The Watering Hole: December 20th – Commodities

Picture found at panoramio.com Sculture by Peter Lenk "Slavenmarkt" (Slaves Market)

Sculpture by Peter Lenk

This is what I always wanted to be. Livestock, a commodity. When I started to work for Digital Equipment Corporation in 1986 I was hired for the Personnel Department. This changed it’s name into “Human Resources” after a while and that didn’t improve how we treated our employees. Obviously things have gone farther. This is from today’s “The Guardian” Business Blog:

The UK’s human capital – the economic value of the knowledge and skills of the working age population – fell by £130bn in 2010, according to the Office for National Statistics.

The knowledge and skills of workers in the UK were worth an estimated £17.12 trillion in 2010. This was more than two-and-a-half times the estimated value of the UK’s tangible assets – such as buildings, vehicles, plant and machinery – at the beginning of that year.

The value of the UK’s human capital stock increased steadily between 2001 and 2007, averaging annual increases of £425bn. The slowing of earnings growth and increases in unemployment during the economic downturn meant that growth in the stock of human capital slowed to an average of £120bn a year between 2007 and 2009, before falling in 2010.

Human Capital Stock…Livestock…Maybe I am a bit too sensitive. What do you think?

This is our daily Open Thread. Join us and discuss..

The Watering Hole: April 14, UBS

Before I start. For us here “UBS” is of course a household name, but our gummitch pointed out my half-cocked assumption and houseofroberts corrected it below in the comments. Thanks to both of you.

Today is General Assembly of UBS in Basle. There are some points of interest in that. Main point: Will Ospel, Rohner, Kurer and Wuffli be discharged from liability for the Years 2007 and 2008? If not, UBS will have to reconsider charging them with fraud or breach of trust. This thread will be updated as soon as the results are in.

The voting on a discharge from liability for the managing board as well as for the supervisory board was a clear “No” for the year 2007, which has never happened before in Swiss business history.

Discharging board and management, traditionally largely an annual formality, means the company itself and the shareholders who vote for it would no longer have the option of pursuing legal action against them [former management], unless new information came to light. (more)

The legal consequences are not really clear yet, the current chairman of the supervisory board, Kaspar Villiger, has already made clear that the management of the bank will hold on to it’s decision not to press charges to hold the former management accountable for their actions. Given the fact that UBS owes those four a multi-billion loss, shareholders lost billions and no dividend was paid either, there might be someone outside the management, however, who may beg to differ.

Now, this is all going to end the banks’ greedy and irresponsible ways of making money. Not.

Zurich-based UBS eked out majority support–nearly 55%–for 2009 pay in a non-binding vote, but board and management members present were grilled by disgruntled shareholders.

“With their new bonus plan, UBS is going back to errant ways,” said Rolf Luethi, a retail shareholder from Oberrieden, Switzerland. (more)

Bonus packages have been approved by the general assembly but a 45% No vote is considered something of a warning.  I will not hold my breath, however, that UBS, or any other major bank, will go back to respectability. As long as “too big to fail” is accepted as an excuse and as long as there remains a tax paying middle class that can be squeezed for a bailout, it’s going to be business as usual. In the end all they really want is getting all the money, yours, ours, everyones.

This is, nevermind my ranting, an open thread. So feel free to comment on whatever is on your mind.

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Observations from the Road

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As many of you know, I travel a great deal.  I can spend four weeks a month in up to eight different places (towns, states, countries).  Also, I smoke.  It is a bad habit, sure, but it allows me the opportunity to spend a lot of time in parking lots worldwide. I have taken that opportunity to do a little unofficial and not-so-scientific observing of the driving habits of our fellow man.  I am limiting my observations to the US market (and not anything I have seen overseas).

I usually can see about 40 vehicles in an average parking lot (as I stand outside puffing away), and what I have noticed is that almost all of the vehicles I spy in these corporate parking lots are not American made vehicles.  The most I have ever seen is five (out of 40) American-made vehicles…which would be approximately one-eighth of all the vehicles I see.  This 1/8th of the market are vehicles made in the good old US of A (assuming, of course, that they are not being made in Canada, as many of “our” vehicles are).

Further, I notice that of those American cars, there are slightly more Fords than General Motors cars, and significantly less Chrysler models overall (I have been in parking lots with NO Chrysler or Dodge vehicles at all).  Conversely, of the foreign made models, there are slightly more Honda’s than Toyota’s, with Nissan, Mazda and Mitsubishi combined close behind.  Of course, there are smatterings of Lexus (the high-end Toyota brand), Acura (the high-end Honda brand), BMW, Mercedes-Benz and the like.  Surprisingly, this holds true no matter which region of the country I am in (deep south, California [where I am now], New York, or where have you.)

That begs the question: Why are there so few American cars? Where did the American automakers go wrong?  I have some thoughts.

Marketwatch: McCain would be a mediocre president

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Rex Nutting, the Washington bureau chief of Marketwatch, wrote a commentary asking if McCain has the right stuff to be president. As a financial writer, Nutting is apparently unhappy with the frivolity that McCain has taken to being his platform. While McCain asks Is Barack Obama ready to lead this country?, Nutting asks Is McCain fit to lead America?

In short, Nutting feels McCain would be a mediocre president because:

Lack of accomplishments:
Like the current occupant of the White House, McCain got his first career breaks from the connections and money of his family, not from hard work.

McCain hasn’t accomplished much in the Senate. Even his own campaign doesn’t trumpet his successes, probably because the few victories he’s had still rankle Republicans.

Every senator who runs for president misses votes back in Washington… But between the beginning of 2005 and mid-2007, no senator missed more roll-call votes than McCain did, except Tim Johnson, who was recovering from a near-fatal brain aneurysm.

Shallowness:
McCain says he doesn’t understand the economy. He’s demonstrated that he doesn’t understand the workings of Social Security, or the political history of the Middle East.

McCain has done one thing well — self promotion. Instead of working on legislation or boning up on the issues, he’s been on “The Daily Show with Jon Stewart” more than any other guest. He’s been on the Sunday talk shows more than any other guest in the past 10 years. He’s hosted “Saturday Night Live” and even announced his candidacy in 2007 on “The Late Show with David Letterman.”

No Leadership:
McCain has frequently taken on near-impossible missions that go against the grain of his party. It’s the basis of his reputation as a maverick. But McCain has never been able to bring more than a handful of Republicans along with him on issues such as campaign finance reform or immigration.

Living in the 60’s:
McCain is still fighting the Vietnam War. But he’s not fighting the real historic war…Instead, McCain is fighting an imaginary Vietnam War, where a sure victory could have been achieved with just a little more bombing, just a little more “pacification,” just a little more will to win at home.

Most of the other high-profile politicians who fought in Vietnam — Colin Powell, Chuck Hegel, John Kerry, and Jim Webb — aren’t stuck in the past, and they don’t view the Iraq War as a chance to get Vietnam right.

No Principles:
After years of honing a reputation as a guy who’ll say the truth regardless of the political consequences, McCain has crashed the Straight Talk Express. On almost every issue where he took a principled stand against the Republican line — taxes, immigration, oil drilling, the Religious Right — he’s changed his views.

We ought to like politicians who change their mind when the facts change; it shows maturity, judgment and flexibility. But politicians who change their mind to suit the prevailing winds show the opposite.

The Bottom Line:
He’s neither a dreamer, nor a detail guy. His major accomplishment, in Vietnam and in the Senate, has been merely to survive.

Just surviving doesn’t make you’re a hero, or a decent president. America needs to do more than survive the next four years.

That pretty well sums it up. We need strong leadership to get us out of yet another mess that the Republican’s have gotten us into. We do not need four years of a wing and a prayer that something might go our way. And we do not need a leader who wants to bomb bomb bomb Iran and is spewing anti-Russia comments as recklessly as Bush did about Iraq. Senator McCain, the cold war ended. Stop living in the past! McCain’s Neocon handlers have started to endorse bombing Russia! How many wars would that put us into? Let’s see: Iraq, Afghanistan, Iran and Russia. This isn’t a game of Risk, for crying out loud.

McCain not only has no concept of economy or many of the other concerns that American’s are facing, he doesn’t have a grasp on reality as to anything concerning these multiple wars he seems to want so badly; where will the money come from? What men and women will fight? Will he institute another draft? How long can our fighting soldiers be Stop-Gapped? And those are just the most basic of questions he needs to understand.

Be sure to read the whole article (and the comments. Remember, this is a financial website and Nutting is a financial writer. I think that when one thinks of markets and finance, conservative comes to mind – right or wrong. The comments might be a little insight into electorate parsing.) I think it’s worthwhile.