The Standard Has Been Set

President Obama explained in his news conference today that the problems in the domestic auto industry are not the fault of the autoworkers, but lies solely with the leadership in Washington and the leadership in the Big-3. He used this line of reasoning to justify, what I feel is a tremendous abuse of power, in telling GM CEO Rick Wagoner to step aside or there will be no additional funding.

I have read some of the pundits say that the Government, with their requests for a viable business plan, is asking no more than any other lending institution considering making a loan. I agree with that rationale except rarely do you see a lending institution tell the CEO of the company to resign or else. That's taking it a little too far.

Obama says the auto industry hasn't "sacrificed" enough in their recovery plan. I wonder if any of those fools in Washington realize Michigan has lost 600,000 manufacturing jobs in the last 5 years, most due to cutbacks in the auto industry. I wonder if they know that as of 2010 the UAW will shoulder the medical costs for it's members and retirees? That came about in the last contract before all of the crap hit the fan. And Washington says we aren't doing enough? I wonder if they know that in the first half of 2008 GM sold 4.54 million cars worldwide and Toyota sold 4.82 million? So much for that superior transplant product. In the second half of 2008 both companies saw declining sales, not due to management but due to increasing oil costs and the FINANCIAL crisis.

As I have already stated elsewhere in this blog I have no particular love for Rick Wagoner. What I do have is a moral sense of fair play. That if a standard is set then all need to play by the same rules.

Therefore, if we need a business plan from the domestic auto industry for a "LOAN" what are we requiring from the investment, banking and insurance industries for the "GIFT" they were given? Which CEO in those industries has the President or Congress targeted as the "sacrificial lamb" before they get more money? Have we determined which company with have to merge with Deutsche Bank to stay viable? Which page had the condition on it that said if you get taxpayer money, you need to make loans with it at a reasonable rate? I'm sure all of these questions have good answers, right?

While we're on the topic of grading people for their performance I think, as a stockholder in this country, I'd like to see Washington's business plan. Just today, Mr. Obama, you promised financial support for areas hit hard by the auto industry downturn. How much is that going to cost? In what form will this assistance be given? Will it be enough to offset the loss of a job?

I think I'd also like to see some explanation of why Mrs. Clinton decided it was our fault for the drug wars in Mexico. I see she promised them financial support in their cause and I was wondering how we're going to pay for it? Another loan from our biggest mortgagor China or are we possibly going to make those 11 million illegals in this country start paying taxes to help pay for it? Speaking of the illegals, how is it "Lawmakers and Executives" are afraid to enforce the laws that they wrote? I mean, where is the debate? They are here illegally, deport them. See how simple that is and guess what you just freed up 5 million jobs, for Americans.

I also would like to know how many of you actually voted for this hair brained war we have ourselves mired with in Iraq? I don't want to know about those that changed their minds I want to know who voted for it because if ever there was a reason to step down or be removed, that's it. Hell the guys on the planes were all Saudis, not Iraqis. And what ever happened to Bin Laden? Oh, and while I'm at it how many of your appointees failed to pay taxes? Because I'm starting to think we have character issues. Speaking of incompetence how about we ask Shelby to step down just based upon the illiteracy rate in his state?

One final thought Mr. President. What if the next time you go to borrow money from China they want you to step down? Would you do the right thing the way Rick Wagoner did?

See, if you have a rule it should be applied across the board. That is the way a nation of laws was conceived and how it is supposed to work. Selective governing sounds more like a theocracy than a democracy. The honeymoon is about over.

Wagoner Resigns From GM At Obama's Request

I just read an article the GM CEO Rick Wagoner is stepping down immediately at the request of the Obama Administration. Now I don't have a particular fondness for Rick Wagoner, and the auto giant has made some mistakes during his watch, but this bothers the hell out of me.

It bothers me for a number of reasons, first what are the shareholders wishes in this matter? Isn't this a decision that should be made by them and the Board of Directors?

Secondly, I guess it irks me that a politician would sit there and say you have to step down because you're not doing a good job. If this is the precedent then should we expect our politicians that have over taxed, over spent, and over regulated this nation into a second class economic power to step down as well?

Third, at least Wagoner recognized that he was part of the problem and relinquished his salary until the company was turned around, would Mr. Obama and the Republicans and Democrats do the same? I doubt it.

Now, I fully realize that the auto industry has come to our government, and hence the taxpayers, with their hand out asking for assistance. In doing so they left themselves open for regulation and strings that go along with the money, but in reality isn't the hardship being felt in a auto industry a problem our government created?

I laugh when I hear fools, who obviously don't have a basic understanding of the industry, stand there before the cameras and spout off about the auto industries failed business plan. The American auto industry was the largest producer of automobiles in the world until last year and they were viable until the "financial" industry went in the tank due to a lack of government oversight. So, how does that make the auto industries business plan flawed?

You and I can't borrow money to buy a car and this is the automakers fault how? When can we expect the heads of AIG, Citibank, and Wells Fargo to step down?

I'm trying to give our new President the benefit of the doubt but the more he does the more it goes against not only what he promised in his campaign, but against basic common sense. This do everything now approach remind me of the old fable about the "Tortoise and the Hare".

Fast isn't always the best. Sometimes fast means sloppy and right now that's the last thing we need.

Credit Scores and How they Work

Obviously with the economy being what it is right now it's fair to say that most people are struggling to pay their bills on a monthly basis. Now the reasons for that vary from person to person, loss of a job, reduced wages, lack of overtime, loss of medical insurance, rising cost of living, these and more are effecting most Americans today.

Because we have to live in today but plan for tomorrow I thought I would post an article explaining how credit scores work. I'm doing this because most people really don't know how they work and secondly, so that you can better manage your credit for the future with the choices you make now.

What Is My Credit Score and How Is My FICO Calculated?If you’re like most people out there, there’s inevitably going to come some point in your life when you’ll need to apply for credit and seek out deeper pockets to help you fulfill your personal financial goals and objectives. While the traditional American dream of home ownership seemed to be fading out of reach during the last few years, the housing meltdown is now thankfully forcing out of control real estate prices back down into sync with reality. But with the resultant repercussions and reverberations of the financial credit crisis, mortgage lenders have grown extra vigilant in weeding out unproven and unreliable mortgage debtors. While a mortgage applicant with a FICO score of 700 in the past could have easily obtained a lofty prime interest rate on their loan, lenders are now increasingly demanding higher FICO’s in excess of 760 for the same prime interest package. The subprime credit mess has made one’s credit report and credit score even more important gateway factors to determining who qualifies and who doesn’t for the loan conditions of their choice. It’s not just for expensive, higher denominational credit prospects like mortgage loans either - even routine applications for things like credit cards, checking accounts, auto loans, and even new jobs are undergoing greater credit worthiness scrutiny.

Both Your Credit Report History and Credit Score Help Determine Your Credit Worthiness, But Credit Scores Are More Uniform Measures Of Comparison From Individual To Individual

While credit reports, like your high school transcript does a better overall job in revealing the compete performance history of the individual, oftentimes, it’s the credit score, like the mathematically calculated grade point average (GPA) that is given the greatest initial attention. Like the analogous school GPA’s, credit scores are frequently used by major lenders to serve as cut off points to determine who will enjoy speedy approval and those who will require further scrutiny. As such, a high credit score serves up the best first impression when it comes to getting quickly approved for credit cards, car loans, and mortgages. Your complete credit report transcript conveys the rest of your credit history, but it’s your credit score that provides that first impression to determine whether you instantly qualify or not. If you’ve ever wondered why some people can get online and get instantly approved for a credit card in seconds, that’s because their credit scores are likely so remarkably high, credit card issuers feel they have more than enough information right off the bat to grant application approval. The same can be said for pre-qualification terms for mortgage or auto loans for favorable rates.

For those of you who buy into the financial wisdom of some personal finance pundits who advocate a cash only lifestyle and preach against all forms of debt, I personally think that is an all too safe but foolish perspective to cling to. It’s not credit or debt that is so evil, it’s the lack of financial education and mismanagement that dooms one to failure. Unless you are a millionaire, come from a very wealthy family, or your last name is Gates, Buffett, or Walton (of Walmart fame), you will inevitably need to take on student loans, car loans, or a housing mortgage loan in some form or another sometime during your life span. A cash only lifestyle is appropriate for engaging in small time transactions, but for the pricier car and home buying process, you will inevitably need to call upon your built up credit history and credit score eventually.

So What Is The Purpose Of Having A Good Credit Score And How Is It Calculated?

Your credit score is basically a three digit number that is mathematically generated by credit reporting agencies based on information found on your individual credit report. The credit score is a numeral representation used to assess your past debt payment history and predict your ability to fulfill future debt obligations. Everytime you perform actions or transactions that relate to the extension of credit in the real world, that request for credit is submitted to the three major U.S. credit bureaus (Equifax, Experian, TransUnion) for recordation. By taking that continuously updated information and plugging it into a special mathematical formula, credit bureaus can generate an up to date credit score on demand to accurately predict your present and future ability to pay off incurred liabilities. Positive actions like on-time payment and low credit usage will boost your credit score, while negative events like bankruptcies, foreclosures, and failures to pay on time will hurt your score. Experience and trends have shown that those with higher credit scores are more responsible with credit and are less likely to default on loans. However, because credit transactions are not always equally sent to all big three consumer credit reporting agencies and not all information is processed by all three in the same mistake or error-free way, there are bound to be slight differences and discrepancies among different credit bureau scoring results, even if they all utilized the same credit scoring methodology. Keep in mind, Equifax, Experian, and TransUnion all individually generate their own credit score results on request.

But in general, one’s credit score is a fairly uniform mathematical measure of credit worthiness. Banks, credit card companies, and mortgage creditors are in the business of taking on risk, and thus utilize this invaluable scoring system to gauge prospects. In exchange for taking on risk, these institutions are willing to extend you money on loan, but in return they expect to be compensated for the financial risk they take on in the form of additional interest rate payments. Different degrees of risk and possibilities of default demand different levels of interest. If you’re a risky debtor with a shaky credit history, you will be required to pay higher interest payments to the creditor to offset the risk. If you are a more reliable debtor, chances are your interest obligations will be a lot less. That is why it is important to keep your credit score high - it’s one of the most important things that lenders look at when they evaluate your financial profile. You might be a nice guy or a nice gal, really deserving of credit approval, but if your credit score is lackluster, your chances may be shot.

What Is The FICO Credit Score Made Up Of, and How Are The Scoring Categories Weighted?

When most people speak about credit scores, more likely than not they are referring to the FICO credit score, the popular credit scoring system created by the Fair Isaac Corporation. There are currently several alternative credit scoring systems out there, most notably, the new VantageScore jointly developed by the big three credit reporting agencies, Equifax, Experian, and TransUnion, but the FICO is still the most widely used scoring method. I recommend avoiding the VantageScore for now and staying clear of credit vendors that attempt to hawk it.

Because the VantageScore also uses a three digit scoring system but on a different numerical range from 501-990, obtaining it at this time will only serve to confuse you. Because most lenders have not broadly adopted the use of the VantageScore yet, you are better off focusing on the FICO exclusively for now. There really is no particular purpose for consumers or lenders to adopt the VantageScore at this point in time as its development was primarily business motivated rather than designed to benefit the consumer. The credit reporting agencies simply got tired of having to pay royalties to Fair Isaac for utilizing their proprietary scoring formula and wanted to create their own cheaper version. For now, stick with the genuine FICO - it’s the most widely used credit score and currently still the most relevant by far.

The FICO credit score is formulated on a scale from 300 to 850, however most people will have scores between 600 and 800. It’s unlikely to find many people with scores below or above this general scoring range. As a rule of thumb, any FICO score that is above 700 should be deemed good, although in this current market, a FICO of 750 will probably be needed to guarantee you the most favorable loan rates.

Here is how the FICO credit score is generated and broken down into its composition categories according to pie chart percentages:

1) Your Credit and Debt Payment History - ( 35% of Your FICO)

This is the absolute most important factor in determining your FICO credit score. To have a high score, you’ll need to develop a history of timely and punctual bill payments. When lenders evaluate you as a prospective credit candidate, they want to see that you have a solid history of not only fulfilling debt obligations, but that you also have a track record of paying on time. Past late payments and unpaid debts sent to collections will significantly damage your FICO score. Negative factors like bankruptcy and defaulted payments will hurt your score as well. How badly a failure to pay or a late payment will affect your credit score is determined by the total number of past due items, how long they were past due, and the length of time since your last late payment. Because the payment history category is weighted to favor more recent transactions over older actions on your credit history, it’s never too late to start paying on time. Better late than never.

2) Amounts and Balances Owed - ( 30% Of Your FICO)

The second most important factor other than timely payment is the total amount of credit money that you owe and the proportional amount of your total available credit utilized. If you are already carrying a substantial amount of active debt in the form of existing home mortgages, home equity lines, car loans, student loans, or credit cards, you are less favorable as a candidate to take on additional debt. Because of your existing debt obligations, you are seen as a greater potential credit risk. However, your total amount of outstanding debt can be hugely tempered and your risk factor greatly minimized by having a lower debt usage ratio.Under the FICO formula, someone with an outstanding credit card balance of $900, with a total available limit of $1000 (utilization ratio of 90%) is deemed to be riskier than someone who has an outstanding credit card balance of $2000, but with a total credit limit of $10,000 (utilization ratio of 20%). Being saddled with a lot of debt isn’t necessarily bad in terms of your credit score if you are well under your total available credit limit. Obviously the more zero balance revolving credit accounts you have on your credit report the better, but the amount of your credit usage in proportion to your total credit available goes a long way to boosting your score.Example: As someone who regularly engages in credit card arbitrage, I frequently carrying large 0% APR balances on my 0% balance transfer credit cards. But despite my high credit balances, I maintain a stellar FICO score (FICO of 758), attributable to my low overall credit usage ratio. I might carry credit card balances in excess of $20,000 on multiple cards, but because I have over $80,000 of unused revolving credit available to me, my low proportional usage keeps my FICO high.

3) Length of Your Credit History - ( 15% Of Your FICO)

When it comes to the FICO credit score, the older the credit account, the better. That is why consumers are sometimes encouraged to initiate credit usage at an earlier age, if only for the sole purpose of building up credit. College students are sometimes advised to open at a least one student credit card for the purpose of building up a credit history file. Those who stick with cash only and wait till later in life to start opening credit accounts are ultimately short changed when it comes to their FICO scores. The same rationale is also why it is almost never advisable to cancel old credit cards. Unless you are obsessive and compulsive when it comes to credit card spending, you should keep those older cards around and let the accounts age like fine wine. You don’t necessarily have to use those cards - just put them away in a drawer if you have to. Because the length of your credit history is based on the average ages of your total active credit accounts, it’s in your best interest to keep old accounts open indefinitely. If you absolutely must cancel a credit card, cancel a newer card instead. Closing out an old account will have the unintended backfire effect of hurting your FICO credit score.

4) Types Of Existing Credit Owned - ( 10% Of Your FICO)

The FICO scoring system favors credit users who are diverse with their usage. The system likes to see users mix it up a little and not just focus on one type of installment usage - like credit cards alone. In general, older individuals with longer credit histories usually tend to have a greater mix of credit account types, thus higher scores. While revolving credit accounts like mortgages and car loans help to inject some diversity into your usage, one shouldn’t go out of one’s way to mix it up purposely. Focus more on paying all bills on time and limiting your credit usage instead (they comprise 65% of your FICO credit score). In my opinion, this category has the least relevance and the least impact on your overall credit score.

5) New Credit or Recent Credit Sought - ( 10% Of Your FICO )

This is where hard credit checks and soft credit checks come in. Everytime you affirmatively submit an application for a loan or additional credit, a hard credit pull is made against your credit report. The resulting credit pull will have a short term negative hit against your formulated FICO score (in time the score will recover). In general, new and recent requests for credit are seen as risky factors in the eyes of lenders. However, new requests for additional revolving credit that follows a recent late payment will likely cause a more significant drain against your score, as they are seen as ominous signs of financial desperation.

However, the way the FICO system is set up, frequent requests for credit within a relatively short 30 day period is discounted in terms of aggregate negative effects on your credit score. This is to compensate and alleviate the effects of those who are merely interest rate shopping for mortgages or car loans who are likely to submit numerous applications within a short period of time. This is the reason why balance transfer arbitrage seekers are often advised to submit their numerous credit card applications simultaneously within a short period of time to minimize the overall hit against their credit score. As always though, only hard credit checks negatively affect your FICO. Self credit checks initiated by you to examine your own credit report or credit score will never hurt your rating.

What Is Not Considered In Your Credit Score, And How To Boost Your FICO

While the FICO score is a very important factor to those seeking instant approval for credit or a quicker path to the best loan terms and conditions, it’s not the end all. Lenders also carefully scrutinize your credit report and other financial factors like income, job stability, education, and amount of money you have in your checking and savings accounts to determine your credit worthiness. That’s because many relevant personal risk factors are not appropriately reflected in the credit report or the credit score model compiled by the big three credit reporting bureaus. Such information include age, race, sex, income, savings, marital status, education, and your current type of housing.

The FICO score also struggles with formulating an accurate score representation for new entrants into the credit world. Those with short credit histories like recent immigrants or college students are unlikely to have much of a credit report transcript to work off of. As evidenced by the Fair Isaac Corporation’s efforts at formulating and developing its new FICO Expansion Score to gauge the credit worthiness prospects of those with incomplete or thin files, the existing FICO system as is probably still needs some improvement, and is far from perfect. However, until a better thing comes along, consumers need to find ways to improve and keep their credit ratings high. Unless you don’t have plans to seek new employment, apply for a new credit card, obtain a home mortgage loan, find a new apartment, or apply for insurance in the next few years, it’s in your self interest to improve your FICO credit score and keep it high in case you ever need to use it.

As it is relevant to your ultimate credit score, I’d recommend taking several minutes to download a free credit report at annualcreditreport.com. With this free federal government service, you get to request a single credit report from each of the three major credit bureaus every four months. Instead of requesting all three credit reports at once, you might want to stagger them out to three times a year for continuous monitoring. If you spot an error, notify the bureau (online, by phone or by mail) and the creditor (call and also send a letter) immediately. While your credit score isn’t free, there are ways to get get your free credit score from the big three credit reporting agencies. Remember, if you want consistency, stick with the FICO score exclusively for now.

Additionally, I found the information contained in this article to be very useful as well:

http://credit.about.com/od/creditreportscoring/a/creditscore.htm#

A Frank Conversation With The Big-3

If I could sit down with the CEO's of the Big-3 the conversaton would go something like this:

Mr. Wagoner, Mr. Ford/Mr. Mulally, and Mr. Nardelli....

I would like to share a few thoughts with you regarding getting your industry viable again. Now I realize that some of these ideas may seem a little radical or unrealistic, but when you look at your options, they may be your best bets.

Unlike Washington I find very little wrong with your business plan of the past. You made cars that people wanted to buy until the oil prices threw everything, including banks and mortgages, into a tailspin. And as you are well aware all of the loans mean nothing, because the situation isn't going to change, until people begin buying cars again so that is the topic of this blog entry.

Let's first look at the way you are currently doing business and in what ways you can improve.

Employee Pricing/Discounts:

For years the production workers have been the biggest customer segment for the auto industry. You have catered to them with special plans, discounts, incentives and that was a wise strategy. Unfortunately, as times have changed you didn't. Have you not figured out that every time you lay-off a worker or send a job overseas you lose that potential customer? And since it seems your common answer to a problem is to downsize the workforce it is no wonder your market share has dwindled.

So now in this time of crisis it's time for you to cast off the old and think out of the box, to which I recommend this "New" perk. "Buy a car, keep your job." Any employee that purchases a new product from your company will be guaranteed a job as long as they are paying on that product. I have a feeling that right there will get the local showrooms jumping almost immediately. One of the major reasons nobody is buying is because they don't know if they will have a job next week. If you guarantee them one for the next 48 or 60 months I'm betting they'll buy on time to keep their job.

The Well Qualified Buyer:

Gentlemen, you do realize that none of your companies, if they could purchase a car, qualify for your best financing rates, don't you? Your credit ratings are poor and so are those of the majority of your customers. You know how you really wanted to slap that arrogant ass Senator Shelby up the side of the head for making you feel powerless? That's how your advertising makes people feel. In case you haven't figured it out the majority of people right now can't get decent financing, or they are getting blemishes on their credit due to cut-backs or other hardships, but they'd still love to buy one of your cars if it were affordable. I spent a career in Real Estate and the one thing I learned about human nature is it's not what it costs to buy, but what it costs each month that matters. That is why we have installment financing.

Now again I'm going to step out of the box here but as they say " the greater the risk the greater the rewards". Why not try this approach 0% financing for all without any incentives, rebates or variations off MSRP. Crazy? Maybe yes but maybe no. As one that has seen the inside of the Federal Bankruptcy Court I can tell you this I haven't been late on a payment in over 5-years but I still pay for it. I have never figured out the logic in making it "harder" for a person that has had trouble in the past. Isn't that a self-fulfilling prophecy? Besides all three of you have financial arms that qualify for TARP so where is the risk? Make the loans, people will buy.

Another option is, and this works well with rebates or used vehicles (and yes you do have to account for used vehicles), is bring us your best purchase pre-qualification interest rate from a viable lender and if you buy a car from us will cut that rate in half! Think of that Big-3 you would not only sell a car but you'd look like a hero doing it!! As they drove off the lot they'd be saying "Thank God for GM or Ford or Chrysler, at least they didn't gouge us like Comerica did". Hell, I went to buy a used car last fall and was quoted 16.63% with the same credit score that allowed me to purchase the previous car at 8.58%. It's those types of things that are keeping people out of your showrooms. You want to sell cars, you want to avoid bankruptcy, take a chance!

Public Trust and Warranties:

One of the biggest gripes about the domestic car companies is the quality of the product. While I don't agree there is this great quality gap between domestic and foreign manufacturers, I will say first hand that there are things the Big-3 need to improve upon. When there is a common problem throughout a car line or body style you need to fix it. A couple of examples would be the 1998 thru 2002 GM SUV line; at 50,000 the gas gauge would go out for no reason other than poor design yet GM did nothing about it. A $600 fix leaves a bad taste in your mouth. Same thing with wheel bearings and hubs going out at 60,000. What happened to the 100,000 mile life expectancy design you touted back in the late 80's? You should have stood behind those types of repairs too. Now I know you have to draw the line somewhere, and business is business, and profit is an objective but customer satisfaction should be an objective too.

Ok, so what can you do? How about allowing warranties to evolve like everything else in the business world? Why do you have to be so black and white, all or nothing? You'd be surprised but in most instances the majority isn't looking for a "free lunch" they just want to be treated fairly. Instead of espousing ridiculous warranties with a huge amount of exceptions or limitations (100,000/10 year, bumper to bumper, except things made out of metal warranty) try keep it simple. Your new vehicle come with a 5yr/100,000 mile warranty that works like this: the first 3yr/60,000 you are covered 100% on everything but oil changes, tires and accidents. The remaining 2yr/40,000 miles you are covered for everything but oil changes, tires and accidents with a 20% co-pay due at the time service is rendered. People are used to co-pays, they may not like them but it sure as hell beats having to pay it all out of pocket. If 20% doesn't work try 30% or 50%, just show the customer that we are in this together. Try this Big-3 you might be surprised how many start to sing your praises again.

Trade-In Values:

For years your dealer network has played the shell game with trades and financing. Many of your customers are upside down in their cars because of it. The problem is they don't see that it was Huntington Ford or Southfield Jeep or Moran Pontiac, in their minds it was GM, Ford and Chrysler. I have a $12,000 Jeep Cherokee that has a note for $15,000 because I had to roll the $3,000 from my Chrysler 300C, that I had to roll the $4,000 from my GMC Jimmy, that I had to roll my $1,500 from my Pontiac TransAm into when I purchased it.

Tell your dealers when a customer comes in to buy a new car with a trade, pay the trade off with no roll over and you will guarantee them some percentage of profit on the trade vehicle. Your dealers got most people in this mess now let them get them out of it. Will this cost you money? Yes! Will it gain you more goodwill that a 15 minute ad during the Superbowl, to quote a female politician "you betcha"!

Now Gentlemen, I know these ideas may sound a bit crazy but the time has come for y'all to get a little crazy and save your companies without government interference. Good luck!

They haven't A Clue

I try not to make many predictions. I've found in my life that people who make predictions more often than not end up with egg on their faces but today I feel I need to make a statement.

Despite the best efforts of our President and Congress to shorten this current recession I fear those efforts are doomed for failure. I say this because of the simple fact they, I mean politicians and economists in the collective, don't have a clue what caused this current calamity. With all of their MBA's, JD's and PHD's they don't have the foggiest idea what causes a recession. They think they know because it is all based in numbers, the GNP, the Deficit, the Budget, Trade Imbalance, Unemployment Rate, these are all indicators, statistics used to quantify a situation but in reality they tell you nothing. The 623,000 new unemployment claims this month doesn't come close to the big picture. It's a snapshot because it doesn't factor in those that have exhausted their benefits, those that didn't qualify for benefits and those that are being fought to obtain benefits. So whether or not the new claims rise or fall it means nothing.

The popular thought in Washington, in the Media, and on Wall Street is that this recession is the result of a "housing crisis" going on in our country. Bad mortgages and sub-prime lending are to blame according to the experts which only goes to prove my point. The reason they don't know what caused this recession is because they are insulated from it. They are millionaires and they have no concept of struggling to pay bills or put food on the family table or wondering if your job will be gone tomorrow and as millionaires they only relate to numbers, and statistics.

Now if you actually walked down main street and talked to a dozen different people about their story they could tell you what caused this recession. They could not only tell you the answer in a heartbeat, most will tell you that reason would be oil, or actually the price of oil. You remember oil, don't you? I know it hasn't been in the news much lately because it's not fun to talk about right now because the price is down. But have you noticed it's starting to creep up again? Just 8 weeks ago it was $31 dollars a barrel but yesterday it closed at $51 dollars a barrel. If you don't believe me take a look. We are heading for $3+ a gallon for gas again because Washington isn't paying attention.

The simple facts are that recessions occur when people either have no extra money to spend or their confidence is so low that they are afraid to spend, and that's what has happened here. As gas prices rose the last 5 years people cut back, when it hit it's zenith in 2008 it crippled people. People all over this country took huge pay cuts imposed by the oil companies and commodities speculators when it started to cost them more than $100 a week to go to work. Higher oil prices also impacted the cost of all goods and staple products either by an increase in manufacturing costs or shipping costs. Not to be outdone the utility companies decided to jump on the energy bandwagon and raise the cost of electric and natural gas. The natural gas one cracks me up! This country is sitting on enough natural gas to heat the entire earth for about 50 years, so since it wasn't scarce they raised the price in case we had a hurricane. You notice it never came down when the hurricane never happened? The amazing thing is that evidence, after the fact, indicates that most of the reasons for high energy prices were fabricated, they didn't exist, yet here is our government letting them get away with it again.

People needed to cut back because of the higher cost of basics. Now human nature is a funny thing because people will go out for dinner but put off buying new curtains. They'll go on vacation but won't buy a new stove, so in some ways we've hurt ourselves. The end result from the cut backs was less purchases, means less employment, means layoffs, means can't pay my mortgages regardless if it's prime or sub-prime, which means companies get into financial trouble and either fold or hold their hands out. That is what caused this recession. It's really that simple! It has nothing to do with the auto companies business plan, which by the way, I'd love to ask that old fart Senator from Alabama about his business plan cause right now our country ain't doing so well. The auto companies were selling SUV's as fast as they could build them, trucks too, and that plan worked just fine until the government allowed gas to go above $3.00 a gallon. So put that in your pipe and smoke it Senator!

Now here is my prediction and I hope I am wrong: As I said Washington doesn't have a clue and they will continue to ignore the oil prices, either by ignorance or design, until they reach the critical stage again where they negate all of this stimulus spending. People will continue to stay in their shells, cars won't sell, manufacturing will not resume, housing prices will not start to grow again because people will still lack the confidence it takes to make our economy grow. We need to reinstate rules that take oil and natural gas off the commodities exchange, we need a comprehensive plan to ensure affordable gas and base utilities in this county. I know everyone is going green but green isn't going to change a damn thing for at least a decade. We don't have another decade to squander. In fact many of us don't have another 6 months to squander.

It's the oil prices dummies! It's the oil prices Democrats! It's the oil prices Republicans! It's the oil prices President Obama! It's the damn oil prices! Control those and your economy heals, ignore them and we're all in for a very long, rough ride.

So as a thought, take five minutes this weekend and shoot off an email to your Congressman or Senator or President. Remind them of what really caused all these problems then ask them what they intend to do about it.

Just my humble opinion.

Ride On Hollis

Hollis Hurst was a friend of mine, we met while doing a project at Metro Airport. Hollis worked for Rauhorn Electric and was part of a crew hired to rewire the airfield for the SMIGS project. There was many a night throughout the winter of 2005 that Hollis, along with his Foreman Rick Raffaelli, Dave and Tony all worked in the most miserable cold weather you could imagine. It was my job to come in a monitor their work from 10:00pm til 2:00am then head back home so I could be back to work by 7:00am. Yeah that worked out well!

During that project, and two others, I got the chance to know all of Rick's crew and considered them all friends. Just a decent bunch of guys, Electricians that took pride in their work and they had hearts as big as all outdoors. Some times it would get to be monotonous doing the same thing day after day, so to break things up a bit I would try to pull off a practical joke or two and I knew I could always enlist Hollis' help. I have to be honest though Hollis was a better giver than receiver but in the end he almost always laughed it off. And he, Rick and Dave weren't beyond payback. There were many a time when I could see it coming like a freight train and a few times I didn't.

Over the years Hollis and I talked on several occasions about motorcycles. Most recently about 4 weeks ago he had asked me if I was ready to ride this spring. I told he I wish I could but that I sold the Harley last year because I had only been putting on 300 to 500 miles a year now and it was a waste to have it just sitting there. He said he was having the same problem just not enough time to ride with work and everything else. I told him I was planning on picking up a cheap bike this year and he said we'd have to get out and ride together. It looks like that's going to be postponed:

Hollis W Hurst was 47 years old and on Saturday March 14th, as he was riding his Harley home from his Grandmothers 90th birthday a young girl pulled out in front of him in Frenchtown, Michigan. Hollis was thrown from his bike and pronounced dead upon arrival at the hospital.

The world lost a really good guy that day. And a young girl has a nightmare that she is going to have to live with for the rest of her life so in a way two lives were ruined that day. I said a prayer for Hollis and his family after I called Rick and confirmed what I had read. Then I said a prayer for that little girl and hoped that she realized it was an accident.

I hope you all pray today as well, for your family, your friends, and use this to remember just how fragile life is. Since we're all here today wouldn't it be a good idea to tell everyone around you that you love them and how much they mean to you? Don't be shy because you never know when that opportunity will slip away.

And Hollis, I pretty sure that right now you're in the Lord's house, getting ready to ride and looking for a nice curvy road. You check it out for me and we'll go for a ride whenever I get there! Rest in peace, buddy!

http://www.monroenews.com/article/20090315/NEWS01/903159997/-1/NEWS&frompost=1

PS: Rick Raffaelli sent me the above picture of Hollis taken a week or so ago. 3/19

It's Time To Pull Together

I don't know about you but I find it harder and harder to watch or listen to the news anymore. It's no wonder people have no confidence in anything because all they hear is doom and gloom on a daily basis.

Now I'm not being silly I realize times are tough. That people are losing their jobs, their homes and their retirements, and it doesn't look like the end is anywhere in sight. We ask ourselves why is this happening. We look to find someone to cast blame upon. We look to others to provide the answers when in reality we are the answer.

Crawling our way out of this mess begins with restoring consumer confidence so that people will start supporting the economy again. All of the bailout money in the world is not going to solve a thing until people start to buy things, which will in turn create jobs, which in return will cause our economy to grow again. Sounds simple, doesn't it? But it's true and it all starts with us.

Now there are people out there that say how can I have confidence in a government/society/system that rewards greed and casts the burden of rescue upon the working man and their children? That is a reasonable question but the answer is how you view your actions. If you view it that you are supporting a system that is flawed then things will remain flawed. However, if you view this as helping your fellow man, your neighbor by getting back into the economy by, not being silly, not being afraid to make a purchase again, only then will things start to improve.

We need to think of this as semantic gymnastics or word play. Let replace the word confidence, which implies that they have earned it, with the word faith. Now faith can take on many forms: Faith in God, Faith in our family, Faith in my ability to work or provide, Faith in my partner or spouse, Faith in my neighbors, Faith in mankind or Faith in my country. Faith typically is a word associated with an unproven or unseen belief. It is by sheer faith alone that we believe something exists. See, faith is a bond or a commitment or a love of something which is why we can have Faith in ourselves.

Once we have supplemented the word faith then we have to ask the real questions. Do I have faith in my family, friends, country, government, my Lord, my faith and to what degree am I willing to go to prove my faith. Faith is more than a belief, faith is an action, faith is much like love. I have a favorite saying "Love is a verb as well as a noun". By that I mean that you can tell someone you love them 100 times a day but you also need to show it in your actions. Faith is the same way. If you have faith in our society, in our country, in our willingness to provide for those that are less fortunate, then you need to step up to the plate and take a chance.

Like many of you I am a believer and I believe that the Lord watches over all of us. Now some people don't share that point of view and that is fine, it is their right to feel that way. I have more faith in my God than I do my elected officials right now so that is my focus. I believe God will help direct us out of this mess we are in. He won't do it for me, he'll allow me to make good choices and do what is best for my family and friends.

What is your focus going to be? Perhaps it's our government, if you have faith then believe! Is it your family, if you have faith then believe! Pick your point of faith and act upon it for the good of those around you.

One last thing......the media. Back in 1990 I watched the media create a recession just based upon doom and gloom predictions. In 1989 the economy was rolling right along but by 1990 the media started talking about how it was time for a recession, and before long we were in one. There is a saying in the news business..."If it bleeds it leads". Meaning the bloody gore or depressing news is going to be what is force fed you. When you think about it, it is actually in the medias best interest that this recession drag on because it means ratings and advertisers. If you make the commitment to have faith, turn the news off because they will just continue to play on your emotions and fears.

It's time we all pull together and get this country rolling again.

Paul Harvey - Good Day!

Paul Harvey Aurandt

(September 4, 1918 – February 28, 2009)

Thank you sir for many thought provoking commentaries and smiles

Obama Take On Special Interests

I read an article yesterday about President Obama saying he was going to take on Washington Special Interests. He as much as challenged them and said don't try to mess with his agenda, that it was his intention to bring the government back under control of the people.

I applaud you Mr. President! This is the type of action or change that the American people are praying for. I support your efforts on this stand as do many others. It is my hope that you are successful, and if you are not that you do not become discouraged or abandon this cause. It is beyond past due that the politicians in Washington start to represent their constituents and not the private interests that control the money or their political party.