The Thrill of Victory, the Agony of Defeat

The modern Business environment must be lived to be understood. It is the Land of ‘cover your own ass’ Memos, which provides Protection from any counter-cyclical degradation of a business initiative. They come in all shapes and sizes, covering almost any extension of Risk by any measure. This CFO probably even sent a Memo stipulating a Drop in Profitability, if a certain level of Loan extension was not maintained. I even know of a lawyer who sent a Memo detailing the dangers of not settling a Case out of Court, when the Jury was already deliberating the Case; predated of course. Memos extend the life on practically no Executive, as procedural arrangements are examined instead of Memos, but Journalists actually believe Superiors should remember them longer than their TV Guides.

The Fed is in a remarkable position to scare the Markets, like quenching hot metal by emersion in water. I will advocate a full Percent rise in federal funds rate. It is SOP to state that raising rates would kill the Recovery, but I would ask what Recovery. All the Numbers are headed down, with expectation of acceleration. No One expects that easing Oil prices will stop the erosion; what they don’t tell you is that raising the fed funds rate will likely produce no alteration of pattern in these economic events, as current commitments maintain the loan levels. The increased fed funds rate, though, would introduce a greater Profitability to the Banking structure, now that there is real suffering from Write-Downs. I guess I must play the Ogre again.

This simply proves that no matter what you do, you are screwing up when it comes to the economy. Gas tax revenues are necessary to build and maintain Roads, but Consumers are saving their Pocketbooks, rather than the Road Maintenance crews. I would explain that such Problems always exist when economies are over-capitalized, and Maintenance Costs exceed capable Payments from normal operations. Some Readers might not understand, but the essential Problem is that Cars and Roads are both too expensive, and too many Vehicles have been sold already; the excess number having driven up the Oil pricing, and cut down the Miles driven. Way too much Capital investment, way too much utilization of Capital. Does it remind One of health care? lgl