Archives for posts with tag: Congress

I always look for trends, especially emerging or changing trends.

As I advise young people, a couple of my “clients” recently spoke about pursuing a career with the FBI. At first I thought it was just a coincidence. And, based on my own or my generation’s experiences, a very different choice. Then, a recent issue of the Wall Street Journal, contains a supplement which shows the Most Attractive Employers based on a large survey of young people just entering the work force. The survey breaks down the 100 top choices for students graduating with degrees in five disciplines: business, engineering, computer sciences, natural sciences and the humanities.

The FBI is in the top ten of three of these categories of graduates and in the top twenty of the other two! For the business graduates, the FBI, at number 10, was above Amazon, Coke and a number of well known CPA firms, consulting firms and large banks. The CIA was also in the top 20 for three categories of graduates. A host of other government agencies were ranked in the top 100 most attractive employers and included: the State Department, the Armed Services, the EPA, Veterans Affairs, and the National Institutes of Health.

Now, I could easily understand a number of the graduates’ top choices, like Google, Apple, Disney or even Nike. But the FBI?

So, in  talking with a couple friends, I concluded a new trend may be occurring with this young group we call Millenniums. Many want what they consider to be more meaningful jobs that somehow contribute to the world rather than just making money. Many also want more balanced work and personal lives versus the seven day, twelve hours a day required by investment banking, giant law firms and consulting practices. Some may seek the attraction or thrill of intelligence work. My own generation and subsequent ones may have had some of these traits but not to this extent.

To those seeking a career with the FBI, I have a couple thoughts. Cleveland, Ohio, where I am from, is one of the FBI’s largest regional offices. Eliot Ness even spent a lot of time there. We have gotten to personally know a couple of agents there. They have certain qualities in common. They are of average height, thin, speak very little and you sense they are watching everyone most of the time. And they agilely move like a young Steve McQueen or today’s Jet Li. One of my young “clients” was recently at a group interview with a handful of FBI agents. He said they looked and acted just like this. So even the FBI has a leadership style and a unique culture which you need to consider and whether you would be a good fit. I am sure that the CIA and the other branches or agencies of our government also have their own characteristics and preferred profiles for people they like to recruit. So do your research on this just as you should to pursue a corporate job.

I also have some advice for our U.S. Government. Right now we have the lowest ratings ever for our elected officials in Congress and the Executive branch. The current presidential campaigns, for both parties, are not making our feelings toward Washington any better. BUT we have all kinds of young graduates who want to work for the FBI and a number of other parts of our government. So what if we recruit a lot more people for the FBI, CIA, NSA, etc. We could make the country a bit safer and maybe develop some future leaders who people might actually like and respect. How do we pay for this in our tough Federal Budget crunch? We could start by cutting the pay, staff, travel expenses and free lifetime pensions and medical care we currently provide to a Congress that most people hold in low regard!

Now this could be a positive new trend!

P.S. My book, The Business Zoo, should be available by the end of September on Amazon and Kindle!

The stock market is hitting new heights so far in 2014. Unemployment is not great, but at 6.3% it is the lowest since 2008 . The economy should be doing well. But Housing and the vast amount of building products and household goods it pulls along are not doing so well. The news media is just starting to talk about all this, but they are not sure what is wrong with Housing.

At first, some thought it was the terrible weather throughout much of the nation this past several months. But now its warmer, (watch out Al Gore for that climate change) and Housing, especially new Housing, is still slow. Some people say that interest rates on mortgages are up and that that is the issue. Although mortgage rates are up from the bottom they are still quite low by historic standards at just over 4% for a 30 year loan. One article about Warren Buffet’s real estate brokerage firm, mentioned that the lack of first time buyers, who usually make up over 40% of buyers but is now under 30%, is the issue. Bingo!

Having been around construction and building materials for way too long, that is the real problem. But to me it is not a Housing problem. It is a major issue with the economy problem. And I will try to explain why.

In endless conversations with my friends in Florida or Chicago, one theme keeps coming up. These are people who are either at the peak or end of their working careers and who brought their first home, like me, in their early 20’s. The reoccurring theme is that my/this generation is still substantially supporting their children and/or grandchildren. I do not mean a cell phone bill or even medical insurance. I mean monthly or quarterly or annual large chucks of cash to keep their children afloat. If friends have three or more children, one or two are still on their “payroll”. It is very rare that one of my friends is not helping at least one child survive. So even if these parents help with a nice down payment on a first time house, how are these young people going to afford it? The average price of a new house today is back to the pre housing crisis level of close to $300,000! Even with a big downpayment, how can young people who are struggling as it is, buy and maintain a house?

Young people now graduate college or with advanced degrees with $50,000 or more of student loans that they must start paying on immediately. This is about the same amount most of my group owed on their first home mortgage!

What value does this generation get for their college and advanced degrees? Often not enough salary to pay back their student loans and live, let alone try to buy that first house.

And if these young people are having trouble buying a first home, how will they ever be able to buy up all the retirement and second homes that are owned by my generation in Florida, Arizona or Vegas?

It is a major problem, but it is not a Housing problem. I believe it is a major long term problem for our economy that our so-called leaders in Washington are ignoring like everything else that is unpleasant. So, hopefully, the media will correctly identify the real Housing problem, and soon, so that it starts getting the attention that it so desperately needs.

Earlier this year I wrote about two articles in the Wall Street Journal that dealt with our world of banking and debt.

Now two more showed up and again reminded me of how our current improving financial times are just part of a never ending cycle. Things get bad, banks do not lend even when they should. Things seem better and banks want to lend and go crazy.

“Shift on NonConforming Mortgages” Wall St. Journal 12/3/13

Banks until recently were very concerned and cautious of who and how they lend money especially on the very mortgages that got them and the whole country in a mess. The article points out that now many banks, and yes, even the ones who were sued by the government and various states for their role in the mortgage crisis (like poor Bank of America), are now starting to make mortgage loans that do not conform to current lending standards. The article states that this might be the old interest-only loan again. Or a loan to someone whose income does not qualify them for the amount borrowed. Or where the bank will not fully document the borrower’s income or assets. To start, bankers claim these loans will only be made to their wealthier, high-end clients.

Well, I assure you this is where it started a decade ago, before we had our mortgage crisis. It starts small and limited. Soon banks, and the infamous mortgage brokers who feed the mortgage industry with new loan applications, will be making most of their loans that are nonconforming or do not meet standards. Last time it ended in a crisis. And we will likely have one in the future as these trends continue.

“Banks Brace for Tighter Regulation” Wall St. Journal 12/4/13

This article deals with the fact that now that the mortgage crisis is over (for this round), the government will finally force banks to limit their overall lending and investments in what we will call collectively “hedging”. In the mortgage crisis, you recall, banks managed to not only make what we called above, nonconforming loans, but they managed to bundle them and sell them multiple times and in parts and pieces to each other and make money doing it. Until they lost money doing it. So the new regulations will restrict how much of this type of trading or investing banks can do.

I have wondered for the last five or six years why these rules were not put in place already. But the banking industry has a very serious lobbying group and are a big source of fund-raising even for Congress people who claim to hate banks. So it has taken forever. It will be watered down.  Bank groups are concerned they will not be competitive with other global banks. And in the end, the new rules will accomplish, sadly, very little. And we will have banks too big to fail, failing again.

A friend in Florida just gave me further evidence to our future reoccurring  financial fate at the hands of banks, mortgages and the housing market. In the last month, he had two real estate people knock on his door and asked if he wanted to sell his condo. He is in a nice area and has an end unit which the brokers claim they have a buyer for.

Real estate agents cold calling. Banks giving out nonstandard loans. And the government unable to meaningfully limit banks and their practices. Have we seen this movie before?

It is just a sign of our financial times. But be care out there in the world of real estate, lending and banking. And in the Business Zoo!

Normally I, like some people, try to avoid politics. But this government shutdown is just too much to ignore. So some thoughts.

Shut down Congress first. The actors in television shows about teachers who turn into mean-spirited meth dealers are more popular than our elected Congressmen. And every week we learn something new and unpleasant about those in our legislative branch of government. I am not referring to just those who text improper pictures. Congress is exempt from the new Affordable Care Act because they have a much better, super medical plan. Congressmen and women who serve one term get this medical plan for life along with their salary as a lifetime pension. Then this last week we learned that when one of them dies, even years out of office, their spouse gets another one year salary as a death benefit. Why do they get all these things? Because they pass the laws that allow them to get them. We complain how corporate executives have too many benefits but at least a Board of Directors is involved, whereas here it is self awarded.

So shut down Congress without pay or benefits.  Not just their staffs who are being gradually placed on leave, but the big bosses.  As my wife would say, give some of this money to those who have served in our military services. We would still save money and we would not lose much if they were all gone for awhile.

The other related thought was to prohibit the President and Congress from talking to any media person until this budget issue is fixed. Without our never ending, 24/7, on 200 channels, news coverage, I am not sure we would even have a Sequester problem. Could you image some of our forefathers scheduling news conferences to rattle on about all this. Not Andrew Jackson, nicknamed Old Hickory; he fought duels with rivals not shout-outs on CNN or Fox. Most of our early Congressmen had real jobs or farms to work and could not afford to waste the endless media time that our current crop eagerly does. This plan might cost some young newscasters their jobs but I am wiling to take that risk.

Finally, I have believed forever that although we are the most fortunate and wonderful country in the world, we may be one of the most amateurishly managed one as well. We elect and often re-elect felons to office. Our main criteria seems to be that they are almost all lawyers by background but who rarely worked in the practice of law or anything else for that matter. We generally hate to elect business people or self-made successful people of any kind.

Maybe we need to re-evaluate our criteria for our elected officials. Less lawyers. Avoid those who love the media. Elect those who have really done something useful in their prior careers. Having them at least wrestle on YouTube would also be fun and make them more popular!

Thanks for listening. I feel better!