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Saturday, September 23, 2023

It’s Your Money, The Way I See It, August 2010

By Andrew Robbins

CSMS Magazine staff writer

I spend my summer in Michigan’s Upper Peninsula reading, windsurfing, and speculating in the equity market. What follows are my observations of our society and how they may impact my investment decisions.

The best scam: I just read an ad on the net and it encouraged borrowers to apply for an educational loan. “Use the proceeds to improve your employment skills.”

 This summer I spoke with a very attractive and highly educated young woman. She told me how she volunteered to leave a well paying job with a major corporation. “I did not like what I was doing. The incentive package to leave and filing for unemployment, while I pretend to look for work, provides ninety-two weeks of income, unemployment benefits. Within that time frame I will obtain another advanced degree. Education will open the employment door to the career I really want!” she said.

This woman is a thinker, a planner! We are financing her free education. She gets my vote for the best scam. I wish her the best. I like to see people succeed.

Not everyone drawing unemployment benefits desires immediate employment. Some are highly rational and deceptive. They milk the system and ultimately they will benefit from the economic downturn.

However, if you choose to be unemployed for nearly two years and you do nothing to improve your job skills, that group has just shot themselves in the foot.

Affirmative Action: Lots of people are discouraged and joining the anti-Obama camp. I like our president, I voted for him.

Why? Is the most frequent question, “Why did you vote for him?” My response is quite simple, I do not believe in affirmative action.

We elected a man, who happens to be black, to be the leader of our nation. Yet, there exist many groups who claim they need special consideration for injustices their race endured. When a black man is elected President of the United States, it is past time to end all affirmative action programs.

Consider the six-billion neighbors who want what most Americans take for granted. Our global competitors do not care what sex or skin pigmentation we are. They are concerned with food, shelter, clothing, medical care, and clean air and water. They are willing to work long hours while they educate themselves and provide for their family. They are the Global Economy that we are immersed within.  

When I worked for an employer, the organization’s affirmative action plan required the promotion of a Hispanic female. Now enters the blue eyed Scandinavian blond, she was born and raised in Minnesota. She applied for the opening. She was married to a Hispanic gentleman and, through marriage, she took his last name and that qualified her to change her race. The promotion was hers.

The down side, a true Hispanic female was never promoted.

We are Americans and like it or not we are in a winner take all global war. The private sector and governments must employ the best labor dollars can command. Quotas are just one of many obstacles that continue to divide us and lower our performance potential.

One of the books I recently read, In the Foot Steps of Eve written by Lee Berger is an accumulation of scientific evidence, suggesting our planet’s birth began six-billion years ago and that our closes living ancestor maybe the great ape. I am not debating how civilization evolved. But, I do believe the human physical differences that allowed us to develop and we see in each other, such as skin pigmentation, color of hair and eyes, height, etc., are the result of geographic location, availability of food, and thousands of years of extreme isolation.

Think about it, only in the past five hundred years have humans had the ability to explore every known land mass. I wonder what humanity will look like one million years into the future. What do we call separation by race? Will it dissolve as many inter-marry? Will society blend so that we no longer are guilty of profiling whole groups of people base on extremists’ actions?

In the 1960s, race relations in our country were violent. Yet, as portions of Detroit burned, those on the battle field of Vietnam were dependent on the holy unity between African Americans, Asian Americans, Hispanic Americans, Native Americans, and White Americans. As a fire-fight near ending, I held the wounded arm of a black sergeant, an American soldier. While applying pressure to the wound and looking deep into his bleeding tissue, I remember seeing a bright white membrane. We had often spoken of history and injustices, my pat answer had always been, “My family never owned slaves.”  Yet, seeing the bright white membrane it just rolled out of me, “See deep down, you are white after all.” My shock comment made him laugh and for a moment forget his pain. 

Outwardly we have physical differences; below the surface we are quite similar.

One of CSMS Magazine’s primary purposes is to end racial bias. This magazine is dedicated to building understanding between diverse groups. Though we may not look identical, we truly are cousins within a single family.

Today, our economic survival is dependent on diverse groups of Americans uniting into a single entity. America is engaged in an all out ‘Holy War’, that conflict is readily described by two words: Global Economy. United we compete for our survival and improved our quality of life.

The President’s plan for redistribution of wealth begins with an educated workforce, jobs, and an ability to provide global products and solutions. Our nation’s plan to maintain and improve our quality of life must incorporate the laws of economics. The laws of economics are more powerful than is commonly understood, for the world is ruled by little else. Ignore the law and economic pain impales the non-believer.

Fixed Income: Above, I praised the president. My personnel belief is that our president has surrounded himself with economic idiots. It is the private sector that creates meaningful employment. Governments are a necessary encumbrance, but left unchecked they create economic chaos.

As this government claims to reap profits from the bank bailout I scream, “Why did you not give the private sector an opportunity to take on that risk?” Under the government’s plan, billions of dollars were diverted from the private sector to the US Treasury.

Next, the government fueled an environment where banks lend only to the federal government. This was one more cloaked plan to use taxpayers’ money and capitalize banks.

These unfortunate bureaucratic decisions took place at the same time the government froze Social Security, cost of living benefits, for two years. Then factor in bank certificate of deposits with a yield of one percent and it is no wonder Americans are in a preservation of capital mood and not spending.

Financial headlines report Baby Boomers fear the stock market and are placing their money in long term bonds. Back in the 1980s, a Wall Street Journal article followed a ninety year old man buying the thirty year bond with a yield of fourteen percent. I remember asking myself, “Why would anyone in their nineties buy a thirty year bond?” 

Advance two years into the future and the answer was obvious. As interest rates lowered to seven percent, a one-thousand-dollar bond with a fourteen percent yield had a market value of nearly two thousand dollars.

If current-day authors are correct and investors are buying into stocks and bonds based on dividend or yield, there is a downside risk. For example, if we enter a period of inflation and interest rates quickly rise, the laws of economics, the market, will price your investment based on current yield.

If your initial investment was one thousand dollars and a yield of five percent, you would expect income of fifty dollars per year. But, if interest rates soar, say to ten percent, that same fifty dollar yield commands only a five hundred dollar investment. Unless you plan to hold to maturity, fixed income investments require constant monitoring!

Note: CSMS Magazine and the author are not in the business of providing financial services or advice. Prior to investing, readers must seek professional assistance.

Andrew Robbins is the author of: It Took My Breath Away; One Man’s Experience May Save Your Life. He may be reached by email at: awrobbins1@earthlink.net

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  1. Another great article by Andrew. I’d like to make a suggestion. Why don’t you guys have an article like this every month? Once a month is too far off. I like this magazine, man! Keep it up.

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