This blog is written weekly by Dock David Treece, a registered investment advisor with Treece Investment Advisory Corp. It is meant to share insight of investment professionals, including Dock David and his father, Dock, and brother, Ben, with the public at large. The hope is that the knowledge shared will help individuals to better navigate the investment world.

Wednesday, March 31, 2010

Defending Dividends

The past several weeks, there has been a conflict brewing in the world’s bond markets. Though known by few in the public, currently many bond traders are waging a buyers’ strike – refusing to buy bonds – until equity markets undergo a correction.

These problems in the world’s bond markets are not limited to the private sector. At present this buyers’ strike extends to US government bond auctions, which have been making headlines as they fail to find adequate buyers to finance a growing debt.

In fact, if nothing else tells us of the market’s coming correction, it is that at this point even the government needs the stock market to correct so that bond traders will lift their buying strike. Unfortunately for investors in the stock market, the US government more often than not gets what it wants.

Given these deficiencies in debt markets, investors, particularly those with a focus on income, would be wise to consider alternative strategies. One such strategy for achieving this income is to seek out and purchase stakes in companies that pay relatively high dividends.

This strategy, like debt securities, provides a regular stream of income from a company to its investors. And yes, as many investors will undoubtedly point out, this strategy does put investment principle at risk. However, few realize that they risk principle in bonds as well, in several ways.

First and most obviously there is the risk of default by debt issuers. If the debt burden of a corporation or a government becomes too great, there are ways for these entities to relieve themselves of their debts owed to creditors, similar to bankruptcy protection for individuals.

This threat of default, which has been spoken of repeatedly regarding every issuer of debt from homeowners to governments, is very real in today’s environment. Between government debt, corporate debt, collateralized debt obligations (CDOs), collateralized mortgage obligations (CMOs), mortgage-backed securities (MBSs), etc, the world of debt investments is an immense minefield that requires a great deal of care for investors to navigate.

Second, and less widely recognized, there is a risk of principle in bonds for any investor who intends to sell their bonds before they mature, which can be decades into the future. If an investor tries to sell bonds into the market, and interest rates have risen since they purchased those bonds, the investor will take a hit on their principle in order to find a buyer of their bonds who is willing to accept less than current interest rates.

Another aspect to consider when debating debt-derived income versus dividend-paying stocks is the psychology behind how investors are being paid. For example, investors who are collecting dividends from stocks are being paid by companies that produce a product and produce sufficient revenue to make regular dividend payments to investors, after operating expenses are paid (and debt is serviced).

On the other hand, quite often bond investments are made in companies, and governments for that matter, that have leveraged their balance sheets (borrowed money) to expand, or even just to keep their head above water. For whatever reason, many of these companies do not have the revenue to pay regular dividends, which is why they are issuing debt in the first place.

Certainly stocks are not always the best option for an investor, even if they are focused on income. However, given the difficulties facing our financial markets today, it’s very wise to consider every opportunity. And with the amount of credit being unwound by individuals, corporations, and governments (e.g. Greece) in any way possible, bondholders face default risk to a degree not seen in many years.

With our country’s rising deficit and burgeoning national debt, there is no guarantee that our government will not one day look for ways to relieve itself of its growing debt burden, even if it means leaving its creditors twisting in the wind. Given all these threats facing the debt markets, can investors really rule out income-producing stocks as an option altogether, or aren’t they at least worth a look?


Disclosure: The author, Dock David Treece, and his firm, Treece Investments, currently have holdings in high-dividend-paying stocks, and have advised clients to do the same.

Monday, March 29, 2010

Dollars & Cents: Re-Re-Writing History . . . Again

One problem that we face every day, particularly in America, is the challenge of staying informed. Many people have put a slightly different spin on this argument, contending that we face an overabundance of information. The real task, wording aside, is in sifting through the noise and getting to the heart of timely, relevant information. This quite often comes down to knowing who to believe.

The most common mistake made by the general public is in basing their logic on fear rather than fact. They listen to people who base their arguments solely on deep-seated fears, rather than seeking out the truth by educating themselves.

Consider the following issues presently facing our country that have been topics for a great deal of debate, protest, even violence:

1. The world is running out of oil, and if we don’t act soon to eliminate our dependence on fossil fuels we will destroy the planet for our children
2. We have troops stationed in conflicted zones on the other side of the world for extended periods of time away from their homes and family’s
3. Our country has never seen such turmoil over social issues
4. US consumers are living in fear of unsafe goods, particularly foreign-made cars

Readers under 30, try the following exercise: Ask your parents about what the world was like in the 1970s. Ask them if they ever sat in gas lines. Do they remember the Ford Pinto? How about the Chevy Vega? Both of these find automobiles were made during the ‘70s to combat the widely publicized ‘oil crisis.’

For some perspective on the issue of military duty, ask someone who lived through it (your grandparents, perhaps) about Korea, or World War 2. Ask them about the civil rights movement in the 60’s, or the deadly demonstrations of the later part of that decade, especially 1968.

[Please note that I do not mean this to disrespect the fine men and women of our military in any way. They are upstanding people, and should be commended for their service. We are all in their debt.]

Finally, anyone who’s now scared of climbing into a Toyota should pick up a copy of Ralph Nader’s famous ruse Unsafe at Any Speed and study the now-infamous Chevrolet Corvair. Then take a look at GM’s website (media.gm.com) to see the list of vehicles being recalled, which totals about 1.3 million.

The bottom line is this: Every generation thinks they are the first to face problems, that they are somehow unique or special, or bear some terrible burden. This couldn’t be further from the truth. Likewise, every generation thinks they’re the greatest in history.

Truly there’s only one greatest generation: the last one. After all, they have successfully handed over responsibility to their successors. They’ve been custodians for the world, and turned it over in one piece; or at least no worse for the wear. At the end of the day, that’s about the best anyone can hope to accomplish.

Nevertheless, understand that the world is full of fear-mongers and uneducated followers. It can be hard to fight the multitudes who argue for a cause, but it’s important to step back and consider why something is being advocated. The goal of college (or high school, for that matter) should have been to teach you how to think, not what to think.

To think that the answers to all the world’s problems can be told to you by a CNN anchor over your dinner table is absurd. The golden rule for knowing and understanding the world we all live in has always been, is now, and will forever by: Think for thine self.

Wednesday, March 24, 2010

Saddling a Bull Market

The market, after a brief correction, has turned up recently and demonstrated notable strength, even after its substantial rally since bottoming in March of 2009. However, lately many well-informed market technicians (e.g.: Corey Rosenbloom) have been sighting frightening similarities between the current rally and the market’s all-time nominal peak in 2007.

Similarities have been noted both in stock market charts, as well as among other indicators like the Volatility Index (VIX). While similar chart formations may or may not be coincidence, the VIX has demonstrated a remarkable amount of complacency in the financial markets.

Considering the pain investors have been subject to over the past couple years, it is incredible that the perceived risk in the market (as evidenced by the VIX) is as low as it is currently.

All of these things tell us that, though it has continued to demonstrate strength as of late, the markets are quite likely poised to head back down.

However, if the markets do head lower, which they undoubtedly will at some point they will, rest assured that it’s not the end of the world. Since the time of Christ people have been saying ‘the end is near.’ So far, they’ve all been wrong.

Unfortunately, people are cursed with short term memories. This works in many ways; complacency develops quickly, fear spreads when things are near their worst, and excitement catches hold when fads are near their peaks.

An example: A few months ago, when gold was near its highs (thus far) many people were screaming that it was going to the moon. You couldn’t turn on a TV or open a newspaper without seeing an ad to buy gold. At that time we warned that there was simply too much hype and the run in gold was probably near its end for the time being.

So far all those celebrities touting gold have been wrong. While they shouted that the dollar was going to zero, the dollar has rebounded lately, and is likely to continue doing so. In fact, what we are now witnessing is most likely the beginning of a long-term trend, which will see a strengthening dollar and resurgence in US manufacturing, as discussed in previous articles.

Periodically it’s good for people to step back and look at the big picture. When the markets change direction, for example, that certainly doesn’t mean that there isn’t money to be made. Investors simply have to smarten up, and dedicate time and energy to outwitting the masses.

Quite often, looking at the big picture is, or should be, a humbling experience (maybe that’s why it’s so rarely done). Keeping with our example of the markets; while many investors think they know how markets should behave, and trade as if trying to bend markets to their will, a change of perspective can prove helpful.

The best analogy that comes to mind, as related to investing, is that of riding a bull. Any perception control is simply your imagination; have no premonitions that you can make that beast submit to your will, they will only end in heartbreak. Instead, just hold on when you can manage, and get off when you’re not sure what you’re doing so you can re-center and saddle back up.

Monday, March 22, 2010

Dollars & Cents: ‘Serfing’ USA

In the wake of the recent passing of healthcare reform legislation by Congress, after considerable debate, we’d like to take some time this week to examine the roll that government plays in our lives, particularly as it relates to finance.

Over the course of an average American’s working life, they will pay in excess of $600,000 to the United States government for income tax alone. Keep in mind that number does not include sales tax, property taxes, or capital gains tax, not to mention social security and the other costs (e.g.: driver’s license, license plates, hunting license).

The question I would pose to readers is this: Do you think that you receive enough benefit for your money?

Obviously, our interest in this subject hints immediately at our own bias; but at a time of political turmoil, with such emotionally charged public debate, it’s important that Americans educate themselves on issues they face.

Tax revenue in the United States historically averages more than a quarter of our country’s GDP. From personal income tax to corporate payroll taxes, the US government collects approximately $2 TRILLION per year to fund its current programs and provide for the national defense.

Unfortunately for us, many of these programs do not work, or they fall apart over time. The history of the United States is plagued with failures both large in small.

• Medicare: Broke
• Medicaid: Broke
• FDIC: Insolvent – Fancy word for BROKE
• Social Security: Broke
• US Postal Service: Broke
• Fannie Mae and Freddie Mac: Broke
• Mustang Ranch brothel: Broke

Thankfully, failures such as these constantly serve as reminders to our elected officials that they should stop trying to do things better than the private sector, and they stick to what they do best: talking.

While it sure would be nice if that were true, we’re not so lucky.

Instead of keeping their noses out of business, politicians remain absolutely convinced that they know how to run your life better than you do. They continue to believe that they know what’s best for you and your family, and that for every problem there is a solution that will make everyone happy.

And so, every time a government program fails, the debate resumes; not on whether or not to abandon the cause and leave it to those more capable people who can run a business, but how best to overhaul a failed program. In other words, let’s put 20” spinners on a ’97 Daewoo Lanos.

For those of you who may not recognize the Mustang Ranch cited above, it was a brothel outside Las Vegas that was seized by the federal government in the 1990s as part of a tax evasion case. The government, thanks to a little known line in the IRS handbook, was required to continue running the ‘business’ to try to recoup its lost tax revenue.

Pretty sweet deal, right? The US government running a bar and brothel just outside Las Vegas, that must have made them back all their losses pretty quick!

This was hardly the case. In fact, the governments running of the Mustang Ranch was a total failure, and the government had to abandon its efforts after a few short years to auction off assets held by Nevada brothel.

Lesson learned: The government has failed in its attempts at running Medicare/Medicaid, social security, banks, and a brothel outside Las Vegas. What, exactly, makes anyone think that they can effectively oversee US healthcare, which accounts for more than 15% of our nation’s GDP?

Wednesday, March 17, 2010

Misguided Media

Last week the New York Times released an article titled Mexico Oil Politics Keeps Riches Just Out of Reach (Krauss and Malkin, March 8, 2010). To the casual reader, this commentary on the oil industry in Mexico would seem to hint that oil is running out for our neighbor to the south, and the world will soon need to find a way to replace the oil that will no longer be flowing out of that region.

The facts of the matter are, fortunately for us, not nearly so bleak. This is simply another case of a major media outlet misleading its [undeserved] audience.

Before getting into the investment industry, my father (“Dock1”) spent several years in the oil industry. He often tells the story of a conference he attended in the 1970s, where he heard a well-known and respected geologist speak.

The story goes that this geologist stood up and told the audience that when we began his studies in geology at college, the very first day his professor told the entire class that they were all fools for entering what was clearly a dying industry. At that time, in the 1930s, this professor told his class that there was only enough oil left in the world for the next 7 to 10 years, and after that they would all be out of a job.

This speaker went on to say that, after college (he obviously failed to heed his professor’s advice) he himself attended a conference in the 1950s, where the keynote speaker warned that there was only enough oil left in the world for the next 7 to 10 years.

Now, in the 1970s, as my Dad sat and listened to a speaker who had been warned twice, in both the ‘30s and the ‘50s, that the world’s supply of oil was running out. This speaker went on to tell the audience that, by his calculations, there was only enough oil left to last for the next 7 to 10 years. Moreover, he added that sometime in the 2000s, geologists would still certainly be warning that there was only enough oil for another 7 to 10 years.

The point to this exceedingly long anecdote is this: Friends, the world is NOT running out of oil. Thankfully, only three things are required to produce oil: hydrocarbons from dead matter, heat, and pressure; three things which the Earth certainly does not lack, or will in the near future.

Moreover, advances in modern technology continue to allow drilling companies to reach oil deposits that could never before be utilized. In fact, many wells that were previously thought to be dry are now being reopened with new equipment.

In Mexico, however, drilling technology hasn’t kept up. The reason is surprisingly simple (for capitalists, at least): In the late 1930s the oil drilling industry was nationalized in Mexico by then-President Lazaro Cardenas. If there is one thing we can count on, it’s that government doesn’t do anything as well as private sector. Can we believe healthcare will be any different?

The oil industry aside, it is infinitely important that people take a step back and examine the media industry. For example, most major media outlets continue to report that the economy is in a very weak, fragile state, and could collapse at any time. This, friends, is hardly the case.

Readers need to understand that the communications industry has been one of the hardest hit sectors in this recession. Most media outlets have gone through – and are continuing to see – rounds of layoffs. The New York Times, in fact, recently announced that it is laying off nearly 10% of its remaining newsroom staff.

The real question is how can we as an audience can expect someone who works in such an environment to be optimistic about the economy. Do you think you’d be optimistic if you were in constant fear of losing YOUR job?

Remember that the media, like manufacturing or, yes, oil production, is a business, and it exists within the larger scheme of an economy. As such, it is nearly impossible for the media to present a completely objective perspective on any event or circumstance, despite all its attempts to do so. The best we can hope for is an accurate presentation of the facts; what we do with those facts is totally up to us.

Monday, March 15, 2010

Dollars & Cents: Frying up a Nest Egg

Everyone wants to be rich, but few are willing to learn how and do what it takes. Instead, many people who had every opportunity to accumulate a great deal of wealth, are agonizing over retirement or struggling to make ends meet.

Before we discuss some very simple tips that will put readers on the road to riches, consider the following: How much money will pass through your hands in your lifetime?

The best way for a person to approach their finances is like a corporation. Any good company keeps track of every single cent coming in or going out. Readers should do the same, and one of the best tools for doing so is by keeping a ledger.

A ledger, despite the intimidating name, is really relatively simple. Readers can use software applications like Quicken, or just keep everything on paper (this should sound familiar to anyone who’s seen “The Untouchables”).

When constructing a ledger, there are three important things to note: who was on the other side of a transaction (who you paid or who paid you), what you were paying for, and how much money changed hands.

On a piece of paper, each time you make or spend any money, you want to note all of these things on a single line (putting the date of each transaction is also helpful), along with a balance running along the right side, which should tell you how much money you have at any point in time.

Once you keep track of your money, where it’s coming from and where it’s going, it’s a great idea to occasionally study your expenses to see where you’re spending most of your money. Look for areas where your spending might be excessive.

One big area to watch is entertainment, which is often full of small costs – a drink out here, a movie there – that add up very quickly. Also, be very conscious of how you use credit cards. For normal everyday purchases (dry cleaning or meals out), don’t put charges on your card that you can’t pay off at the end of the month. If you have big purchases, like new car tires, understand how much you’re going to be charged in interest and work religiously to get your balances paid off as quickly as possible.

The next step is to create a monthly budget, complete with anticipated outlays in different areas, from car insurance to groceries; but keep it within your means. One thing you will find is that after you’ve kept track of your cash flow for awhile, a budget can be extended into the future by forecasting future expenses. For example, if you know that you have big expense coming up next month, you can budget for it now rather than having to scramble to come up with cash later on.

It’s important that, once you get a grasp on your spending and where all your money is going to start setting goals for yourself to retain a certain amount of your income for savings every week or month. If this requires cutting back on spending in some area, consider it. More likely than not, it just requires being more conscious of spending.

Just as important, when you save some money, do yourself a favor and put it away someplace where you won’t be tempted to spend it, like a savings account that you refuse to let yourself dip into.

Remember the old saying, “out of sight, out of mind.”

Once you build up a good amount of money, start talking to people who can help you manage it so that it can grow even faster with interest. There are different types of people to fill this job, from, but you should take time in choosing one, the same way you would pick a doctor. Though advisers often have different requirements for minimum investments, some will work with as little as $10,000.

Going back to the question posed at the beginning of this article, if you make $50,000 per year, that’s about $37,500 per year after taxes. Working for 30 years at that salary means that, during the course of your working life, more than a million dollars will pass through your hands ($1.125 million). The challenge is not how to make more money (though that can certainly help), but how to keep as much as possible from slipping through your fingers.

Wednesday, March 10, 2010

Looking Out for #1

Over the last couple weeks the activity in the markets has dried up significantly. With no real economic news to speak of nothing is moving much lately. From stocks to commodities to interest rates, there’s just nothing doing in the markets.

We’d like to take this opportunity presented as a lull in market activity to discuss another area in the realm of investing, of which investors need to much more conscious. The issue is one where investors simply can’t be too careful, and that is having an advisor you can trust.

In today’s world, big government is present in nearly every aspect of our lives; from using cell phones while driving to chastising automakers for sticky gas petals. In these areas, as well as, if not especially, financial services, people are lulled into a false sense of security by [admittedly burdensome] regulation.

However, in a world where calls are regularly seen in the media for increased regulation on this product or that from one regulatory body or another, few realize just how many hoops we in the financial industry have to jump through before we ever sell a single share of stock.

Any new broker joining the financial industry (any college seniors should take note) is required to go through several background checks, including criminal checks where certain crimes (e.g. DUI) can disqualify a potential broker from the financial industry for ten years or more.

After the checks for criminal records, employment history is reviewed. Any candidate left standing is fingerprinted and handed 1200 pages in study material for tests they need to pass to complete their ‘registration.’

Now, some brokers pass all their checks, go through the fingerprinting and the testing, just to screw up sometime after. Unfortunately for them (or fortunately for investors), they’re hardly off the hook. All employment/criminal/residency/registration information is required to be updated at least annually, and a professional can still be banned or censured from the industry, sometimes for the rest of their lives.

What few investors realize is that, despite this very detailed, involved process by which financial professionals must enter their industry, regulators provide a much great perception of security than actual security (just like TSA). The real goal of regulators is to allow investors to feel safe so that markets can continue to function properly.

Let’s equate the role of regulators to the policemen of the financial world. When was the last time you heard of a police officer arresting someone before they broke into someone’s car, or kidnapped or murdered someone? They don’t. The role of the police is to show up after and figure out who to prosecute. The same is true of financial regulators: They can’t prevent crime; their best hope is to catch it early on and help clean up the mess.

Bernie Madoff and R. Allen Stanford, two of the biggest financial frauds in the history of finance, both went unnoticed for years by regulators, continually coming up clean on audits. Smaller, more local examples abound as well. In Northwest Ohio there was Continental Capital, who received a clean bill of financial health from the NASD (now FINRA) just months before it blew up.

Similarly, Bravata Financial Group, headquartered in Southeast Michigan with offices all across the Midwest, operated an illegal securities business – and a Ponzi scheme – for years before they finally blew up. In both of these [smaller] cases, more than a few clients lost a significant portion of their life savings in that debacle.

The bottom line, the real lesson here, is that investors need to quit relying on FINRA, the SEC, and other regulators to protect them. Consider this the golden rule (the rule to live by if you want to keep your gold!): KNOW THY BROKER.

Just as good brokers should want to know their clients, good clients should want to know their brokers. Know not just their character, but their system. Knowing what to look for will help protect your assets more than any regulator ever could. Though they’ve been discussed in greater detail in previous articles, here again is the unabridged version:

1. Know who serves as the custodian for your account. This is the party that actually holds the cash or securities in your name.

2. Is it possible for your broker to get his hands on your money? An advisor may be able to deduct their fees from your account, for both your convenience and their security of payment. However, if they can get their paws on any more than that you’re just asking for trouble.

3. Who’s verifying the amount of funds/securities in your account, and are they a credible source? Clients of Bernie Madoff received their statements complete with a list of holdings and return information, etc, without any outside verification. It hardly seems smart to repeat the mistakes they’ve already paid to learn.


Protection yourself and your assets from fraud is hardly as difficult as many might think. In today’s world we all need to be a little skeptical and any good broker will understand your inquiries into their way of doing business. Don’t be afraid to ask these questions. You have much more to fear by not asking, and finding out down the road that you should have.

Monday, March 8, 2010

Dollars & Cents: Impetus for Investing

Many people, especially young people, don’t often give serious consideration to saving or investing for retirement. All too often they expect their financial future to be taken care of by either their employers (if they have a career) or the government. Unfortunately, as the last few years have made quite apparent, these assumptions can be very dangerous.

First regarding employers, let’s face facts: Since 2008 the job market is shaky at best. Jobs can disappear at any time, as can 401(k) matching programs (this happened in many companies during 2008 and 2009), as employers continue to look for ways to cut costs.

Many companies want to help their employees save for retirement, but they do expect their employees to have additional savings aside from employer-sponsored plans.

When it comes to relying on the government to secure a person’s financial future, the idea is almost laughable. Put bluntly, our generation will be lucky to ever see a thin dime back from Social Security.

As books, TV personalities and many political activists have shown in detail, our government has shown itself totally incompetent of handling finances, be it fiscal deficits or funding government programs.

What this means to young investors: We need to be prepared to fend for ourselves. We need to write off Social Security as a lost cause and look at 401(k) programs for what they are: a small piece of the pie.

Some readers would undoubtedly argue that their parents take care of their finances, and they will make sure everything is structured properly. Young investors can rest assured that, after 2008, their parents are in hot water themselves, and are probably worried enough about their own retirement, which was just pushed out four or more years, that they don’t have time to worry about their kids.

Young readers need to understand that your parents raised you, fed you, clothed you, maybe even put you through college. You’re on your own now, and need to take care of yourself. If anything, you need to be preparing yourself to take care of your parents, should they ever need your support.

Unfortunately, the statistics tell a very different story. In fact, the savings rate in the United States is among the lowest of all industrialized nations.

Here’s a sad fact: More low-income families think that they are more likely to accumulate money for retirement by winning the lottery than by saving and investing over time.

Something that few investors understand is the power of compound interest. For a startling example, let’s assume that young investors decided to put themselves on a strict saving plan for the next 50 years, so they could accumulate enough money to retire.

These young investors would probably just be starting their career, but they think they can watch their spending enough that they can consistently put away $100 every month for the next 50 years. They plan to invest the money they save with a good financial adviser who can average returns of 10 percent per year [after fees] on their hard-earned money.

Now, a quick calculator reference will reveal that over the course of this 50-year program, this investor has saved away $60,000, certainly not enough to live on through retirement. However, taking into account the interest they’ve been earning year after year, by the time they retire, their account will be worth well over a million dollars, or $1,331,511 to be precise.

Saving and investing are surprisingly small tasks for those who can start early. They require a well-thought plan and plenty of discipline. Our future is not something we can leave in the hands of our employers or politicians; it’s up to us to take charge and play an active role.

Wednesday, March 3, 2010

Blame Game is Up in Capital City

Readers will have to excuse my tone this week, but I’m just plain mad, for reasons that will be apparent to you shortly.

Friends, what we are seeing now is the beginning of what may be (at least for awhile) one of the biggest jobless recoveries in American history. Unfortunately layoffs are continuing across almost every sector, but they are now spreading to even the highest rungs of the corporate ladder.

While 2008 and 2009 were dismal years for blue collar workers, recent layoffs are affecting management and so-called ‘key employees’ just as heavily as less skilled laborers. This isn’t to say that companies aren’t busy as of late. In fact, many companies have been forced to call employees in for overtime.

This evidence is coming out of many sectors that are key indicators of economic activity, such as rail freight. The Dow Jones Transportation Average is one of the most-closely followed stock market indicators in the world for precisely this reason.

Unlike the Dow Jones Industrial Average, which is an excellent gauge of the profitability outlook for some of this nation’s largest firms, Dow Transports provide a much better pulse of economic activity in this country on the ground floor.

From the ground floor to the top floor, companies are beginning to spur their operations. Thankfully, unlike years past, they are choosing to leverage their people rather than their balance sheets. Why service the debt when you can’t put it to work for you?

In other words, why would they have any demand to borrow money when they can’t earn any interest on their borrowings? Quite the contrary, companies are lately building up massive cash positions, which they are now using to streamline operations, consolidate facilities or, in some cases, buyout competitors.

For this reason, much more is being required of the now-slimmed-down management teams in this country. Companies need to move key players quickly and efficiently, evidenced by a recent rise in corporate aviation purchases (e.g.: light business jets).

Global warming aside, corporations are putting significantly less emphasis on ‘going green’ and are much more focused on efficient operations (as they should be). It is no longer considered a good use of a CEO’s time to wait hours to pass through security before getting on a commercial flight.

In short, it is plain at this point in time that companies are doing all they can to cut costs and maximize revenue with each opportunity they are presented. The biggest problem left facing business is that 53rd card in the deck: the Joker in Washington.

The weakness that remains in the economy is not due to finance or economics, but to the cloud of uncertainty hanging over possible policy changes in Washington.

Each and every one of the proposals coming out of the White House has far-reaching implications for business in this country, and it is apparent that this nation’s leading businesses are smart enough not to commit the assets to expand our bring back workers until they have a better idea of how things will play out.

Oh how our words can come back to haunt us. Both Rahm Emanuel and Hilary Clinton are on the record as saying that they don’t want to waste a good crisis. Now it seems they are bound and determined not to let this latest crisis end until they’re sure they’ve taken full advantage.

Now, I certainly can’t speak to the feelings of readers, colleagues, or fellow market commentators, but I can tell you that I am not happy about what I see happening in Washington. The blatant irresponsibility with which the US Government has been run by the 545 who are truly accountable (1 President, 9 Supreme Court Justices, 100 Senators, 435 Representatives) is absolutely astounding (Reese, 1995).

My own feelings are best summarized by a quote from Howard Beale in the 1976 movie Network, “I’m mad as hell and I’m not going to take this anymore!”