munky.org|v3.0

Microsoft Headquarters

I need to cool it on the software giant. HR took one for the team, saved a little face, and give some breathing room to those who were overpaid on their severance. According to The Bing Blog, Microsoft has announced that they won’t be asking for a refund.

According to sources, 25 people were overpaid by roughly $5,000. Do the math. That’s $125,000, a lot of money for sure, but barely a drop in the buckets of the multi-billion dollar corporation.

This may have been a face job, but regardless, they did the right thing, regardless the intentions. Just remember, the road to hell is lined with good intentions, so those are worthless.

Hopefully HR’s will take a page out of the Microsoft book going forward. It’s bad enough to lay someone off. It’s even worse to realize you overpay them then come back with your pockets sticking out saying we need the money back. Might as well dress em up like spider monkeys and feed em poop pies. 

Now if we could just get Vista to work right….

Our poor investors

To prove the point of investors on a leash, look at today’s movements. Friday we had Christopher Dodd make a statement about nationalizing banks, which shot bank stocks into the cellar. Monday people digested the bank economic news announced, and shot the rest of the market into the cellar.

Now today, Bernanke announces that the U.S. should be able to pull the economy out of recession by the end of the year, then everything shoots up.

People are flocking around news. They are scared of the unknown territories that come along with stock ownership. Yet more often than not, they overreact. Sure the problems are bad, but they aren’t as bad as most people think. Sure the news is good, but things are as good as we think.

If more people took the time to think things through, they would be surprised at their own reactions. Take a period of “sell sell sell” the bad news. If these guys sat down and thought about it, by the time they could consider selling, they stock has probably crept back up. And without getting caught up the in the moment, they didn’t go brain dead and take an avoidable loss.

Let this be a lesson to the politicians who supposedly want to turn this thing around so badly: a little bit of good news goes a long way in a bad economy. Too bad I feel sorry for the other suckers out there who aren’t willing to think for themselves.

I will make this blunt. Any IP that is responsible for spamming will be blocked. Continued spamming from similar IP’s will result in an entire block being banned from this site. I have already blocked several. The most recent is actually from a server on a social content website.

I will not tolerate spamming of any sort. You can feel free to post a comment that includes your site or blog, but anything with multiple links, advertises products, or has any form of message that anyone can easily conclude was not hand written, this will be flagged, removed, and your IP blocked.

I may eventually set up an address to allow someone to address your concerns if you are unrightfully blocked, but for now, it is final. No warning.

What awaits at the bottom?

The stock markets went free falling today, matching numbers we haven’t seen since May, 1997. Wow, I wasn’t even a freshman in high school. For the first time, these numbers weren’t dragged down by financials. In fact, most of the financial stocks were up for the day, outside of AIG. Maybe the thought of the U.S.A. becoming a near majority stockholder was a success?

Is this is a sign that Wall Street has met Every Street? The only stock weathering the storm is Walmart, and even they are losing ground. As bad as things seem though, I don’t believe they are as bad as the pessimists think. Pessimists being the investors in the stock market: you know, the guy who is so smart but can’t manage his own money.

What this shows is our economy is not being run on thought, it’s being run on fear. Sure, not everyone is panicking, but the majority of people have gotten to the point where they press the sell button without even thinking. Investors are in a fight or flight mode, flying being the preferred option. Whatever happened to long-term, disciplined investing? It’s apparently out the window.

This takes us back to an old adage: Things are never as good as their appear, nor are the ever as bad as they appear. The markets will get worse still, I’m afraid we still haven’t seen the bottom territory. The only thing that has me concerned is how low these undisciplined, scare investors will take us. Yet I hope you don’t fear it, because the only thing to fear is fear itself.

But since we are back in ’97, let’s reflect a moment where we were at back then. For most of the year the markets were on their ride up during the dot-com era, minus the pain we felt from the Asian financial crisis. We also met Monica Lewinsky for the first time – discovering why Bill had an affection for cigars – and we lost a beloved public figure, Princess Diana. A civil panel found OJ Simpson guilty that year, and Mike Tyson took a bite of Evander Holyfield. More info is available at thepeoplehistory.com.

We also saw the Dow break 7000 for the first time, a number we may wind up below. And to bring up my next point, the New York Stock Exchange halted trading – by invoking a circuit breaker rule – on November 24th when a 554.26 point free fall happened from a scare of a global economic crisis. Too many people hitting the idiot (sell) button.

Here’s a radical solution to keep the markets here from continuing to slide: let’s halt the stock markets for a week. Hopefully this will give investors a break, a chance too cool off. Then they can seriously sit down and digest the news, the be able to make an informed decision when they can buy or sell again. Unfortunately, it probably won’t work, given the propensity of people to sell out of fear.

Scratch that idea, I don’t think people are smart enough for it to work. Maybe next time.

Microsoft Headquarters

This latest blunder at Microsoft – no matter how cruel it is to its recently unemployed workers – is fitting for the software giant. If you haven’t heard already, a glitch in the system gave laid off workers a larger severance than they were supposed to get. Now Microsoft is asking it back.

For years people have complained about glitches in Microsoft software. Their current mainstream operating system, Vista, may be the most notorious of recent history. Yet when a glitch in their software costs us money (lost productivity, lost information, etc), they point to the EULA and say “sorry.”

Yet Microsoft comes out and demand those former workers to return the extra money, cash, money orders, personal check. Can we rub anymore salt in the wound for these poor people! They’ve just lost their job (probably with a decent salary knowing Microsoft) in the middle of the worst recession in recent memory. Odds are they are going to have a really hard time finding work, and if they do, it may be for $7.75/hour at the local supermarket.

Microsoft does have a legitimate claim for wanting a refund, but of all companies, should Microsoft expect one?

Hoover's Remove from Reality

I was watching 60 minutes last night, and when Andy Rooney came on he talked about the past presidents. A group of 65 historians had come together to rank the former presidents from best to worst. The worst was James Buchanan, who was also a bachelor: I agree with Rooney that no lady would want to be associated with America’s worst president.

Then he went on about the Bushes. George H. was listed as 18th, while his son, our most recent G.W., was ranked 36th. What shocked me was that Herbert Hoover was ranked 34th. He was the man in charge when the Great Depression hit.

What’s surprising for all of his problems, at least Bush admitted things were getting worse, he even made sure we had those stimulus checks. While there is a great deal more he could have done, he still did a world more than Hoover.

While people in Kentucky were eating wild-grass, people in Chicago were living out of garbage piles, a million mean were living out of railway cars, Hoover had the audacity to so that nothing was wrong. Americans were living better than they ever had, even the hobos were better fed than ever.

Hoover was a man too far out of touch with not only the people, but with human spirit. He also didn’t believe that people should ask the government for money. He was known as the great humanitarian for a while, organizing and managing relief supplies to European victims in WW1 and to Americans that had suffered disasters before he became president. However, he didn’t think that the funds were from government aid; he believed they were private donations.

Hoover had too much a blind eye driven from his own instinct of making it on your own. Unfortunately, there comes a time when you need to relent such thoughts for the sake of the public good. Hoover was a let down of epic proportions. So although I don’t hold Bush in regards, I cannot agree with considering Hoover to be the better president.

Barack Obama at Harvard Law School

With the economy going into the sink and businesses failing left and right, the effects on job hunters is well known. It even affects the soon to be law school grads. Few feel sorry for them, knowing that in a few years they will probably be making $100,000 a year selling their soul for a false defense. Let’s get some thing straight. Not all lawyers are crooks. Some are very honest, respectable people. Because regardless of being a lawyer or not, they are people. I’ve had the priviledge to meet many good lawyers throughout my lifetime; not those nasty ambulance chasers and workers comp guys you see on TV.

I also get to see firsthand what a rough economy will do to soon to be grads. I have a good friend, we’ll call him Mike. I’ve known him my entire life, going back to playing as kids. He has always been an honest, respectable person, someone you could admire for not becoming like everyone else, or faking that he hadn’t. After graduating with his bachelors, he went into law school. He graduates this May. He got engaged last year to his girlfriend of far more years than I can remember, and they plan to get married in August. He’s been an excellent student and did very well at his internships over the summer. He’s also not one of those “yuppy” guys who came from money, in fact he owes $65,000 in student loans. One third of my mortgage.

He’s one of the lucky ones. He received a one year clerkship at the state supreme court getting paid $50,000/year. He’s in the budget. Many of his friends though, after accepting those $100,000/year jobs at big law firms in the city, are now finding that they are back to looking for work, and they haven’t even started. Imagine owing $65,000 for school to become a lawyer. You were your hardest to get picked up by a good employer for a good paycheck, then find yourself clipping ads for jobs that don’t even pay a fraction of that. In fact, a lot of the places hiring won’t even consider that background, because they know they will run away from that minimum wage to $8/hr position the second they get a shot. Not to mention that those jobs won’t even pay the interest on those student loans. What a shame.

So if you happen to meet a recent law school grad who is busy trying to find a job, give him a break. He hasn’t had the chance to show what he is made of, but he’s already starting off in the hole.

Citigroup Headquarters in New York

After doing my rounds tonight of digging through the news for something of worth, I came across this article on Reuters. It looks like the U.S. government may be converting its preferred share into common stock, and possibly moving its hold on Citi to up to 40%. Although I am outright against nationalization, this may be the right thing to do. Hopefully the government may be able to prop up Citi into a healthy position without wiping out all of the equity owners. Of course it will dilute the shares of Citi, but hopefully won’t wipe them out.

Out of the large banks, Citi may be in the most dire straights. It’s problems predates the current crisis. Poor management of assets and resources prompted Meredith Whitney to sound her alarm against them in October of 2007 ( 2 months prior to the recession), which turned out to be highly accurate.

However, this move still unnerves me somewhat. I am avidly against nationalization, but the government could be in a position to easily move to a majority control. They also would gain voting rights in the company, which could be dangerous. There is also the concern about repayment of the tax funds place into Citigroup via the preferred shares in the first place. I wouldn’t think that the government would still be entitled to its interest payments that go along with preferred shares. If you know, please comment.

Citi is also actively trying to persuade some of its largest preferred share holders - the Government of Singapore Investment Corp (GIC), Abu Dhabi Investment Authority and Kuwait Investment Authority – to convert their preferred shares into common shares, according to the article. They are considering offering more shares as well, in an attempt to raise more cash. However, their share price is so low – should we call them a penny stock now? – that I don’t know how effective that will be. Even with the after hours gains, they are still only at $2.20 a share.

At least the good news is that this revelation has helped bolster Asia stocks today, and anything bringing up the markets is a great thing.

Lockheed Martin Photo - F-22

With the hard times come hard decisions. Right now in the mist of potentially record deficits fueled by years of war, pork-barrel spending, bailouts, and tax cuts, some things are going to have to be trimmed. The Obama administration has made it clear that it considers cutting funding for further acquisition of the F-22 Raptor. Each F-22 costs about $140 million, and the Air Force is wanting to purchase several hundred more to augment their current small fleet. Obviously, billions of dollars are at stake, and we currently have a number of fighter jets including the F-16 and F-15, so on the surface this sounds like a good idea.

Wrong. The F-22 goes above and beyond the capabilities of the current fleet of U.S. fighter jets. America has learned since World War 2 that air superiority is critical in mission completion. And in terms of superiority, the F-22 has it. It’s incredibly stealthy – the only time radar can pick one up (it’s actual radar signature is classified however) is when it opens its weapons bay for a fraction of a second to launch a missile – and it is maneuverable in ways that only an F-15 can dream about.  It has the capability of cruising at mach speeds without afterburners, allowing it to more efficiently go deeper in enemy territory fast and on less fuel.

Opponents of the F-22 say that it’s role can be filled by the F-35 Joint Strike Fighter, which utilizes stealth technology developed from the F-22, is more flexible in its uses, and costs between $80 t0 $90 million dollars. However, the F-35 is not production ready, and won’t be for a few more years. The average age of the US fighter fleet is around 30 years old and is in the process of slowly being phased out. The F-22 is available here and now (there are approx. 120 in service today). Even though the F-35 may be more cost conscious monetarily, once you weigh in the unfactored costs it’s not worth the weight.

There is also 95,000 jobs tied up in the production of the F-22, coming out of nearly every state in the union. Do we need to create a policy that would put another 100,000 people out of work?

There is also other concerns that not everyone else is willing to mention. The F-22 is state of the art technology and is more advanced than anything out enemies have created. If we back out of it though, the technology behind it may find its way into the wrong hands. The last thing we need is for China (who we know has attempted with some success to smuggle F-15 parts into the country to reverse engineer one into their own fighter) or Russia (whose puppet master is ex-KGB and government policies lend themselves better to the U.S.S.R. than democratic Russia) to get their hands on the technology and secretly develop a fleet of advanced fighters. We’d be sitting ducks.

Thankfully – for now – most in Congress have been opposed to the cut backs, due to pressure from their constituents over the potential job loss. They’ve learned quite well the power of the ripple effect through the economy, so this may hold them at bay for now. However, the recession is going to get worse before it gets better, and with Obama wanting to wipe the deficit within his first term (good luck to the that), I don’t know how long they will hold up.

I ask you to please go to contact your U.S. Representative and U.S. Senators and implore them to fight against cutting the funding for the F-22 Raptor.

For those of us who have become so diluted in the events over the last few months that we have forgotten the energy and vigor that brought us into November, watch this video as a bit of a reminder. This is our then president-elect Obama, with an inspiring speech after claiming the election.