[Rhodes22-list] Economics - More Good News

[Brad Haslett]

Warren,

We hired a few Mexicans during the clean-up effort in the beginning.  They
were about the only thing available and certainly were the best. We treated
them well and they us. The day labor rate quickly went from $10 an hour to
$15 per hour.  Then, the locals had the INS and Border Patrol run them off.
Now we're back to locals, which means we don't have labor readily
available.  My brother was in the construction business in Illinois for 30
years and has no love for unions.  We don't talk much about me being a
member. Right now we'd gladly pay union wage rates if we could count on X
amount of production and pass the costs on to the customer.  Alas, we can't
count on X amount of production from the local labor and the customers won't
pay the price to attract the labor we need.  The common theme you hear from
all the contractors is "we can't find help".  I don't know what the solution
is to that problem.  I do know this solution:  FEMA, get the hell out of
town, the emergency is over!

Personally, I'm not liquidating out of anything.  I'm going to make a
decision in the next week or so to change future contributions to cash
equivalents, ie, money market or T bill funds. Interest rates have been at
forty year lows for a long time and can't stay there forever. I'm on a nine
year time frame and should be moving into bonds by conventional wisdom, but
the stock market returns have been so good since 02' that it's like giving
up crack-cocaine.  It doesn't matter who is in office, business cycles can
only last for so long.  This one has lasted a long time.

Find a used piece of construction equipment near LEX for me to go look at
and I'll fly the Bo there.  We'd really like a vibratory drum sheep foots
roller.  We can't afford one, we'd just like to have one.  All I need is an
excuse to go flying.

Brad

On 7/14/07, Foy, Warren <Warren.Foy at masonandhanger.com> wrote:
>
> Brad,
>
> I do own FDX, as well as UPS, both as individual stocks and I'm sure
> through my MF investments.  They have both done well and I thank you for
> both of them, competition helps.
>
> In my profession, the federal government requirements for union
> construction labor wage rates have hindered or cancelled many projects
> because of the high, and non-competitive labor union rates.  I know that
> you could not compete in your endevors in the Gulf Coast area in Katrina
> re-construction if you were required to pay union wage rates, thus you
> hire Latin-Americans (the latter, probably not).
>
> As far as Toyota, I personally have no problem with Japanese companies
> "Coming To America".  You mentioned Toyota being in Indiana, Texas and
> California but there is also a major Toyota plant just north of me in
> Georgetown, KY.  I have been there and know many people that do, and
> have, worked there.  I do not know the "economics" of where the money
> goes but I do know that the Georgetown plant is a great place to work,
> providing many jobs and benefits to many Kentuckians.  I suspect that
> the bulk of the profits made from the sale of the Camry's and other
> vehicles and parts made in Georgetown, stay in Kentucky and pay tax to
> the U.S.
>
> I know that I, nor you, nor anyone else on this list (including my
> namesake, Mr. Buffett (any kin to Jimmy), just kidding about the
> namesake part, I couldn't afford even a couple of shares of BRK.A), can
> ever time the market (save what's his name from "Back to the Future
> II,(or whatever it was called)). That's why he and I are LTBH investors.
> That's kind of what I meant in my thought about further investment in
> stocks or MF's vs. T-Bills of saving bonds.  Should I simply divert
> further investments or should I sell current holdings and convert to
> cash.
>
> I know sailors, I am way off topic but this is a bar environment, right?
>
> You mentioned money market.  Back to my original question, why consider
> money market vs. saving bonds or some other investment that directly
> supports our government?
>
> What flying story?  Details man!
>
> Warren
>
>
> P.S.  I glad (no ecstatic) that Fed Ex decided to by planes from Boeing
> rather than from Air Bus.
>
>
> -----Original Message-----
> From: rhodes22-list-bounces at rhodes22.org
> [mailto:rhodes22-list-bounces at rhodes22.org] On Behalf Of Brad Haslett
> Sent: Saturday, July 14, 2007 2:49 PM
> To: The Rhodes 22 mail list
> Subject: Re: [Rhodes22-list] Economics - More Good News
>
> Warren,
>
> I hope you own some FedEx stock as it is a good international investment
> play. I try to keep my holdings in FDX under 10% for diversity, but
> every
> time I sell some it just keeps increasing in value. Trust me, my union
> negotiated raise had negligible effect on the earnings per share.
> Unions
> and small time investors are two issues Marx and Engels didn't figure
> into
> their theory.  China has moved away  from being a 'nanny state' as fast
> as
> practicable and the results are good.  Every country that has moved in
> the
> opposite direction has suffered (think European Union).  Globalization
> is a
> fact of life, somewhat like gravity.  Remember when the Japanese were
> going
> to take over America in the 70's?  They have in a sense, Toyota's built
> in
> Indiana, Texas and California, Honda in Ohio, Nissan in Tennessee and
> Mississippi, etc., and now we have Koreans in Alabama (Hyundai), BMW in
> SC,
> and the Bama Benz.  What goes around comes around.
>
> Brad
>
> You will never become expert at timing the market any more than the
> 'professional' fund managers are good at timing the market.  That other
> famous investor named Warren wasn't a trader, he was a buy and hold guy.
> I'm thinking about stopping any future purchases in mutual funds myself
> for
> a while and parking in T bills or money markets until things cool off a
> bit.
>
> Now as to the flying story, let's just say all ended well and my crew
> was
> eventually rewarded with an "atta boy".  That was after being under the
> microscope for a while which is normal.  There are some things best left
> alone on public boards.  BTW, I really do enjoy my job and work for one
> of
> the best employers ever!
>
> Brad
>
> On 7/14/07, Foy, Warren <Warren.Foy at masonandhanger.com> wrote:
> >
> > Brad and all,
> >
> > Seldom poster but can't resist today.
> >
> > I know that you're a union employee and I appreciate your employ (as
> > well as your anecdotes about flying) but I'm not sure that helps me as
> a
> > shareholder of Fed Ex (or any other company).  I obviously agree that
> if
> > you or I could predict where the market was going, we could own the
> > world. (As far as Gulfstream, my friend, (Senior Structural Design
> > Manager or some similar title) would appreciate your reference).
> >
> > Who's complaining?  Not me necessarily, but until I become an expert
> day
> > trader where I can time the market, it does concern me to see my
> payrole
> > withholding going to purchase MF (Mutual Fund, (easy folks:)) shares
> at
> > such lofty prices.  I'm seriously thinking about diverting to cash
> these
> > days.
> >
> > Winnings off the table?  Wish I had some as most of mine were invested
> > during the bubble.
> >
> > -----Original Message-----
> > From: rhodes22-list-bounces at rhodes22.org
> > [mailto:rhodes22-list-bounces at rhodes22.org] On Behalf Of Brad Haslett
> > Sent: Saturday, July 14, 2007 1:06 PM
> > To: The Rhodes 22 mail list
> > Subject: Re: [Rhodes22-list] Economics - More Good News
> >
> > Warren,
> >
> > Wow, that's a lot but, I'll take a stab at it.  But first, a
> disclaimer:
> > I
> > am an hourly paid union employee.  If I knew where the market was
> going
> > next
> > month I'd fly my Gulfstream to the coast and take the yacht out this
> > weekend.
> >
> > The growth of this market is not sustainable.  No market ever is and
> > that is
> > why we have business cycles.  This one has lasted longer and has been
> > more
> > robust than I would have predicted, but hey, who is complaining? We
> saw
> > what
> > 9/11 did to the market - over a trillion dollars of wealth was wiped
> out
> > as
> > soon as the markets re-opened.  The same thing would happen again with
> > an
> > attack of that scale.  My time frame to retirement is a bit shorter
> than
> > yours and quite honestly, I'm probably more of a risk taker than is
> > prudent
> > right now. But,  this market sure has been good.  When to get out?
> I'm
> > seriously thinking about taking some winnings off the table, however,
> > every
> > time I've done that in the past I missed the next run-up.  The time to
> > buy
> > clothes is when they are on sale.  I'm not changing my savings rate
> > right
> > now, I'm just scaling back to more conservative investments until
> things
> > cool a bit.  Unlike the Dot-Com bubble, this market is fundamentally
> > sound,
> > just a bit pricey for my tastes.
> >
> > To oversimplify the debt situation with China, we are a nation of
> > spenders
> > and they are a nation of savers.  The US runs a huge trade deficit
> with
> > China and they have to park that money somewhere.  US debt is a pretty
> > safe
> > bet.  China could wreak havoc if they dumped their holdings but it
> would
> > seriously harm their economy as well. A weaker dollar helps some, for
> > example, it makes American goods easier to sell overseas.  But like
> > anything
> > in life, it has other repercussions as well.  Oil is priced in
> dollars.
> > For
> > OPEC  to keep the same purchasing power per barrel they have to charge
> > more
> > for the stuff.  That hits us at the pump.  The upside is it should
> > encourage
> > us to use less oil, but the demand for oil is stubbornly inelastic.  A
> > weak
> > dollar also makes Disney World attractive to German tourists and beer
> in
> > Munich expensive for us.  Where's the happy medium?  I don't know,
> they
> > don't call economics the "dismal science" for nothing.
> >
> > I love the next question.  Why do people spend so much to save on
> taxes?
> > Remember who you are talking to.  I've been asking myself that
> question
> > a
> > lot lately.  Remove the politics, the social agendas, and the class
> > warfare
> > from the argument and you come to this indisputable conclusion: lower
> > taxes
> > make for a more productive economy. Our marginal income tax rates were
> > as
> > high as 90% in the early 60's.  At those rates it makes no sense for
> the
> > most productive citizens to earn any more money.  Anytime you have
> this
> > discussion here on the list or on a national level everyone wants to
> > hide
> > from the truth.  The top 5% of taxpayers pay over 50% of the federal
> > income
> > tax.  We are not talking about so called "rich" people, we're talking
> > about
> > married professionals, small business owners, a lot of people on this
> > list.
> > People start looking for ways around paying more taxes when they don't
> > think
> > they are getting a good value for their money.  You cannot avoid
> taxes,
> > you
> > can only defer them to a later date.  For example, I'm aggressively
> > using
> > the the tax provisions of the Katrina GO Zone Tax Act to expense
> > construction equipment rather than depreciate it.  The tax will be
> paid
> > sometime, either through the use of the equipment of the disposal of
> it.
> > The idea is to pay the tax at a later date and use the time value of
> the
> > money.  Losing money to save on taxes makes no sense at all and is
> based
> > on
> > emotion.  That being said, in 1980, I could sell an airplane to a
> > doctor,
> > lease it back, and the doctor would be positive cash flow for the
> first
> > 18
> > months after debt service, even if the airplane never flew because of
> > the
> > tax savings.  That is why there is a limit to marginal income tax
> rates
> > without things getting silly.  Now factor in class warfare, socialist
> > agendas, etc. and things really do get silly.
> >
> > If you want to participate in an interesting experiment, fly to
> Gulfport
> > and
> > we'll go knock on some FEMA trailer doors.  I'll offer them a job and
> > you
> > record the reaction.  It will be something along these lines, "what,
> are
> > you
> > crazy man, I've got a free place to live, no utilities, a monthly
> > stipend,
> > why give-up all that for some risky job scheme"?  We need to evolve
> into
> > a
> > nation of workers AND savers.  That's where politics rears its ugly
> head
> > again. Becoming wealthy in this country is really simple.  The secret
> > is,
> > GET A JOB AND LIVE ON TEN PER CENT LESS THAN YOU EARN!
> >
> > How is that for a short answer?
> >
> > Brad
> >
> > On 7/14/07, Foy, Warren <Warren.Foy at masonandhanger.com> wrote:
> > >
> > > Brad,
> > >
> > > Why is so much of the national debt held by China and why does the
> > > Federal Government allow this to happen? (honest question, I don't
> > > know).
> > >
> > > You mentioned in a previous post yesterday the apparent good
> economic
> > > news and rise of the S&P and workers 401k's.  Yes, I checked mine
> this
> > > morning and all of the funds I am investing in are at record highs
> as
> > > well as many of the individual companies I am invested in - I love
> it!
> > > (for today): (maybe, as the current funds going into these funds are
> > > purchasing fewer shares).
> > >
> > > (I'll pause for L.Sailor (Elle) - Do I use too much punctuation?)
> > >
> > > However, I remain concerned that because of political and terrorism
> > > issues, the growth of the market is not sustainable.  I am young
> > enough
> > > (though not necessarily young, 47 with 20 or so years to retirement
> > > (maybe them I can purchase a Rhodes 22)) that I feel that my 401k
> > > retirement account can bridge more than one more significant market
> > > corrections due to (political/terrorism/Mr. Market/ whatever).
> > >
> > > I know I am rambling but my primary question (not necessarily to you
> > but
> > > to the list) is, why don't Americans absorb the national debt
> > ourselves
> > > rather than allow it to go to other countries?  Aren't we the
> > wealthiest
> > > nation the world?  I think that the simple answer is the lack of
> > > confidence in the administrations, whether it was Bush, Clinton,
> Bush
> > or
> > > however far back you want to go, and a thought that the stock market
> > > (whether American or International) will provide a better return,
> > which
> > > is probably (no definitely) true.
> > >
> > > I my opinion, the typical American individual and companies view
> that
> > a
> > > potential lower overall return of investment in the United States of
> > > America (via Saving Bonds or Treasury Bills), is super ceded by the
> > > perception of a potential additional rate of return by investing in
> > the
> > > markets.  In short, I think that greed rules over national pride and
> > > provision of national security.
> > >
> > > Simi related question - Why do so many Americans look for ways to
> > spend
> > > money to save on taxes?  I know people who have effectively blown
> > > thousands of dollars to keep from paying a couple of hundred in
> > Federal
> > > taxes?  (I do understand that it is potentially better for the
> overall
> > > economy).
> > >
> > > Sorry for the long rant, I've got work to do and I can't go sailing
> as
> > > Rummy has my boat.  How is the boat Rummy?
> > >
> > > Warren Foy
> > >
> > >
> > >
> > > -----Original Message-----
> > > From: rhodes22-list-bounces at rhodes22.org
> > > [mailto:rhodes22-list-bounces at rhodes22.org] On Behalf Of Brad
> Haslett
> > > Sent: Friday, July 13, 2007 3:22 PM
> > > To: The Rhodes 22 mail list
> > > Subject: Re: [Rhodes22-list] Economics - More Good News
> > >
> > > Rob,
> > >
> > > And the bad news is - much of that debt is held by China.
> > >
> > > The good news is - much of that debt is held by China.
> > >
> > > This is like "mutually assured destruction" with the Soviets but
> with
> > > money
> > > instead of nukes.  Speaking of bombs, if we could just stop the
> > ticking
> > > on
> > > the SS IED waiting down the road, I'd be happy.
> > >
> > > Brad
> > >
> > > PS - I'm going back to work this afternoon, I have my own deficit
> and
> > > debt
> > > issues looming.
> > >
> > > On 7/13/07, Rob Lowe <rlowe at vt.edu> wrote:
> > > >
> > > > Oh, I think Stan knows, but here goes anyway.
> > > >
> > > > The deficit is the yearly difference between spending and
> receipts.
> > > The
> > > > national debt is the sum of all the yearly deficits to date. The
> > > national
> > > > debt is approaching $7 trillion (yep, with a T).  Just think, your
> > > > personal
> > > > share is only about $30K, just short of the price of a new Rhodes.
> > > >
> > > > http://www.brillig.com/debt_clock/
> > > >
> > > > - rob
> > > >
> > > >
> > > > ----- Original Message -----
> > > > From: "stan" <stan at rhodes22.com>
> > > > To: "The Rhodes 22 mail list" <rhodes22-list at rhodes22.org>
> > > > Sent: Friday, July 13, 2007 2:52 PM
> > > > Subject: Re: [Rhodes22-list] Economics - More Good News
> > > >
> > > >
> > > > > help:  what is the difference between our national debt and our
> > > national
> > > > > deficit ?  And what are the comparison figures for the same
> years
> > > for
> > > > the
> > > > > national debt ?
> > > > >
> > > > > capitalistic minds need to know
> > > > >
> > > > > ss
> > > > >
> > > > > ----- Original Message -----
> > > > > From: "Brad Haslett" <flybrad at gmail.com>
> > > > > To: "The Rhodes 22 mail list" <rhodes22-list at rhodes22.org>
> > > > > Sent: Friday, July 13, 2007 2:45 PM
> > > > > Subject: [Rhodes22-list] Economics - More Good News
> > > > >
> > > > >
> > > > > > Yesterdays record S & P was indeed good news!  Anyone look at
> > the
> > > > > > performance of their 401K lately?  No one needs to explain to
> me
> > > the
> > > > > > fundamental weaknesses of the current economy, but by all
> > > conventional
> > > > > > yardsticks, things look good.  If we had some fiscal
> discipline
> > > from
> > > > the
> > > > > > Congress and especially the White House, we could cut taxes
> > again.
> > > > Alas,
> > > > > > that won't happen.  But the previous tax cuts and the robust
> > > economy
> > > > that
> > > > > > has resulted has made significant reductions in our debt load.
> > > > > >
> > > > > > Total US Deficit
> > > > > >
> > > > > > 2004 - $413 billion
> > > > > > 2005 - $318 billion
> > > > > > 2006 - $248 billion
> > > > > > 2007 - $205 billion
> > > > > >
> > > > > >
> > > > > > US Deficit as a percentage of GNP
> > > > > >
> > > > > > 2004 - 3.6%
> > > > > > 2005 - 2.6%
> > > > > > 2006 - 1.9%
> > > > > > 2007 - 1.5%
> > > > > >
> > > > > > I just love good economic news!
> > > > > >
> > > > > > Brad
> > > > > > __________________________________________________
> > > > > > Use Rhodes22-list at rhodes22.org, Help? www.rhodes22.org/list
> > > > >
> > > > > __________________________________________________
> > > > > Use Rhodes22-list at rhodes22.org, Help? www.rhodes22.org/list
> > > >
> > > >
> > > > __________________________________________________
> > > > Use Rhodes22-list at rhodes22.org, Help? www.rhodes22.org/list
> > > >
> > > __________________________________________________
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> > > __________________________________________________
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> > >
> > __________________________________________________
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> >
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