Wednesday, March 30, 2011

This Elephant Wants Cheap Oil!

To determine where the economy is going it is important not to ignore the elephant in the room. (Note: “Ignoring the elephant in the room” is a common business expression that should never be used if there is a rotund woman in your meeting). In our case, the elephant in the room is caused by uncertainty in Japan and Libya. Here is my take on both:

Japan: The Japan nuclear crisis was caused by the tsunami. Sure the 8.9 earthquake caused some damage to three reactors that were built to “only” withstand an 8.0 quake. But the problems would have been contained by the safety systems, if those systems would not have been destroyed by the tsunami. So until there are tsunamis on the Great Lakes, our U.S. nuclear plants are in great shape. We need abundant nuclear power to compete globally in this century.

Libya: Most Americans couldn’t find Libya on a map. Most Americans can’t spell Gha, Kad, okay I can’t either, but you get the idea. The only humanitarian mission we are interested in is the one that provides cheap gas for the humans in the U.S. I’m not saying this is right, I’m not saying this is moral, but you know that it is true. So why pretend it is about anything but the oil? Therefore why not just enter Libya and just take over the oil fields until the conflict ends? Don’t get involved with the war at all, just babysit their oil while they duke it out. We can turn the oil fields back to the winning side when the civil war is over. This is cheaper and less dangerous that what we are doing now (and much easier to explain!).

But don’t worry about the other problems in the Middle East because we have strong, decisive, leadership in the White House. Okay, in less than two years we will have the opportunity to elect strong, decisive… Okay, so maybe Donald Trump is starting to look better every day (except for the lousy hair). You get the idea that if Trump called Libya and shouted into the phone, “YOU’RE FIRED”, that somebody would be catching the next camel out of town.

Now let’s take a look at the major economic indicators:

GDP: Economists are scaling back forecasts due to high gas prices. My expert panel is at 3.2% for Q1 and 3.6% for Q2. January and February were hurt by bad weather conditions in the U.S. March was hurt by bad weather in Japan and the political tsunami in the Middle East. The economy is trying to gain momentum, but grease (and sometimes Greece) keeps getting thrown on the track. It’s going to be tough to hit 3.6% unless the elephant goes away soon.

Housing: The bad numbers keep pouring in. Housing starts and housing prices are in terrible shape. However if the housing market is hitting bottom, you would expect “bottom-feeder” numbers. Those numbers are worse than I expected, even though I still expect a recovery to start in the second half of the year. But some experts are very concerned with the “shadow inventory” – foreclosed homes not on the market yet and houses to be foreclosed in the near future. If the shadow inventory is significant, things could get much worse before they get better.

The housing recovery would have already begun if the government would not have artificially propped up the market last year. The government is like your mother-in-law, it means well but it should have stayed out of the way (and kept its trap shut).

Unemployment: Economists keep trying to use the traditional models to predict job growth. This was not a typical recession and this is far from a typical recovery. Job growth will be stronger than predicted because some companies panicked and cut too many employees during the recession. Now they are hiring more employees back than they would in a normal recovery. However, due to some structural changes in the employment market I believe we will hit a “wall” and it will be difficult to get below 7% unemployment. It is still taking people too long to find new jobs, but it is a much better job market than the pit of mid-2009.

Freight: Freight is still strong. It is fluctuating because businesses are having problems matching inventory with sales as the recovery progresses, but the overall trend is positive.

Retail Sales: People are starting to buy things again, especially wealthy people. Luxury good sales are spiking due to pent-up demand. Let’s hope that this is a preview of things to come in the other retail product segments.

Manufacturing: Industrial production and employment are stronger than anyone expected at this point. Exports have slowed down out a bit however.

The Model T: Indicates the recovery will continue throughout 2011 leading to a very strong 2012. Let’s just hope that the elephant doesn’t take a big dump in the middle of the parade route.

Tuesday, March 22, 2011

My Poets Have Never Been Cowboys

Recently Senate Majority Leader Harry Reid (D-NV) defended maintaining the funding of the National Endowment for the Arts. His best argument for continuing the funding was that if the funds were cut, the Cowboy Poetry Festival (held in Nevada, what a surprise) might have to be cancelled.

Unfortunately, I am not making this up. We (taxpayers) are subsidizing cowboy poets and powerful people in government think it would be tragic if we stopped providing this service. Isn’t it interesting that you would get the same reaction from a junkie if you threatened to take away his smack.

I think that if I needed an example of why cutting the funding was needed, I might play the “cowboy poetry” card. If we do go broke, people 100 years from now will say “Look at those idiots, the deficits were so high, but they still spent money on that cowboy poetry.

What is cowboy poetry anyway? When I told my friend Sue that I was going to write on this subject, she said that it wouldn’t be fair to comment on it without actually reading some of it. She is obviously an intelligent woman, so I did read some cowboy poetry using a new technology called the “Internet”.

It is bad. It is “last thing I would read in the doctor’s office” bad. It is “Oprah reading list runner-up” bad. It is “against the Geneva Convention to read this to prisoners“ bad. It is “third-grade poetry contest” bad. I had to clean my computer monitor after the download to get the stench out.

But if it so bad, why do cowboys continue to write it and why is there a tax-payer funded festival every year to promote it? My theory is that cowboys do this stupid thing for the same reason men have done stupid things throughout the ages: Chicks dig it.

And there is another dynamic taking place here. Woman love cowboys. They find this rugged masculinity very sexy and appealing. Why do you think so many men’s colognes have “western” names? Even business executives want to smell like cowboys, because woman love cowboys. If you can’t be a cowboy, the next best thing is to splash on some Stetson and smell like one.

Even gay men are attracted to cowboys. My evidence is the cowboy character in The Village People and the movie Brokeback Mountain. So if you like men, you like cowboys.

And when cowboys write poetry, they reveal their sensitive side. And guys know that women crave that mix of strength and sensitivity. Of course most guys who realize this, still have problems making it work.

Woman: “What the hell are you doing?”

Man: “I’m trying to be strong”

Woman: “Well stop it and try to be more sensitive, you jerk!”

The next day …

Woman: “What the hell are you doing?”

Man: “I’m trying to be sensitive”

Woman: “Well quit being a wimp and show some strength!”

So I’m not surprised that cowboys write poetry. I’m also not surprised that a cowboy poetry festival is popular as hundreds of cowgirl wannabees descend upon northern Nevada (including maybe some Vegas showgirls). For a weekend the cowboys have more groupies than rock stars. Sure they are saddle sore for the next week, but they don’t mind. It wouldn’t even surprise me if a cowboy poet first coined the term for that reverse riding style.

So yes, I guess cowboy poetry has a purpose. And yes, I suppose people have a great time at the festival. But I still don’t understand why one dime of taxpayer money should go to fund this. If the cowboys are having as much fun as I think they are, they will most assuredly pay all the expenses.

So in honor of cowboy poetry, I will end this blog with a cowboy poem of my own:

Tham Chaps

Tham chaps are rubbin’ me the wrong way
Tham chaps are ruinin’ my day
Tham chaps in D.C.
Are really irritating me

Tham chaps are chaffing my thighs
And tellin’ us lies
They take corn for my cattle
To make gas for Seattle

Tham chaps are pinching my buns
And they’re after my guns
They don’t want to hear
Then they go taxin’ my beer

Tham chaps are inflaming my loins
As they grab all tham coins
They’re taxin’ my smokes
And screwing us folks

Tham chaps are grinding my nubs
And sayin’ thing that are dumb
Thar dense as a bird
And make more manure than my herd

Tham chaps are rubbin’ me the wrong way
Tham chaps are ruinin’ my day
Tham chaps in D.C.
Are really irritating me

Yee Haw!

Wednesday, March 9, 2011

Ollie, Ollie, In, But Never Free

It was a quiet Saturday afternoon when I heard a knock at the door. I opened the door and there stood a very strange looking fellow. He was a large, rotund, man. His face swollen and red, he sort of looked the Michelin man only more bloated.

“Gimme me some money for gas”, he demanded.

“What?” I asked.

“I need money for gas,” he explained. “I thought I had enough gas money to make it home, but when I stopped to buy gas it was so expensive I couldn’t buy enough. So my car stalled out in front of your house.”

He got redder and was wheezing as he spoke.

“Are you alright?” I asked. “Do you have a problem with high blood pressure?”

“My blood pressure is just fine”, he explained. “325 over 280, very normal.”

“Wait here while I call you an ambulance”, I said.

But as I turned my back, he belly bumped me back into my house. When I turned around, I saw they he had followed me inside and was now standing in my front room.

“Hey look at that sandwich!” he exclaimed. And then he picked it up and took a huge bite.

“Who the heck are you”? I demanded.

“The name is Ollie, Ollie Inflation”, he said.

“Well Inflation, you just ate my lunch”, I barked.

“And it was delicious”, Ollie exclaimed. “I hope dinner is just as tasty.”

“Dinner! Oh no, you are not staying for dinner. You are leaving right now”, I insisted.

“Afraid not”, said Ollie. “Most people think I won’t show up, but once I arrive I tend to stay awhile and I’m very difficult to get rid of.”

“But you are so rude and demanding”, I pleaded.

“Yes, you are correct sir”, he explained. “Most people find me very difficult to live with.”

Then Ollie went over to the wine cabinet and started to chug-a-lug a very expensive bottle of cabernet. He cranked the air-conditioner up and plopped down in front of the television and ordered a pay-per-view movie.

“What do you think you are doing?” I yelled “Dude, money doesn’t grow on trees.”

“Oh yes it does”, Ollie said with a smile. “At least the paper version is made from trees. I was just down at the mint printing money like mad with my buddies Tim and Ben. That reminds me do you have a towel? We were working so fast I got green ink all over my hands.”

“So you printed so much money that you made a mess. And now you are here in my house!” I exclaimed.

“And I will have an impact in every room of this house, including the garage”, he boasted. Your food will cost more, your entertainment will cost more, and your clothes will cost more.

“At least you won’t have an impact in the bedroom”, I protested.

“Don’t be so sure, Ollie said. Guys who worry too much about me might be subject to certain deflationary conditions and once you complain to your wife that she’s spending too much money, you might not even get that far. I am going to cost you dearly my man.”

“But I can’t afford you”, I interrupted. “I am barely making ends meet now.”

“Not my problem”, said Ollie. “Perhaps you should find a higher paying job.”

“Are you crazy?” I exclaimed. “Unemployment is still very high and wages aren’t going up.”

“Then it looks like you are going to have to get by with less”, he said. “Are we having pie with dinner? I’m getting very, very hungry!”

“You are pushy and persistent and you are really putting the squeeze on my finances. Why are you bothering me?” I asked.

“Oh, it’s not just you, said Ollie. “My cousins and I are visiting every house on the block. Well, every house except for G. Gordon Liddy’s. He put up that nasty golden hedge. Inflations absolutely hate those hedges.”

Inflation then ran around the room taking a bite out of or ripping a piece from everything in its path.

I started to clean up Ollie’s mess when he walked past me with a stack of dollar bills.

“Hey, where are going with my money?” I demanded.

“I have to take a dump and I couldn’t find the toilet paper”, he explained. “These should work just fine.”

A few minutes later, Ollie yelled out from the bathroom, “Hey, do you have any tens and twenties? It’s going to be a big one.”

It’s going to be a big one indeed.