Deika Morrison: Reasoning The Reasons

An Appeal For Human Capital Development

2009-05-05T21:37:00.013-05:00

If you notice, I haven't written since My Wish List for The Summit of the Americas. Well, the outcome as we all know was disappointing. So, as my mother so wisely taught me, "if you have nothing good to say, say nothing". So here's what I have to say : Nothing.

Moving on....

Tonight, I am departing from my own self-imposed restrictions. Normally, I don't speak about Jamaica. Tonight I will because the situation warrants it.

If you live here, you know we - like many other countries- are facing a tax package. I understand why we have to have one. I accept that not all people can be happy. But there are two particular inclusions that I feel compelled to comment on. Now, for the record, I could comment on ones that materially affect my life - because there are those. But, as usual, my interest is the national interest.

The GOJ has decided to charge GCT on books and computers. I have tried and tried and tried and cannot rationalize this:

First, the GOJ and the Opposition (when the roles were reversed) by way of a special parliamentary agreement made specific commitments to education. The whole nation accepts that development of human capital must be the highest priority given the benefits for social stability, employment, growth etc etc. The PM himself reminded us all today in his budget presentation to just accept that the current education system is not producing the desired results and that it must continue to be prioritized and reformed. So why tax the very tools - books and computers - that promote and nourish education and the development of human capital? I accept that schools can get them without the tax, but don't students have homework? So, is it that we don't use books and computers for educational purposes outside of school? Reading a classic novel that is not on the book list is not educational? And if we do not, then is it not perhaps part of the problem? Do we not want to provide our people with the maximum access to those tools that will help them to be able to compete successfully with the best and brightest anywhere in the world?

Second, tax policy exists to 1) increase revenue 2) encourage certain activity 3) discourage certain activity. The matter of equity is a separate issue. In this case, computers and books do not provide a massive amount of revenue. If it were something like, say cars, I could see how this would be a harder decision. But, in my very humble view, cars only get you from A to B, they do not develop the human potential. Certainly the possible revenue that could be generated is not enough to negate the potential costs of idleness when people - children, youth and adults - who could have been using computers and could have been reading books instead get into crime. So, let's forget the revenue argument for a moment. Moving on to encouraging and discouraging activity - in this case, an increase is likely to be translated into a real disincentive to purchasing computers and books. Why? Because real disposable income is declining at an increasing rate - depreciation, inflation, the pending JPS increase, the expected recovery of oil prices, the gas tax and pass through effects etc etc. A computer is already a big ticket item for many of the people for whom the policy would wish to have and use it most. I am having a difficult time understanding how a 16.5% tax will not materially dampen demand when I am aware of some of the other serious sacrifices that people are already making.

Third, like all other countries, we are having job losses. Job losses are going to continue. Companies and people (even those employed) must re-tool to stay competitive. I commend the PM for all the initiatives for MSME's and entrepreneurship. But I must ask. How does one start any kind of sustainable venture without a computer? How does one develop a competitive advantage in this very open economy that globalization has brought without a computer? If I heard him correctly, the PM correctly noted the lack of access to financing that most people have. Increasing the cost of a computer and reading material just means that they are likely to be unfairly sacrificed for other needs. What about all of the immense opportunities, especially for the younger generation, in computer, IT and new media industries. These are viable opportunities in an era when the PM himself has so correctly highlighted the need to provide the younger people with hope and a real chance. It is true that most small businesses are extremely challenged to survive - yes, they fail. But, they are even more likely to fail without a computer, or if they have to take on the additional costs of computers. As for books and reading material not deemed educational, what will nurture creativity other than books? What about reading about trends and global market needs in publications and periodicals?

Finally, is it really even possible to guarantee collection of these taxes? So, for the price we are likely to pay on the impact on development, is the revenue potential - which is relatively minimal - really going to be realized? And will that potential not be dampened by the significant likelihood that demand will be depressed?

I understand the need for revenue. But why not do ALL that is possible to encourage the growth and development of the most precious resource we have - human capital - to create the successful industries and enterprises of today and tomorrow that can even be handsomely taxed because they would be so spectacularly profitable. :)

My Wish List - Summit Of The Americas

2009-04-08T19:44:00.009-05:00

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If you've followed this blog, you may know I rarely mention Jamaica. That's deliberate. So I'm not commenting on the budget or the Cabinet reshuffle.

However, I will comment on something that Jamaica is involved in - and that is a grouping of countries called the Americas. There are many commonalities - geography is an obvious one, dependence on tourism and remittances are others, for example. But there are many differences - language is one, cultures are another, for example.

There's a big meeting coming up next week - April 17-19 2009 - called the Summit of the Americas. There's a theme...but here's what I think they should get done if we are to accelerate this global recovery.

First, please do not spend the time blaming the US for this mess. They know, we know, the world knows..... Let's focus on solutions. We have no time to waste.

Second, please do not spend the time working on things that are really unlikely to happen. For example, lobbying for offshore banking after the G20 communique and declarations is really not the most productive use of time. Save that for another forum. Petition the G20 if you like. Take it up at the next IFI meeting. Anything, but right now at this time, this one is unlikely to go very far. France and Germany threatened no deal with the G20 over this issue (it was one of them).

Third, please focus on a few tangible quick wins. Yes, you can do like the G20 and pledge the world of cooperation, but come out with actual measures - and money and an implementation timetable - for real things to make real differences in the region

Fourth, here are three suggestions for tangible things that I think are win-win for everyone. And here's the best part, President Obama already said he's supportive of them. See his campaign document: A New Partnership For The Americas.

1) Find some way to get the remittance flows to return to at least the level it was before the collapse in September 2008 - even if it is a temporary measure. My two cents? To ease the tensions with Mexico, the US would benefit greatly from the stability that the remittance flows facilitate. This is a real problem with a practical solution. Come to the table with some measures to encourage remittance flows. For example, explore - just explore - facilitating the ease of transfer of funds between countries. And for example, facilitate and allow job programs that allow remittances to flow. Job creation for all people will generate much stability in the region and significantly reduce what the IFIs need to provide on a recurring basis. Translation - that $1T pledged by the G20 can stretch further.

Want to know what Obama's document said when he was Candidate Obama:

"Tap the Power of Remittances: Obama will work with international organizations, particularly the Inter- American Development Bank, to leverage the financial resources immigrants send to native countries. At more than $50 billion a year, remittances dwarf U.S. foreign assistance. Obama will work to foster a new spirit of partnership and cooperation to maximize the impact of those remittances on social and economic development across the hemisphere." See that "tap the power", "maximize the impact of those remittances on social and economic development across the hemisphere"

2) Pull out all the stops for micro and small business development - special fund or funds, special loan programs, whatever it takes - all the bells and whistles. Job creation in their own counties solves a myriad of problems - poverty alleviation, social stability, crime reduction, growth, wealth creation so people can buy imports, etc. etc. etc. This is a win-win for everyone and with the exchange rates, a little hard currency from the larger developed members goes a long way.

Want to know what Obama's document said when he was candidate Obama:

"A Fund for Small and Medium Enterprises (SMEs): It is neither sustainable nor appropriate for donor countries to focus solely on reducing poverty in the developing world. The challenge is to build the capacity of communities and countries in the developing world to generate wealth on their own and in a way that is sustainable over time. Building on the growing evidence that microfinance is an effective tool to facilitate this growth, an Obama administration will provide initial capital for an SME Fund. Administered through the Overseas Private Investment Corporation, an independent U.S. government agency, the government will provide capital matched by a larger portion from the private sector. The SME Fund will be designed to provide seed capital and technical assistance to catalyze the establishment of job-creating small and medium enterprises, and to build the capacity of entrepreneurs to translate their ideas into viable businesses, including through the creation of regional “SME Universities” supported by America’s business schools." See that..." A Fund for Small and Medium Enterprises", "Building on the growing evidence that microfinance is an effective tool to facilitate this growth..", "seed capital"..... etc etc.

3) Use the brainpower in this region to pipe in and push for IMF reform. I doubt any other region has the depth of experience with IMF programs and its impact like the Americas. Use that experience to guide what "not to do". The IMF just got all the money from the G20 to try to fix the world. Everyone knows the IMF needs reform - including the IMF. Everyone knows the IMF needs to reform its "terms and conditions". In order for the IMF money to really work to fix this global economic mess we are in, the region needs to take an interest and active role in the reform.

Want to know what Obama's document said as Candidate Obama:

"Lead Efforts to Reform the IMF and the World Bank: The International Monetary Fund (IMF) and the World Bank have contributed in important ways to an era of tremendous openness and global growth since 1945, but both institutions face crises of governance and are in need of modernization and reform. Its limits were apparent during Argentina’s economic struggles in the late 1990s and early part of this decade. As president, Barack Obama will lead an effort in the G-8 to achieve a new consensus on the missions of the IMF and the World Bank, while at the same time securing necessary changes in how both institutions are governed
to reflect the increasing influence of middle-income countries." See that..."both institutions face crisis of governance and are in need of modernization of reform" etc. etc.

Let me be clear - if President Obama and the Americas are willing to make sweeping changes on Cuba, support for education, and cooperation for crime and security, and debt relief and energy measures etc. etc. - all those things in that document - I would be the happiest person on earth. But I live in the real world, and we have been talking about some of these things for a long time. Most of these are difficult to get agreement on; and even more difficult to get a realistic implementable plan for.

FURTHER, if we do not get an urgent recovery in remittances, get some serious urgent dedicated and sustainable funding and focus on micro-enterprises and small businesses, and urgently reform the IFIs to ensure that we can access the funds in ways that do not cause severe social dislocation, then frankly, none of these other things are likely to happen in an sustainable manner.

So, I am going to lower my own expectations and limit my wish list to what I have listed above.

I personally would be satisfied if the members could come out of this Summit with at least tangible, realistic, practical and implementable programs for whatever the leaders decide. And seriously, we need it like....yesterday!

So Now What G20?

2009-04-02T18:30:00.013-05:00

Image by zongo69 via Flickr

Let's give credit where credit is due. The G20 met and agreed. The alternative - not meeting, or meeting and not agreeing - is too horrible to contemplate. So let's give thanks for what we have.

Surprisingly, they have said a lot. Really, I've had some experience with communiques and they are usually very vague because its the only way to get all the countries to agree. And how much is a lot? Well, 1 statement and 2 appendices with details. Shocker! Here are the links and they are well worth reading. And if you have followed this for years like me, some of this stuff will make your eyes open very wide because I never thought I'd see this day. So:

Leaders' statement

Declaration on Strengthening The Financial System

Declaration on Delivering Financial Resources Through The International Financial Institutions

All in all, a good start. Seriously. Lots of recognition of problems, lots of promises of things to be done, some specificity, commitments to fight poverty, create and save jobs etc. Sounds - I repeat, sounds - perfect. BUT, see that image of the standoff. Let's not think we have now magically gotten order from the disorder. Evidently they "know" and that's a lot. But the test is really the collective "will". Because nothing has actually happened yet other than the agreement. People have to do things now - things have to happen, money has to flow, rules have to be made and enforced. We needed the agreement ages ago; and now that we have it, we need the action eons before that. There is no time to waste!

What's the bottom line?

The IMF gets a ton of money to try to save the world. Other institutions too but the IMF gets the bulk of it. Question though? Access, access, access? Terms and conditions? The terms and conditions contributed to this mess and can contribute to instability. The IMF is famous for "structural adjustment" which you might as well call "social pain". Social pain right now is NOT helpful. Unemployment is rising, incomes are falling and savings are lost. People do not need to be "adjusted" right about now. So this money can be really helpful, only if it can be accessed and it is made available in a way that helps.

If the financial sector was a wild animal, the leaders want it tamed. So countries have "agreed" to lots of sweeping measures - oversight for credit ratings agencies (that alone can save the world if done properly), supervision for some - yes, unfortunately some - hedge funds, restrictions for tax havens, accounting reform, a body that warns us if this is going to happen again, measures for executive compensation.....read the separate declaration because it's pretty good "whats". You know where this can all fall down - HOW? Yes, how do you enforce these things? And yes, how do you prevent domestic legislation for overruling or ignoring this - please note the US Congress relaxed mark to market accounting the DAY these lovely agreements were released? And yes, how do you ensure that the intent of all these measures results in a functional financial system? Because frankly, there are easier ways - people may not like them but banking will work again. I have already noted a number of qualifying statements which are just big loopholes if you ask me. But as I said, getting 20 countries to agree does require some vagueness. Leaders should be reminded that whatever they say and agree to, the genius and will of the "engineers" must never be underestimated. They will engineer ways around whatever they do not want to do and they are not concerned with the matters that keep world leaders up at night like avoiding social unrest, preventing poverty etc. So, I take these documents as good intentions on the parts of leaders. And I wait in breathless anticipation for the details. And I hope that people are really realistic in making up those details, and that domestic legislatures are supportive of the intentions that their leaders have committed to. This is NOT a political football - the financial system must work, or we - the whole world - are in big trouble.

The documents are worth reading....but the action steps are really what I am waiting for. The proof of the pudding is in the eating. Nice looking pudding.....but we haven't tasted it yet. The G20 had a great talk...but now it's time to have an even better walk.

G20 Gets Ready To Deliberate Global Financial Sector Regulatory Reform

2009-03-30T20:49:00.005-05:00

Image by Downing Street via Flickr

Ok...how weird is it that there is a draft statement available before the leaders have met? From Reuters: Draft Communique for G20 Summit. Anyway, never mind. It's inadequate. So let's hope they go back to the drawing board. I'm not commenting on that tonight - I'm going to wait until they realize they must have a concrete job plan for their respective peoples.

Tonight, I'm commenting on financial regulation that's being considered. And specifically, I want to refer to this informative piece from Bloomberg: G-20 Targets Hedge Funds as Leaders Near Consensus

Now, all of this article is interesting....but let's look at some things in particular...

"“Having the U.S. and Chinese on board makes it a whole lot more likely” that an international framework will eventually emerge, says Harvard University’s Kenneth Rogo ff, former chief economist of the International Monetary Fund.

Rogoff says that “it seems virtually certain that four to five years from now, the world will have either a global financial regulator or, more likely, a treaty on global financial regulation with a secretariat, akin to the World Trade Organization.” Still, he adds, “nothing is going to happen quickly.”"

See that? "treaty on global financial regulation..." That was on my wish list. See post: My Wish List - The New Global Financial Architecture. A single regulator is not realistic. A treaty is very realistic.

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"Geithner suggests empowering the Financial Stability Forum, a group of international market regulators, to “play a more effective role” alongside the IMF and the World Bank in promoting and monitoring new international regulations."

Great...except, guess who is in charge of the Financial Stability Forum now? A former Goldman Sachs exec. Anyone shocked?

"The U.S., which has long expected other nations to follow its lead on regulations, may now have to yield to more cooperation, says former Federal Reserve Chairman Paul Volcker.

“The U.S. is no longer in a position to dictate that the world does it according to the way we’ve done it,” Volcker, head of Obama’s Economic Recovery Advisory Board, told a March 6 conference at New York University."

And here's why I think so highly of Volcker - he lives in the real world.

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"The call for greater regulation unites China, possessor of the most vibrant economy in the developing world, and the U.S., possessor of the world’s largest economy. China’s central bank governor, Zhou Xiaochuan, challenged the West to fix flaws in financial supervision on March 26, the same day U.S. Treasury Secretary Timothy Geithner outlined a broad initiative designed to do just that. "

"“China has to be listened to,” says Glenn Maguire, chief Asia-Pacific economist at Societe Generale SA in Hong Kong. “What they are trying to do is exert maximum influence on the design of the new global financial architecture.” "

Aha....here's the reality. I think I've said several times to watch China....

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"A new collaborative strategy was evident in a working paper released on March 27 by the Canadian government on behalf of the G-20, which comprises 19 developed and emerging economies plus the European Union and represents 85 percent of the world economy. "

Stop the presses. Does this mean that Canada is drafting this document! All my wishes are coming true. I asked for Canada to take a leadership role in this from the very beginning.

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Pretty interesting developments...can't wait to see what they end up with.

Winning The War....Even If It Means Losing A Battle

2009-03-25T19:43:00.009-05:00

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I must say I'm not overly interested in this US budget process.

Yes, it's groundbreaking.

Yes, the President wants his first budget to have education, energy, health care and work towards reducing the deficit. He's pretty fixated on those 4 specific categories and to him they are non-negotiable. All of them - he's said it a zillion times. And in fairness, they are all critical, they are all important, and they have been waiting for too long. But they have been waiting....and they can continue to wait....the world won't fall apart.

Frankly, the world won't fall apart without fixing education AND energy AND health-care AND reducing the deficit in the very next budget. It just won't. Would I like to have all of them? Sure! But there's a MUCH bigger battle which totally impacts this one.

And here it is: the global financial sector/banking system. Because what's a budget if you cannot fund it? What's a budget if it cannot be sustainable because there are no funds to pay for the programs year after year?

Follow me here:

The world WILL - I repeat WILL - fall apart without a functional global financial sector/banking system. We need one yesterday.

Let's examine this. A budget is funded by tax revenues and debt (which is just an expensive advance on tax revenues).

Let's look at tax revenues: Where are the tax revenues when companies are not profitable - because they cannot borrow to expand and invest, for example? Where are the tax revenues when small businesses cannot get back to generating the majority of employment - so you get income tax from the businesses and taxes on salaries and wages?

Let's look at debt: If the society cannot go back to generating private wealth, isn't creditworthiness going to fall - so credit gets more expensive and less accessible? How do you reduce the deficit if you have to keep borrowing because you don't have a functional banking system so people can go back to making money so they can pay taxes? How much more money can the US borrow IF it does not demonstrate that the society will be generating the wealth to repay it?

Frankly, all these lovely programs WILL NOT get funded in a sustainable manner in the absence of a global functional financial sector and banking system. In one of the few matters where Bernanke and I see eye to eye, this is really the deal breaker, folks. All the stimulus in the world is carrying us nowhere without this global banking/financial sector clean up.

I haven't read the budget and maybe if I did I would feel differently. Maybe if I were President I would be seized with the historical significance of the "first budget". And hey if the President can get all four of these done AND the global financial sector/banking system fixed, then great. Except he was visibly annoyed when asked about AIG. And that made me wonder if he is fully seized about what is negotiable on his very full plate.

Because the global financial sector/banking system is a necessary, pre-requisite, must do, have to have, non-negotiable.

Bear with me - it is straining relations between countries, it is encouraging protectionist measures, it is reversing all of the gains that were made in the last 50 years. It requires the dedicated attention of the President - not the Secretary of the Treasury and the Chairman of the Fed. If people believe countries will not end up in civil war over this, or go to war with other countries over this, then they have forgotten history.

Respectfully, we cannot leave the global financial sector/banking system one more second. Even if the President magically gets everything he wants this year in the budget, without a global banking/financial system, that budget will be a one-off anomaly because next year's priorities will be totally different, and may I say not in a positive way. So here are some solutions: maybe we can do all four of what the President wants but not on that scale. Maybe one of them can be delayed until next year.

Hey, I'm not the President, but if I were maybe I would look at the big picture, and realize that my energies are better spent elsewhere - like in a functional global banking system/financial sector so this never happens again. Sometimes to win the war, you have to lose a battle.

Why Can't We Put Volcker In Charge?

2009-03-20T22:54:00.010-05:00

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Evidently the powers are be are willing to think and act out of the box.

90% tax passing in the House? Unheard of!

AIG bonus payments? Madness!

Requiring the same WRONG credit rating agencies to rate the Government Bonds for the relief effort? Insane!

So, if you all are willing to consider and do all these off the wall, and destructive things, let me suggest an off the wall, and may I say constructive solution.

Can we put Paul Volcker in charge? No more advice. Put him in an "order giving" capacity. He has more common sense, experience and more focus on the big picture that the entire Fed and the entire Treasury put together. He's already done every thing. He understands Wall Street. He understands the power of the Fed (he was the Chairman of the Fed). Who else can get us out of this mess? Geithner has all Wall Street solutions. Hear the new one? Subsidizing the purchase of toxic assets. From the Wall Street Journal, Tim Geithner's Op Ed: My Plan for Bad Bank Assets. Hello - they are "toxic". More waste of taxpayers funds!

Why can't we put Volcker in charge? I am now so thoroughly disappointed with Bernanke's confidence in the ratings agencies. After all those speeches about regulatory reform. Evidently, they are hollow. You cannot be serious about regulatory reform and have an iota of confidence in the ratings agencies. I am so thoroughly disappointed with Geithner's plan to allow the private sector to set the prices and then get huge subsidies to buy them - all with taxpayer's money.

Can we put Volcker in charge of the Fed and the Treasury at the same time? Where are the constitutional lawyers?

Watch Paul Volcker here - doesn't he give you confidence? He gives me confidence. At least I feel like he's telling the truth. And most importantly after today's testimony, I don't feel like he's being condescending. Roughing up from Congress comes with the territory, and without Congress there is no new law, so I'd really like it if Geithner and Bernanke would nicely answer some simple questions about how taxpayers money is being spent. That is Congress' job after all - the people sent them there and the people can make sure they do not go back.

WORSE Than AIG. Seriously.

2009-03-20T19:57:00.010-05:00

Image by jeco via Flickr

See that crushed up globe. That's the world. See the hand crushing the globe - that's the hand of the credit ratings agencies.

Ok, yes, I was and am outraged about the whole bonus matter at AIG. Can you believe anything can be worse than that? OH YES! We need a new word in the dictionary to describe the credit ratings agencies because "outrage" will not do. Have you read this madness? Ratings Agencies, To Blame For Some Of The Crisis, Could Now Benefit. The article references today's Wall Street Journal Article: Raters See Windfall in Bailout Program

See this outrage:

"The new rescue effort, run by the Federal Reserve, kicked off Thursday with bond deals totaling more than $7 billion. Each bond issue will need to be blessed by at least two of the three big rating firms: Moody's Investors Service, Standard & Poor's Ratings Services and Fitch Ratings."

WHAT? "Blessed"? Who are they to "bless"?

Please revisit my post explaining in detail why they have no "blessing" credibility: Rating The Rating Agencies

Consider: The ratings agencies told AIG all the garbage they were buying was the greatest thing since sliced bread. The ratings agencies branded all the garbage as priceless so the whole world would buy them. Everybody bought all the garbage and now we are in a mess. When AIG was scrambling for funds to meet the contract requirements of the Credit Default Swaps and the whole financial sector was in a free fall, what did the ratings agencies do? They threatened to downgrade. Well, if you are a country or company looking for funds, and the ratings agencies say they are about to downgrade you, no one will give you one cent. Did I say that the ratings agencies were the very reason why AIG bought the garbage in the first place?

Consider: AIG has a financial products problem that is SO huge that it impacts the entire global financial system. It is "too big to fail". On the other hand, the ratings agencies can rate EVERYBODY - so all products, all countries. The rating agencies have had FAR MORE POWER to destroy the ENTIRE global financial system and the ENTIRE global economy. The ratings agencies make AIG and its dramas look like kindergarten stuff. Ratings agencies can literally cause world war. They are "playing" with a lot of people's lives with rating sovereign debt, in particular. When countries are downgraded, they have difficulty accessing funds. When they need to make decisions so people can live - literally - they have to live under the written threats of further downgrades. The decisions that let people live are usually the complete opposite of what the credit agencies threatens the countries that they better not do or else. Seriously, these ratings agencies think they run countries - and quite frankly they are allowed to. Even the IMF has better bedside manners. The ratings agencies care ZERO about development. At least the IMF will talk about poverty. Can you imagine? The ratings agencies make the IMF look generous. An entire economy and society can hinge on a few utterances from these rating agencies. And if they were right, I would say - it's part of the system. But they're wrong. That's the shocking part. And they are unsupervised with no transparency. Utter madness.

Consider: The rating agencies caused this mess AND admitted that they were wrong, but they are STILL allowed to rate even through they are STILL wrong. They are driving the nails into the coffins of the entire global financial system and companies and countries. If they make a mess of the global economy, and everyone's prospects dim, how do these ratings agencies be allowed to downgrade them? These ratings agencies have to take responsibility. Whatever they say, people still listen to them. So if you are a sound company, and a ratings agency gets it "wrong", too bad for you and your employees. Many companies would be here now, many jobs would be here today if these ratings agencies were suspended after Lehman collapsed. Congress needs to do that analysis - what companies suffered and jobs were destroyed because ratings agencies were allowed to keep chattering after Lehman collapsed. Try this analogy: If the financial sector was bleeding, the ratings agencies opened the wounds wide and made new ones - and the ratings agencies were the ones that inflicted the wounds in the first place! And if you are the Government, the ratings agencies can shut down your relief effort. Don't believe me? From the WSJ article:

"One of the biggest concerns surrounding TALF is the seemingly arbitrary nature of ratings decisions. Many of the ratings firms, for example, changed their view of one part of the auto-financing sector, deciding that loans made to auto dealers were far riskier than they previously thought.

Their downgrades meant that bonds backed by loans to those dealers would be unlikely to get triple-A ratings, effectively shutting them out of the TALF."

NOW, hear this one, the US government's $7B bond rescue effort REQUIRES rating by these agencies. What is the US Government ON? So they are going to listen to these people who caused the mess, said they are wrong and still make a mess? And I hope you are sitting down because they are actually going to PAY them for this service - with taxpayers funds - YOUR MONEY. No, I ask again - have we collectively lost our minds?

Want to know how much money?

"Rating services typically charge $40,000 to $120,000 for every $100 million in so-called structured-finance securities they rate. For the initial $200 billion portion of TALF, that translates to $80 million to $240 million. If the program is extended to $1 trillion as the government plans, those fees could skyrocket to anywhere between $400 million and $1.2 billion."

You know what. I've been very supportive thus far, and tried to be very understanding. But I think that something is gone really wrong here. Forget too big to fail. Let the whole entire thing collapse and let some other monetary system take its place, and some other financial sector system take its place. Because what is happening now is not only completely illogical and completely counter to any form of recovery, frankly it is extraordinarily insulting to any normal person's intelligence.

Americans, citizens of the global economy, are we really going to take this?

The Financial Sector Is Destroying Itself

2009-03-19T21:20:00.006-05:00

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I must admit that I am completely lost about what is happening here.

Either these financial sector executives and institutions are completely out of touch with reality and the rest of the world - and the freight train that is about to hit them out of this stratosphere - or they have some genius plan that we are not aware of. Follow me:

First it was the free for all with the CDOs, CDS' etc. which unraveled the entire global financial sector.

Second, they had to have a zillion dollar bailout, or the earth would crater in on itself. Never mind they got the bailout and people's savings not only did not return, they continue to disappear before their very eyes. I do accept that the sector needed government support. I do not support how that support has been provided. Full nationalization was called for long ago. Moving on.....

Third, they refused to take the bailout if there were restrictions on salaries and bonuses. Completely illogical. If they were really falling apart and needed the funds, then they should just take whatever they could get, right? I mean if you were having cardiac arrest, are you really turning away all the best heart specialists unless they allow you to have your own way?

Fourth, they agreed to restrictions, except to the ones they hid which are now causing the outrage.

What do they think the rest of world is here for? Do they know that Governments have power. Not to act unconstitutionally, but what about the future. Have they heard of bad faith?

Earth to the financial sector: the more you push for your way that makes a mess and is completely insensitive, the more the rest of the world will push back.

Don't believe me? The House actually passed legislation to tax bonuses at 90% - with Republican support. 90% tax of anything! Legislation drafted in a week - rare. This is no joke. Now this particular bill may be unconstitutional - and therefore unenforceable - but if the intent is there - you know the saying "where there is a will there is a way". Meaning, if they cannot do anything about these bonuses, you can bet they are going to go as far as they can in future. It was very interesting to note this piece in tomorrow's New York Times (online tonight) "Regulators Worldwide Scrutinize Bankers' Pay". Did you note this gem from the article:

"Not only will regulators insert themselves into the secretive realm of bank compensation practices, Mr. Turner said, they will also demand that banks set aside more capital if their pay packages are too high."

“This has never been done before,” said Mr. Turner, who heads the Financial Services Authority in Britain. “But the days of light-touch regulation are over.”

Nothing unconstitutional about future contracts, and future practices - as far as I am aware. Is this really the direction the financial sector wants? This is more than not making bonuses; this is restricting the ability of the financial institutions themselves to even make more money. I've said a thousand times that the financial sector should really get some enlightened self-interest and stop being so confrontational with the general public, legislators, regulators etc. The financial sector and its participants are going to end up with consequences they will not like - restrictions and oversight that will make banking very difficult. Missing the forest for the trees, people!

And if you think the people's outrage is anything to take lightly, watch Keith Olbermann's Special Comment below. Watch when that outrage of the people is helped by the media. Keith Olbermann is right: Enough! And if the financial sector doesn't do it for themselves, then we the people, the governments (as in all of them around the world), the media and all other mere mortals living here on earth will ensure that it is some kind of "Enough!" - our version of enough.....and the financial sector is quite unlikely to like it.

Visit msnbc.com for Breaking News, World News, and News about the Economy

So What Now AIG?

2009-03-18T21:37:00.013-05:00

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Yes, I did hear most of Liddy's testimony, and I did hear the insistence that these were contracts. So, I ask: if AIG was left to go completely bust, what money would have paid the policyholders? Are those not contracts? Or is it because those contracts are with mere mortals they are somehow less important that those of the financial wizards? Because, taxpayers buy into protecting policyholders - that was the point of the bailout, or so we thought because so we were told. Taxpayers do not buy into big salaries, and cannot comprehend "bonuses" in this context.

Yes, I did hear Senator Dodd say he was the one to allow the bonuses because it was a compromise with the Treasury Department. So I ask, who in the Treasury Department? And did that "who" act alone? Specifically, where was Tim Geithner? Don't these meetings have minutes? I hear the Fed knew? Which Fed? Tim Geithner's New York Fed that he was president of at the time?

Yes, I did hear Congress up in arms. But I ask: Don't you read every line before you vote on it? I imagine given the public outcry surrounded this legislation, and Paulson's attempt to have no review, no oversight and unlimited power in the first draft that it might, just might, have been a good idea to read every word before you voted on it?

Yes, I did hear the Republican members of Congress try to blame this Administration. So I ask: Which Administration presided over the free for all that created this mess? Wasn't the last President a Republican? Now I agree: please use conditions to try to do what you can. But when the horse is out of the gate, and the Republicans opened the gate and egged on the horse to move as fast as he can, can the Republicans really complain about the gate and the horse now?

Yes, I did hear President Obama. And without being biased, he's really the one who's the most correct. He didn't sign those contracts, but he takes responsibility. Translation - ok, now that we know, prepare for strict rules and regulations. And then at his Town Hall at Costa Mesa he did a fantastic job of explaining this mess in plain english - you know, the language that us mere mortals speak - and why it has to be fixed. When I find the video, I will be sure to post it.

So where are we?

Well, Liddy has said he has asked for a portion of the bonuses to be returned, and we hear that some people are returning all of the bonus. I commend them for that.

For those who do not want to return any portion of the bonuses, and are really content with Congress taking up time tomorrow for the House to try to tax 90% of these bonuses, and the Senate to try to tax 70% of these bonuses, I humbly submit that you are making matters worse for yourselves, your professional future, and your own profession. Frankly, Congress has lots of work to do to fix the economy that all these exotic products destroyed. It doesn't really have the time to do something it really does not want to do ideologically - and that is impose taxes of this magnitude. Shockingly, neither party wants to do this ideologically. But they will.

Respectfully, you bonus recipients are missing the entire forest for the trees. When the Government gets "tax happy" - watch out!

If this wasn't so important, and so sad, this would be a real soap opera.

Do Yourself A Favour - Get Rid Of The Bonus System

2009-03-17T18:54:00.003-05:00

Image by Barrybar via Flickr

First, let me make a few things absolutely clear.

If you are a fully private company, and you deem an employee worth trillions of dollars and are willing to pay that employee trillions of dollars in any shape or form - as long as you and your company are not infringing upon society - then I support the right of PRIVATE COMPANIES to pay their employees as much and in what manner they see fit.

If you - as an individual - are some kind of specialist, I support your being worth more than mere mortals like me. So, for example, if you are an oncologist who has never lost one single cancer patient, I say you deserve the world. Not being sarcastic, you do deserve the world. Not to equate a human life with money, but if you are a specialist in the financial sector - like say a derivatives trader - and you make lots of money for the system so we can all have more money, then sure you deserve to make lots of money. But all professions have sanctions. Doctors lose their licenses because of malpractice, accountants lose their licenses because of irregularities, lawyers get disbarred over ethical issues, etc. And mere mortals like us, lose our jobs. NOW: Who makes more money and get "bonuses' when they destroy their own company, their own industry and the entire global financial system and the entire global economy? People in the financial sector, that's who! Is there something not radically wrong with that?

I am insulted to hear anyone say that this matter of bonuses is a "perception" problem and immaterial in the scheme of things. Oh no - I beg to differ. It is the very HEART of the problem.

Make tons of money, please do. But if you make a mess, you have to pay for it. The rest of society is structured that way.

Make lots of money in a private company, please do. But when taxpayers funds are involved, the rules are different. Taxpayers need healthcare, roads, education etc. There is not enough money for the things taxpayers funds are supposed to do. There is record deficit and record debt. So where is the money to reward people who made a mess? Sorry, that is not on!

Now, I've heard some things today that warrant comment:

"The only people can fix this mess are the ones who made it, so you can't afford to lose the talent". Rubbish. This is a perverse incentive. You want someone to fix something, you pay them on the basis of how long they take to fix it. The longer they take, the less they make. And they definitely don't make a "bonus"

"A bonus is just the way it is". Wrong again. A bonus is defined - as in the dictionary - as extra, something earned. The very first synonym listed is "reward". You cannot make a mess and be "rewarded" for that. Have we all lost our minds?

"These are contracts". Now I am a stickler for the law. If these are contracts, and they are so airtight that they cannot be broken, then these lawyers are the most valuable legal minds in the world. They should be the ones who sue the AIG recipients for a share of the "bonuses" because this legal work requires real talent. If these contracts were entered into after bailout funds were provided, then someone has done something really wrong - they have broken the public trust. And that should be exposed. Even if the "bonuses" are lost. Regardless, no more money for anybody without conditionalities - are the government lawyers sleeping?

Please, financial engineering is critical for a functional market. But if those who financially engineer don't try to meet us mere mortals - who cannot comprehend your value system - halfway, then the people and the Government are going to force a solution. And that means restrictions and over-regulation. And then everyone will lose. But at least, we, the mere mortals, won't be insulted, offended and outraged.

What Are They Thinking? AIG Is A Disaster.

2009-03-16T19:19:00.009-05:00

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Ok, I don't need to post a link to an article. The WHOLE WORLD knows about this one. There has actually been a debate for days- yes days - over this AIG bonus matter.

I need to know what "they" are thinking. But the key question is who are the "they"

First, at the risk of being controversial, who are the "they" that agreed to these contracts in the first place. It has been raised that these contracts were actually entered into after - yes, after - AIG received the first set of bailout funds. Please tell me that it is not so. Because this would mean that after that public outcry, someone actually developed and signed these contracts knowing taxpayers money would be paying for this. Do these "they" have no conscience?

Second, if the taxpayers own 80% of AIG, is that not partial nationalization? I have already spoken and written several times about why partial nationalization is such a disaster. This is exactly why. Case in point. Those in charge get to spend taxpayers money as they like. Fully nationalize and cut out this nonsense.

Third, excuse me, but these are contracts. And if they are contracts, then evidently there are obligations. The American way of capitalism is all about honoring contracts, so I get that. So where were the "they" to make these contracts null and void if government assistance is provided? That is called a "conditionality" - quite another popular feature of the American way of capitalism. Ben Bernanke, please add this to your list for regulatory reform.

Fourth, and here's where I must be missing something. Am I really to understand that derivatives traders - the same "they" who caused this massive mess not just to the AAA rated AIG, but to the entire global financial system - are the "they" who MUST get bonuses, and that these "they" actually want them? Do they live in society with the rest of us? You know, I said that Wall Street was in desperate need of PR. Strike that. All these companies need an entire machinery to explain this NEED for this type of compensation system when 1) people do not perform and 2) when people make a mess of the entire world. I am sorry but us mere mortals do not get it. Because in our world, if we mess up we get no bonus or we get fired. And in our world when those "they" make a mess of the world, we in the rest of the world lose our jobs because of those "they" and we wonder how we are going to literally survive this period. Earth to AIG: The majority of the world wonders where their next meal comes from. Where are the sanctions for making a mess? Ben Bernanke, you need this one on your list too.

AIG and its employees need to get a grip. Nothing lasts forever. We all live in this world. If your customers, clients, target market, regulators and all the people you do business with absolutely abhor you and your practices, not only will the company not last, but all your employees will become unemployable. Respectfully, these "they" are not team players.

Geithner: Global Financial Crisis "Still Evolving"

2009-03-14T16:53:00.004-05:00

Crisis is "still evolving"? Thank you Christopher Columbus.

Read the Article at HuffingtonPost

According to AP:

"They (the G20) aren't waiting patiently. Brazilian Finance Minister Guido Mantega said there is an "urgency" for the U.S. to solve its banking problem.

"If they're going to be nationalized then go ahead, if they are going to be liquidated then go ahead. But it must be done quickly," he said after the Saturday meeting."

I have written and said a thousand times - just get on with it. Do something.

When China Gets Worried, I Get Worried

2009-03-13T23:19:00.004-05:00

Image by Getty Images via Daylife

See Yahoo News: China "worried" about US Treasury Holdings

If China is worried, it's time to start looking at this whole matter again.

According to the article: "Of course we are concerned about the safety of our assets. To be honest, I'm a little bit worried," Wen said at a news conference Friday after the closing of China's annual legislative session. "I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets."

"Worried". Premier Wen Jiabao said "worried"

I haven't been worried precisely because China had money, and China was willing to lend the US money. Everywhere else is in a mess, other countries haven't really been trying to help the US and other countries don't have the kind of money China has. It took forever for the G7 to have the first meeting. And since then, Europe has its own internal difficulties - can't agree on form of assistance to its own Eurozone members, amount of assistance etc.

If China is worried, then China is unlikely to keep lending. That is logical. It's worried about the existing assets. Where will the US turn to next?

We may just see a new world order, and a completely new monetary system. WOW!

I have noted China's statements on the need for the G20 to focus on the developing world and the poorest countries in the meeting in April.

From the article:

"Wen also said Beijing wants the G-20 summit in April focus on helping the poorest countries.

The premier said Beijing has met its own commitments to help developing countries by erasing a total of $40 billion in debt owed by 46 countries and giving out 200 billion yuan ($29 billion) of aid to developing countries."

"We must see to it that we show concern for developing countries," he said.

THANK YOU CHINA!! But let's face reality, if the US cannot stabilize that is bad news for all of us. And the US needs China's help - in more than money - to stabilize.

America, the ball is in your court. Ben Bernanke says all you need is the will. Do you know what to do, like he says? Because clearly, you have not yet fully appreciated what is at stake if you do not - or you would have done it. And here's a gentle reminder - what is at stake is much more than China not lending you money, should that be the outcome.

This is really going to be interesting.

Jon Stewart Deserves An Award. Watch This!

2009-03-13T18:31:00.007-05:00

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Remember my post a few days ago: A Plea To Jon Stewart? Well, now, Jim Cramer from CNBC was his guest last night. Please take the time to watch the videos. It's not long - it's just in three parts.

Jon Stewart deserves an award! And this is exactly what I want Jon Stewart to do with the ratings agencies. Remember my posts: Another Look At Ratings Agencies. and Rating The Ratings Agencies. Today, the Jamaica Observer ran a fantastic piece Should Jamaica Continue To Place Faith In the Ratings Agencies? Another worthwhile read.

I wish Jon Stewart would ask these ratings agencies the same kind of common sense, public interest "don't we deserve better" kinds of questions. Let's have some more admissions of guilt and responsibility. And let's get a pledge to do better.

By the way, in my post My Wish List - The New Global Financial Architecture, I mentioned a "grownup" body to keep an eye on everyone else. Remember?

7. In my ideal world, we have a "grownup" - a super stablizer body comprised of membership from the developed and the developing world. How do I explain this? We cannot go through this again. We need some "body" whose job it is to keep an eye on everyone else. Not a regulator, but some kind of independent watchdog group. Maybe the media can form a partnership with some prominent NGOs. Maybe we should start a new NGO. Whatever or whoever, but here's what this body must do:

Some "body" to make sure all the powerful people and parties do not abuse their power - and expose them if they do
Some "body"to make sure mandatory financial education is taking place, and if it is not, then expose that
Some "body" to make sure the foundation is funded and is funding what it is intended to fund, and expose the financial sector if it does not make it's donations, and expose the foundation if it is not doing what it should
Some "body" to make sure the free for all is over, and expose anyone getting back into the reckless behavior with no limits, no or limited audits, no or limited regulation, no or limited transparency, no or limited supervision
Some "body" to make sure the universities lead the design of this stronger, more stable, more equitable and more sustainable global financial and economic system, and expose them if they get off track
Some "body" to make sure domestic regulators are keeping their commitments with regard to the treaties, and expose them if they don't

Well, I nominate Jon Stewart to sit on that board.

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 1

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 2

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 3

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

Will You Help The Huffington Post And Me?

2009-03-11T21:27:00.010-05:00

Image by LiminalMike via Flickr

Ok, would you like to help with a very important project?

The Huffington Post is asking for your help. This is the article: Help Dig Up The Praise That Today's Bailout Bandits Once Received

Basically, they are asking you to submit "heaps of praise that newspapers, magazines and TV news shows doled out when times were good. Now that times are bad, it's even more important to remind ourselves how easily the wool can be pulled over the media's eyes and, consequently, those who consume it." Read the article for some suggested names.

According to the article:
"Email submissions+praise@huffingtonpost.com with the articles you find. Include your name, the date the article was published, and let us know if you would like to remain anonymous. "

Now, why is this an important project? Because I love the media so much - not being sarcastic - that whenever they are used to dupe us, those offenders should be exposed. Also, because I know that you should always question your information - still love the media - it's good for us to see that everything we see, read or hear is not necessarily the truth, the whole truth, and nothing but the truth.

Thanks to the Huffington Post for this excellent idea.

So now I ask you, my readers, do you want to do something for me - for us all?

Please email earnandsavenow@gmail.com with all published incidents (with date and source) of every incident you find when the ratings agencies were wrong. I have already filed away their testimony by the House Oversight Committee on October 22, 2008. If you want a quick reminder of why I care so much about this issue, see my recent post: Another Look At The Ratings Agencies and my earlier post: Rating The Rating Agencies. And just to remind you of the urgency, Moody's has now come out with 283 companies they say are at risk of default. Well, if they weren't before - this publication from Moody's won't help. And this is the precise problem, they have been wrong in the past, but people base their decisions based on whatever these rating agencies say anyway.

Maybe if I gather the information for Jon Stewart, he'll do the piece on the ratings agencies I've made the plea for. (See my blog post: A Plea To Jon Stewart)

President Obama, Congress, G20 - Are You ALL Listening?

2009-03-10T20:23:00.006-05:00

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Yesterday, I outlined My Wish List - The New Global Financial Architecture. If you missed it, I outlined 7 features of the reformed financial sector - in my ideal world.

So today, as luck would have it, Ben Bernanke gave a speech entitled "Financial Reform to Address Systemic Risk" His best speech yet! Spot on with the Q & A!

I can't debate the usefulness of TARP since I don't have enough information to do so. BUT, with regard to moving forward, I think we are of complete like mind. I may be a bit harsher, though. :)

Here is my one minute interpretation of what he said:

he has explained why "too big to fail" is a disaster, and what to do about it;
he has outlined why a holistic approach - with maximum international cooperation - to regulation is required;
he has endorsed reform of accounting standards and other requirements that encourage bank behavior that exacerbates the problem and
he has called for a "super-investigator" of sorts - an agency that is charged with looking for systemic risk in particular recognizing that a fragmented regulatory system cannot catch everything. This agency really just identifies the problems so we can head them off. Some other body or bodies take care of problems.
there is NO economic recovery without fixing the banking system - he said it in the speech and more than once in the Q&A
the best thing the G20 can do is develop guidelines for cooperation - agreements and so forth. I did not hear one word about any global regulator which some countries have proposed.

Bottom line: the US knows what to do, there needs to be the will to do the things they know need to be done. Check the Q&A. That was his answer.

My questions: When, Chairman Bernanke? We need this like, yesterday! I hear you that you are doing what you can, and there are things that Congress must do, and there are things the Administration must do, and there are things the G20 must do. So, President Obama, Congress and the G20 - are you ALL listening?

If you missed the speech, here is the video compliments of CSPAN. I would recommend that you watch it because then you get the benefit of the Q&A which is particularly insightful, especially if you are trying to understand how all these pieces fit together.

Or here's the link to the speech compliments of the Federal Reserve website

Or from the Federal Reserve website. Anything in bold is my emphasis:

"Chairman Ben S. Bernanke
At the Council on Foreign Relations, Washington, D.C.
March 10, 2009

Financial Reform to Address Systemic Risk

The world is suffering through the worst financial crisis since the 1930s, a crisis that has precipitated a sharp downturn in the global economy. Its fundamental causes remain in dispute. In my view, however, it is impossible to understand this crisis without reference to the global imbalances in trade and capital flows that began in the latter half of the 1990s. In the simplest terms, these imbalances reflected a chronic lack of saving relative to investment in the United States and some other industrial countries, combined with an extraordinary increase in saving relative to investment in many emerging market nations. The increase in excess saving in the emerging world resulted in turn from factors such as rapid economic growth in high-saving East Asian economies accompanied, outside of China, by reduced investment rates; large buildups in foreign exchange reserves in a number of emerging markets; and substantial increases in revenues received by exporters of oil and other commodities. Like water seeking its level, saving flowed from where it was abundant to where it was deficient, with the result that the United States and some other advanced countries experienced large capital inflows for more than a decade, even as real long-term interest rates remained low.

The global imbalances were the joint responsibility of the United States and our trading partners, and although the topic was a perennial one at international conferences, we collectively did not do enough to reduce those imbalances. However, the responsibility to use the resulting capital inflows effectively fell primarily on the receiving countries, particularly the United States. The details of the story are complex, but, broadly speaking, the risk-management systems of the private sector and government oversight of the financial sector in the United States and some other industrial countries failed to ensure that the inrush of capital was prudently invested, a failure that has led to a powerful reversal in investor sentiment and a seizing up of credit markets. In certain respects, our experience parallels that of some emerging-market countries in the 1990s, whose financial sectors and regulatory regimes likewise proved inadequate for efficiently investing large inflows of saving from abroad. When those failures became evident, investors lost confidence and crises ensued. A clear and highly consequential difference, however, is that the crises of the 1990s were regional, whereas the current crisis has become global.1

In the near term, governments around the world must continue to take forceful and, when appropriate, coordinated actions to restore financial market functioning and the flow of credit. I have spoken on a number of occasions about the steps that the U.S. government, and particularly the Federal Reserve, is taking along these lines.2 Until we stabilize the financial system, a sustainable economic recovery will remain out of reach. In particular, the continued viability of systemically important financial institutions is vital to this effort. In that regard, the Federal Reserve, other federal regulators, and the Treasury Department have stated that they will take any necessary and appropriate steps to ensure that our banking institutions have the capital and liquidity necessary to function well in even a severe economic downturn. Moreover, we have reiterated the U.S. government's determination to ensure that systemically important financial institutions continue to be able to meet their commitments.

At the same time that we are addressing such immediate challenges, it is not too soon for policymakers to begin thinking about the reforms to the financial architecture, broadly conceived, that could help prevent a similar crisis from developing in the future. We must have a strategy that regulates the financial system as a whole, in a holistic way, not just its individual components. In particular, strong and effective regulation and supervision of banking institutions, although necessary for reducing systemic risk, are not sufficient by themselves to achieve this aim.

Today, I would like to talk about four key elements of such a strategy. First, we must address the problem of financial institutions that are deemed too big--or perhaps too interconnected--to fail. Second, we must strengthen what I will call the financial infrastructure--the systems, rules, and conventions that govern trading, payment, clearing, and settlement in financial markets--to ensure that it will perform well under stress. Third, we should review regulatory policies and accounting rules to ensure that they do not induce excessive procyclicality--that is, do not overly magnify the ups and downs in the financial system and the economy. Finally, we should consider whether the creation of an authority specifically charged with monitoring and addressing systemic risks would help protect the system from financial crises like the one we are currently experiencing. My discussion today will focus on the principles that should guide regulatory reform, leaving aside important questions concerning how the current regulatory structure might be reworked to reduce balkanization and overlap and increase effectiveness. I also will not say much about the international dimensions of the issue but will take as self-evident that, in light of the global nature of financial institutions and markets, the reform of financial regulation and supervision should be coordinated internationally to the greatest extent possible.

Too Big to Fail
In a crisis, the authorities have strong incentives to prevent the failure of a large, highly interconnected financial firm, because of the risks such a failure would pose to the financial system and the broader economy. However, the belief of market participants that a particular firm is considered too big to fail has many undesirable effects. For instance, it reduces market discipline and encourages excessive risk-taking by the firm. It also provides an artificial incentive for firms to grow, in order to be perceived as too big to fail. And it creates an unlevel playing field with smaller firms, which may not be regarded as having implicit government support. Moreover, government rescues of too-big-to-fail firms can be costly to taxpayers, as we have seen recently. Indeed, in the present crisis, the too-big-to-fail issue has emerged as an enormous problem.

In the midst of this crisis, given the highly fragile state of financial markets and the global economy, government assistance to avoid the failures of major financial institutions has been necessary to avoid a further serious destabilization of the financial system, and our commitment to avoiding such a failure remains firm. Looking to the future, however, it is imperative that policymakers address this issue by better supervising systemically critical firms to prevent excessive risk-taking and by strengthening the resilience of the financial system to minimize the consequences when a large firm must be unwound.

Achieving more effective supervision of large and complex financial firms will require a number of actions. First, supervisors need to move vigorously--as we are already doing--to address the weaknesses at major financial institutions in capital adequacy, liquidity management, and risk management that have been revealed by the crisis. In particular, policymakers must insist that the large financial firms that they supervise be capable of monitoring and managing their risks in a timely manner and on an enterprise-wide basis. In that regard, the Federal Reserve has been looking carefully at risk-management practices at systemically important institutions to identify best practices, assess firms' performance, and require improvement where deficiencies are identified.3 Any firm whose failure would pose a systemic risk must receive especially close supervisory oversight of its risk-taking, risk management, and financial condition, and be held to high capital and liquidity standards.4 In light of the global reach and diversified operations of many large financial firms, international supervisors of banks, securities firms, and other financial institutions must collaborate and cooperate on these efforts.

Second, we must ensure a robust framework--both in law and practice--for consolidated supervision of all systemically important financial firms organized as holding companies. The consolidated supervisors must have clear authority to monitor and address safety and soundness concerns in all parts of the organization, not just the holding company. Broad-based application of the principle of consolidated supervision would also serve to eliminate gaps in oversight that would otherwise allow risk-taking to migrate from more-regulated to less-regulated sectors.

Third, looking beyond the current crisis, the United States also needs improved tools to allow the orderly resolution of a systemically important nonbank financial firm, including a mechanism to cover the costs of the resolution. In most cases, federal bankruptcy laws provide an appropriate framework for the resolution of nonbank financial institutions. However, this framework does not sufficiently protect the public's strong interest in ensuring the orderly resolution of nondepository financial institutions when a failure would pose substantial systemic risks. Improved resolution procedures for these firms would help reduce the too-big-to-fail problem by narrowing the range of circumstances that might be expected to prompt government intervention to keep the firm operating.

Developing appropriate resolution procedures for potentially systemic financial firms, including bank holding companies, is a complex and challenging task. Models do exist, though, including the process currently in place under the Federal Deposit Insurance Act (FDIA) for dealing with failing insured depository institutions and the framework established for Fannie Mae and Freddie Mac under the Housing and Economic Recovery Act of 2008. Both models allow a government agency to take control of a failing institution's operations and management, act as conservator or receiver for the institution, and establish a "bridge" institution to facilitate an orderly sale or liquidation of the firm. The authority to "bridge" a failing institution through a receivership to a new entity reduces the potential for market disruption while limiting moral hazard and mitigating any adverse impact of government intervention on market discipline.

The new resolution regime would need to be carefully crafted. For example, clear guidelines must define which firms could be subject to the alternative regime and the process for invoking that regime, analogous perhaps to the procedures for invoking the so-called systemic risk exception under the FDIA. In addition, given the global operations of many large and complex financial firms and the complex regulatory structures under which they operate, any new regime must be structured to work as seamlessly as possible with other domestic or foreign insolvency regimes that might apply to one or more parts of the consolidated organization.

Strengthening the Financial Infrastructure
The first element of my proposed reform agenda covers systemically important institutions considered individually. The second element focuses on interactions among firms as mediated by what I have called the financial infrastructure, or the financial plumbing if you will: the institutions that support trading, payments, clearing, and settlement. Here the aim should be not only to help make the financial system as a whole better able to withstand future shocks, but also to mitigate moral hazard and the problem of too big to fail by reducing the range of circumstances in which systemic stability concerns might prompt government intervention. I'll give several examples.

Since September 2005, the Federal Reserve Bank of New York has been leading a major joint initiative by the public and private sectors to improve arrangements for clearing and settling credit default swaps (CDS) and other over-the-counter (OTC) derivatives. As a result, the accuracy and timeliness of trade information has improved significantly. However, the infrastructure for managing these derivatives is still not as efficient or transparent as that for more mature instruments. The Federal Reserve Bank of New York, in conjunction with other domestic and foreign supervisors, will continue to work toward establishing increasingly stringent targets and performance standards for market participants. To help alleviate counterparty credit concerns, regulators are also encouraging the development of well-regulated and prudently managed central clearing counterparties for OTC trades.5 Just last week, we approved the application for membership in the Federal Reserve System of ICE Trust, a trust company that proposes to operate as a central counterparty and clearinghouse for CDS transactions.

The Federal Reserve and other authorities also are focusing on enhancing the resilience of the triparty repurchase agreement (repo) market, in which the primary dealers and other major banks and broker-dealers obtain very large amounts of secured financing from money market mutual funds and other short-term, risk-averse sources of funding.6 For some time, market participants have been working to develop a contingency plan for handling a loss of confidence in either of the two clearing banks that facilitate the settlement of triparty repos. Recent experience demonstrates the need for additional measures to enhance the resilience of these markets, particularly as large borrowers have experienced acute stress. The Federal Reserve's Primary Dealer Credit Facility, launched in the wake of the Bear Stearns collapse and expanded in the aftermath of the Lehman Brothers bankruptcy, has stabilized this critical market, and market confidence has been maintained. However, this program was adopted under our emergency powers to address unusual and exigent circumstances. Therefore, more-permanent reforms are needed. For example, it may be worthwhile considering the costs and benefits of a central clearing system for this market, given the magnitude of exposures generated and the vital importance of the market to both dealers and investors.

More broadly, both the operational performance of key payment and settlement systems and their ability to manage counterparty and market risks in both normal and stressed environments are critical to the stability of the broader financial system. Currently, the Federal Reserve relies on a patchwork of authorities, largely derived from our role as a banking supervisor, as well as on moral suasion to help ensure that critical payment and settlement systems have the necessary procedures and controls in place to manage their risks. By contrast, many major central banks around the world have an explicit statutory basis for their oversight of these systems. Given how important robust payment and settlement systems are to financial stability, a good case can be made for granting the Federal Reserve explicit oversight authority for systemically important payment and settlement systems.

Another issue that warrants attention is the potential fragility of the money market mutual fund sector. Last fall, as a result of losses on Lehman Brothers commercial paper, a prominent money market mutual fund "broke the buck"--that is, was unable to maintain a net asset value of $1 per share. Over subsequent days, fearful investors withdrew more than $250 billion from prime money market mutual funds. The magnitude of these withdrawals decreased only after the Treasury announced a guarantee program for money market mutual fund investors and the Federal Reserve established a new lending program to support liquidity in the asset-backed commercial paper market.

In light of the importance of money market mutual funds--and, in particular, the crucial role they play in the commercial paper market, a key source of funding for many businesses--policymakers should consider how to increase the resiliency of those funds that are susceptible to runs. One approach would be to impose tighter restrictions on the instruments in which money market mutual funds can invest, potentially requiring shorter maturities and increased liquidity. A second approach would be to develop a limited system of insurance for money market mutual funds that seek to maintain a stable net asset value. For either of these approaches or others, it would be important to consider the implications not only for the money market mutual fund industry itself, but also for the distribution of liquidity and risk in the financial system as a whole.

Procyclicality in the Regulatory System
It seems obvious that regulatory and supervisory policies should not themselves put unjustified pressure on financial institutions or inappropriately inhibit lending during economic downturns. However, there is some evidence that capital standards, accounting rules, and other regulations have made the financial sector excessively procyclical--that is, they lead financial institutions to ease credit in booms and tighten credit in downturns more than is justified by changes in the creditworthiness of borrowers, thereby intensifying cyclical changes.

For example, capital regulations require that banks' capital ratios meet or exceed fixed minimum standards for the bank to be considered safe and sound by regulators.7 Because banks typically find raising capital to be difficult in economic downturns or periods of financial stress, their best means of boosting their regulatory capital ratios during difficult periods may be to reduce new lending, perhaps more so than is justified by the credit environment. We should review capital regulations to ensure that they are appropriately forward-looking, and that capital is allowed to serve its intended role as a buffer--one built up during good times and drawn down during bad times in a manner consistent with safety and soundness.8 In the area of prudential supervision, we should also ensure that bank examiners appropriately balance the need for caution and the benefits of maintaining profitable lending relationships when evaluating bank loan policies.

The ongoing move by those who set accounting standards toward requirements for improved disclosure and greater transparency is a positive development that deserves full support. However, determining appropriate valuation methods for illiquid or idiosyncratic assets can be very difficult, to put it mildly. Similarly, there is considerable uncertainty regarding the appropriate levels of loan loss reserves over the cycle. As a result, further review of accounting standards governing valuation and loss provisioning would be useful, and might result in modifications to the accounting rules that reduce their procyclical effects without compromising the goals of disclosure and transparency. Indeed, work is underway on these issues through the Financial Stability Forum, and the results of that work may prove useful for U.S. policymakers.9

Another potential source of procyclicality is the system for funding deposit insurance. In recognition of this fact--as well as the weak economic outlook and the current strains on banks and the financial system--the Federal Deposit Insurance Corporation recently announced plans to extend from five years to seven years the period over which it would restore the deposit insurance fund to its minimum required level. This plan, if implemented, should help reduce the costs imposed on banks at a time when capital and lending are already under pressure. Policymakers should consider additional steps to reduce the possible procyclical effects of deposit insurance costs while still ensuring that riskier banks pay higher premiums than safer banks. One possibility would be to raise the level to which the designated reserve ratio may grow in benign economic environments, so that a larger buffer is available to be drawn down when economic conditions worsen and insurance losses are high.

Systemic Risk Authority
The policy actions I've discussed would inhibit the buildup of risks within the financial system and improve the resilience of the financial system to adverse shocks. Financial stability, however, could be further enhanced by a more explicitly macroprudential approach to financial regulation and supervision in the United States. Macroprudential policies focus on risks to the financial system as a whole. Such risks may be crosscutting, affecting a number of firms and markets, or they may be concentrated in a few key areas. A macroprudential approach would complement and build on the current regulatory and supervisory structure, in which the primary focus is the safety and soundness of individual institutions and markets.

How could macroprudential policies be better integrated into the regulatory and supervisory system? One way would be for the Congress to direct and empower a governmental authority to monitor, assess, and, if necessary, address potential systemic risks within the financial system. The elements of such an authority's mission could include, for example, (1) monitoring large or rapidly increasing exposures--such as to subprime mortgages--across firms and markets, rather than only at the level of individual firms or sectors; (2) assessing the potential for deficiencies in evolving risk-management practices, broad-based increases in financial leverage, or changes in financial markets or products to increase systemic risks; (3) analyzing possible spillovers between financial firms or between firms and markets, such as the mutual exposures of highly interconnected firms; and (4) identifying possible regulatory gaps, including gaps in the protection of consumers and investors, that pose risks for the system as a whole. Two areas of natural focus for a systemic risk authority would be the stability of systemically critical financial institutions and the systemically relevant aspects of the financial infrastructure that I discussed earlier.

Introducing a macroprudential approach to regulation would present a number of significant challenges. Most fundamentally, implementing a comprehensive systemic risk program would demand a great deal of the supervisory authority in terms of market and institutional knowledge, analytical sophistication, capacity to process large amounts of disparate information, and supervisory expertise.

Other challenges include defining the range of powers that a systemic risk authority would need to fulfill its mission and then integrating that authority into the currently decentralized system of financial regulation in the United States. On the one hand, it seems clear that any new systemic risk authority should rely on the information, assessments, and supervisory and regulatory programs of existing financial supervisors and regulators whenever possible. This approach would reduce the cost to both the private sector and the public sector and allow the systemic risk authority to leverage the expertise and knowledge of other supervisors. On the other hand, because the goal of any systemic risk authority would be to have a broader view of the financial system, simply relying on existing structures likely would be insufficient.

For example, a systemic risk authority would need broad authority to obtain information--through data collection and reports, or when necessary, examinations--from banks and key financial market participants, as well as from nonbank financial institutions that currently may not be subject to regular supervisory reporting requirements. A systemic risk authority likely would also need an appropriately calibrated ability to take measures to address identified systemic risks--in coordination with other supervisors, when possible, or independently, if necessary. The role of a systemic risk authority in setting standards for capital, liquidity, and risk-management practices for the financial sector also would need to be explored, given that these standards have both microprudential and macroprudential implications.

In general, much discussion will be needed regarding what can reasonably be expected from a macroprudential regime and how expectations, accountability, and authorities can best be aligned. Important decisions must be made about how the systemic risk regulation function should be structured and located within the government. Several existing agencies have data and expertise relevant to this task, so there are a variety of organizational options. In any structure, however, to ensure accountability, the scope of authorities and responsibilities must be clearly specified

Some commentators have proposed that the Federal Reserve take on the role of systemic risk authority; others have expressed concern that adding this responsibility would overburden the central bank. The extent to which this new responsibility might be a good match for the Federal Reserve depends a great deal on precisely how the Congress defines the role and responsibilities of the authority, as well as on how the necessary resources and expertise complement those employed by the Federal Reserve in the pursuit of its long-established core missions.

It seems to me that we should keep our minds open on these questions. We have been discussing them a good deal within the Federal Reserve System, and their importance warrants careful consideration by legislators and other policymakers. As a practical matter, however, effectively identifying and addressing systemic risks would seem to require the involvement of the Federal Reserve in some capacity, even if not in the lead role. As the central bank of the United States, the Federal Reserve has long figured prominently in the government's responses to financial crises. Indeed, the Federal Reserve was established by the Congress in 1913 largely as a means of addressing the problem of recurring financial panics. The Federal Reserve plays such a key role in part because it serves as liquidity provider of last resort, a power that has proved critical in financial crises throughout history. In addition, the Federal Reserve has broad expertise derived from its wide range of activities, including its role as umbrella supervisor for bank and financial holding companies and its active monitoring of capital markets in support of its monetary policy and financial stability objectives.

Conclusion
In the wake of the ongoing financial crisis, governments have moved quickly to establish a wide range of programs to support financial market functioning and foster credit flows to businesses and households. However, these necessary short-term steps must be accompanied by new policies to limit the incidence and impact of systemic risk. In my remarks today, I have emphasized the need to address the problems posed by firms that are perceived to be too big to fail, the importance of efforts to strengthen the financial infrastructure, the desirability of reducing the procyclical effects of capital regulation and accounting rules, and the potential benefits of taking a more macroprudential approach to the supervision and regulation of financial firms. Some of the policies I propose can be developed and implemented under the existing authority of financial regulators. Indeed, we are in the process of doing just that. In other cases, congressional action will be necessary to create the requisite authority and responsibility.

Financial crises will continue to occur, as they have around the world for literally hundreds of years. Even with the sorts of actions I have outlined here today, it is unrealistic to hope that financial crises can be entirely eliminated, especially while maintaining a dynamic and innovative financial system. Nonetheless, these steps should help make crises less frequent and less virulent, and so contribute to a better functioning national and global economy."

My Wish List - The New Global Financial Architecture

2009-03-07T14:06:00.015-05:00

Image by vaXzine via Flickr

If you have been following this blog, you would know I have a major bee in my bonnet.

If I could write every day about the need for a new global financial architecture, I would.

If I could spend all day designing what I have termed not just a new global financial architecture, but a stronger, more stable, more equitable and more sustainable global financial and economic system, I would.

But since I can't here's my very quick wish list, in no particular order of significance because they all are to me. By the way, this list is not meant to be comprehensive. Let's think of this as a good start.

1. In my ideal world, there is no abuse of power. Not by anyone. That's right.

In my ideal world: Financial institutions do not abuse their power over anyone. Why? People depend on their banks - they trust them. Rather, let me correct myself. They used to trust them; and they want to trust them. Leading people astray into undertaking obligations they cannot manage, or selling them investments they do not understand is not only immoral, it is an abuse of power. What is that power? It is the power of information.

In my ideal world: Regulators do not abuse their power, or make it up when they have none. Why? Regulators are to ensure the efficient and fair functioning of the markets. Because the cornerstone of functional financial markets is that people have confidence in the regulators even if they cannot have confidence in the institutions. People need to believe that there is someone or something or some institution charged to make sure their money and their investments are as safe as possible. So regulators have a responsibility to act predictably, transparently, within the confines of the law and regulations, according to the law and regulations and only constitutionally with due respect to people's rights.

In my ideal world: Ratings agencies do not abuse their power. Why? Rating agencies are crucial for functional markets. As we see, the whole world can spin on their advice. So that advice MUST be based on reasoned technical assessments in a transparent process that is supervised. They are to be supervised by an independent body comprised of representatives of different countries from the developed and the developing world. Respectfully, that institution cannot be the IMF or any of the other multilaterals. Independent ratings agencies must be independent from the financial sectors and companies they rate, independent from the IFIs and independent from the influence of any one individual or country. They must be independent of their perception of their own self importance.

2. In my ideal world, there is mandatory financial education for everyone - in every country. Why is this important? Because people must understand 1) how to manage their own money 2) what affects their money and the value of their investments 3) how to question all the financial advice they get. In my ideal world, financial education would start at kindergarten and be mandatory at every level through to the end of college. I am totally serious. Think about it. You need money all though your life, and you need to be able to manage your money all through life. So why don't you have access to financial education the same way you learn to read, or do arithmetic, or learn spelling and grammar?

3. In my ideal world, financial education must be funded by the financial sector, but not conducted by the financial sector. That's right. I'm probably alone here but I think that the financial institutions should fund an independent foundation that finances the school education project in 2. above as well as public education initiatives through the media. I completely support their right to makes lots of money. But to whom much is given much is expected. So, the more exotic you get with the financial engineering, the more money you should be required to provide to the foundation. You do plain vanilla banking in a conservative manner - then you get to pay less. This fund should be an international fund under the auspices of the United Nations. There are loads of ways to determine fair allocation - I could write a whole paper on how the fund should be financed and how it should function to make it fair for all people in all countries. Talk about a dream job! By the way, this kind of remedy is not unprecedented. Back in the early 2000s, the SEC made Wall Street pay for financial education for investors after they - Wall Street - made another mess, albeit minor compared to this. Check the history.

4. In my ideal world, the free for all is over. There are to be product limits, effective regulation, transparency, supervision and audit. It is beyond my comprehension that any type of financial product could be sold in such sufficient quantities that the market for any one type of financial product could exceed the GDP of the entire world. Really, did anyone think this was sustainable? Seriously, Credit Default Swaps - one type of Credit Default Obligations - exceed the GDP of the whole world. Insane. No more of that. Traders et. al. have all admitted that no one knows who even owns what. Are they kidding? No more of that. We need clearing houses, proper records, proper accounting, proper auditing and STRONG incentives to remain compliant. Yes, I did write incentives. Why? We've tried sanctions - people either don't care, or they are just not working or strong enough. People need to understand that the world is interconnected and it is in their "enlightened self-interest" for their own survival to act responsibly and build a sustainable system. By the way, everybody - yes, absolutely everybody - who takes or trades or engages in a transaction with even one cent of someone else's money gets regulated. Different levels of regulation for different players, I agree. But as long as you want to participate in the financial sector, you must agree to have a second pair of eyes - regulators - have a look at what you are doing. No ifs ands or buts. And no, I do not support overregulation. And yes, I made the abuse of power - by regulators - a big no-no. But there is no way I can support people doing whatever they want with other people's money. No more of that.

5. In my ideal world, the world's best universities lead the actual design of this stronger, more stable, more equitable and more sustainable global financial and economic system. Hey, this is just my wish list. Universities have studied this and are studying this. There are tons of experts. We need a year of structured seminars with working groups and working papers . THIS is something the IMF can host - because it has money. Bring in the practitioners, but don't give it to them to design. We are well overdue a balance between the public interest and the private interest. We are well overdue a balance between the bankers and the non-bankers. And we are well overdue a balance between the general public and all the various players in the financial sector - including the institutions, regulators and the rating agencies.

6. In my ideal world, international cooperation is effected by treaty with domestic legislation enactment. I hear and support the G20 in the very good and noble intention to have greater clarity and yes, control over what happens in the financial cyberspace. But realistically, one body to regulate everyone is just unlikely to happen. The reasons for that is really worthy of a book. Volume I would have to cover politics and political history just for context. However, it is possible to have international treaties with domestic legislation for enactment - you know, everyone agrees it is in their mutual interest to play by a certain set of minimum rules (to be decided), and that the local domestic regulators would enforce same, and that these local domestic regulators would meet frequently and talk frequently. This route is more possible than a super regulator for everybody. Further, having the IMF as that super regulator would require MAJOR reform of the IMF, and even the IMF has admitted that.

7. In my ideal world, we have a "grownup" - a super stablizer body comprised of membership from the developed and the developing world. How do I explain this? We cannot go through this again. We need some "body" whose job it is to keep an eye on everyone else. Not a regulator, but some kind of independent watchdog group. Maybe the media can form a partnership with some prominent NGOs. Maybe we should start a new NGO. Whatever or whoever, but here's what this body must do:

Some "body" to make sure all the powerful people and parties do not abuse their power - and expose them if they do
Some "body"to make sure mandatory financial education is taking place, and if it is not, then expose that
Some "body" to make sure the foundation is funded and is funding what it is intended to fund, and expose the financial sector if it does not make it's donations, and expose the foundation if it is not doing what it should
Some "body" to make sure the free for all is over, and expose anyone getting back into the reckless behavior with no limits, no or limited audits, no or limited regulation, no or limited transparency, no or limited supervision
Some "body" to make sure the universities lead the design of this stronger, more stable, more equitable and more sustainable global financial and economic system, and expose them if they get off track
Some "body" to make sure domestic regulators are keeping their commitments with regard to the treaties, and expose them if they don't

If it were up to me, this is what I would do.

A Plea To Jon Stewart

2009-03-05T20:07:00.007-05:00

Image via Wikipedia

Have you seen this video below? Priceless.

So tonight I have a plea for Jon Stewart:

Jon Stewart, can you do one of these for the credit ratings agencies - you know Moody's, Standard and Poor's etc.? Sadly, CNBC doesn't have a fraction of the power of the ratings agencies. Because of the power of competition, people can just start watching Bloomberg or something else, ratings go down and CNBC changes the programming.

That is not the case with ratings agencies.

We have had to live with whatever they say and do.......even when they know and admit that they have been wrong. The media can influence the global financial system, but not the way the rating agencies can. And right now, the rating agencies actions are only resulting in more layoffs, lowered share prices (your 401Ks people), lowered confidence in companies etc. etc.. And they have already admitted that they have been horrendously wrong and partially responsible for this global financial disaster.

So Jon Stewart, please do one of these for the ratings agencies. Let's have a look at how many times they have been right. Let's look at all the "AAA ratings" that got the world into this global mess.

The Daily Show With Jon StewartM - Th 11p / 10c

CNBC Gives Financial Advice

Daily Show Full Episodes
Important Things With Demetri Martin

Political Humor
Joke of the Day

Another Look At Rating Agencies

2009-03-04T21:48:00.011-05:00

Image by thor_matt83 via Flickr

I am going to do something very unusual tonight: I am going to write about Jamaica. Something has happened, and I would like to comment on it.

I am so glad that I have written repeatedly about Ratings Agencies. You know them, right?

They convinced the world about the "creditworthiness" of all those exotic instruments based on subprime mortgages - CDOs, CDs etc. And because their words are taken as gospel, all these financial institutions went and overdosed on essentially worthless instruments just because the ratings agencies told them they were the greatest inventions since sliced bread. And that overdose continues to make the world ill.

You remember when these same Ratings Agencies confessed in Congress that they have had a major role in the global mess we are now in, that they - the ratings agencies - were wrong and flawed. I personally found the testimony riveting. Here is the video: House Oversight Committee Hearing on the Credit Rating Agencies (October 22, 2008). Here is an interesting short piece on the hearings from ABC, if you prefer to read: Lawmakers Blame Execs For Meltdown: Congress Grilled Credit Rating Executives on Capitol Hill Today

And you do remember that for some reason, no matter how much every major country complains about the need for reform of ratings agencies, these rating agencies are still allowed to rate? The G20 has already agreed that the rating agencies need reform. It cannot come quick enough.

Well, I am glad the record reflects that I called for rating the ratings agencies long ago: Rating the Rating Agencies. Please have a look at it. And look what I said back in October 22, 2008. Because not surprisingly today, Moody's downgraded Jamaica.

And with the greatest of respect, Jamaica may be a tropical island, but there is nothing exotic about what we offer. It's very straightforward. We borrow money to finance the budget, you know for development etc. Really straightforward. We don't take people's mortgages and do all sorts of fancy things with them and create a web of, well, air. We produce, or provide a service, or have some other way bring in revenue to repay the debt. Really straightforward.

Prior to the global economic meltdown, Jamaica's prospects were great. Lots of countries' prospects were great. We depend on bauxite - commodity prices were up, and so was demand. We depend on tourism - year on year growth in visitors and yield. We have a great tourism product. We depend on remittances - our people were employed in health, education and elsewhere in the US and the UK.

Now, did Jamaica crash the commodity prices or cause the economic slump that has depressed demand? NO. Did the ratings agencies have a role in that? YES.

Did Jamaica make people lose their savings and investments so they travel less and spend less when they travel? NO. Did the rating agencies have a role in that? YES.

Did Jamaica make people lose their jobs in the US and the UK? Did Jamaica cause massive unemployment in these countries? NO. Did the ratings agencies have a role in that? YES.

Here in Jamaica, our Constitution calls for debt repayment as the first call on revenues. We are a very proud people. We have never defaulted. No government regardless of party has ever defaulted. It is the one thing that both parties take with the absolute utmost seriousness. Investor confidence is paramount and both parties work extremely hard to make investors confident. Since the crisis, we have had visits from the leadership of the multilaterals who have provided hundreds of millions (in US$) of support. We have had a visit from Vice President Xi Jingping of China whose country provided over US$118M in aid. We have not been abandoned by either the multilaterals or our special friends. The Government has implemented a stimulus package - with minimal impact on the budget. And we have already been told to expect "hard decisions" in the upcoming budget in April. We are not sitting on our hands. We are not asking for help and being told to go away.

Now all countries in the world have reduced prospects. Every single one. Our prospects have taken a downturn because of the global downturn. Our prospects have not taken a downturn because of something Jamaica did. Therefore it is only fair that we note that it is the very action of the ratings agencies in precipitating a global economic collapse that have led those very rating agencies to downgrade us. Now is that fair?

Respectfully, it is not a foregone conclusion that Jamaica is therefore doomed. Jamaica has people of incredible spirit, will and determination. We are a country that had an Olympic bobsled team when we don't have snow. We dominated the 2008 Olympics, setting world records left and right - completely free of any form of drug scandal. See Usain Bolt. We brought the entire world Bob Marley. The whole world is in strife and we are possibly the only culture that gets along with everybody. I could go on and on and on. We are a "can do" culture. If any country will not be "depressed" in a "depression", it will be us. Finding a way is in our DNA.

It is not a foregone conclusion that ratings agencies have some monopoly on analysis. Frankly, they have been mostly wrong. If they were right, we would not be in this global mess. So am I to believe that the world will continue to take the word of the ratings agencies as gospel? Is there not merit to question their judgment? Personally, I think that this immense power to influence the market, and the lives of billions of people needs to be checked.

My two cents: Reform them, and then let them rate again. But as I said back in October, allowing them to rate after what they have done is really making the whole entire global system weaker. Rating agencies serve a critical function but to be allowed to have that degree of power, they must be subject to rules of transparency, fairness, and integrity. They must be subject to oversight.

We need a new global financial architecture urgently - and it has to be sustainable and fair for ALL. China, I'm depending on you. Germany, UK, France - yes, you all want the rating agencies reformed. But you are not now considered developing. So I'm not sure you fully comprehend what happens when investors seek information from "independent" sources like rating agencies when it comes to sovereign debt.

This weekend I'm preparing my wish list for that new global financial architecture. Look for it!

A Must Read...And Watch!

2009-03-03T21:04:00.004-05:00

Image by Getty Images via Daylife

Now, I am starting to get it.

Today, Chairman Bernanke asked Congress for the framework to handle the problem in the financial sector. From the HuffingtonPost: Bernanke asks Congress for "Nationalization" Framework; Graham Pushes Point. Please read it. And by all means, take the time to watch the video. You have to hear Bernanke yourself. And you have to hear Senator Graham (R) say he's willing to set aside ideology - yes, I nearly fell out of the chair I was so happy!

After all they have done - and never mind all the advice they have given the rest of the world - the United States does not have the tools to handle the problem? Who knew?

So, rather than oppose nationalization - which is what has been happening - is it not more logical to have called for the tools in the first place?

Or, is it that Chairman Bernanke et. al. knew that unless the markets tanked - I do try but the Dow is still below 7000 no matter what TV station I watch or what website I look at - that Congress would not be moved to do what needs to be done?

Whatever the case, for the love of mankind - literally - we have to have a functional global banking system. We have nothing without a functional global banking system. A stimulus, all the stimulus plans of all countries, all the grand budgets (and deficits) in the world, free trade - all of that comes to naught without a functional global banking system.

Please, do what needs to be done to make it work. And after it's working, let's document it as the next generation of textbooks and new ideology. Clearly what we have so far is just not it!

February Update: Nine for '09 Resolutions

2009-03-01T17:24:00.012-05:00

Image by ducktourer via Flickr

As you may know, I made resolutions in January: Nine for '09 and then provided a January update: January Update: Nine for '09 Resolutions. As we are now just in March, its time for the February Update.

If I did not have Total Leadership, I would have written off February as a disaster.

Truly.

Does anyone know if there is any scientific data to document when people lose their way with their resolutions? Well, I'm willing to guess anywhere after the 4th week. In fairness, there were some really good reasons for the derailment. But, the bigger story is how I got back on track. And that is where Total Leadership comes in.

Just to recap, Total Leadership is a whole new way of living. It's about integrating the all 4 domains of life - "work", "home", "community" and "self" . It's about developing and implementing experiments to make change.

So let's look at my resolutions and my progress:

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Resolution 1. Read at least one non-business or non-political book per month.
Progress: I read not one book. Nope, not one. I read several last month. But not one this month. Not one of any kind. I borrowed a photography book and never even opened it. I had an opportunity to integrate with Resolution 2 and I never took it. So what went wrong? Well, I became super busy this month with work and with Resolutions 2, 5, 8. Photography consumed me this month (which I will get into later). Blogging became my entire evening every evening (which I will also get into later). But I was way off track with this resolution - and I knew it. And because I had made a Total Leadership experiment out of it, and written down this goal (for everyone to see), I was determined to get back on track. So, what did I do? I looked for a non-business and non-political book. A local bookstore was having a reading about Outliers, and hoping to make a social event out of it, I started Outliers by Malcolm Gladwell. I like it, but haven't finished it. I'll finish it this month! :)

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Resolution 2. Undertake at least one significant photography project for the year.
Progress: Resounding success! Beyond my expectations. From the very first class I was totally happy. I learned so much from my instructor and my classmates. I've made new friends. I've fallen more deeply in love with my Nikon D300. I see so many possibilities for this hobby now - some just artistic, others to earn money, and frankly, the majority just to make me happy doing something for myself. In terms of integration with other resolutions, look at Resolutions 1, 4, 5, 6, 8. There are tons of awesome photography books - I never have to struggle to find a non-business non-political book again; photography increases my earning potential so I am prioritizing personal finances; photography is a new skill; photography provides tons of opportunities to do something nice but unexpected for my family and images are powerful communication tools in blogs. Amazing! Total Leadership at its fines, folks - integrating work, self, family, and community. Photography has potential for all. As for next steps: I am going to miss the class immensely, but my classmates and I are going to keep in touch, keep sharing our work thanks to Flickr, get together when we can, and maybe even arrange for an advanced class and/or Photoshop. In terms of my resolution, this one is completed - I did one major photography project for the year :)

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Resolution 3. Be consistent with my exercise regime and dietary habits.
Progress: Disaster. What happened? Well, let me be frank. After a number of years of making it through allergy season unscathed, I managed this year to suffer from the absolute worst sinus attack. Really dragged me down for two weeks. So I had a hard choice to make - 1) continue doggedly at my resolutions no matter the cost or 2) rest. Because Total Leadership stresses all domains - not one domain at the expense of the others, it was clear what my choice was - I chose to rest. So there went half the month in terms of exercise. Then, next problem? I've met my weight goal. So it's a wee bit harder to be motivated. :) Thank goodness, I actually love exercising with the Wii FIT, and when I don't exercise I'm very cranky. My dietary regime became less strict as I met my weight goal. I think this is more sustainable for the long run. How is Total Leadership integration achieved here? This is primarily the "self" domain, and health and strength are the foundation of achieving progress in all other domains of life, and therefore achieving all other Resolutions. Total Leadership is focused on the intention, not the details of the experiments. So, I've cut down on my exercise time in an effort to achieve a daily workout
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Resolution 4. Prioritize personal finances.
Progress: This continues to take off. Still doing research for my own personal purposes, and the family's. Increased the knowledge sharing through talking with friends, and using social media. Still a part of my daily routine. Again, consistent with Total Leadership principles, I have achieved integration with Resolutions 1, 5, 6 and 8. I've been so busy here with the following:

reading articles and blogs and expanding my knowledge base immensely

conducting personal finance experiments and have found new ways to earn, save and invest. Developing, implementing, monitoring and measuring experiments are critical tools of the Total Leadership framework to achieve real change

improving my blog - Financial Security: Tips + Tools - and writing almost every day.

maintaining the Facebook group - Earn and Save More Money Facebook Group (which is affiliated with Financial Security: Tips + Tools) with 311 members at the time of this post

developing strategies for the family based on new trends and innovation

and much more

Plus, as an added bonus, in my full time job with a multinational financial institution, I continue to find ways to integrate this knowledge into the work that I do. That has taken on more prominence in the last month. So this knowledge is immediately transferable to my job in keeping up with current trends and innovations. This is yet another Total Leadership integration principle, and one of the critical ones since so many people often find the "work" domain completely divergent from and in competition with the "home", "community" and "self" domains

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Resolution 5. Learn a new skill/Do a refresher course.
Progress: Resounding success! Really. I spend a lot of time everyday in my own study of blogging and the world of social media. I experiment with the layout and content of my two blogs: Reasoning the Reasons, Financial Security: Tips + Tools. I am learning to use the analytical tools and services, so I can understand how traffic, links and all those other technical matters work. I am really getting into the nuts and bolts of how to become a truly skilled blogger. And I am having a ball doing it! I even went to a fantastic all day seminar on Social Media Marketing.

So blogging has really opened the door to other forms of social media, so I am actually learning more than one skill. And talk about integration? I took my photos (another skill I'm learning) and turned it into a Youtube video: Sweet Sweet Jamaica on my own channel. Amazing! See the images at the banner of this blog? Those are mine! I took them in class and for homework. Again - I'm thrilled at how much I've learned to take better pictures, and incorporate them into the blog. I had no idea how to do either a few months ago! Again, through Total Leadership principles, I am achieving integration with Resolutions 2, 4, and 8. The blogs continue to be a work in progress.

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Resolution 6. Do at least one unexpected nice thing for my family every month.
Progress: Still doing nice things. But could always do more :) Again, in keeping with Total Leadership principles, this resolution achieved integration primarily with Resolution 4, although the activities were much broader than that.

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Resolution 7. Watch at least one new movie every month - DVD or at the cinema.
Progress: I just barely made this one :) Because I had made my resolutions, I made a point of borrowing two movies: Madagascar 2 and Under the Hedge 2. But, I did not find the time to watch them. I had an escalation with work responsibilities, and a complete throw off my schedule with my 2 week sinus attack. I really wasn't sure I was going to make this one. But then, thankfully, the girls arranged to go see a movie at the cinema one night in the week: "He's Just Not That Into You". It was perfect. Light and silly. Just want I needed. So resolution fulfilled. Again, in keeping with Total Leadership principles, this resolution achieved integration primarily with Resolution 4, as movies are an affordable yet fully enjoyable mode of entertainment, as well as keeping my creative juices flowing for work.

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Resolution 8. Blog.
Progress: Ok, confession here. I think all I ever do is blog now. Seriously. This is so much fun. When I don't write, people ask me what happened. So I try to write everyday. I have a schedule - before and after exercise. And that helps. But as my other responsibilities increase, and now I want to make more space for photography, I need to have a look at my approach to blogging. I am significantly advanced in the learning curve, and in fairness, what has taken so much time is tweaking this and that. The writing itself does not take that long, and I love writing. So, this month's project is to devise a plan to deliver the same or better quality output in both my blogs in less time. I know Total Leadership has provided me the tools to figure that out. Blogging provides me integration with all domains, as well as Resolutions 2, 4 and 5

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Resolution 9. Maintain my gratitude journal.
Progress: Missed just a few nights. But Total Leadership brought me right back on track. Again, integration principles at work since all of the above Resolutions are some of subject matters I write about.

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Stretch Target: This would be 10, but let's call it a Stretch Target (a marketing term for an extremely ambitious goal): Start writing a book.
Progress: I've actually made some headway here. And seriously I did not make this one up. A former classmate contacted me because he wants to write a book. We've had a preliminary chat and have agreed to see how we can collaborate. But here's the collaboration: He will provide me exposure to the process - agents, manuscripts etc. And I have offered him assistance with blogging. Now, is that integration or what? And it gets better. The topic of his book is completely integrated with my resolutions and one of my blogs. :)

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Takeaway?

As is typical, not all resolutions will go exactly as planned. But some exceed your expectations, and others need a helping hand to get back on track. What Total Leadership does is help you to see the forest through the trees -help you to celebrate where you have exceeded; and give you the tools and framework to recommit. Total Leadership also makes it OK to tweak the experiments, because it is the achievement of the overall goal and vision for yourself that is of the ultimate importance. Total Leadership has programmed me to think "vision" and "integration" - that's my roadmap. I don't have to do every single thing a specific certain way. The point is that I get to the top of that mountain you see in the image at the top of that post. And am I getting there? For Sure!! :)

If you want to see a video of me explaining Total Leadership in this New York Times piece, click this link: "A Catchy Title and Contagious Formula for Leadership"

If you are a blog follower, Professor Stew Friedman's Total Leadership Blog Link is here.

Tell me how you are doing! See you in April for the March update!

Government Increases Stake In Citigroup to 36%. Share Price Tanks

2009-02-27T17:47:00.005-05:00

Image by LoopZilla via Flickr

Read the Article at HuffingtonPost

Citigroup shares tanked today. Closed at $1.50. Fell 39.02% today. Still falling in after hours trading.

I wish I could be shocked!

What was the Government really expecting?

Of course, Citi shareholders were not going to like this. And of course, because the banking system is so interconnected, other shareholders in other banks wonder if they are next. This is not like the US Government to be a shareholder in banks; other countries yes, but not the US. The market is not used to it, doesn't understand it and doesn't like it.

Saw this?: "But analysts said the loss to regular shareholders from the government's move touched off worries that other banks could see their shares hit as well."

And saw this?:

"Citi has been a leading indicator the whole way down and the dilution that shareholders took today is sort of a leading indicator of what could happen to other banks, particularly the weak ones," said Kevin Shacknofsky, co-portfolio manager of the Alpine Dynamic Dividend Fund in Purchase, N.Y.

When will this agony be over? The Government needs to just get in and get out. Half way is making it worse.

Secretary Geither Needs A Dictionary

2009-02-26T19:07:00.005-05:00

Image via Wikipedia

I love the English Language. And moreover, I love the English Dictionary. How dictionaries work is that if you are unsure of the meaning of a word, then you look it up. Now with the internet, you can do it easily online. With the greatest of respect, Secretary Geithner needs a dictionary because I am not convinced he fully comprehends the meanings of the words "nationalize" or "nationailzation".

Here's one meaning of Nationalize: "To convert from private to governmental ownership and control" . That's from dictionary.com.

Or if you are a purist like me, you prefer the Oxford Dictionary. So according to AskOxford.com: Nationalize - transfer (an industry or business) from private to state ownership or control

Have a look at this article from the Huffington Post. Geithner: Nationalization is the "Wrong Strategy", "Deeply Offended" By Banks. I beg you, watch the interview as well with PBS' Jim Lehrer

Let's recap, shall we:

Secretary Geithner was part of the team that agreed - rightly - to intervene in the private banking system back in September. That was to prevent complete collapse. I'm not rehashing what the Government did to cause this problem in the first place because we would be here all night. At that time, he was in charge of the New York Fed. You know New York right, where Wall Street is......moving on....

When he and the Administration - rightly - tell CEOs who have taxpayers funds propping up their companies that no, they cannot buy corporate jets and no, they cannot have lavish retreats, what do you call that? Is banking private then? Because when the Government is telling anybody how to run a company - beyond exercising legislated regulatory authority - then that is some form of nationalization.

Again, see the definitions above. Telling companies what to do - beyond normal regulatory supervision - and own shares, and providing funds IS exercising "control". Or am I missing something?

Now, did I read this right? From the article above stated:

"As for the banks and their behavior during this crisis, Geithner said he was "deeply offended by the quality of judgments we've seen in the leadership of our nation's financial institutions. They've created a deep hole of public distrust and anger..."

So he would prefer to keep these people who have "deeply offended"? And this is because he trusts these people who have created a "deep hole of public distrust and anger"? This makes NO sense. Could the Secretary please clarify?

Moving on, which private person will put money into this halfway arrangement - private parties who the Secretary says exercise bad judgment and the Government who has no place in banking other than supervision.

The Government needs to get in and get out.

This half way is making matters worse.

Respectfully, I have to completely disagree with the Secretary. The Government does not have to be tentative. The Government has every incentive to get out as soon as possible.

Propping up banks and pretending to be a "silent investor" is really just a charade that is not fooling anyone, not making the banks and the banking system work as it should, and not instilling confidence in the sector, or frankly, confidence in the Government to take the hard decisions to handle this problem.

We are waiting.

Wonder What China Is Thinking

2009-02-25T17:43:00.001-05:00

Image via Wikipedia

As you've heard me say many times, China is the country to watch as this recovery unfolds.

Wonder what China thinks of the new Commerce Secretary nominee - Chinese-American former Governor of Washington Gary Locke?

Wonder what China thought of yesterday's speech from President Obama? Well, no official word, but here is some reporting from CNN. Worth the time to watch it.

President Obama Is Large And In-Charge!

2009-02-24T22:51:00.004-05:00

Image via Wikipedia

Tonight, President Obama made his first address to a joint session of Congress outlining the budget and economic goals.

In light of what has been happening in the US, and what I consider the ongoing "strangulation" of the US by ideology, I really wasn't expecting much. Well, I'm pleasantly surprised. None of this dilly dallying, or waffling (although we still need a definitive bank plan). There was Candidate Obama, but with authority - and boy, did he let us know it. Strong clear leadership in plain English. Finally!

I've read a lot of biographies and autobiographies of world leaders, and I've met quite a few and even served as a Senator and Deputy Finance Minister. I've followed politics all of my short life, and have been mostly intrigued with the most difficulty times in history, and the most challenging political problems. But frankly, if I tried to summarize this performance, I could not do it justice.

This is the kind of speech, the kind of tone, the kind of delivery, the kind of language and the kind of leader that the moment calls for.

Well done, President Obama!

Take the time to watch the speech here courtesy of MSNBC:

Visit msnbc.com for Breaking News, World News, and News about the Economy

If you prefer to read, here is the transcript: Remarks of President Obama - Address to Joint Session of Congress

C'mon Already!

2009-02-23T19:45:00.013-05:00

Image by jeco via Flickr

Ok, I'm confused. Frankly, I need to exercise one of my favorite provisions of the Constitution tonight: the right to free speech. So here goes:

Today, it's reported that the President says that the banks should be in "private hands". The implication of this is that he is anti-nationalization. Is he?

Well, let's examine this. What does one consider the current Government shareholdings of banks? That is "partial nationalization". I hate to be the one to have to break it to everyone.

Can somebody explain to me the merit of increasing the stakes in the banks but not fully nationalizing? Let's look at this.

Banking is a private sector activity. Government's regulate. And Government's must not regulate themselves in banking.

There is plenty of merit for the Government to hold shares permanently in certain companies in certain industries, under certain conditions. Banking is NOT one of those industries

There is plenty of merit for the Government to nationalize certain industries. Banking is NOT one of them - UNLESS it is temporary and ONLY to prevent the complete collapse of the banking system , clean up the entities and put the entities back into private hands. Temporary nationalization is not the same as permanent nationalization.

Governments must intervene when depositors are at risk and the whole banking system is on the verge of collapse. Paulson did that. President Obama has continued it. It was the right move. It is ONLY a holding pattern. It is NOT the end all.

Now, what is the point of increasing ownership in banks but leaving them in "private hands". This only adds to the uncertainty. Markets HATE uncertainty. Here are the logical questions: So after 40%, is the Government going for 45%? What will make the Government go for 51% or more? What does 40% mean anyway? Who is in charge? Will the government be a shareholder forever? Why on earth would the US government be a shareholder in a bank forever? If the US Government is planning to be a shareholder forever, then let's all know so the markets can just deal with the pain of that adjustment and let's move on. This "in between" but "nowhere" is just ridiculous.

Weak banks need to be fixed. This is non-negotiable. Sell them, whatever but protect the depositors. The world needs a banking system and it doesn't much matter which particular banks are in it.

This situation is dragging down the entire domestic and global financial system. And because the domestic and global economy depends on the banking system, this situation is dragging down the entire global economy. And because domestic and global social stability depends on the local and global economy, this situation is threatening the entire global social stability. Is anybody getting this picture?

Ideology is strangling the US. Don't believe me? Well, check this out: Now some Republican Governors are not taking the money for the people because they did not get what they want. Of course they want different things in the stimulus, but they didn't win the election. No one gets everything they want. This is a democracy, or did they all forget? Thanks to the Republicans, I am really wondering what is the point of democracy. No seriously, if you don't have something constructive to say, then what is the point? Let's get over it and get the country back into gear.

In my lifetime, I thought I had seen the last of the major global turning points. I remember the end of apartheid and when the Berlin Wall fell, for example. I am now convinced that I am going to see an entirely new world order because American leadership just cannot seem to see past ideology.

Long ago, when the collapse started, I said that I was making plans to learn Mandarin. Thank you China, for taking the time to visit us here in Jamaica last week. Thank you for all of your assistance. And as one of the newly announced cooperation initiatives, thank you for making it very easy for me to learn Mandarin right here if I wish to.

Bye Bye To The Way Things Were And Are?

2009-02-22T11:26:00.009-05:00

Image by B Tal

Anti-regulation, free marketers, this post is for you. If you are in favor of ratings agencies and hedge funds carrying on as is, this post is for you. If you are a banker or a trader happy with the previous incentive reward system, this post is for you. Bye, bye to the way things were and are now.

After a rocky and delayed started, the G7, then the G8 and the G20, and then multilaterals etc. all started to sing the same tune: there must be a new global financial architecture. Of course, there are divergent views on what that should be. And yes, it is true that the EU itself cannot find one voice on this matter.

But one thing is for sure - everyone agrees that what "was" will not "be"; what "was" does not work.

Somewhere not "here" and not "back there" but "elsewhere" will be found.

What that new "elsewhere" and "what will be" depends on

What happens between now and the next meeting. Does the global economy deteriorate more. Does the global banking system fall further into decline? Are more financial scandals and Ponzi schemes exposed? etc.

The willingness of the private parties to cooperate with the Governments and regulators to find a middle ground. It is wise for us to all remember that whether or not we like it, governments do have power to make and implement unilateral decisions. Dialogue between the regulated and the regulator for a middle ground is always my preferred modus operandi

The G20 will meet again on April 2, 2009 to discuss the new global financial architecture.

Want to know what world leaders are thinking? Well the EU and the UK just met in a precursor meeting.

Read this BBC Article: EU Heads Back Financial Clampdown. Watch the video of Prime Minister Gordon Brown contained herein.

Between now and April is going to be very, very interesting. I'm keeping a close eye on this. Are you?

Senator Schumer Adds His Name To The List In Favor Of Bank Nationalization

2009-02-21T08:10:00.002-05:00

Senator Schumer whose constituency includes Wall Street, has now added his voice to the debate. And now he's in favor of what he calls "good nationalization"
Read the Article at HuffingtonPost.

Whatever you call it "good nationalization", "detoxification", the effect is the same. Structured, short lived and only to send it back into private hands. In fact, whoever is hired to do the clean up should have their salaries and incentives based on the time it takes to get toxic institutions properly "detoxified". The longer they take, the less money they are paid.

Nationalization of some banks is not only the best for select institutions, but the entire global banking system. It's not an idea or a concept. There are places where "good nationalization"/"detoxification" has worked.

Here's my blog post on it: Why the US Should Nationalize Banks

FYI: Here is the growing list of notable people in favor of and against nationalization: Favouring Nationalization are....

Brilliant Visual: How We Got Into This Global Mess

2009-02-21T07:10:00.006-05:00

I posted this on my other blog: Financial Security: Tips + Tools

Given the topic- credit crisis, main street vs wall street, sub prime mortgages etc., I thought that I would post it here as well for all my readers here who do not follow my other blog. If you follow both blogs, I apologize for the repetition:

If you have been confused by the Credit Crisis, what it means, what is has to do with the average person, what CDOs are, what leverage did etc. then this is the answer for you.

Watch this video in two parts:

The Crisis of Credit Visualized: Part 1

The Crisis of Credit Visualized: Part 2

The Grown-Ups Are Here

2009-02-19T20:31:00.008-05:00

Image via Wikipedia

I'm a really old fashioned person.

I believe in having manners, no matter the circumstances.

I believe in civilized discussion, no matter the topic.

And I believe in the ability to find a common ground, even if that common ground can go no further than to respect differences

So, did anyone catch today's joint press conference between President Obama and President Harper? See here thanks to CSPAN

Now, let me declare bias here. Canada and Jamaica have a special relationship. We are really good friends. It's not a matter that we are members of the Commonwealth, although that is a fact. It is just the way it has always been - Canada and Jamaica are just close.

So, I was not at all surprised to hear Canada and US were civilized, respectful and cooperative. They are working closely on:

economic recovery, growth, protection of workers, lowering of taxes etc. (emphasizing people - yes, that is Canada's way)

environmental protection and energy security (yes, the environment is priority - that is Canada's way)

shared priorities for international peace and security (yes, people must live in civilization - that is Canada's way)

Then, did you listen to how the questions were handled?

Straightforward. Definitive. Absolutely clear on the need for coordination. Absolutely clear that their most pressing trade issues are common and external, not internal. No impression of protectionism whatsoever; lots of support for trade. Protection of sovereignty, respectful of each other without being hostile or domineering, but open to ideas and cooperation - see the answers on the future potential harmonization with regard to regulation?

Did you hear "listening and sharing ideas". Wow!

And did you hear all the explaining? Fantastic, we now have leaders who understand they need to have the patience to explain to people what they are doing and thinking.

Did you hear the understanding that the recovery of one country depends on recovery everywhere else? Sounds like progress to me.

Did you hear open border, integration while keeping security concerns? Amazing, middle ground is nice, eh?

"Threats to the US are threats to Canada". How much more of an ally do you need?

Hear the use of the word "friends"? Yes, that's Canada's way.

This is the kind of leadership the world needs.

Praises be to civilized grown-up behavior.

I expected nothing less of Canada, and I am delighted to see that President Obama has gone to Canada as his first overseas visit and been the world leader I had expected him to be. Great start.

If Canada and the US can start to form a critical mass of common understanding, then we are well on our way to recovery.

Since I live in Jamaica - part of the "Americas" - special thank you to President Obama for looking "forward to the Summit of the Americas. My Administration is fully committed to active and sustained engagement to advance the common security and prosperity of our hemisphere. We will work closely with Canada in advancing these goals and look forward to a meaningful dialogue in Trinidad." Your words. Music to my ears.

Why The US Should Nationalize Banks

2009-02-18T18:12:00.009-05:00

Image by wilmack via Flickr

I realize I am venturing into a controversial topic, but I think the time has come for us to debate this matter of the US nationalizing its banks seriously.

Please indulge me while I share my background so you can understand my perspective. As it happens, I have some experience in this particular area:

I worked with the Ministry of Finance in Jamaica when the local financial sector was in crisis in the 1990s. Although I had no decision-making authority, I did have an incredible amount of exposure to the Government's and the Central Bank's deliberations at the highest levels about what to do, and then I was actually able to see what was done

After a brief stint at Harvard for graduate school, I returned to Jamaica and undertook many responsibilities. One of these was as a member of the board of the holding company that held the 4 nationalized entities that the Government had merged into one for re-privatization. The job of the board was to make it into an entity that would attract private capital. Simple mandate: Get ready for re-privatization ASAP. There were what seemed to be zillions of subsidiaries, I sat on the board of many of those and read hundreds of minutes in addition to the re-privatization preparation. It was almost like a full-time job. The nationalized entity was successfully re-privatized, has never had a hint of a problem since and is now owned by Royal Bank of Canada.

After a year at the Wharton School where I went back to do my MBA, I was asked to serve in the Government of Jamaica as a Senator and a Deputy Finance Minister. I had to take a Leave of Absence from school to do that. My tenure with the Government as a Senator and Deputy Finance Minister was after the financial sector crisis, and after the re-privatization of the nationalized banks and coincided with strengthening the regulatory framework for the financial sector

I will never claim that Jamaica did it perfectly. But, the sector is stronger than it was before. And like every experience in life, there are learning lessons.

Now with regard to the US, I started writing the weekend of the Lehman collapse. That was the genesis of the notes on Facebook, the commentary of the articles and this blog. I kept writing that I had hoped that by observing what had happened when other countries had their crises, that the US would have learned from those experiences and not make the same mistakes. That did not happen.

Finally, however, there is a new Administration, and a sizable majority in Congress. So things can happen.

We are now debating nationalization of the US banks, so here are my two cents:

The private sector is THE engine of growth. Government's job is to facilitate. If, however the private sector is unable to be THE engine of growth, the Government's job is to step in. At no point can the economy come to a standstill, or people die of starvation because of ideology.

The financial sector is special - very very special. It is not any sector. It is the sector that facilitates all other sectors. It is not optional. Without a financial sector, people would keep money at home or elsewhere stashed away. That poses a massive national security problem that no country could manage. Without a financial sector, wealth generation would be severely limited, and international trade would come to a virtual standstill.

The financial sector cannot - I repeat cannot - operate in the absence of confidence. If institutions are solid and strong, and there is no confidence generally, the whole sector becomes weakened. If the sector is weak and there is no confidence, it becomes crippled. A crippled financial sector results in a national security crisis and economic crisis, at minimum.

If the private sector were perfect, there would have been no crisis. Therefore, the argument that governments are inefficient holds no water. What matters is that the government has credibility to borrow from other governments. Private institutions that have been impaired do not have that credibility to borrow - sometimes not even from anyone, any entity or otherwise.

What must happen is that private institutions' credibility must be restored ASAP. Those that are solid cannot be made to suffer for those that are weak. Every day you hear on CNBC - "Not sure if you can trust the financials (financial statements) of the banks" "Stay away from the financials stocks". Well, let's examine that. Not all banks have problems. But the rumor mill doesn't distinguish and banks do business with each other. So the whole sector starts getting painted with a brush. Not good. Therefore, those that are solid need to be left alone to do what they do best - without government intervention or nationalization. Jamaica did that. There were a few institutions that did not need intervention, did not ask for intervention, did fine without intervention and are doing just fine today. However, those that are weak should be nationalized, repackaged, made efficient, and then re-privatized on an aggressive timetable. Yes, I did say efficient. The Government can hire private sector experts to evaluate, design and implement what needs to be done for this purpose.

Nationalization therefore makes sense when 1) there are serious national security risks from people keeping money at home because of a lack of confidence 2) it is a short term - I repeat, short term measure - for the sole purpose of cleaning up the entities such that private capital will be interested. The Government is not in the business of personal or commercial banking. Nationalization is only to protect depositors, restore normalcy and confidence in the sector, surgically remove what needs to go, and then place the nationalized institution or institutions in a state that will attract private capital

NOTE: Nationalization just to nationalize is the wrong move and sends the wrong signal. The Government must be satisfied that depositors are at risk, the banking system is at risk from contagion, and that the entities do not have the capacity and wherewithal to fix their problems themselves.

HOWEVER: To oppose nationalization on ideological grounds in not only impractical, it can spell the demise of the entire domestic financial sector, and in the case of the US because of the depth of the inter-linkages, the entire global financial sector. And because the financial sector is so special, we could face global instability, social instability and perpetuated economic decline.

No one can deny that the world changed drastically.

The US Government owes itself, its people, its position of leadership in the world and the global community a clean up plan on an aggressive timetable for its banking sector - no matter what ideology it falls into as long as it works.

Otherwise, the US must decide not only how it is going to deal with its own domestic problems from further bank weakness, but also how it will deal with the world - in any and every way - if its position of economic leadership is lost.

The world has already decided that a new global financial architecture is necessary. Is the US going to help shape it, or just learn to live with it - whatever it is? There are many developing countries that have had to do that. Maybe the US should ask one of them what that feels like - to not lead but to have to follow. Maybe that will give them the impetus to get on with it.

Finally! And Thanks :)

2009-02-17T21:26:00.007-05:00

Image by HuNo (On & Off) via Flickr

Most of my readers know that I love photography. Well, see this one on the right. This is exactly how I feel - hopeful and looking into the light that is illuminating the beautiful, but dark scenery.

I have always been taught to express gratitude. And tonight I am grateful for a stimulus bill that has become law. Finally, there is some light in the darkness.

The pundits will try to depress you that it is not enough. Who cares? It is more than nothing. It is at least one more job that yesterday. It is at least one more unemployment benefit than yesterday. It is at least one more...you, get the picture.

We get to round 2 when we get through round 1.

I am grateful that finally, we can start to move in a forward direction.

I know it's not perfect. I don't expect it to be.

Laws can be amended if they are really causing havoc, so I am not worried there either.

The important thing is that finally, finally, finally after months and trillions of dollars of lost value, there is an actionable plan.

It's no longer an idea, or a point of debate or for some a political football to impede progress.

It is now something real to do real things.

Finally!

Let's get to work. We don't have even a nanosecond to waste.

Venezuela's Unclenched Fist? Extended Hand?

2009-02-16T21:14:00.009-05:00

Image via Wikipedia

Now, before I write, I must state that Jamaica and Venezuela have always had excellent relations. Venezuela is Venezuela. Jamaica is Jamaica. Venezuela does not ask Jamaica to be Venezuela; Jamaica does not ask Venezuela to be Jamaica.

However, Venezuela and the US....well, let's say they have not been the best of friends in recent years.

So, do you remember President Obama's inaugural speech? Remember this line: "...but that we will extend a hand if you are willing to unclench your fist." Full Text of Speech.

By and large, Americans (to be clear, not Jamaicans) would describe Venezuela as having a "clenched fist" with respect to their bilateral relations. By and large, the IOCs would subscribe to a similar view with respect to their relations with Venezuela

Well, have you been following Venezuela's extending hand? Have you been following the news out of Venezuela?

First, it was reported that President Chavez is willing to talk to the IOCs (International Oil Companies) again. See International Herald Tribue article here: Chavez reopens oil bids to West as prices plunge

Now it's reported that he's ready to talk to President Obama "any day". See article in the NY Times: Chavez reaches out to Obama ahead of vote

Whatever the motivation, willingness to dialogue is always preferable to hostility.

Whatever the motivation, whenever oil rich countries are the ones willing to talk, the world generally benefits.

Let's hope that the US and Venezuela do talk, can find some middle ground of civilized discourse - at minimum. The world will be better off for it.

If they agree to cooperate, that would be a milestone worth celebrating!

What's The Real Objection To Assessing The Nationalization Option?

2009-02-15T16:31:00.003-05:00

Image by Mike Licht, NotionsCapital.com via Flickr

Nationalizing the US Banks? Now, just now, people want to talk about this?

Read the Article at HuffingtonPost

If the objection is based on "we, don't like the idea of it", well, that is just not good enough in my humble opinion.

The banking sector must function in order for the rest of the economy to function, and the rest of society for that matter. The US and the world cannot continue on this path of "we hope these interventions will work". The interventions may have prevented a complete free fall, but the banking system is not working as it is intended to do - support the growth and development of the economy.

Here's where I'm confused though. Are Republicans going to be in favor of it - like Senator Graham in this video - and then not vote for it just because? Are Democrats going to not vote for it because the banking lobby is probably one of the strongest?

Real options must be considered realistically - not with ideology but in the harsh cold reality of today considering the US and the US' position in the world.

What's a brief - very very brief - nationalization if it gets the economy back on track quickly? Or would everyone prefer the US economy to continue to sputter until it cannot go on anymore at all just so lawmakers can say "Well at least we didn't nationalize". What would be the point of that since if there's no economy, there would be no point of having lawmakers, would there?

Same Blog, New Look!

2009-02-14T23:15:00.006-05:00

Image by gullevek via Flickr

Just wanted to let all my readers know that the blog is in the process of improvement.

The objective is to make it as useful and relevant to you all without a lot of "unnecessary clutter".

All the original posts are still here here. A new one will be up by tomorrow.

For those of you who have been following my progress with my New Year's resolutions, you might remember that this was the month for me to undertake a major photography project. For reference, here is the original resolutions post: Nine for '09 and January Update: Nine for '09

Well, today was the second all day photography class. There will be four in the series. I am absolutely loving every second of it! And learning so much!

So that you can follow my progress, I have now embedded a slide show of some of the shots I've taken with some of the techniques. The slide show is just below the YouTube Bloomberg channel on the right.

Comments welcome! :)

Is This For Real? Republicans Support The Bill But Don't Want To Vote For It?

2009-02-13T22:31:00.007-05:00

Image via Wikipedia

Is this for real?

Senator Specter says some of his colleagues support the bill but don't want to vote for it.

Huh? Are they kidding?

And politicians wonder why the general public by and large despises politics ?

So, if Senator Specter's colleagues are supportive but unwilling to vote, am I to understand that the House Republicans again provided not one vote in favor of the bill not because they have a substantial point of difference, but because they just don't want to vote for it?

So Republicans would rather have history record that they did nothing to help the people because they have elections coming up?

Is that what politicians get voted in to do? Stay in office by any means necessary, including doing nothing for the people who elected them?

So what's the point of democracy if you aren't going to say and do something constructive for the people? Are Republicans reading the world economic and political news? Do they understand what has been on the line since this crisis started? Is this going to go on for the next four years? Opposing just to oppose when so much is on the line?

Memo to House and Senate Republicans: Please think of the people you represent - all of them.

Read the Article at HuffingtonPost

Dear President Obama: Can I Be Your Commerce Secretary?

2009-02-12T17:20:00.010-05:00

Image via Wikipedia

Ok, so I'm not serious.

But I am seriously concerned about the fact that there is no Commerce Secretary after two tries. Bill Richardson had what we will call a "personal problem", and now Judd Gregg is having what's appears to be some version of a "conscience problem".

If you have followed this blog, you may have noted the post I dedicated to the announcement of the nomination of Bill Richardson - The Richardson Promotion. I invite you to have another look at it to see why I thought the job is so important today. It may not have been really important in the past, but in today's world it is getting more important by the second. In a nutshell, the Commerce Department exists to "promote, foster and develop the foreign and domestic commerce". With borders closing and joblessness rising in the US and worldwide, sounds like a pretty important job to me.

So President Obama, since you have not yet found a third candidate, let me volunteer. Here's why I'm asking to be your Commerce Secretary:

I believe in realism and have limited patience for ideology. In fact, I'm getting allergic to ideology. Here's how I see the world: What is the problem? What are the options? What are the constraints? What is the best solution given the constraints? When are we going to do it? Haven't we fixed it yet?? Hmnnn.....no questioning ideology there.

I believe even one more job is better than nothing. The more jobs the better. The faster we get the jobs the better. I do not support and cannot understand the school of thought that joblessness is not a monumental problem. The cost to society cannot be overstated. So, the stimulus bill that creates jobs - doesn't matter how much or what else is in it - is good enough for me as long as there are no constitutional violations

I believe that immediate relief is critical or the economy will become paralyzed. People without jobs become desperate and filled with despair. People with jobs just waiting for the "bad" to become" worse" are unproductive. A stimulus bill that provides immediate relief is good enough for me - as long as there are no constitutional violations.

States and infrastructure must get assistance to ensure that goods are produced and transported within the US and inside and outside the country. A stimulus bill that provides some form of assistance to states and infrastructure is good enough for me - as long as there are no constitutional violations.

I believe in getting along with the world, and interacting with other countries and cultures on a basis of mutual respect. C'mon, I grew up in Jamaica - we have no external enemies. We get along with everybody.

I believe in sustainable fair trade. Exploiting others is not only immoral, it only leads to diminished markets in the long term. Mutual opportunities for growth is the best way to proceed.

I believe that commerce can be a valuable tool for peace because prosperous people would rather go on with their lives as they see fit as long as they can afford it, rather than live in fear and terror.

I believe that the private sector is THE engine of growth. I did go to business school - twice (undergraduate and graduate). But I do believe that the Government must provide limited interventions where necessary, and more interventions if warranted to prevent complete market seizure or economic collapse. How long have we been talking about market seizure and economic collapse? And who was in power when the downward spiral started? Why Republicans are not in favor of Government interventions so that the private sector can quickly get back to its position of being THE engine of growth is just beyond my comprehension. Oh, wait - that would involve me taking time to debate ideology and we are just about running out of time for that luxury.

I am excited beyond words at the prospects of change and transformation to a green economy. Hey, two degrees in the environment and being raised in a gorgeous tropical island - what else do you expect? I know the green revolution is a "need to have"; it is not a "nice to have"

So, that's why I would want to be considered. But, since I can't be considered - could we have someone who thinks like I do, or is that asking too much? :)

Democracy At Its Finest!

2009-02-11T18:40:00.004-05:00

Image by _Robert C_ via Flickr

For those of us who believe deeply in democracy, today was a day to be very proud.

Despite the expectation that the House and the Senate of the US Congress would have a difficult task ahead in reconciling their differences to get a bill passed, within a day - yes, a day - they have managed to reach an agreement.

After what we have seen in the last few months in Congress, this was a much needed moment - not just to have an agreement, but to show that democracy can work, people can be civil, have their differences, but find a middle ground, and find a middle ground quickly.

This video is worth watching: House, Senate Agree On "Right-Sized" Stimulus.

Listen for yourself because Senator Baucus (D) and Senator Snowe (R) get it (list not exclusive of select quotes):

"this is the right thing to do"

"much is expected from those to whom much is given"

"all those who seek public office are expected by the people we represent to do the right thing, work together for them"

"bill will create 3.5 million jobs"

"turn the recession around"

"showing people who have lost jobs we care, showing people who may lose jobs that we care"

"showing the world that the US Government is standing up, is leading"

"a lot of give and take to meet American's objectives"

"gravity of circumstances"

"consensus based solution"

"critical time in our nation's history"

"the question is what works for this country"

"job creation"

"assisting those displaced"

"make investments in the jobs for future"

"jumpstart this economy"

"American people have the assurance that we can develop the solutions to make a profound difference at this very grave moment in time"

The legislation may not be perfect. No legislation is.

But these intentions, are as close to perfect as we will get.

Congress has done exactly what Congress exists to do. Well done!

Obama On Banking Crisis: We Can't "Prolong The Agony"

2009-02-10T21:10:00.002-05:00

Image by Mimi_K via Flickr

Well, it doesn't get much clearer than that.

And is that what they want to hear? I think not.

Is it what has to be done? I think so.

So, let's get on with it.
Read the Article at HuffingtonPost

Markets Are Information Junkies

2009-02-10T18:01:00.005-05:00

Image via Wikipedia

Yes, markets are information junkies. More, more, more.

If markets don't hear "enough", then they tank.
If markets don't hear what they "like", then they tank.

President Obama is between a rock and a hard place. Transparency and announcements will not promote market stability unless markets hear what they deem is "appropriate".

And the only thing that will make markets happy now is lots of money, no questions asked, no regulations, and that the government will take the bad assets and pay the companies handsomely for them. And everybody goes back to the way things were before the crash regardless of the consequences. Since Secretary Geithner cannot tell them that, then evidently we will continue to have a problem. Today, it was reported that markets reacted negatively to his "plan". Oh, that's so shocking.

My 2 cents: Come up with a detailed plan, share it only with the potential participants, come to an agreement, implement it and then make grand announcements for the media and the general public to dissect. Frankly, no one really knows how to fix it, especially those with the least amount of information - that would be everybody except the troubled institutions and the Government.

About Timothy Geithner
Read the Article at HuffingtonPost

Hip Hip Hooray for Democracy!

2009-02-09T22:10:00.006-05:00

Image by ethanlindsey via Flickr

Tonight, thanks to all the Senate Democrats - especially Ted Kennedy who returned specifically for this vote - and Republicans Senators Olympia Snowe (Maine), Susan Collins (Maine) and Arlen Specter (Pennsylvania), the US and the world is one gigantic step closer to stability, closer to recovery, closer to job creation, and closer to the return of "normalcy".

Yes, tonight was the indicative vote on the Stimulus Bill but it was indicative that it would pass with 61 votes. Tomorrow is the real vote.

Whatever the motivations of the Republicans, they found something they could live with. They were willing to keep talking until they did, but did so quickly recognizing the urgency of the problem. Democracy did well tonight. And in all of US history, this period will be one of the most pivotal and the names Snowe, Collins and Specter will be recorded for having placed their priorities in the right place - at least trying to do something for the people.

After tomorrow, it will be up to the House to reconcile their differences. Let's hope for even more people who want to be on the right side of history. And let's hope for another good day for Democracy.

Memo To Congess: Did You Catch This Bit Of News?

2009-02-07T23:51:00.004-05:00

Image via Wikipedia

The Wall Street Journal ran an interesting article today. Although the title, says it all - the article itself is well worth reading. Nations Rush To Establish New Barriers To Trade

Maybe it was the sheer number of countries reportedly erecting trade barriers
Maybe it was the countries in particular that were reportedly erecting trade barriers
Or maybe it was the special meeting the WTO feels it needs to have on Monday. Yes, this coming Monday.

Now, I have often criticized globalization. But I am not anti-globalization. Rather, I am pro-globalization that is fair and sustainable.

So now, we have a position of hostility developing. Is this supposed to be progress? Because I am not getting that impression.

So since the crash in September 2008, let's do an ideological check:

Capitalism took a major hit - some say permanent, others say altered

Democracy looked dicey when the Republican party had not one but two internal party revolts when it was in power. And, by the way, Democracy's not looking so great now with all this bickering and inability to find a compromise

And now, Globalization is on thinner ice than it was before

And by the way, aren't these all the bedrock of American foreign policy?

So here's my question for the Republicans. Is it the tax cuts they are holding out for? Because, frankly if something does not happen ASAP, I really don't see the point of them.

Because businesses have to sell and trade and have markets to make money to even have money to pay taxes. Barriers to trade make that kind of difficult

And oh yes, business do need inputs, right? So, what happens when those prices go up because everybody is seeing who can erect the most barriers?

And one more thing, when was the last time you looked at the data from the US Department of Commerce - the US depends on the world quite a bit.

Again, every time there is a delay the cost goes up. There has to be spending. There's no avoiding it. But why make the tag higher than it needs to be? No trade or limited trade or difficult trade means money has to come from somewhere. That's State Subsidization. And that ideology is somewhere along the lines of Socialism. And which party would honestly be responsible?

Ironic, isn't it?

Congress, if you missed that WSJ article, may I humbly suggest that you have a quick look at it?

Why The World Needs Bob Marley Today

2009-02-06T16:50:00.006-05:00

Image via Wikipedia

Today is Bob Marley's birthday. He is the ultimate embodiment of "reasoning", so it is fitting that this blog will feature Bob Marley as today's blog post.

Personally, I cannot imagine my life without having known his music. From the day I was born, Bob Marley has been playing in my house. My family knew him, but I was too young to remember. And although I can sing the words of every single song, and find a song for every mood or occasion, I don't remember him.

I do remember the day he died. My mother picked me up from school and told me when I got in the car. I was 9, but I remember it like it was yesterday.

I've often said:

If you need inspiration - listen to Bob
If you need cheering up - listen to Bob
If you are angry about or with someone or something - listen to Bob
Or if you just want some vibes - listen to Bob

Importantly, if you want to understand the real world - listen to Bob.

His words and music are timeless. He always has just the right thing to say.

Needless to say, the impression Bob Marley has had and continues to have on my life is immeasurable.

Everywhere I go, and I meet someone and they ask me "Where are you from?" I say "Jamaica". Without fail, the response is "Jamaica, Bob Marley!" With a smile.

Watch his concerts and over-packed venues with screaming fans in countries that don't even speak English as a first language, let alone Jamaican dialect (patois). Watch their faces - they know every word.

That a man could come from such humble beginnings could impact the whole world in this timeless manner is mind boggling. That he continues to do so, conquering the world with messages of peace, love and overcoming rather that what we have become accustomed to - hatred and war, is indeed stupendous. As Jamaicans, we should all be proud. Maybe if the world listened to a little more Bob, half our problems would be over.

There's something in his life we should all know, or remember. On April 22, 1978, Bob had the One Love Peace Concert. Jamaica was embroiled in such bitter political divisions and warfare, it nearly tore us apart. Look up Jamaica's history - this is not an exaggeration. The concert was to cool down the warfare.

Bob called the leaders of the two parties on stage to hold hands in unity with him - for the people. That they did so amazed everyone.

Here is that video clip. Listen to what he's saying. If you don't understand Jamaican patois, let me translate: He's saying "Show the people that we're going to unite. Show the people that we're going to do them right. Show the people that everything is alright". And then he called for Michael Manley (the then Prime Minister) and Edward Seaga (the then Leader of the Opposition), and they joined hands with him

Then he says "Show the people that we're going to unite. That we mean them right" (Mean them right means having their best interests at heart)

A lot of unity would carry us a far way right now.

Need a song to inspire you in this global economic crisis we are in: "Wake Up and Live"

Lyrics?

Wake up and live, y'all,
Wake up and live!
Wake up and live now!
Wake up and live!

Life is one big road with lots of signs,
So when you riding through the ruts, don't you complicate your mind:
Flee from hate, mischief and jealousy!
Don't bury your thoughts; put your vision to reality, yeah!

All together now:
Wake up and live (wake up and live, y'all),
Wake up and live (wake up and live),
wake up and wake up and live, yeah! (wake up and live now),
Wake up and (wake up and live) - wake up and live!

Rise ye mighty people, ye-ah!
There's work to be done,
So let's do it-a little by little:
Rise from your sleepless slumber! Yes, yeah! Yes, yeah!
We're more than sand on the seashore,
We're more than numbers.

All together now:
Wake up and live now, y'all!
(Wake up and live) Wake up and live!
Wake up and live, y'all!
(Wake up and live) Wake up and live now!

You see, one - one cocoa full a basket,
Whey they use you live big today: tomorrow you buried in-a casket.
One - one cocoa full a basket, yeah, yes!
Whey they use you live big today: tomorrow you bury in-a casket.

W'all together now:
(Wake up and live now!) Wake up and live! Oh! Yeah-eah!
(Wake up and live!) Uh!
(Wake up and live now!) Wake up and live!
(Wake up and live) Keep on playin'!
(Wake up and live, y'all) Uh! Yeah! Yeah!
(Wake up and live!)
(Wake up and live now!)
(Wake up and live!) Break it down!
---
[Saxophone solo]
Come on, man!
How is it feelin' over there?
(Wake up and live now) All right!
(Wake up and live!) Yeah, yeah, yeah, yeah, yeah.
Uh!
Come on, man!
You gotta wake up and live!
---
Life is one big road with lots of signs, yes!
So when you riding through the ruts, don't you complicate your mind:
Flee from hate, mischief and jealousy!
Don't bury your thoughts; put your dream to reality, yeah!

W'all together now:
(Wake up and live, y'all)
(Wake up and live!) Wake up and live, yea-eah!
(Wake up and live now!)
(Wake up and live!)
Wake up and live now!
(Wake up and live) Wo-oh!
Wake up and live now!
Wake up and live

Yes, President Obama - Tell Them!

2009-02-05T18:22:00.007-05:00

Image by Getty Images via Daylife

President Obama says "The time for talk is over. The time for action is now."

Watch him in this video courtesy of MSNBC. It is worth watching.

Also, in a different piece in today's Washington Post: The Action Americans Need, he spells it all out. And please check out the very last line: "The writer is the president of the United States". That he is!

Senator Harry Reid now says he has the votes to pass a stimulus bill. Today, CNBC reported that passage may come next week. Let's get on with it!

Is America no longer at war? Did I miss the announcement?

2009-02-04T17:31:00.012-05:00

Image by CS Muncy via Flickr

No, really? Is America still fighting a war in two countries, and fighting terror and facing international threats? That must be all over because I can see no other reason for this incessant delay in passing the stimulus bill.

Look, I get politics and politicians. I had the privilege of serving in the Senate. I understand the need, and the responsibility more importantly to be heard and to speak up. Making law is an extremely serious responsibility that can make or break a person's life, and an entire society. I understand the need to represent your constituents. But what is going on? Is this really what you are all doing?

Honestly, I am lost. Last I heard, America was at war. Economic instability cannot be helping your military strength. You need money to fight, and economic power to negotiate. If you have economic stability in a global interconnected world, there is more incentive to find peaceful solutions since all countries have a vested interest in find opportunities for their own economies to grow - i.e., markets and people who can afford to consume their goods and services. Maybe you don't remember when the world was more polarized and we were not so interconnected - when people did not see advantages of trade. Do you remember what they did? They just preferred to conquer.

I thought the internal bickering stops at the water's edge. I thought the country was united in the face of a foreign threat. Does no one make the connection between economic stability and ability to defend themselves?

You know what the problem is? Job security. Yes, the people with the power to pass the stimulus bill have job security. Unless there is a revolution, or they are found to be corrupt, they cannot be removed. They have to be voted out on a certain date in the future by law. And that's democracy and democracy is good. But somehow, there is a major disconnect between the people who are guaranteed monthly cheques for a number of years to come and those who have lost their jobs and others who fear every moment of every day if they are going to lose their jobs tomorrow or the next day. Somehow, Congress seems to be missing the day to day reality of the rest of the population they serve who do not have job security, and are becoming paralyzed with fear of the unknown. Every day that the Congress does not act, they are making the situation worse.

Congress needs to find something that it can live with and do it quickly. Bad law is worse than no law. But no law is worse than inaction. As long as you are not behaving in an unconstitutional manner and affecting the rights of your citizens, you can find middle ground. Law is never perfect, but it can be sufficiently effective. If you don't ever get pass round 1, how will you get to round 2? When will anything else get done if the economy becomes frozen?

Here's a video of President Obama explaining what is in the stimulus and what it is intended to achieve.

You have to be independent to have a Congress. Perhaps Congress should give some thought to whether its own job security is on the line.

History Made Today

2009-02-02T22:04:00.012-05:00

Image via Wikipedia

Well, I think real history was made today:

1. Hillary Clinton - a woman, a former Senator from NY, a former First Lady, a former Presidential Candidate, the only female Presidential Candidate for the Democratic Party and the woman who engaged in the most competitive battle for the Democratic Nomination for President of the USA - was sworn in today as Secretary of State in the Administration of the man who beat her for the Nomination, now President Barack Obama.

2. Eric Holder - an African American, of Caribbean (Barbados) heritage - was confirmed by the US Senate to be the USA's first African American Attorney General, an event eclipsed only by the fact that it is in the Administration of the first African American President.

And, some may find this one controversial, but I just have to say it:

3. The IOC (International Olympic Committee) has accepted Michael Phelps' apology for his photograph with with Marijuana Bong. We all know who Michael Phelps is - the superstar American swimmer who took home 8 gold medals in the Beijing Olypics.

In a statement, the IOC expressed confidence that he would continue to be a "good role model" - a direct quote from the statement See Sports Illustrated story - The IOC Confident that Phelps will Continue as a Role Model Despite Photo.

Now this post is not about Michael Phelps. It's about Jacques Rogge

Now, the current President of the IOC - Mr. Jacques Rogge - is the same Mr. Jacques Rogge who chided, yes scolded as his very first response, the other superstar of the Beijing Olympics - Jamaica's Usain Bolt. Who is Usain Bolt? Let me remind us all. Jamaica's Usain Bolt took home

the Men's 100M gold in a World Record of 9.69s making him the fastest man on the planet and

the Men's 200M gold in a World Record of 19.30s by the biggest margin ever making Jamaica the only country to ever set World Records in both the Men's 100M and Men's 200M in the same Olympics and

took home gold in the Men's 4X100M in a World Record of 37.10s making him the only sprinter to ever set three world records in the same Olympics

He set a World Record in every race he ran in the same Olympics - all three races.

What exactly did Mr. Rogge say? That Usain Bolt should "show more respect" - a direct quote (See Story from AOL Canada - Rogge: Bolt Should 'Show More Respect')

And what did Usian Bolt do that made Mr. Rogge believe he needed scolding, and needed to 'show more respect'? And no, there was no effusive congratulations accompanying it. What was so horrible that Rogge completely dampened the euphoria the whole international athletic community, fans and well wishers all over the world, and the country of Jamaica felt at Bolt's success? Bolt congratulated himself after setting the 100M World Record and taking home the gold. Yes, he was accused of being unsportsmanlike. Oh, and Bolt's achievement was completely free of performance enhancing drugs. You've heard of performance enhancing drugs? They're those things that make the Olympics so scandalous.

Now, what do you think of the IOC's acceptance of Michael Phelps apology and accompanying statement? History? Yes! Double standard? Just a little.

January Update: Nine for '09 resolutions

2009-02-01T08:40:00.027-05:00

Image by zeitkunst via Flickr

Life has taught me that part of effective leadership is making goals, timelines and achieving them. Total Leadership (click here for book flyer) - taught me how to achieve real sustainable change efficiently in all 4 domains of life - "work", "home", "community" and "self" - on an integrated basis.

Click here for Amazon.com: See the author Stew Friedman on video and buy the book.

I had included my resolutions in this Reasoning the Reasons blog - which is focused on commentary on global economic and political news - because I believe we all have to be the change; each and every one of us. So I posted - Nine for '09 - at the beginning of this year, my New Years resolutions. In a nutshell, I made a list of 9 things I wanted to make sure I achieved, plus a stretch target. And remember, these were not in any particular order of priority.

Today is February 1st, so since some of them are monthly - at minimum - here is my first update of how I'm doing.

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Resolution 1. Read at least one non-business or non-political book per month.
Progress: On the positive side, I have been reading much more. Although, to be truthful, I was supposed to be reading books completely different from business and politics. I've read a number of personal finance books - "how to" and motivational. Do those count as non-business and non-political? I think so. :) Plus, in keeping with Total Leadership principals, this goal integrates well with Resolutions 4, 5, 6 and 8 which I will get into more below. Anyway, if you think it doesn't count, for next month I'll read a book by a famous philosopher loaned to me by a colleague from the office. :)

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Resolution 2. Undertake at least one significant photography project for the year.
Progress: I registered and paid for a photography class that starts next weekend. (And, in keeping with Resolution 4, I made sure I got my discount). It's for one month, one day per week all day. I am really looking forward to that. Back to Total Leadership integration again - learning a new skill would be consistent with Resolution 4. Creativity and out-of-the box thinking through art training can be transferable to the work environment. This resolution is also consistent with Resolution 7, because photographs are extremely powerful communicative tools in blogs.

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Resolution 3. Be consistent with my exercise regime and dietary habits.
Progress: My dietary regime is completely in tact. However, my exercising dropped off to 5 days a week. I was doing 6 days and had a goal of 7 days. As usual, something "comes up". Although, I increased my workout from 60 minutes to 90 minutes. So in effect, I am exercising more. However, I want the discipline of daily exercise, even if some days I exercise for less than an hour. So that shall be my adjusted goal - every day, seven if some days are less than an hour. How is Total Leadership integration achieved here? This is primarily the "self" domain, and health and strength are the foundation of achieving progress in all other domains of life, and therefore achieving all other Resolutions.

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Resolution 4. Prioritize personal finances.
Progress: Well, if ever doubted the power of Resolutions, I am now a complete believer. This one has really taken off, and literally become part of my daily routine. Again, consistent with Total Leadership principles, I have achieved integration with Resolutions 1, 5, 6 and 8. I've been so busy here with the following:

reading books, articles and blogs and expanding my knowledge base immensely

conducting personal finance experiments and have found new ways to earn, save and invest. Developing, implementing, monitoring and measuring experiments are critical tools of the Total Leadership framework to achieve real change

developing a blog for knowledge sharing to help others and learn from others - Financial Security: Tips + Tools. This is in addition to my first blog: Reasoning The Reasons which you are now reading

starting a Facebook group - Earn and Save More Money Facebook Group (which is affiliated with Financial Security: Tips + Tools) It's been up less than a week, and as at the time of this post there are 189 members

developing strategies for the family based on new trends and innovations

writing for the company blog - see the piece here at Jamaica National Building Society blog entitled "More Money Now"

and much more

Plus, as an added bonus, I work with a multinational financial institution. So this knowledge is immediately transferable to my job in keeping up with current trends and innovations. This is yet another Total Leadership integration principle, and one of the critical ones since so many people often find the "work" domain completely divergent from and in competition with the "home", "community" and "self" domains

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Resolution 5. Learn a new skill/Do a refresher course.
Progress: Truthfully, when I wrote this one down, I wasn't sure what it was going to be. But because I had set it down as a goal, I focused to find one and did. It has turned out to be blogging. In January, I learned an incredible amount about blogging. If you look at my older posts, or if you have been following this blog, you will see that much has changed.

There are more images, widgets, a Google search tool, blog feeds which are updated automatically, labels, more links within posts, news links showing current news, and links to Amazon where I have selected Bob Marley's Survival album as inspiration for the time; after all There is "So Much Trouble in the World" but we have to "Wake Up and Live!". Click on it and listen to snippets of the songs!

With the help of the World Wide Web, I learned and am still learning how to edit html code (a little), and how to publicize effectively.

With the help of the World Wide Web, I've learned how to use new forms of software with my blogs that can make them more interesting and user friendly.

Moreover, I've even started another blog called Earn and Save More Money - which I spoke about in Resolution 4. That blog has much more interactive functionality - all of which I learned in the last month. Again, through Total Leadership principles, I am achieving integration with Resolutions 1, 4, and 8. I'm updating my blogs all the time, but promise not to make my sites too busy or confusing.

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Resolution 6. Do at least one unexpected nice thing for my family every month.
Progress: Honestly, too many to mention here. But take my word for it, I've been keeping this resolution. :) Again, in keeping with Total Leadership principles, this resolution achieved integration primarily with Resolution 4, although the activities were much broader than that.

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Resolution 7. Watch at least one new movie every month - DVD or at the cinema.
Progress: Unfortunately, I did not watch any animated movies in January. But, I did go to the cinema twice and saw Bride Wars and The Curious Case of Benjamin Button. Both achieved the objective: sufficiently light hearted (Bride Wars) and unrealistic (Benjamin Button) to be a fun evening out. Much thanks to my friends who love going to the movies! Again, in keeping with Total Leadership principles, this resolution achieved integration primarily with Resolution 4, as movies are an affordable yet fully enjoyable mode of entertainment, as well as keeping my creative juices flowing for work.

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Resolution 8. Blog.
Progress: I've talked about learning blogging as my new skill in Resolution 5. I've also talked about reading more about personal finance in Resolution 1 and I am using that reading to write from an informed position. I blog more now because I have much more information to share, I have two personal blogs to maintain and I have volunteered to write for my company's blog - JNBS Blog. Do you see Total Leadership integration principles at work again? :)

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Resolution 9. Maintain my gratitude journal.
Progress: Every single night so far! Just as planned. Again, Total Leadership integration principles at work again since all of the above Resolutions are some of subject matters I write about.

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Stretch Target: This would be 10, but let's call it a Stretch Target (a marketing term for an extremely ambitious goal): Start writing a book.
Progress: Well, I'm writing and reading so much more now that it's good practice. I do have some ideas and have been whittling them down. And as luck would have it, a former Wharton School classmate contacted me this week to help him with a book project, although I'm not going say what it is. :) So, it's not such a stretch target after all! This is a prime example of what Total Leadership can achieve - integration of domains, Resolutions and goals, and making progress where you may not have been able to make before.

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How have I managed to keep and exceed my Resolutions?

The reason why I achieved so much, is precisely because I integrated my resolutions, and made them all doable with the exception of one stretch target. I am achieving more that I set out which is motivation in of itself. I've not only integrated my Resolutions, I've integrated the 4 domains - "work", "home", "community" and "self".

If you want to see a video of me explaining Total Leadership in this New York Times piece, click this link: "A Catchy Title and Contagious Formula for Leadership"

If you are a blog follower, Professor Stew Friedman's Total Leadership Blog Link is here.

Tell me how you are doing! See you in March for the February update!

Green Jobs First Topic For Biden's New Task Force (VIDEO)

2009-01-31T08:43:00.002-05:00

Image by Jvstin via Flickr

A middle class task force? Good!

It's first meeting focuses on jobs? Great!

Not just jobs, but green jobs? Fantastic! Now this is more like it!

About Joe Biden
Read the Article at HuffingtonPost

I think I've found Fidel Castro's blog....

2009-01-30T22:46:00.007-05:00

Image via Wikipedia

In case you haven't heard, the news has been abuzz Fidel Castro's blog.

I think this is it. Reflexiones del Comandante en Jefe Click here.

Each post is in several languages, so for the English speakers just click the blue Ingles

Click here for his reflections on Obama right after the swearing in. This is one of the posts on the blog. And this was the post that made a lot of news.

Thoughts?

What are they thinking?

2009-01-28T20:18:00.005-05:00

Image via Wikipedia

The House Republicans are at it again. And I'm totally lost.

The whole world says there has to be a stimulus, and it has to be big. This is really non-debatable. Experts have looked at the global economy and the trends. A stimulus is not a "nice to have", it is a "need to have"

Now here's where the House Republicans have completely lost me. They have ALL, yes ALL voted against it. So, I don't know what point they are trying to make, but here is the point they have made:

1) It was under a Republican government and a Republican majority in Congress that this economic collapse took place in the first place.

2) It is Republican principles of deregulation, self regulation, "all hail to the market", that caused the economic meltdown - no moderation, almost no or inadequate regulation. Now they say that the market isn't perfect. Really? Who knew?

2) It was under a Republican government and a Republican majority in Congress that a surplus became a massive deficit to fund a war in a foreign sovereign state, so now Americans - their own people who vote for them to sit in Congress to represent their own interests - are in danger of facing a prolonged recession and depression. Every American is hurting.

And what have the House Republicans done? Well, first they stalled. Then they said they had a better way. Well, excuse me but if they had a better way why is it taking so long for us all to see it.

I don't know about you, but I wonder if the House Republicans understand that people put their own lives before politics. And people generally think that they vote for people to be Representatives to "represent" them - that's what a "Representative" does.

I made a suggestion earlier that since there is a documentary on the Depression of the 1930s, it should be played on every television station repeatedly until people start making decisions based in reality. Sometimes I think people really do not understand the gravity of the situation.

To want bragging rights if the stimulus does not work is not only petty, frankly it shows little concern for the people who elected them to sit in Congress. Who cares whose fault it is if one cannot eat, one does not have a job or cannot find a job, get loans or get back their savings? Please, fix those problems, and then let's talk about whose fault it is or who could have done it better.

Right now, there is one President and he's going to do something about it one way or another.

Presidency in the age of instant gratification....

2009-01-21T18:05:00.006-05:00

Now this is more like it!

Within 24 hours of the new Presidency:

White House pay has been frozen
Lobbyists have been curtailed with strict limits
Trials have been suspended at Guantanamo Bay for 120 days pending review for proposed closure.
Definitive statement that government will be transparent with specific directives for interpreting the Freedom of Information Act.

See video and article here

Mr. President, not sure if you can keep up this pace, but this is a great way to start! Oh, and by the way - love the language - simple, straight to the point, and definitive.

President Obama's Call to Action

2009-01-20T18:01:00.010-05:00

This may seem strange to some, but I did not have great anticipation for today's speech. Don't get me wrong, I was not about to miss one second of today's Inauguration but I've heard the new President speak many times before. Although he was always impressive and a brilliant orator, the content and tone were always consistent. I felt he did this deliberately to provide certainty to a country and a world gripped with fear of the unknown; where uncertainty was becoming paralyzing. So I was not expecting anything really memorable; but to me it was more than memorable - it was stirring.

As he placed the moment in context highlighting the challenges, I thought that yes, it's true that there are all those challenges, but the tried and true foundation values have made us overcome challenges before

I nodded as he named all the negatives and talked about turning them around...a shift in our thinking, in our outlook, in our views. I affirmed quietly: Unity. No more fear. No more conflict. No more discord.

I could not believe he actually said: "end petty grievances, recriminations and worn-out dogmas....the time has come to set aside childish things"....I wished at that moment that I could have had an Instant Replay or pressed a rewind button so I could hear it again and again.

I captured the words "all are equal, all are free, and all deserve a chance to pursue their full measure of happiness" into my consciousness to walk with me in my own life journey.

I said to myself that yes, it's true. People do have more in common - we are all generations that have evolved from some kind of struggle. It has been work that has brought reward. We are not given, we have to earn. Our talents have not changed, nor has the ability to apply them....it is the circumstances that have changed and we must adapt. We have done that time and time again for that is the story of mankind

When he decried "narrow interest", I thought that finally, we are going to be led to be our brother's keeper. The environment teaches you of the inextricable interconnectedness of life and yet so often we act as if our actions have no impact on others, and if they do we don't care what the impact is.

The President said "pick ourselves up, dust ourselves off..." and I immediately thought of Peter Tosh's "Pick Myself Up" (click link here). And now I had a song to associate with the speech, and have been singing since.

When he said that the question is whether or not government works, I said: That's the point!

In speaking of the market, he affirmed its critical role but made it clear it must provide opportunity for all. And in those few sentences, I was reassured that he understood what had gone wrong in the financial sector crisis, and what must be made better in the future - a subject I have written on many times.

I felt pride to be an American (yes, I was born in NY) whose country wants to be friends with the world. "Know that America is a friend of each nation and every man, woman and child who seeks a future of peace and dignity, and that we are ready to lead once more", he said.

I will never forget: "....power alone cannot protect us, nor does it entitle us to do as we please. ..... power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint." Does not entitle us to do as we please.

I was elated to hear the President speak in respectful tones with respectful content in reference to the return of Iraq to "its" people. "Peace" in Afghanistan, he said. Peace, everywhere I pray.

I felt pride to be an American whose President sees diversity as a strength.

And, I was beyond words and elated to be an American whose President makes special effort to reach out to the Muslim world and those with whom there have been conflicts for it is only through dialogue that we can build lasting peace based on respect. What an image: "...we will extend a hand if you are willing to unclench your fist"

I sensed we had a President who had a greater understanding of the complexities of poorer nations. He spoke of how he would help them help themselves; and he said that other nations cannot be indifferent. Development is a two way street.

As a student of the environment, I listened for it. And I heard it. He knows the importance of the warming climate, and importantly the responsibility to use resources sustainably

And then he said the most important sentence of all: "For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies." He continued with a passage that should be repeated again and again: "Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends -- hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism -- these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility -- a recognition, on the part of every American, that we have duties to ourselves, our nation and the world; duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task. " President Obama cannot fix the world's problems, or any individual's problems. It is you and I who have to do it. He can lead, he can organize, and he can provide support. But a country is nothing without the people; without the will of the people; and without the work of the people.

And no good speech ends without a call to action: "Let it be said by our children's children that when we were tested, we refused to let this journey end, that we did not turn back, nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations. "

I'm ready to carry "forth that great gift of freedom and deliver it safely to future generations." Are you?

Overflowing with Pride!

2009-01-18T18:51:00.004-05:00

Although I decided not to trek to DC for the inauguration, I watched today's pre-Inauguration concert at the Lincoln Memorial on HBO. My mom and I sang along with the artists, and took in all the sights and sounds right here from sunny warm Jamaica.

And then, we saw Herbie Hancock and heard the first few notes of a very familiar song......"It's One Love", I screamed! Mom screamed! We called for dad!

I am told that the President-elect chose the songs - every selection had to be relevant to the moment. And OUR Bob Marley's One Love was a song for the moment. With immense pride we watched OUR, yes, OUR One Love by OUR, yes, OUR Bob Marley being sung as part of this incredible moment in history. We watched three accomplished and popular entertainers - Herbie Hancock, Sheryl Crow and will.i.am - in their own individual rights singing OUR One Love by OUR Bob Marley. They could have sung one of their own songs, many artists did. will.i.am did a wonderful addition. The cameras panned and we saw the Future First Lady rocking to OUR Bob's One Love, and then later President-elect Obama was rocking to OUR Bob's One Love. The crowd was rocking and singing. We even saw a small Jamaica flag and a big Jamaica flag. No amount of ad spend can top that!

I can't wait to watch it again, and again and again!

Nine for '09

2009-01-02T16:57:00.010-05:00

Happy New Year!

It is clear that the events of '08 radically altered all our lives. As we have ended the typical season for introspection and resolution-making, I decided to do my own reflection on the year and focus not on what happened in '08, but rather what I want to happen in '09. The list is not exhaustive, nor an indication of priority. Rather, it is just Nine things I want to accomplish in '09. My "Nine for '09"

By way of background, the genesis for this list started back when I took a life changing course called Total Leadership (I highly recommend my professor's book - Total Leadership by Stew Friedman) when I was at the Wharton School finishing my MBA. That course taught me the importance of developing a long term vision for myself, aligning my actions to my values, and identifying priorities for four domains in my life - work, family, community and self. Life should be about integrating these domains, not trying to balance them because that will be a never-ending struggle with limited success. You may be interested in this thought provoking piece called "Do Not Waste This Crisis" Stew wrote on the Harvard Business Publishing website.

My "Nine for '09" - in no particular order:

Read at least one non-business or non-political book per month. I am an avid reader. I love autobiographies of world leaders (I think I've read all the big ones), and of course I read lots of business books. But I never find the time to read anything else. That changes in '09. January 1st, I spent the day reading Daniel Pink's "A Whole New Mind". Brilliant book that really peaked my interest in the neurosciences. So maybe that'll be my first book - something neuroscience related.

Undertake at least one significant photography project for the year. I love taking pictures. The more pictures I took, the fussier I got about the image quality so I treated myself to a Nikon D300 and the works for my graduation present. Now my objective is to learn to use it properly and focus on a type of photography. I love nature so much that I earned a bachelor's degree and a master's degree in the environment. I also love black and white photography. So far, I have identified a hands on photography course that runs for a month and I'll be doing that and see where I go next from there.

Be consistent with my exercise regime and dietary habits. Right now, I try to workout everyday but it ends up being six days a week. And I have had a strict dietary regime for years - low sugars, no or limited white products, lots of vegetables and fruits and nuts etc. Good for health. Good for nutrition. The difficulty with working out is that it's hard to stay committed - something always comes up. Now that I have a Wii Fit, all that has changed. It's fun and convenient. No excuse. The discipline is really rewarding.

Prioritize personal finances. I've been extraordinarily lucky in this crisis. I have had no personal financial crisis of any form and I am still employed. But, this is no time to rest on my laurels. I will be even more careful and prudent, but look out for the investment opportunties that do exist.

Learn a new skill/Do a refresher course. For those of you who know me, this may seem really odd since I have four degrees - a Bachelor of Science in Economics from the Wharton School, a Bachelor of Applied Science in Environmental Systems (UPenn), a Master of Science in Engineering Science (Harvard) and a MBA from the Wharton School. However, we continue to live in uncertain times. Record job losses at all levels in all sectors. It is always beneficial to keep fresh with marketable skills.

Do at least one unexpected nice thing for my family every month. New Year's Day, I cooked dinner for my family (I don't normally do the cooking), and that felt good. At Christmas, we exchanged presents for the first time in a long time (we had outgrown the tradition because of age). Christmas shopping for them was fun. The nice thing does not have to be expensive. You would never believe which present thrilled my mother the most - it was something really practical and cost very little!

Watch at least one new movie every month - DVD or at the cinema. I love movies but always say I am too busy. My normal evening routine is MSNBC - can't miss Chris, Rachel or Keith. But I've watched a few movies recently and I have to say that the animated or kiddies movies have really made me realize how much I miss them. Plus, movies are a great way to put things in perspective and forget about whatever your day to day issues are. Also, kids movies are the best for getting creative juices flowing.

Blog. If you have been following my blog, you may note that this is the first entry since December 5, 2008. I'm not much of a blogger - this is my first time at it. Actually, my aunt asked me to do it when I kept yabbering on about the economy and the elections. I only write when something is really bugging me so I resolved to take a hiatus until after January 20th 2009. The President-elect cannot do anything until then. Turns out, I enjoy blogging, and was surprised by how many people actually read the entries, and found them useful. For that reason, I'll keep blogging

Maintain my gratitude journal. That's right, I have a book and before I go to bed I give God thanks. I may itemize all the things that I can think of at the time. But usually, I give a general thanks - especially for my family. I make a point of making an entry especially when I can think of mostly negative things so it's very helpful in a economic downturn.

This would be 10, but let's call it a Stretch Target (a marketing term for an extremely ambitious goal): Start writing a book. I've actually tried a few times, but never was very disciplined at it. I don't have a topic, and no, it's not about me or my life. But, I've learned at lot and maybe some of that may be useful to someone - written as a novel or something. Problem? I have no idea how to write a book. Never took a class. But, in all my life, there were tons of things I did not know how to do yet I learned how to do them - at school, or on the job, with big responsibilities, or over matters of little import. The fact is that I tried and I did it. Somehow this year, I am going to make a meaningful substantial start. Maybe I'll find a mentor.

So that's my Nine for '09 plus a Stretch Target. What's yours?

Befuddled by the Big 3 dilemma

2008-12-05T19:58:00.015-05:00

Studies show people are unlikely to buy cars from a bankrupt company. And at the end of the day, there is no guarantee that bankruptcy will protect jobs. So, I don't think bankruptcy is an option and personally, I cannot understand the way the auto companies are being treated. Here's why:

The US economy is in recession. Record unemployment. 533,000 jobs lost in November alone. Close to 2 million jobs lost since the beginning of this year. To make matters worse, these numbers do not include those who have given up looking. I don't want to sound alarmist, but this is very very serious - for economic AND social reasons.

The Congress and the President (43) has a chance to save, yes save, millions of jobs by providing assistance to the auto industry. This money is to save jobs.

Did I say the US is in a recession? So, if the auto industry collapses, these employed people who become unemployed have few options for employment. There is much supply of labor, and little demand. A recession is a very inopportune time to take a hard line of "let them fail" - the broader ramifications for all Americans will be too severe

Now, lets look at some of these ramifications. Unemployed people do not have the resources to consume or pay debts in the way that they could when they were employed. Some may not pay debts at all. So who suffers other than the unemployed people? As it turns out, all the companies and their employees that rely on that consumption are affected. Therefore, greater potential for further unemployment and poor company performance. If these companies that produces consumables are publicly traded, then investors will batter the stock price. Battered stocks depress markets, and therefore affecting investment portfolios. Investment portfolios are managed by companies in the financial sector. Who else is affected? All the companies to whom debts are owed are affected. Those companies are also members of the financial sector.

Ah, the financial sector. Remember the financial sector? Well, let's revisit that sector for a bit. The sector got itself into a crisis. Note, the auto-makers did not cause the financial sector crisis. And then, the financial sector needed a bailout which they got of $700B. All of this has not been used, but the President won't touch those funds to help the auto sector because its saved for the financial sector. Now, did I mention that despite the bailout, there have been record job cuts in the financial sector? But of course, because saving jobs - unlike the objective of the auto manufacturers - was not the objective. The objective was to stabilize the system, provide confidence in the sector and strengthen institutions. And then, it was HOPED, yes HOPED, that ordinary people would feel the benefits of that by banks doing what they exist to do - provide loans etc. But that never happened, and subsequent interventions and speeches by Secretary Paulson have tried to provide greater consumer benefit. But alas, banks that are not owned by the State cannot be forced to do what they does not believe is in their interest. Private institutions have a responsibility to shareholders, and logically, they sat on the funds they have received. So now, the irony of this situation is that if unemployed people don't pay debts, banks will need more government funds. Unemployed people consume significantly less, so those companies that produce consumables bring in less revenues and have a harder time paying debts, so banks will need more government funds. And then if the auto industry fails, there will be no new business from millions of consumers who need credit to buy cars, so banks will need more government funds. So now, the banks' current and future prospects look pretty dim. So, you'd think they'd encourage the government to give $34B to the auto industry. The auto industry is asking for a loan.

Now, here's the best part. The financial sector started this crisis. And had it not been for the crisis, the auto industry would not be at the precipice at this point in time. Yet, its having a much harder time getting approval (even with all the strings and concessions) for a smaller amount of funds for direct consumer and economic benefit when the financial sector received multiples more (much of which is unaccounted for). So, when the sector gets in trouble again what will happen? Well, the financial sector will get more money of course. And it will argue that there was no problem with the auto industry at the time of the approval of the $700B, so therefore this need is unforeseen and therefore the sector needs money in addition to the $700B. Yet, because the sector has been hit badly the sector will have to engage in more layoffs (did that the first time). And then because the companies in the financial sector are private, the Government will beg them to lend to ordinary people etc., and they will refuse.

And through it all, millions of people would have lost their jobs as a result of the collapse of the auto industry, and maybe millions more in the financial sector and other industries as a result. More companies are unlikely to survive, and those who do survive and do not perform satisfactorily and are publicly traded will get a battering from investors. The stock market may be depressed further, taking with it confidence. And the bailout costs will just rise way above $34B now being refused to the auto industry now. More cost, less jobs. Does this make sense to anyone?

No doubt the auto sector needs reform. No doubt the political protection has hurt them and has not forced them to become competitive. No doubt that taxpayers money should never be wasted.

But, the cost of this unemployment will be far greater than $34B. And there seems to be sufficient foundation to base the new manufacturing for the new America. If these auto companies do not make green cars, they can be retooled to make green machinery ( wind turbines etc). Allowing skilled workers to lose their skills and allowing machinery to become rusted is not the answer to this problem.

The auto industry needs a transition plan. And it needs transition funds to tide it over. Otherwise, the cost of starting over - for it and the rest of the country - is just far too great to contemplate.

The Richardson Promotion

2008-12-03T16:54:00.011-05:00

No, I did not mistype - I really think Bill Richardson just got tapped for a major promotion. I don't understand why the view persists that he's been passed over for Secretary of State, and that given that as well as his impressive credentials, that he has somehow been demoted by being named as the nominee for Secretary of Commerce. In my humble view, nothing could be further from the truth.

So why is the Richardson appointment a promotion? Because he has one of the most important jobs in the Cabinet. Look at what he is expected to achieve (from the Commerce Department's website):

"The historic mission of the Department is "to foster, promote, and develop the foreign and domestic commerce" of the United States. This has evolved, as a result of legislative and administrative additions, to encompass broadly the responsibility to foster, serve, and promote the Nation's economic development and technological advancement. The Department fulfills this mission by:

a. Participating with other Government agencies in the creation of national policy, through the President's Cabinet and its subdivisions.

b. Promoting and assisting international trade.

c. Strengthening the international economic position of the United States.

d. Promoting progressive domestic business policies and growth.

e. Improving comprehension and uses of the physical environment and its oceanic life.

f. Ensuring effective use and growth of the Nation's scientific and technical resources.

g. Acquiring, analyzing, and disseminating information regarding the Nation and the economy to help achieve increased social and economic benefit.

h. Assisting states, communities, and individuals with economic progress."

What's the reality?

The US has been in a recession for a year and faces the real possibility of depression. The world is in a global slump
For the ten months of this year, 1.2 million jobs have been lost. An unconfirmed estimated 250,000 additional were lost in November
Much global hostility towards the US does actually stem from the way other countries were "encouraged" to adopt globalization.
All the states are in dire need of budgetary support as a result of the economic and financial crisis.
One of the major industries in the US - the automobile industry - is on the brink of collapse and is seeking budgetary support from the Government
The Government has significant involvement in the private sector (the banks, for example) and I expect this will increase in the short run out of necessity.

This situation is dire for the US. The economy must recover - that is not optional. Global interdependence means that the rest of the world also needs the US to recover.

Why is Bill Richardson uniquely suited to this post?

He is a former congressman - a useful experience to persuade Congress to adopt groundbreaking legislation related to a green economy and green jobs

He will be a former Governor - a useful experience to bridge the understanding between the States and Federal Government to achieve progress where real cooperation is needed for policies that are efficient and produce results

He has held portfolio responsibility for Energy - a useful experience to find that required balance for sustainable development; to understand the complexities and nuances that must be overcome with respect to global political and commercial interests to advance and achieve progress on an affordable green agenda.

He has held responsibility as a UN Ambassador - a useful experience for that much needed diplomacy in trade negotiations which if effective can reduce tensions between the US and the rest of the world, improve the image of the US, and importantly evolve a more sustainable globalization model

His Latino background provides an innate understanding of some of the more challenging economy related governance aspects in US history (as it relates to immigration reform, for example); and will be - in my opinion - particularly useful in finding a new path for small business development which has historically been the source of job growth in the US

At this time in history where the US economy must recover but with employment (I once said that jobless growth is a hollow victory), must grow but only sustainably, and must lead without dominating, it is my considered view that the role of the Secretary of Commerce will take on a significance it has not before. How could it not if the Obama agenda calls for a fundamental change in domestic economic policy? Obama ran on a platform of a new America - and so "business as usual" will not do. (It wasn't anyway which is why we are in the global mess we are in).

Bill Richardson, in my view, has not been demoted. If he achieves a green agenda, win-win trade reform, and a sustainable growth path with sustainable jobs for a sustainable planet, Bill Richardson will be one of the most important people in this Administration, and the world.

Building back confidence one day at a time......

2008-11-25T21:48:00.006-05:00

Don't know about you, but I'm feeling more confident everyday. I look forward to hearing from President-elect Obama. Let me tell you why:

Consistency in tone. He consistenly sounds the same. Same tone. Same unpanicked demeanor. Same balance between a sober tone and an optimistic one.

Consistency in message. He sounds like candidate Obama and that's good. Priorities then are priorities now. Jobs, jobs jobs and people first. Tweaking here and there as details emerge through the transition sharing of information; but the objectives remain the same.

Consistency in approach. He's practical. He's people oriented. He's solving problems. He actually said today that the American people are not interested in ideology; they want solutions. Well, I for one am not interested in ideology, and I for one want solutions. All these ideologies need review since none of them seem to be working (or we would not be in this global mess). So, while people philosophize, let's look at the real problems and come up with real solutions. Who knows, we may even invent a new ideology in the process.

Consistency in personality. This one requires some explanation. Over time, I watched him speak at events and he has the ability to "feel the pulse of the people". That is a rare gift that manifests itself in many ways. For example, on the campaign trail, it is the gift that allowed him to go off script, and connect with people while being himself. President-elect Obama is showing that consistency in personality in his appointments. He's "reading the pulse of the people". For reasons too numerous to mention here, the selection of the economic team and, more importantly, the positions for which they were selected speaks volume - to me personally - of a deep understanding of multiple issues beyond confirmation hearings.

Confidence is a key - not the only key, but a key - factor to recovery. Recovery won't happen overnight; but it won't happen ever without confidence.

So far, I'm getting the impression the President-elect knows what he's doing: he's got a vision for a plan to get things done, and he's got a team whose mandate is to get those details for the plan to achieve that vision...to get things done. Things for the people. Things to solve problems. And that's making me pretty confident.

In search of the intellectual President with a practical Presidency

2008-11-18T19:00:00.008-05:00

I find this transition period very....well, interesting.

I understand the need for unity. Please do show everyone how magnanimous you are, Mr. President-elect, to look beyond all the comments made about you on the campaign trail. Never mind that those who made the comments are highly unlikely to be as supportive of you even after all this "forgiveness". Problem with this? Unity is a nice concept; but a real challenge to achieve. Alienating your base is a real risk in wooing those who have not warmed up to you. History is full of examples of people who have ended up with nothing by ignoring those who loved them because they spent all their time trying, and failing, to make those who didn't love them do so. Try convincing your base to woo them too, because there are those who will have a harder time with forgetting comments about race, experience (or proposed lack thereof), and generally dismissive and condescending tones. Recognize that that takes time - not everyone is you.

I understand the search for experience. I recognize the magnitude and variety of challenges - so many balls in the air all at once. But no change can happen without people and people will become disengaged if promises are not kept, if the authenticity of the leader is doubted. Hope and change are what the winning team ran on. If there was a yearning desire in the country for a complete return of any Administration, then would that candidate not have been selected from the very beginning? There is still time to balance the experience and familiarity that seems to be so critical to "hit the ground running" with those fresh revolutionary ideas to get the country out of the deep ditch quickly; those fresh revolutionary ideas without which there would be no President-elect Obama . Age and experience have no monopoly on solutions. Let's have a healthy mix of perspectives - old and new; experience and youth.

I understand the intellectual appeal of "the team of rivals". What a statesman and leader you are if you can pull it off; if you can get a team of rivals formed. Does the team get anything constructive done though after they have agreed to serve? Or do they just look nice and give historians lots to write about? That is the real test. We need some realism about the personality types. Leopards (note the plural) never change their spots. Qualifications are not the issue. Ability to work in a team is; to not act in a parallel, and opposing manner that introduces divisiveness. Has that test been passed? I'm not so sure.

Frankly, the President-elect has made some great choices, and like all choices there are positive and negative aspects to each one. In net, the country needs a team that works; a team characterized by personal dynamics where members exhibit respect for each other and can work together to find creative practical solutions - for all people - that can be implemented in the fastest and most cost-effective manner.

The first 100 days...

2008-11-13T19:18:00.004-05:00

Respectfully, I have to agree with Chris Matthews who seems to have dedicated every Hardball show on MSNBC to lobbying for a package of jobs, infrastructure development and immediate relief to the American people.

Why he has to lobby though is truly fascinating but puzzling.

In this environment of record unemployment and severe financial hardship due to a man made shock to the financial system, I am trying to understand the viewpoint of those who support "small" changes that don't cost money, but don't solve the pressing problems either. It is amazing to watch fiscal conservatives argue against spending to save the economy from irreparable damage because of cost when they have presided over this monumental deficit and debt.

I'm not calling for immediate energy independence or health care reform, BUT is it that "big" things cannot be done, and only "small" things (that are not small but called "small" because they don't come with a big price tag) can be done. Why is there not space for some of both? So:

I love the environment, but how does an environmental proclamation put food on the table for hundreds of thousands of people?

I support all and every efforts for human rights, but how does closing Guantanamo Bay create jobs for hundreds of thousands of people?

Why is it either or?

Why is there a debate about mandate when the President-elect won so convincingly?

My two cents? Obama was elected to do what he promised.....so now he should do it without apology because those practical people-oriented solutions he promised are more urgently needed with every day that goes by.

Holding on to hope.......

2008-11-13T17:15:00.007-05:00

For those of you who have been following my blog, please forgive me if I sound like a broken record but there's just something I must say.......again.

The global financial system is broken.....badly broken. It is not serving domestic economies, or the global economy. It is not serving the people. It is not serving even itself.

The global financial system needs fixing......urgently. But we need...and here I go again...not just a "new global financial architecture" but a stronger, more stable, more equitable and more sustainable global financial and economic system.

How do we achieve that? Well, as it turns out we were, yes were, off to a great start. Governments managed to talk, agree and act in a coordinated manner. Developing and Developed countries will come to the table in the first of several summits as the G20 meets this weekend in Washington. China, in a major move, stated it would be an active participant.

So why have I used "were"? Because I am becoming doubtful that we are heading in the right direction:

First, I still hear some world leaders and their surrogates talking about blame and responsibility. I really think we do not have the time or luxury to squander this precious opportunity to achieve real meaningful change to the entire global landscape. Use history to understand the problems and guide solutions, but long speeches about who did what to whom is really not helpful. There are very constructive ways to spend time at this weekend's G20 meeting, and pointing fingers respectfully, is not it.

Second, this cementing consensus of the absolute need for an expanded role for the IMF is troubling, frankly. There are well documented problems with the IMF. Increasing funds to the IMF and expanding its powers before reforms are even agreed upon seems like a recipe for further problems - sooner rather than later. I recognize that there are so many issues that are complex that it will take time, but I hope this weekend's meeting realizes that the emergency measures must not cause more problems.

Third, I have struggled with the best way to say this one so here goes:

I understand there is only one President at a time, and I agree. So I understand that the President-elect does not either want to or feel that it is appropriate to be at this weekend's meeting.

I understand the need for the President-elect to have representatives who do not necessarily participate, but listen.

But, with the greatest of respect to the representatives that the President-elect has chosen, may I ask why - given the significance and complexity of these specific issues - has he not included as an additional representative someone familiar with these issues - like for example, Governor Corzine? Great to have a bi-partisan duo, but a former Secretary of State and a pro-deregulation former member of the House of Representatives when the genesis of this problem is so highly technical and due in part to lax and absent regulation? I think that the criticism being leveled at the transition team is fair - the selection of representatives does seem to indicate disinterest in this meeting.

I am so incredibly disappointed if that is the case.

It is no small accomplishment that the G20 is willing to meet.

It is no small opportunity to reshape the global financial and economy system so that it works better for all in a sustainable way.

It is no small task to achieve consensus on very technical issues where I am sure that Heads of State will come fully prepared from their respective Finance Ministers who meet just before this meeting.

Finally, it is a huge underestimation of the global will to move on - and do so urgently. This state of limbo just will not do while the US waits for a new American president. Other countries are more than happy to be the financial center of the world. And no matter what, some countries will not allow this to happen to them again ever - Obama or no Obama.

So, I'll watch this weekend and yes, I recognize this is the first of many summits to deal with these issues. But most importantly, I remain hopeful because after all, that is what my candidate and now President-elect told me for so long to be.

Making the case for sustainable and responsible capitalism

2008-11-09T22:50:00.004-05:00

If you have missed it, this is a very worthwhile read "Yes Business Can" written by the Chairman and CEO of Starbucks, Howard Schultz

Why China gets it, and the US has not

2008-11-09T17:25:00.011-05:00

No matter what, China has an ability to remain focused on what matters - and that's China, China's interest and the Chinese people.

The announcement of the $583B stimulus plan is just further evidence of this.

See here for Huffington post article.

See here for the 10 areas designated for spending

Economic growth and the welfare of the people will not be jeopardized, ladies and gentlemen.

So while the USA whose damaged economy lies on the verge of extended recession and even depression, and the powers that be even debate the merit of a stimulus package before an amount can be agreed upon, China comes out with an aggressive broad based plan to revitalize the economy, keep and generate employment, stimulate domestic demand, and provide assistance to those in need.

No matter what the critics may say, China is using this time of unprecedented uncertainty to bring certainty to its economy - to strengthen the fundamentals of its economy, so when the global economy gets back into gear, China is more than ready - China will be ahead.

And for every day that goes by in the US without a stimulus package, the US deepens its economic problems and falls further behind in preparation for global competition.

Sadly, ideology is the reason for this unfortunate US position - some strange objection to spending in order to provide relief to the people, and stabilize the economy. The government is not replacing the private sector; but the economy cannot come to a standstill while the private sector undergoes unprecedented change through a man-made shock largely generated by an element of the private sector itself. Something must happen to make the private sector the engine of growth again - and a stimulus plan can help with short term measures.

It is not either government or private sector. It is necessarily both.

And this is why China gets it, and the US has not.

Thankfully, the President-elect has called for a strategic stimulus package now, and will make it so immediately upon taking office if necessary. Let's hope that the American people and the economy do not have to wait until then because I'm not quite sure that they can.

President-elect Obama sounds like Candidate Obama.......and that's good!

2008-11-07T16:32:00.006-05:00

Throughout time, voters have voted for candidates on the promises. Unfortunately, right after they are successful, candidates either forget or decide not to bother with the promises made. Those who voted for them become disillusioned, disappointed and lose even more faith in governance and government. National development becomes even more difficult because people just become detached.

Not so today.

President-elect Obama had his first press conference today. Yes, short but sweet. Yes, thoughtful answers to questions. But most importantly, he has remained on message. President-elect Obama sounds just like Candidate Obama and that's good!

In summary, he reiterated 5 priorities:

getting a fiscal stimulus package in place - as previously mentioned and still urgently needed

containment of the financial sector crisis to minimize the spread to other industries and globally

special initiatives for long-term competitiveness of the auto industry

an assessment of the bailout plan initiatives, and whether or not they are true to agreed bipartisan objectives

getting started on the long term key priorities identified in the campaign

Importantly, he stressed what I will call "realism" and "practicality"

Practical solutions are needed for meeting the challenges which are difficult.

Recovery will take time but the American people are resilient and more than capable

The election cycle was long and its time to put that behind us and focus even more on the needs of the people. It must be remembered that the American people need help.

It's time to put aside partisanship and politics

The President-elect mentioned that a President can do much to restore confidence - a critical function in an era where crisis of confidence, perhaps more than anything else, nearly brought the economy to a grinding halt and will dictate to a large extent the speed of the recovery. When the President-elect has chosen in his first press conference to stay completely on message - to say all the things he no longer must say to appeal to voters but he does say because he means what he had been saying all along, this is perhaps the most tangible way to be credible, and to lead that restoration of confidence.

Well done, Mr. President-elect.

The Treasury Secretary

2008-11-06T19:42:00.004-05:00

OK - I cannot resist. I have two cents on this topic.

First, check this link to see the names supposedly in consideration so far.

My two cents for President-elect Obama?

Please don't rush - we already have a Treasury Secretary and the new one cannot even go through confirmation hearings until after you are sworn-in in January. Please let's not make the markets skittish unnecessarily. Please let's not make matters worse.

Please don't pick people for the wrong reason - like "they have already been vetted"

Please don't pick people so it looks like the return of any previous administration, and that does include a complete return of the Clinton administration - Bush43 did that and people did not like it. People expect new and fresh - that's why they voted for you. Experience yes, of course.

Please, if you must consider controversial people, please have anyone who may have said controversial things like "women aren't smart enough for math and science" deal with that issue.

Finally, please pick somebody who can do the job with credibility with the people AND the private sector.

The President-elect goes for gold in the Olympics of the Superpowers

2008-11-05T00:43:00.004-05:00

Tonight, I just want to record that I saw it for myself.

History.

Change.

A new President has been elected to be the 44th President of the United States of America. Congratulations to President-elect Barack Hussein Obama.

A President-elect with a platform that is decisively inclusive and built solidly on hope, unity and change.

A President who embodies a new dawn - in his style, in his temperament, in his approach to organization, in his beliefs, and yes, of course, in his ethnically diverse background.

The baton has been passed. The American people executed that smooth and successful baton change placing the last runner of the USA team in the 4x100 relay in the Olympics of the Superpowers in a real position to go for gold.

America, your President-elect has told us all who runs the last leg. It is each and every one of us.

Let's get to work.

Great spot from NBC - 5 ways to make sure your vote counts!

2008-11-01T17:55:00.002-05:00

In a spot called Making your vote count (click here) see 5 things to do before you go to the polls. Very important!