Making the most of it… or not

It’s absolutely fantastic that Generation X (which, according to the article I am referring to, are all those born after 1977) are such optimists. And with reason: the world does hold a lot of potential to become an amazing place for everyone to live in.

However, signs that this is also an overly self-centred generation abound, as this article from Maclean’s shows. While remaining positive about the economic situation is definitely a good idea, does stating that one is ‘funemployed’ help the situation at all?

Baha’u’llah tells us: “Be anxiously concerned with the needs of the age ye live in, and centre your deliberations on its exigencies and requirements.” While I don’t think that Baha’u’llah meant for us to live a neurotic life spent biting all our nails to the quick, I do think that He meant for us to contemplate the larger picture rather than the limited one of our immediate surroundings.

Which makes me wonder… What if all these newly graduates who are having a hard time finding a job used their optimism to devote themselves to helping solve the cause of the economic downturn, i.e. greed and ensuing injustice?

Now that would be making the most of it.

Populist rage: Any hope the 1789 French Revolution will become The 2009 Global Revolution? Part I

I was going through some old papers a couple of weeks ago (spring cleaning and all that jazz) and found notes I had taken on the French Revolution all the way back in High School. This is one of the very few things I had kept from that time, for the event had left quite an impression on me.

I had been 7 or 8 years old when I had my first class about the French Revolution, but even then it struck me how it was the little people, the ‘nobodies’ (i.e. the of 1789, who brought about the massive changes that define the French Revolution. Like most other historical events of this magnitude, it has definitely been romanticized, but the fact remains that, at its core, the French Revolution was the uprising of an outraged population asking for social justice.

Consider the facts: the French Revolution was, in (very) short, the boiling over of years of frustration. One factor was the widespread famine and malnutrition, bringing about disease and death. King Louis XV’s involvement in many wars and Louis XVI’s support of the colonists during the American Revolution emptied out the country’s coffers and forced them to go deep into debt. So what did they do to get more money? They increased taxes, and unjustly so as the poor were shouldering a disproportionately large portion of it. Meanwhile, Louis XVI and his wife, Marie-Antoinette, continued living lavishly.

Meanwhile, dangerous ideas (for the royalty, that it) were being discussed amongst those suffering the most. The rise of Enlightenment ideas and philosophies made more and more people question the absolute character of the royalty as well as the numerous privileges granted to a lazy nobility. It didn’t seem right that the hard-working professional and mercantile classes were the ones working so hard and yet still suffering so.

And so the population rose up and demanded justice. Imagine, in a country where royalty used to be akin to divinity, the king and queen were both beheaded.

Far be it that I am encouraging such a violent revolution against the forces of injustices that are operating today. After all, that was the end of the 18th century, and we are nine years into the 21st century. However, the injustices are just as rampant today as they were then, the proportion of people suffering around the world is probably about the same, if not more, and the changes required will be just as painful to put in place today as they were back then.

Don’t be fooled by the seeming eloquence of this post; it took quite some musing before I wrote it, and that only happened after I saw Jon Stewart’s interview with Jack Cafferty (watch the clip of the interview here).

And, of course, the part that made me click (finally) was the following:

Jon Stewart: There is a lot of talk about populist rage. (…) Is there a stirring up of a population that feels helpless and therefore will become destructive, or is there something constructive in people getting upset? Because Americans, when they get upset… You know, you look at other countries man and when they get upset, they go on strike, they have riots and we just send emails in capital letters.
Jack Cafferty: In fairness, you know what they did when they got upset? The elected an African American president.

I have often blogged about how the real power lies with the grassroots, and that it’s up to the masses to make the changes that have made history. There is no reason why so many people who think the current system is unjust shouldn’t have their views respected. It actually doesn’t make any sense; a little like the irrationality of celebrities being role models instead of role models being celebrities, powerful people have become heroes rather than every day heroes having power. The real heroes, those who work steadfastly, day after day, making the world a better place, are considered to be nobodies.

It makes me wonder how we got ourselves into this state of affairs. Think about it: who are considered to be the ‘nobodies’ of today? You and I are. We aren’t celebrities, we aren’t criminals, we aren’t socialites, we aren’t big time politicians, we aren’t big bankers, we aren’t big economists – we are the day to day workers, making the world go around. And although the entire system rests on us doing that work to the best of our ability, we are considered as nobodies.

It doesn’t make sense, and this in itself should make us realize that we aren’t the ‘nobodies’. They are. And it is up to us to create a Revolution which will change the course of history.

The AIG bailout debacle: Careful not to let the pitchfork wielding crowds out

It was quite amusing, watch The Colbert Report dated March 16th where Colbert encouraged his audience to join him in creating a huge, angry, pitchfork wielding crowd and go march on AIG (watch the clip here). And while most of us do feel that anger at what happened, we are far too civilized to actually do that.

Or are we? Discussion boards are teeming with angry threats, and I have received a couple of emails about some readers’ anger over what happened with AIG. While the anger is understandable, perhaps we aren’t channeling it in the right way.

One example of a positive channeling of this anger is – can you guess who I am going to talk about? Yes, about Barack Obama. But let’s face it – he’s the President of the United States, ergo he has some power to do what needs to be done. But what can we, little people of the world, do when all the power we have is that over our younger siblings and/or our children – and even that power is often challenged?

There needs to be a major restructuring of the way we do things, not only at the top (which good old President Barack Obama seems to be taking care of), but also at the bottom. We cannot continue to feed into a system made to make us consume excessively and irresponsibly.

My advice? Stop shopping too much, start shopping wisely and start contributing your time, money and attention to those around you who need it, from your neighbor’s child with ADHD who needs to be tutored with patience to the poor people across the city who can barely make ends meet. Let’s be the change!

There are probably a lot of other things we can do, and I’m open to trying many of them – but the one thing we can’t do is let this anger blind us or, worse, make us so things we are going to later regret.

From IHT: Whipping A.I.G. feels good, but it hurts us all

By Joe Nocera (published on March 21st 2009)

Can we all just calm down a little?

Yes, the $165 million in bonuses handed out to executives in the financial products division of American International Group was infuriating. Truly, it was. As many others have noted, this is the same unit whose shenanigans came perilously close to bringing the world’s financial system to its knees. When the Federal Reserve chairman, Ben Bernanke, said recently that A.I.G.’s “irresponsible bets” had made him “more angry” than anything else about the financial crisis, he could have been speaking for most Americans.

But death threats? “All the executives and their families should be executed with piano wire — my greatest hope,” wrote one person in an e-mail message to the company. Another suggested publishing a list of the “Yankee” bankers “so some good old southern boys can take care of them.” (…)

How does outing these executives fix skewed compensation incentives, which have created that unjustified sense of entitlement that pervades Wall Street? No, it’s mostly about using subpoena power to satisfy the public’s thirst for blood. (…)

Then there was that awful congressional hearing on Wednesday, in which A.I.G.’s newly installed chief executive, Edward Liddy, was forced to listen to one outraged member of Congress after another rail about bonuses — and obsess about when Treasury Secretary Timothy Geithner learned about them — while ignoring far more troubling problems surrounding the A.I.G. rescue.

Oh, and let’s not forget the bill that was passed on Thursday by the House of Representatives. It would tax at a 90 percent rate bonus payments made to anyone who earned over $250,000 at any financial institution receiving significant bailout funds. Should it become law, it will affect tens of thousands of employees who had absolutely nothing to do with creating the crisis, and who are trying to help fix their companies.

Meanwhile, the real culprits — like Joseph J. Cassano, the former head of A.I.G.’s financial products division— are counting their money in “retirement.” Nobody on Capitol Hill seems much interested in getting that money back. (And the bill does nothing about bonuses that were paid before 2009, meaning that most of those egregious Merrill Lynch bonuses, paid at the end of last year, will not be touched.)

By week’s end, I was more depressed about the financial crisis than I’ve been since last September. Back then, the issue was the disintegration of the financial system, as the Lehman bankruptcy set off a terrible chain reaction. Now I’m worried that the political response is making the crisis worse. The Obama administration appears to have lost its grip on Congress, while the Treasury Department always seems caught off guard by bad news. (…)

How is the political reaction to the crisis making it worse? Let us count the ways.

IT IS DESTROYING VALUE During his testimony on Wednesday, Mr. Liddy pointed out that much of the money the government turned over to A.I.G. was a loan, not a gift. The company’s goal, he kept saying, was to pay that money back. But how? Mr. Liddy’s plan is to sell off the healthy insurance units — or, failing that, give them to the government to sell when they can muster a good price.

In other words, it is in the taxpayers’ best interest to position A.I.G. as a company with many profitable units, worth potentially billions, and one bad unit that needs to be unwound. Which, by the way, is the truth. But as Mr. Ely puts it, “the indiscriminate pounding that A.I.G. is taking is destroying the value of the company.” Potential buyers are wary. Customers are going elsewhere. Employees are looking to leave. Treating all of A.I.G. like Public Enemy No. 1 is a pretty dumb way for a majority shareholder to act when he hopes to sell the company for top dollar.

Read the rest of the article here.

Barack Obama on Jay Leno

This is worth the watch – and not only because I might (really) like Barack Obama, but because the way things are explained are a great way for those who want to end the fear and confusion Warren Buffett talked about to start getting a grasp on things.

Watch here.

From Maclean’s: Warren Buffett and the power of optimism

I haven’t found the link to this particular article, but read it in the paper copy of Maclean’s I picked up today. You can find the Maclean’s website here.

When Warren Buffett speaks, people are wise to listen carefully. The legendary investor became the world’s richest man by keeping his eye firmly trained on the long term, ignoring fads and manias, and sticking to the timeless fundamentals of sound business. So this week, when Buffett gave CNBC a three-hour interview, millions were hoping for some guidance. Those who listened carefully were not disappointed.

(…)

But Buffett said one thing that was particularly resonant for those of us wading daily through a deluge of troubling economic data. “People are scared, and fear is very contagious. They’re also confused,” he said. “And if you’re fearful and confused, you don’t start to get over being fearful until you aren’t confused.”

The most important role we in the media can play in this environment is to dispel some of the confusion that fuels fear and paralyzes consumers.

Which brings me to the following question: what of the role of the public to inform itself? Have we been doing a good job with that? We were all (myself included) quick to point the finger at Jim Cramer, but we might as well have turned it on ourselves for not investigating the truth more.

Perhaps now is the time to start that off.

A look back at Christmas 2008

Amidst the dire forecasts of a global economy headed for the toilet, contrasting against the heart-warming election of an African-American to the United States presidency, Christmas 2008 was a particularly hard one for some of the earliest victims of the current economic turmoil.

But there is always a way to turn anything into something positive, and so was Christmas 2008 for some of these people. MacLean’s reported on this in a very interesting article:

The recession that saved Christmas, by Ken MacQueen and Cathy Gulli

Lean times, some find, are connecting them to the real meaning of the holidays

You’d have to go back in Audrey and Owen Freeman’s lives to the Christmas of 1964 to find a time such as this—when bleak circumstances should doom the spirit of the season to wander lost in a fog of loneliness, dislocation and worry. It was their second Christmas together. They lived with their infant daughter in a bare apartment in Toronto—a city so foreign to Audrey that when she moved there from the outport of Carmanville, Nfld., she says: “If I had been going to the moon at the time, I wouldn’t have been more scared.” Owen was laid off just before Christmas. There wasn’t a spare cent once the rent was paid. They were too proud to tell their parents so they resigned themselves to a Christmas without presents, turkey or tree. “We were young and in love, I suppose,” says Audrey, “so we were willing to put up with most anything.”

Two days before Christmas, a trunk was delivered to their apartment, unannounced. Audrey’s parents had stuffed it with decorations and gifts; with candy, fruitcake and nuts; with a tiny red velvet dress and a stocking full of the things little girls love. There was a letter inside, too, and a cheque for $100, because there was no room in the trunk for a tree and dinner with all the trimmings. And so a Christmas that seemed destined to be marked with tears was instead celebrated with weepiness of the happy sort. Tears became a Freeman holiday tradition as three more children, then spouses, and then eight grandchildren joined the fold, all settling into communities near the Freeman’s home in Ajax, Ont. “If anybody walked into our place Christmas morning,” says Audrey, “they’d think we were all very sad.”

Sad? Not at all. But the biggest test of that comes this Christmas. Owen lost his job last winter after 37 years with a drugstore chain, forced into early retirement in part by illness. In all, he spent three months this year in hospital. With finances tight, the Freemans reluctantly sold their home in Ajax, and moved back to Carmanville this October. “I guess you could say we’ve come full circle,” says Audrey. “The economic downturn has affected us in that we had no choice but to move halfway across the country in order to survive on our small pension and limited savings.”

They aren’t alone in planning this year for a lean holiday season. World markets are in turmoil, retirement savings are gutted. The economy of Canada, like most of its global trading partners, is in decline. Consumer confidence, the Conference Board of Canada reported in November, fell to its lowest point since the brutal recession of 1982. And no wonder: some 71,000 Canadian jobs were lost last month, the largest drop in 25 years.

(…)

Obviously for many this will seem a diminished holiday born of fear and debt. And yet, with tough times comes an opportunity to reimagine the holiday. There are many who see this as the recession that saved Christmas, a chance to scale back the spending and search out the optimism of our inner Tiny Tims. What is Christmas, after all, but the willing suspension of disbelief? There is much that can’t be measured by leading economic indicators, or by money in the bank or the lack of it. For the Freemans, the standard for all the Christmases to come was set in the hardship of 44 years ago. “We are fortunate in that we started to cut back on spending and realize the true meaning of Christmas long before we were forced to,” says Audrey as she readies their home for the holidays.

This year, they face the prospect of a first Christmas far from their children, like many families this recessionary season who will be unable to spend as they are accustomed to on presents and travel. The Freemans are determined to make the best of it, saying it gives the children, now in their 30s and 40s, a chance to start their own traditions. Their gift-giving has never been extravagant. (…) The family will watch each other open their presents Christmas morn via a Skype computer video link; (…). The Freemans will then dine with Audrey’s cousins in Carmanville, where they will toast their good fortune and Owen’s improving health. “He’s doing really well,” Audrey says. “We’re very thankful just to have each other, and to be able to celebrate Christmas at all.”

Read the rest of the article here.

To strike or not to strike: justice and equity in a messed up world

Here is a quote that found its way to my inbox. I found it all the more interesting in the context of the mounting anger of the dwindling number of employees.

Strikes are due to two causes. One is the extreme sharpness and rapacity of the capitalists and manufacturers; the other, the excesses, the avidity and ill-will of the workmen and artisans. It is therefore necessary to remedy these two causes.

But the principal cause of these difficulties lies in the laws of the present civilization; for they lead to a small number of individuals accumulating incomparable fortunes, beyond their needs, whilst the greater number remains destitute, stripped and in the greatest misery. This is contrary to justice, to humanity, to equity; it is the height of iniquity, the opposite to what causes divine satisfaction.

This contrast is peculiar to the world of man: with other creatures, that is to say with nearly all animals, there is a kind of justice and equality. Thus in a shepherd’s flock of sheep, in a troop of deer in the country, among the birds of the prairie, of the plain, of the hill or of the orchard, almost every animal receives a just share based on equality. With them such a difference in the means of existence is not to be found: so they live in the most complete peace and joy.

It is quite otherwise with the human species, which persists in the greatest error, and in absolute iniquity. Consider an individual who has amassed treasures by colonizing a country for his profit: he has obtained an incomparable fortune, and has secured profits and incomes which flow like a river, whilst a hundred thousand unfortunate people, weak and powerless, are in need of a mouthful of bread. There is neither equality nor brotherhood. So you see that general peace and joy are destroyed, the welfare of humanity is partially annihilated, and that collective life is fruitless. Indeed, fortune, honors, commerce, industry are in the hands of some industrials, whilst other people are submitted to quite a series of difficulties and to limitless troubles: they have neither advantages nor profits, nor comforts, nor peace.

Then rules and laws should be established to regulate the excessive fortunes of certain private individuals, and limit the misery of millions of the poor masses; thus a certain moderation would be obtained. However, absolute equality is just as impossible, for absolute equality in fortunes, honors, commerce, agriculture, industry, would end in a want of comfort, in discouragement, in disorganization of the means of existence, and in universal disappointment: the order of the community would be quite destroyed. Thus, there is a great wisdom in the fact that equality is not imposed by law: it is, therefore, preferable for moderation to do its work. The main point is, by means of laws and regulations to hinder the constitution of the excessive fortunes of certain individuals, and to protect the essential needs of the masses.

‘Abdu’l-Baha, in Baha’i World Faith, pp. 280-281

Justice comes in many shapes and forms, but it’s always sweet

While I don’t wish anyone ill, I do like it when people get what they deserve. Contradictory? In some cases, yes. Then again, in some others, no. And in this case, I think bankers are getting what they deserve.

Commentary: Give bankers some of their own medicine

By Douglas Rediker, published on December 23rd

You know the financial crisis is bad when investment bankers are grumpy at Christmastime. That’s because in investment banking, Christmastime is bonus time, and bonus time is what it’s all about.

Bonus time is when all the deals you crafted and all the money you made for the bank gets toted up and you get your fair share.

Usually, in the world of Wall Street and its international counterparts, that “fair share” can reach 10 or 15 times your annual salary. That usually makes year-end a time of great joy in investment banking land.

But this year is different. This is the year when dodgy mortgages, which had been packaged together, securitized and thus magically transformed into “ultrasafe” securities, blew up. That led to the collapse of so many of the deals bankers had crafted (and got paid for) in past years. Many banks disappeared or were merged out of existence.

Thousands of jobs were lost, and retirement nest eggs, made up largely of stock received at previous bonus times, dramatically declined in value — many to the point of worthlessness.

This year is different because many CEOs have agreed to forgo bonuses entirely, and other investment bankers who still have jobs will awaken to find that coal in a Christmas stocking looks good by comparison.

That’s because one of the world’s largest financial institutions, Credit Suisse, just announced that it would pay its bankers up to 80 percent of their 2008 year-end bonuses in the form of what The Wall Street Journal called “an illiquid group of junk bonds, mortgage-backed securities and corporate loans” instead of cash or stock, as had been the norm throughout the industry.

CS effectively told its bankers that this year, instead of getting paid money, they would get paid in kind — the same kind of over-leveraged, securitized paper that caused much of the crisis in the first place.

This is a fabulous idea. Not only does it help the bank’s balance sheet by moving these toxic assets off their books and onto those of its employees, but it serves as an unambiguous reminder to those whose job it is to create and sell financial products in the markets that this isn’t a game of smoke and mirrors.

Securities actually have to have value, and those who create and sell them can’t just walk away after the wreckage and claim that it’s somebody else’s problem. It imposes the discipline that if you are selling a deal to your clients, you should be willing to invest in it yourself. Those who created, traded and sold securities defined by words like “junk” or “toxic” now own them. A lot of them.

Perhaps it will make those who structure products and deals think a little differently in the future. It’s one thing if you think that your job is just to sell something. It’s another if you know you will have to live with the consequences yourself.

Read the rest of the article here.

If your IQ is high, does that make you Smart? Not according to Toyota!

I remember reading, a long time ago, an article about Toyota’s new car, the IQ. I couldn’t help myself: I immediately saw it as a declaration of war on the Smart Car. The subsequent visual of an arm-wrestling match (or the car equivalent of an arm) between a Smart Car and a Toyota IQ still deeply amuses me.

What can I say, I have simple tastes.

When I first saw the new Toyota IQ, I couldn’t help but chuckle at its name, which seemed like a gauntlet thrown in front of Smart Cars face. Once I got over my amusement – it did take awhile – I realised how fantastic the release of such a car in North America is going to be. I’m looking forward to see it on our roads in the near future!

Read about the Toyota IQ here.

Lovely heartwarming yet sad picture

Sometimes a picture is worth a million words – and here is a picture definitely worth checking out, of a gentleman selling Streetwise in Chicago. Enjoy!