Monday, January 26, 2015


Greece is in the news again, which is ok, I guess. They elected a new government, the “left-wing, anti-austerity Syriza party.” Apparently, the Grecian voters were tired of “right-wing, austerity?”
So now they are going to proceed to “spend their way to prosperity,” using somebody else’s money. Who do they think they are, California? The new leaders were elected to end the “Troika” era when the European Union and others came together to bail out Greece in return for sound fiscal policies. The Greek leaders are going to re-negotiate those demands. Apparently, they are like others we know who want the money but not the rules. Sort of like teenage girls where money and hot water are to be used until all gone.
No, Greece is not California. The Gross National Product of Greece is about the same as that of Missouri, and that’s a lot less. While we Americans may be a little ticked off if Missouri decided to collectively kick back on the shores of Lake of the Ozarks and forget about working or keeping a sound fiscal house, it wouldn’t make much of a ripple on the international economic ticker board. I know, there are a lot of differences, just sayin’.
This is when I yearn for my old subscription to “The London Economist.” Unlike everything I see today, the “Economist” tended to be ahead of the news, not behind it. They seemed to grasp the significance of events, not just the cosmetics. Getting a little tired of “If it bleeds, it leads” journalism.
For instance, I would like to see what is happening to two economies that have (to my knowledge) little or no oil production—Ireland and Japan. Ireland’s economy is similar in size to Greece, but it is also English speaking and has attracted a lot of foreign investment over the last couple of decades due to that fact and tax laws. Maybe tax laws speak more loudly? Nevermind, just interesting.
Japan, on the other hand, is a major world player. I see very little about the effect of significant economic events on Japan’s total economy, despite my assumption that a major economy has greedy needs for energy (like oil?) and tends to benefit from a strong dollar making their goods “cheaper” in the US market. Seems like folks such as Toyota might benefit from that? How about their shipping interests?
Still, it is a niggling thing that the Euro has dropped to under $1.10 (for a brief moment) and oil is on another downward jaunt. But the stock market is up.
Back to the drawing board.

Saturday, January 24, 2015

The Milk Check

This Blog is primarily to record some of the experiences and observations of my life for the potential benefit of my kids, grandchildren and the people who I think might be interested. Due to that, there is little of significance, although my sometimes pontificating may indicate that I pretend otherwise.

The gross payment for the milk produced was delivered every two weeks, so we were more like factory workers than farmers in that regard. My dad kept books like most farmers of the day; what he owned was in the left pocket of his bib overalls and what he owed was in the right pocket. Not much else mattered.

There was one bank account which meant that my mother had no resources for “hiding” expenses and that created for her a dilemma one Christmas. So, she “appropriated” one of the milk checks. It didn’t get to the bank, she delivered it to John, the local furniture retailer and mortician—furniture on the main floor, viewing upstairs, bodies in the basement.

The word “milk” was pronounced differently at home. Not as noticeable as our pronunciation of “creek” which was definitely “crick,” but not like standard, talking-head way of saying it. Came out more like “melk.”

Wallie noticed that the “melk check” was missing, but chalked it up to some administrative miscue at the dairy and decided to figure it out later. The check was swapped for his Christmas gift, a recliner chair. This was probably in the late 1950’s and I have no idea what that chair sold for, but it struck me the other day that the production of our capital (say, 60 cows, barns, feed, vet services, etc) and our labor (at least two men, 3 hours minimum per day, 7 days per week for two weeks) was traded for a chair. We didn’t know how poor we were and how little we were paid for our efforts.

As little as it was, it kept us on the farm. Every March 1, the traditional day for selling farm land and for the rent to begin, our neighbors would sell out and leave for California where they could buy a chair for less than two weeks of work.

Sunday, January 18, 2015

Greece, Exxon and markets

Greece is pushing the euro and the rest of the world economy around a bit these days. Nothing new as, over the last five years, Greece has had two bailouts, three Prime Ministers, and two defaults. And negative GDP growth.

Let’s talk about that GDP—with 11 million people, Greece produces a GDP of $242 billion accounting for 0.39% of the world’s economy. Exxon Mobil, with 75,000 employees (down from 98,000 in 2001), produces revenue of $420 billion or nearly twice as much.

Exxon is reviled; Greece is bailed out. Another one is coming, but sooner or later, the rest of Europe is going to get fed up and kick Greece out of the euro.

I wish I were smart enough to know what this “means.” Would suggest it will be a depressant on the financial markets, probably continue to drive the euro down and the dollar up. After all, back in 2008 when the “Great Recession” was going on, it took $1.59 to buy €1.00. As of last Friday, January 16, 2015, that was down to $1.15.

Good news for the dollar? Well, not exactly. US goods are that much more “expensive” on the global market.

Another part of what this means? Take a look at some history:

·         In 2008, oil as measured by West Texas Intermediate (WTI) was $133 and the Euro was at $1.59. So, if you had Euros, it cost you €84 to buy a barrel of oil

·         By the winter of 2008/2009, oil had dropped to $39 per barrel and the Euro had dropped to $1.25 as the recession hit Europe, too. A barrel of oil cost €31. Instead of a drop of 71%, it only dropped 63% in Euro terms

·         In the summer of 2014, WTI was $103 and it is now $46

·         Last summer, the Euro was $1.39 and it is now $1.16

The drop in oil in 2008 and now is interesting. The drop in the Euro is also interesting. But here’s another “factoid” to think about:
·         The S&P 500 in the summer of 2008 peaked at 1,358

·         By March of 2009, it had bottomed at 683, a drop of 50%

·         Last July, the S&P 500 was at 1,987

·         Today, it is 2,019 or 2% higher than it was
Apparently the wise ones who are stock buyers believe that the economy is thriving although there is some frightful stuff going on in the huge oil sector and the European community is a bit shaky.
Wonder what will really happen? Wait and see.

Tuesday, January 6, 2015

Black Panthers

Both Jerry DeFrance and I get a daily email from an outfit called “Delancey Place.” They excerpt a few paragraphs from a book each day and give you info on how to buy the book. They make a small fee if you buy it through their link.

Many times, the excerpts are entertaining, and sometimes controversial. Today’s was about the Black Panthers and gave a glowing description of their rise, their community service and their generally high level of education, including how one founder, Huey Newton, graduated from Berkeley High as a functional illiterate and then taught himself to read by repeatedly going through Plato’s Republic. Nothing about them being a menace to the general population.

Here’s another view of the Black Panthers:

Pete...around 1968, Stokely Carmichael of the Panthers had disappeared from public view.  I was there when he reappeared in Panmunjom in the middle of the DMZ of the Korean peninsula.   He came through with a small North Korean tour group. The buzz got around there quickly.  He approached one of our guys, a black fellow, also college degreed and began to berate him some for his service.  Our guy, Brook, just grinned and said "bullshit" and walked away. 
From Jerry DeFrance who was an MP stationed at the DMZ. All the MPs stationed there were tall, physically fit, good-looking men, deliberately selected to tower over the smaller North Koreans. They would be on hand when the negotiations were going on in the modest building in the DMZ.

Carmichael’s association with the North Koreans is similar to Traitor Jane Fonda’s treachery that resulted in the torture and death of American prisoners in North Vietnam. We should not, in my opinion, give awards to people who did those things as if all is forgotten. And books should give a balanced account.

Yeah, I know. Probably have better luck waiting for pigs to fly.

PS Jerry gets this post, so if he has corrections, they can appear.