are going to be in for some pain, and that it is necessary.  We did a lot of stupid things, but delaying the pain only delays the inevitable.’

Just my thoughts…

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So I’m not close to an economic or accounting expert.  However, I’ve been in business for a while and the current request by financial firms on Wall Street that FASB 157 be suspended is ludicrous.  I won’t even attempt to articulate all the reasons why…I’ll leave that up to Barry Ritholtz in this post.  However, the thought that a company can hide the true value of their asset simply because it has dropped in value below what they are willing to bear is insane.

Amidst this entire credit/financial crisis, the underlying theme seems to be people abdicating their responsibility to another.  Wall Street blaming Washington for not keeping them in check.  Investors/companies seeking “get rich quick” schemes to create new trading mechanisms for which the existing rules don’t work.  Bankers and Lenders greedy to get rich quick by throwing money at consumers to buy homes they couldn’t afford or qualify for.  And Consumers buying homes they knew they couldn’t afford, but banking on the increasing home value to save them down the road.  The worst part here, is that no one is willing to say “We got it wrong, let’s get it fixed.”  Rather they are doing all they can to hide their errors (which everyone knows about) and hoping this blows over.  Insanity…

crisis financial

This is a great read.  I follow Barry Ritholtz’s blog The Big Picture.  He often has thought provoking material from him and others.  This information by Bill King is great.  It’s a quick read and makes far more sense than anything else I’ve seen.  Check it out here.

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I find it ridiculous and infuriating that Bernanke and Paulson are exercising socialist powers to nationalize the financial market.  I’m pissed that there hasn’t been more of an outrage at what they are doing.  I regularly read the blog The Big Picture by Barry Ritholtz.  He has very interesting commentary on the financial world.  He recently posted an article titled “14 Questions for Paulson & Bernanke“.  These are really good questions that I, as a taxpayer and the financer of these two’s empire, want answers to.  Check it out…

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With my recent job change to VP of IT, I needed to get our corporate projects as well as my personal projects in line. I’ve been a follower of the David Allen GTD philosophy, and have implemented it to varying degrees of success. However, the one thing that I have gleaned from the process is that you can only really focus on the next action. In addition, the key is having things simply listed, noted, messaged, etc.

We started the evaluation process looking at dotProject, Project.net, and Basecamp from 37Signals. We settled on 37Signals for our solution, and I have to say I’m loving it. The interface is so clean and simple. There are no questions about where to find things, and the IT team is embracing the simplicity. I am a certified Project Manager (PMP) and i have to say Basecamp is far simpler to use and implement than any other solution I’ve used in the past.

To pull in my personal projects, I’ve started using Backpack…also from 37Signals. It is a personal Intranet/File Storage/”Backpack” for all my stuff. The pages are email enabled, so that I can send content directly to them. I can drag things around. Use Writeboards, lists, notes, etc. I really enjoy the system and I am improving my use daily.

Check these out. 37Signals has their act together.

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Well, I haven’t had much to write recently…or at least I couldn’t write a few things. However, I wanted to do a quickly update and let everyone (all 2 of you) know what has changed with me. As of 7/1/08 I am no longer employed by Helio. With the merger of Virgin Mobile and Helio it was time for me to move on from my capacity managing all the technology related to Member Care. I really appreciated my time there, and being able to work for my really good friend, Dennis, made it even better.

So now what…where do I go? Well, needless to say I am blessed in that I have just a few contacts in this industry and I’ve taken a new job with O’Currance Teleservices. They are a smaller call center in Salt Lake City, specializing in inbound telesales and the at-home model. I’ve taken the position of VP of Information Technology. I am working with people I have worked with in the past and, while there will be a lot of challenges, I see it as a great opportunity.

Anyway…just the quick update.

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