A Quote for Today's Economic Times - From an Unusual Source!

From Winnie the Pooh

“It's snowing still," said Eeyore gloomily.

"So it is."

"And freezing."

"Is it?"

"Yes," said Eeyore. "However," he said, brightening up a little, "we haven't had an earthquake lately.”


A. A. Milne

Are Any of You Runners, Joggers, or Have "Bad Knees"?

I've always had "bad knees" - jogging was never a possibility for me. That is until I found these great shoes that actually have springs in them! I got the "trainers" not the running shoes, but for the first time in my adult life I can now jog without it bothering my knees!

The "runners" were actually "Banned in Boston" - yeah, the Boston Marathon banned them for giving runners an unfair advantage. Don't know how it settled out, but the maker loves to use that for advertising purposes!

They have running shoes, trainers and walkers. Don't laugh at the source I found them at - I get lots of catalogs 'cause I'm a mail order/catalog buyer (I hate shopping at the stores):

Credit Card Offer - Reduce Your Balance and Get a Reward

I got an interesting offer in the mail the other day from one of my credit cards. This is one that had already reduced my credit line down to just what I owed a few weeks ago. I had taken advantage of a previous offer to get a low interest rate if I transferred other balances to it. Since it was pretty max'd out it the credit line only went down $1,240 - strange number, huh? Basically the computer looked at what I owed and added enough for the next interest accumulation and that became my new credit line. I figured that if I pay-off any more of it they would probably reduce my credit line even further. So that that card has been getting the minimum payment, until the special interest rate offer expires.

The new offer from them is interesting...for the next 4 months they will match 20% of the amount over the minimum payment I make, up to $550. Sounds good, but the catch is that they will temporarily suspend the ability to charge on the account and at the end of the 4 months they will reduce the credit line by what I paid over the minimum plus the 20% they give me.

In my opinion this is a more reasonable way to get people to pay down their credit balances - give them a financial incentive and tell them up-front that they will also be lowering their available credit line. The other way, just lowering credit lines arbitrarily, leaves people without credit they may have been counting on to pay college tuition, etc. And many, like me, will quickly max out their available credit with a cash advance in order to make certain that money is available for upcoming expenses or "buffer money" for those unanticipated expenses.

For example this past spring our beloved dog unexpectedly collapsed while we were 3,000 miles away and was diagnosed with a very aggressive blood vessel cancer; they didn't expect her to survive the night. We put several thousand dollars on our credit card for transfusions, surgery, etc. in order to buy (literally) time for us to return home and spend a few weeks with her before she passed. For us, not having had that credit available would have been tragic emotionally.

The availability of credit in our society provides for flexibility; yes, it has gotten out of control and some people have used it to live beyond their means, but the random reduction of credit lines without any reason (late payments, etc.) puts more of a strain on people that are managing their credit. And in many cases it will have a backlash when people who have been paying down debt begin to save that money instead and pay only minimum payments so that they retain their ability to respond to unforseen needs.

Employees and Employers - What Are The Issues?

Ok, so it it just us, or are all business owners experiencing problems with employees?

We have always operated our business on the basis of treating our employees the way we would like to be treated; after all, we were employees of someone else a long time ago.

We have always had a policy of “you have a life,” meaning if you need to take time off to go to your kid’s school, great, just make sure you’re work is covered by someone else - we don’t want you to work overtime; it means we are understaffed - we want you to enjoy coming to work, not dread it.

While we were active in the business on a daily basis it worked great! The majority of our employees have been with us 10-18 years. At one point I joked that we needed to hire a “token” young person in order to get our health insurance rates down! And that is my issue…it seems that the younger people take advantage of our policies; don’t understand the incredible flexibility we offer. We never fired anyone; we worked with them. Seems these days that attitude is passe. We’ve fired at least three people in the last year (all new hires) for taking advantage of our flexible policies and just blatant disregard of basic business policies (not calling in when you had to take time off unexpectedly, using a company laptop during work hours to download photos and songs, etc.).

Some of it I take direct responsibility for - my former part-time assistant had been padding her hours for almost 4 years - to the tune of 50 - 75% more than was realistic. I never reviewed her timecard (hand created) I just assumed she would be honest.

Other things we've grappled with time and time again over the years are experiences with employees just up and leaving, including never calling and leaving us frantic thinking they were ill or injured, etc. I think that's a universal experience for anyone who's been in business any amount of time, no matter how "good" you are to your employees.

We have always tried to treat our employees exceptionally well, remembering what it was like to be an employee, not an employer. The old Golden Rule concept. And sometimes that has come back to bite us; but my husband, who is the more accepting of life's frustrations always says, "let it go...don't let it drag you down to their level." "What goes around comes around" is something he would say to me when I'd be upset about being taken advantage of...and his other favorite saying is "always err on the side of generosity, you'll never be in the wrong." I guess that goes for generosity of spirit as well as monetarily.

When I argued with him once about it "not being right" he quietly pointed out that the difference between how he looks at life and how I do is that he never expects it to be "right," or "fair" and therefore he doesn't let the negative things get to him and is pleasantly surprised when things go well. It's actually a much more reasonable approach and I have tried to emulate it. When I succeed at it I find I am much less stressed and when I fall back into my old ways I end up harboring tension and negativity, neither of which is good for one, or one's subconscious mind (remember the quotes, you are your thoughts and you become what you think).

Does it change how we treat current employees when we've been "burned " in the past? Yes and no. We still try to err on the side of generosity and remember the Golden Rule, but we have learned to temper it with reality and know that some people will always take advantage and not respond in kind. So we look at what is best for the business first and foremost now, and then at what we can afford to realistically do for our employees, whether it be a monetary issue or time-off, etc.

Friends All Over the World

When our kids were very young we were just starting our business and they had to go to daycare before they were even one year-old. As they got a little older and began school I felt badly that their summers would be spent in that type of environment. I found a wonderful program that provided European girls the opportunity to come to the U.S. during 10 weeks of the summer and be Au Pairs for American families.

Each summer we had a new person...first from Belfast, Northern Ireland then Poland, England, Sweden and Croatia. We adults got to learn a lot about their home countries and the environments they grew up in and our kids got great care, in their own home, and learned that no matter where someone lived or how they sounded, they were all just the same as us.

On our 2 weeks in Europe we got to visit our Croatian Au Pair, now living in Venice (just a 3-hour drive from Zagreb, Croatia, her hometown). And she had just had a baby! What deja vu! Our daughter is now almost the same age she was when she came to us that summer twelve years ago!

We've kept in touch with the others and gotten invitations to weddings, photos of their kids and cards keeping us up-to-date with what was happening in their lives. But actually being able to visit with someone is the best.

We've also made friends with hoteliers and restaurant owners during our travels and it is always so much fun to see them again and to be greeted as not guests, but family in another country.

My husband and kids were hesitant at first when I planned our first family trip to Europe. They were afraid of not being able to communicate with people. But with a phrase book and memorizing the phrases in their languages for "I'm sorry, I don't speak XXXX," please and thank-you got us through with no major problems as we traveled around.

But it was embarrassing to only know English; almost everyone spoke at least some English and often very fluent English. At one point we stopped at a restaurant in the countryside and no one spoke more than a word or two of English. The waiter tried speaking to us in his native French, then Italian and Spanish. We made ourselves understood, but it was obvious he was shaking his head at the fact that he could communicate in 3 languages and we could only speak ours.

Maybe it's just the close proximity of countries in Europe that speak different languages, but I think its more that we don't put enough emphasis on being bi-lingual or even multi-lingual. Our Au Pair living in Venice spoke 5 languages fluently when she was in her early 20's; she's now up to 8 and working on yet another! Now she may be the exception, but it also allows her to go almost anywhere - and she has, often times staying on after her vacation and working, as she did upon visiting the Canary Islands a few years ago. Language allows for a very flexible, fluid lifestyle.

A Hedge Fund Manager Quits - Read His "Goodbye" Letter

I am back from my two weeks in Europe and ready to jump back into my daily blog posts. Today I found this very interesting "Goodbye" letter from a Hedge Fund manager on CNBC and definitely it is an interesting read:

Hedge Fund Manager: Goodbye ... And Think Pot

Topics:Earnings | Economy (U.S.)

By Matthew Malone, Portfolio.com | 17 Oct 2008 | 12:48 PM ET

From the Scorched Earth Files:

Andrew Lahde, manager of a small California hedge fund, Lahde Capital, burst into the spotlight last year after his one-year-old fund returned 866 percent betting against the subprime collapse.

Last month, he did the unthinkable -- he shut things down, claiming dealing with his bank counterparties had become too risky. Today, Lahde passed along his "goodbye" letter, a rollicking missive on everything from greed to economic philosophy. Enjoy:

Today I write not to gloat. Given the pain that nearly everyone is experiencing, that would be entirely inappropriate. Nor am I writing to make further predictions, as most of my forecasts in previous letters have unfolded or are in the process of unfolding. Instead, I am writing to say goodbye.

Recently, on the front page of Section C of the Wall Street Journal, a hedge fund manager who was also closing up shop (a $300 million fund), was quoted as saying, "What I have learned about the hedge fund business is that I hate it." I could not agree more with that statement. I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.

There are far too many people for me to sincerely thank for my success. However, I do not want to sound like a Hollywood actor accepting an award. The money was reward enough. Furthermore, the endless list those deserving thanks know who they are.

I will no longer manage money for other people or institutions. I have enough of my own wealth to manage. Some people, who think they have arrived at a reasonable estimate of my net worth, might be surprised that I would call it quits with such a small war chest. That is fine; I am content with my rewards. Moreover, I will let others try to amass nine, ten or eleven figure net worths. Meanwhile, their lives suck. Appointments back to back, booked solid for the next three months, they look forward to their two week vacation in January during which they will likely be glued to their Blackberries or other such devices. What is the point? They will all be forgotten in fifty years anyway. Steve Balmer, Steven Cohen, and Larry Ellison will all be forgotten. I do not understand the legacy thing. Nearly everyone will be forgotten. Give up on leaving your mark. Throw the Blackberry away and enjoy life.

So this is it. With all due respect, I am dropping out. Please do not expect any type of reply to emails or voicemails within normal time frames or at all. Andy Springer and his company will be handling the dissolution of the fund. And don't worry about my employees, they were always employed by Mr. Springer's company and only one (who has been well-rewarded) will lose his job.

I have no interest in any deals in which anyone would like me to participate. I truly do not have a strong opinion about any market right now, other than to say that things will continue to get worse for some time, probably years. I am content sitting on the sidelines and waiting. After all, sitting and waiting is how we made money from the subprime debacle. I now have time to repair my health, which was destroyed by the stress I layered onto myself over the past two years, as well as my entire life -- where I had to compete for spaces in universities and graduate schools, jobs and assets under management -- with those who had all the advantages (rich parents) that I did not. May meritocracy be part of a new form of government, which needs to be established.

On the issue of the U.S. Government, I would like to make a modest proposal. First, I point out the obvious flaws, whereby legislation was repeatedly brought forth to Congress over the past eight years, which would have reigned in the predatory lending practices of now mostly defunct institutions. These institutions regularly filled the coffers of both parties in return for voting down all of this legislation designed to protect the common citizen. This is an outrage, yet no one seems to know or care about it. Since Thomas Jefferson and Adam Smith passed, I would argue that there has been a dearth of worthy philosophers in this country, at least ones focused on improving government.

Capitalism worked for two hundred years, but times change, and systems become corrupt. George Soros, a man of staggering wealth, has stated that he would like to be remembered as a philosopher. My suggestion is that this great man start and sponsor a forum for great minds to come together to create a new system of government that truly represents the common man's interest, while at the same time creating rewards great enough to attract the best and brightest minds to serve in government roles without having to rely on corruption to further their interests or lifestyles. This forum could be similar to the one used to create the operating system, Linux, which competes with Microsoft's near monopoly. I believe there is an answer, but for now the system is clearly broken.

Lastly, while I still have an audience, I would like to bring attention to an alternative food and energy source. You won't see it included in BP's, "Feel good. We are working on sustainable solutions," television commercials, nor is it mentioned in ADM's similar commercials. But hemp has been used for at least 5,000 years for cloth and food, as well as just about everything that is produced from petroleum products. Hemp is not marijuana and vice versa. Hemp is the male plant and it grows like a weed, hence the slang term. The original American flag was made of hemp fiber and our Constitution was printed on paper made of hemp. It was used as recently as World War II by the U.S. Government, and then promptly made illegal after the war was won. At a time when rhetoric is flying about becoming more self-sufficient in terms of energy, why is it illegal to grow this plant in this country?

Ah, the female. The evil female plant -- marijuana. It gets you high, it makes you laugh, it does not produce a hangover. Unlike alcohol, it does not result in bar fights or wife beating. So, why is this innocuous plant illegal? Is it a gateway drug? No, that would be alcohol, which is so heavily advertised in this country. My only conclusion as to why it is illegal, is that Corporate America, which owns Congress, would rather sell you Paxil, Zoloft, Xanax and other additive drugs, than allow you to grow a plant in your home without some of the profits going into their coffers. This policy is ludicrous. It has surely contributed to our dependency on foreign energy sources. Our policies have other countries literally laughing at our stupidity, most notably Canada, as well as several European nations (both Eastern and Western). You would not know this by paying attention to U.S. media sources though, as they tend not to elaborate on who is laughing at the United States this week. Please people, let's stop the rhetoric and start thinking about how we can truly become self-sufficient.

With that I say good-bye and good luck.

All the best,

Andrew Lahde

In Italy...Food, Wine and Conversation

Sorry for the lack of daily posts, but I'm traveling in France and Italy and after a day of sightseeing, food and wine I fall into bed and am asleep before my head hits the pillow! But today we slept in a bit so I have a little energy left!

When we were in Florence we had dinner at a restaurant we have been to many times before. The first time was in the summer of 2002 when it seemed no one was traveling, especially Americans. So the manager of the restaurant spent time talking with us and we found out quite a bit about him. And our teenage son found an internet cafe right next door so we spent time drinking wine and talking to our new friend every day.

We went back the next summer and he greeted us as old friends, and the summer of 2004 found us visiting with him again. By now we were "family" and we heard about his recent marriage and laughed and talked over a long dinner. Until this year we haven't been in Florence again - but after a very slight pause when we approached him he broke into a big smile and welcomed us back again, this time with our friends. But he asked about the children and remembered what we had talked about four years ago. Friendship truly does last regardless of how much time passes.

So in our conversation at dinner the other night he expressed an interest in our upcoming Presidential election. And then he made a comment that we didn't quite understand, "Politics, it's all just pasta." He laughed and said "You know, spaghetti with red sauce, spaghetti with clams, spaghetti with meat sauce...it's still just pasta!"