There was a time when I thought I wouldn't have anything to say; now I can't seem to shut up.
Anyway, nothing to say today, listening to the rain and watching the mice play. I've read your journals but I'm not about to start commenting on children. Having once been one is enough.
I hope you all enjoy the weekend.
Peace.
Notes from the financial front lines:
I'm not a financial genius; not even a whiz, so this may be less cohesive than usual. But ever since I learned that I needed to understand what sort of processes were involved in the making of profit, I have mercilessly pummelled my brain cells in an attempt to grasp some of the particulars.
I have lately tried to compare our situation to that of a small business, in light of what I have been able to absorb.I wouldn't say we're "flush with cash", but we have a modicum analogous to what a small business might have.
The 'Bonnie & Malcolm Company' has, of course, overhead, which amounts to necessities - a space in which to conduct business (a home), utilities, equipment (car, clothing, food, etc.) We have two employees (ourselves), so we have a payroll.
A small business has several options - it can return a dividend to its loyal shareholders, it can hire more workers, it can buy new equipment, it can invest its cash, it can buy back shares.
Returning a dividend makes shareholders happy, but investor goodwill isn't all that important unless investors start bailing, which seldom happens in a bull market, because many investors equate paper appreciation with actual income. It's only when investors feel as if they're making less than a good return that they start to get antsy.
Curiously enough, that seems to be the case these last few years, as investors burned by the tech bubble are less likely to put their money into high-flying, low-paying stocks. Also, many investors, particularly large institutional funds, are attempting to make companies more responsive to shareholders (e.g., Disney.)
Returning money to investors, of course, is the least palatable option - after all, that money is not being put to use for the good of the corporation; it's basically going to waste.
Say, for example, that the B&M Co. takes money from relatives and promises to give them a return on equity. Since the B&M Co. would, in this case, be a hedge fund, we would have to make wise investments in order to satisfy the relatives. Every dollar that we returned to them is a dollar not being put to use for ourselves.
In today's competitive business environment, hiring more employees is not a very good option either, because more workers often means added expenditure and less productivity, leading to less profitability. And profit, after all, is the main, perhaps the only reason for the existence of a business.
If the B&M Co. were to hire nieces and nephews, said nieces and nephews would expect to be paid a decent wage and would probably also want health benefits. (Besides, they might turn out to be layabouts and ne'er-do-wells.) Our company would be better off hiring 'contract workers' (aka 'temps') who would be paid by the employment agency and would not expect the B&M Co. to give them benefits or vacation days. In extreme cases we might even outsource.
Buying new equipment is only necessary if old equipment becomes too expensive to maintain, or if better, more productive equipment is available.
(The B&M Company is as thrifty as any small business in this respect.)
Investing excess cash is an attractive option, because properly invested money will earn either a return on equity or actual income, without having to produce tangible goods or services.
(Needless to say, this is a very attractive option for the B&M Company.)
The last option, buying back shares from shareholders, is the most desirable of all, from the company's viewpoint, because a continuing source of cash drain is closed off and shares are concentrated in the hands of fewer people. An added benefit is that there is more cash with which to invest. In extreme cases, the company might well go private, doing away with outside shareholders altogether. (This option works best if shares can be repurchased at a reasonable price.)
The B&M Co., when graced with an infusion of cash, hastened to buy back its shares from its 'investors' (i.e., credit card companies.) Happy B&M Co.!
I hope you don't mind my sharing this little exercise in financial self-explication with you. As I age, I find that it helps to write things down so that my thoughts might more easily wrap around a particular subject. Now I have to sit back and study it awhile so I can fathom 'what it all means'.
Peace.
There's something happening here.
What it is ain't exactly clear.
There's a man with a gun over there,
Telling me I got to beware.
I think it's time we stop, children, what's that sound?
Everybody look what's going down.
There's battle lines being drawn.
Nobody's right if everybody's wrong.
Young people speaking their minds,
Getting so much resistance from behind.
I think it's time we stop, hey, what's that sound?
Everybody look what's going down.
What a field day for the heat.
A thousand people in the street,
Singing songs and carrying signs,
Mostly say, "Hooray for our side."
It's time we stop, hey, what's that sound?
Everybody look what's going down.
Paranoia strikes deep:
Into your life it will creep.
It starts when you're always afraid.
You step out of line, the man come and take you away.
We better stop, hey, what's that sound?
Everybody look what's going down.
Stop, children, what's that sound?
Everybody look what's going down.
This became an anthem of sorts to those of us who came of age during the '60s and early '70s, when Richard Nixon reigned the country.
It is coming to seem relevant again now that George Bush and his radical Republicans rule the country.
Peace.
My favorite quote from the press conference:
"It's in our country's interests to find those who would do harm to us and get them out of harm's way." - President George W. Bush, press conference, April 28 2005
Yes, it was taken out of context, but I'm fairly certain I understand what the phrase "in harm's way" means, and I know what its opposite meaning is. I'm not sure that W. does.
Peace.
This will go down as one of my all-time favorites:
Incoming cloud forces Bush into safe bunker
Julian Borger in Washington
Friday, April 29 2005
The Guardian
President George Bush was bundled into an underground bunker, Dick Cheney was evacuated to an "undisclosed location" and heavily armed secret servicemen took up defensive positions when a fast-moving cloud scudded towards the White House, it was reported yesterday.
(Article continued on The Guardian's website.)
It reminds me of the Conan O'Brien show where Triumph the Insult Comic Dog was shown doing the weather report on a local Hawaiian news station:
"Oh, my, Hawaii is threatened by . . . . . clouds!"
It would be damned difficult to make this stuff up.
Peace.
Well, more like a shrub.
Those ophidian eyes. That supercilious smirk. That whiny tone of voice. That charming mispronunciation and those endearing malaprops. Our beloved president must be holding another of those frequent news conferences that he enjoys so much. I watch attentively, hoping to pan some nugget of substance from the river of fertilizer that spews from the TV screen. Alas. Once again, I am bitterly disappointed. Oh, well, Survivor's on. Later.
<Photo courtesy Eastman Kodak CO.