Sushi Money

Okay, the rebate check is in the bank and we’re going through the budget again.  I was shaking my head at the price of groceries and gas today, but it’s hard to see much of an economic slowdown by the amount of traffic out on the roads.  People must be cutting back though because everything has gone up in price recently. I’ve even heard some of the restaurants are struggling. 

We’re learning like never before how fuel prices really impact consumers and the needs of the family.  Simple things such as a trip to a nearby town are put off until really necessary, and I find myself driving a lot slower than I used to.  Some enterprising automaker should come up with a really efficient vehicle they call the Frugal.   I’d call it our Family Frugal and drive it proudly around.  Not a very sexy name perhaps, but heck I’m all about practical efficiency these days.  Actually it sounds kind of like a Volkswagon… Das Familie Frugal.

Ah but we use fuel for more than our vehicles.  We use propane fuel for some of our winter heating needs, and I usually fill the tank in late spring each year.  But with oil prices out of control, propane prices are crazy high too.  Do I fill the tank now, or wait until next fall or winter?  I’m inclined to wait and see if somebody… anybody, will do something about the rampant speculation in the oil markets out there.  At some point these high prices are bound to blow off.  It’s bad enough with gasoline, but the debate even involves diesel fuel supplies which are tighter and more expensive.  It’s a problem we need to solve because it affects everything- driving cars, trucking and transportation for goods, grocery prices, heating, etc, etc.

Members of the House Transportation and Infrastructure Committee’s Highways and Transit Subcommittee generally agreed that diesel prices have risen faster than gasoline prices, and that increases are reflected in higher food and merchandise costs. But they broke along party lines in suggesting ways to address the problem.”The conventional wisdom is that speculation provides liquidity to the market. But when you have a huge entry of people who have no intention of taking delivery of a commodity but are merely interested in making money by bidding prices higher, that’s a different matter,” Rep. Peter A. DeFazio (D-Ore.), the subcommittee’s chairman, said in his opening statement.

But Tyson Slocum, energy program director at the consumer advocacy group Public Citizen, agreed with DeFazio that speculators are exerting an unhealthy influence on energy commodity markets. “A certain amount of speculation or hedging is essential. But we have a financial bubble resulting from too much speculation. About 95% of the trades today do not involve taking delivery,” he said.

DeFazio still was interested in the possible impact of speculators on oil prices. “What would it hurt to have trades no longer opaque and off the books?”

I’m a pro-business, free market kind of guy, but when you have a critical commodity that drives every aspect of the national economic engine, how can we allow speculators and commodity investors to leverage investments in oil contracts that will never be delivered?  And if oil prices just keep going up, can the U.S. economy and consumers even survive in that environment?

Here’s one for you:  Just yesterday I was talking with the local propane company manager about fuel prices and my propane bill, and he spoke of a close friend who was a truck driver.  This guy regularly drove from the midwest roundtrip to the south and southwest, but his normal routine was to fill up his truck’s fuel tanks in Mexico!   “Why does he do that?” I asked, and the answer was that truckers can buy a cheap $20 pass to cross the border to buy fuel and they pay half the price for gas and diesel that we pay in the U.S.!   

Why does gasoline or diesel fuel cost half as much right across the border in Mexico than it does in the U.S.?

I don’t know how accurate that is, but the propane company manager I spoke with said it was true.  Perhaps Mexico has more reserves for oil, more drilling, more refineries… oh, maybe that’s why it costs less?   Even so, should petroleum products be half-price just across the border?  If it is, then we’re doing something wrong here in the U.S.  Hey, maybe we can tie in some of the immigation issues with cross-border agreements for oil or fuel?

But with the economy still teetering on the edge of a recession, at least Alan Greenspan thinks that ”the worst of the credit crisis is behind us.”   But what about inflationary costs to consumers for fuel and grocery prices?  I’m really not sure what Congress is doing beyond posturing and looking at raising taxes.  Is raising taxes on fuel and energy companies going to save consumers money?  I don’t think so.

I’m still calling for a U.S. Energy Summit however.  We’re not going to get anywhere if people don’t stop pointing fingers.  They need to sit down and map out the issues- start taking proactive measures and move forward with a plan for the nation. 

But in other news at the homefront, we’re busy planting a garden this year.  A different kind of fuel for the family perhaps, and another way to live a little more frugally.  With a little bit of space, how hard is it really to grow a few vegetables?  Especially tomatoes, but this year we’re even planting corn.  It’s much cheaper to grow your own, but admittedly it does take some effort to get started.  But if we’re successful and have enough veggies, it will cut down on the grocery bill.  And we hope to freeze and put up some of the extra to last into winter.  Now if I could figure out how to grow our own fuel for the cars we’d really be doing well. 

 Even with a challenging economy and dynamic swings in stock prices, the market has begun to advance over the last couple of months.  While the U.S. economy teeters on the edge of recession, is it really that bad out there? That certainly depends on your individual situation, but for the most part we’re managing to get by, even with gas and commodity prices that are out of control.  Interest rates have dropped quite a bit and that’s provided some relief to homeowners with ARM loans.

But is the Fed finished cutting rates?  Many experts believe so, and that from here will be a long pause to allow the economy to work its way back into growth mode.  Maybe the Fed Has Bought Enough Anti-Recession Insurance for now.  But we’ve got to put our money to work somewhere, and for most of us that means staying invested even in difficult times.

The amount of negativity about the economy and markets have been amazing this past year, and Jason Zweig’s near-contrarian view offers some good advice for Why Acting Bearish is a Dumb Move.

“This has been one ferocious stock market. Not only has Wall Street been flirting with a bear market - conventionally defined as a 20% decline in the major indexes - but we’re now in “the second-worst eight-year period for stocks since the 1930s,” says money manager Martha Ortiz of Aronson Johnson & Ortiz in Philadelphia.”

“…a growing chorus of bears thinks that the worst is yet to come and that investors should get out of the market. After all, everyone knows stocks will keep sagging since it’s obvious the economy is sinking into recession, right?”

“Even if the economy is headed for real trouble, don’t assume that your portfolio is too. Larry Swedroe, director of research at Buckingham Asset Management, notes that the U.S. economy has experienced 11 recessions since World War II. From the first day of those economic contractions to the last, stocks still managed to deliver average gains of 7.1% vs. 5.1% for cash.”

Bottom line?  Stay invested, stay long, and focus on living positively each day.  It’s not always easy to do, but I try to tune out the economic noise, and remember what’s important at home and with family.   If there’s something I’ve learned from this almost-recession and high gas and grocery prices, it’s that we really don’t need a lot of the things we spend money on.

Cutting back spending and becoming more frugal isn’t that difficult.  I don’t know about you, but when I save money or do something more efficiently, it really makes me feel good in other areas of my life.  It helps me to focus on the important aspects of life, and the goals I have for personal growth.  I’m not tied to worries or stress about the market, and how my retirement funds are doing.  

It’s about improving the quality of our lives and experience versus the quantity of something that is always changing.  

Laura Rowley describes it very well as feeling blessed. 

“Money can certainly buy us a measure of freedom or security, but money itself is none of those things. If we think money is security, we’ll never amass enough to feel secure. If we think it’s freedom, we’ll never earn enough to be free.”

“Once we remove the emotional baggage, we can acknowledge that money is just one component to achieve our goals instead of an all-encompassing solution. If freedom is a value, we have to ask which people, qualities, and experiences have made us feel most free in the past: Where do I need to live to be around those people? What should I do for my work, and how should I spend my leisure time? How much money do I need to help me create a life with those qualities and experiences? Being as specific as possible about how to manifest these qualities in our lives will keep us from running on the hedonic treadmill.” 

“… long-term flourishing requires discipline, persistence, hard work, faith, and, most important, pursuing goals that are close to your heart and based on your personal gifts.”

When we take time to appreciate what we do have in our lives, we begin to understand more about ourselves, our relationships and where we want to go.  It’s an essential part of the process of discovery, not only for whatever personal gifts we possess, but for the direction of the journey itself.  

Is money the reason for the journey?   Not by a long shot.  But it certainly helps.  A little balance and reflection helps even more.  Growing our money, like growing our lives, takes time and staying invested.  Money provides a lot of things in life, but it can’t buy long term happiness.  Money is simply a tool to take along the journey.  Sure it’s important, but if we forget our goals and what’s important in our lives, then we really haven’t gone anywhere have we?

It’s amazing how high fuel prices have gone this year.  In short, like many Americans, I’ve simply had enough of paying so much for gas.  Honestly, it’s such a total waste of money don’t you think? The quality of the ride we’re getting at $3.50 a gallon for driving doesn’t feel any better than it did at $2.25 a gallon.  For the increased price of fuel there is no additional satisfaction or more importantly, no contribution to a greater good gained from paying more to do the same thing with a gallon of gas.  It’s actually worse, and a waste of money.  And that’s the rub for most of us.

So what am I doing about it?  Personally we’ve already drastically reduced our vehicle use, and are investigating more fuel efficient cars for the future.  But that really doesn’t change much in the face of rising prices, except maintaining the status quo.  And I just don’t think the status quo is good enough anymore. I was looking back over the past 12 months and was surprised that we were paying almost a dollar less per gallon for several months last year.  Then in late summer, prices began a slow climb, spiking after the new year and reaching an average of $3.50 a gallon this week.

So now, with a humble voice from the wilderness, I’m calling for an Energy Summit for Congress, the Administration and leading oil company experts to sit down and begin devising a strategy to take the nation out of the grip of oil dependence.  Not a new theme, but has any legislator or administration official proposed anything constructive in the face of oil price inflation?  Sure oil company executives have been called on the carpet to testify before Congress, but to what end?  Grandstanding by politicians to make us think they’re doing something? Do we realistically think companies that are in business to make a profit should start to not work to make a profit?  Is that going to benefit our economy and those who need the fuel these companies produce?  Does anyone really think that making oil companies the scapegoats will solve America’s oil dependence problems?   More importantly, has the SEC or any governing body investigated the impact of energy sector speculation or the influence that the rise of sovereign wealth funds have had on market dynamics?

As much as I believe that the the U.S. is being driven towards a greater economic crisis due to energy impacts, my frustration is really a personal issue. Which is due to the simple fact that the engine of the U.S. economy is ultimately distilled into the basic economic units of individuals and families as consumers.   We are the spending sparks of economic activity that drives this great machine, and our ability to do so is being damaged with each passing day. 

A few weeks ago I took a short poll asking if high gas prices have affected people’s driving habits.  After a fairly small response, more people indicated that gas prices only affected them “a little”, while the others said “a lot.”  But gas prices really had only been higher for a couple of months.  I’m willing to bet more people would indicate “a lot” today, and over the next few months as fuel prices remain higher.  Have you changed your driving habits?

It’s not just fuel prices though- it’s also the economic costs passed on to consumers because of fuel prices, and higher commodity prices that are causing turmoil across the nation.   So I’m the first to admit that fuel prices and grocery prices affect our family’s choices every single day.  And I feel fortunate, because technically we can afford to drive our cars, commute to work and do what is necessary each day.  So consumers are starting to feel pinched?  I think that’s an understatement.

With higher prices something else is given up to accomplish the same tasks.  We don’t go out and eat or visit new places as often as we used to.  And we won’t be traveling as much this year as last year.  We even cancelled a longer vacation we had already planned for the summer because of fuel costs.  We take fewer trips to the store, and the discretionary funds we normally spent on nice-to-have items or entertainment in the past are being used for basic needs such as food and putting gas in the tank to get to work.

But there are many other families who can barely afford to get to work or put food on the table each day.  I’ve read of some who may not have the money to pay for gas for a trip to the doctor or hospital. Many Americans live in rural areas and must travel extensively to get to work and fulfill basic needs.  High fuel prices hurt those who must travel greater distances especially hard.  This nation is larger than most nations in the world- and driving long distances is something we are accustomed to.  We are not accustomed to enormous prices for gas to be able to get to the doctor or the grocery store.

So is the government doing enough?   Is Congress and the President’s administration taking these issues seriously enough?Perhaps what really bothers me is that maybe they’ve collectively looked at it and simply shrugged, without really putting a plan together to do something about it.  The U.S. says oil prices are too high, but no one seems to have any idea what to do about it.  Instead, we push for biofuel production and increase demand for oil.  Yet biofuel production soaks up oil supplies and is being blamed for increasing hunger across third world nations as it drives up commodity prices, challenging the ability of support organizations and governments to get food supplies to people in need.

So what is going to solve the oil conundrum?   Do we not have the technology and ability to find more oil and ramp up production?  Or do we lack the collective will as a nation to do what’s necessary, simply remaining dependent on other nations for our oil needs and paying whatever the market demands?  Tapping the Strategic Reserve isn’t going to solve anything over the long term either.  I simply think we can do more as a nation to support the American family’s needs at home, that would also serve to strengthen the U.S. economy for the long term.

My hope is that we’ll see Congress and the Administration get together an conduct an Energy Summit to put a plan in place that will  support the nation’s needs.  New energy, alternative energy, new research, and yes- more oil to fulfill the nation’s needs.  One day perhaps we’ll find the holy grail that relieves our dependence on oil.  But the U.S. economy is tied to oil for countless needs right now and we risk being economically crippled for too many years if we don’t start working together more aggressively.

We are better than this dependence, and we need a little more forward thinking by our elected leadership.  We’ve put off the energy debate for so many years it’s now come back to haunt us.  Whether we enter or are in a recession now is beside the point. Consumers are spending more on fuel and food, and less on everything else.  And I think it’s a threat to our nation’s economic viability over the long term. That’s simply got to change. 

Here’s the video of the original version of Over the Rainbow / What a Wonderful World by Israel Kamakawiwo’ole. Simply beautiful. I remember I heard this before and never knew who sang it. Now I know, and I’m thankful I know a little of his life and how many friends he had.

While we read of so many challenges across the nation, and the unpredictability of the markets, I think it’s important to remember what we do have. To love and appreciate the people and relationships in our lives, and the simple good that we find around us. Being able to frame the context of life and our perceptions with something greater in the moment, and to look with hope towards the future… perhaps that’s what this song brings forth. Have a great day.

The news and numbers are pretty negative lately. The economy is struggling, real estate is looking for traction, the markets are bouncing around aimlessly, and Clinton and Obama are one-upping each other with promises while talking about how bad everything is. If I didn’t know better, this feels like it’ll go on forever. But it won’t. It’s just a temporary funk. Mostly an economic funk. We’ve been there before, and we’ll emerge with newfound optimism for something seemingly better.

But what is that something that might be better? What is the next big thing that people will really be excited and hopeful about? Do you ever wonder what it might be that’s going to be a huge focus for people or change on a mass scale? Sometimes it’s generated by the media, or a company product, or just some growing trend or mania that people are interested in.

Whatever it is (and I don’t think we’ll find it on eBay), there always seems to be some new “big thing” around the corner. Why do I care? For the same reason that most businesses, entreprenuers and investors care… because if you can put your finger on the pulse of this change and human interest, then you can focus your energy in that direction, potentially growing your life’s work and/or financial fortunes in leaps and bounds over the next 5, 10 or even 20 years.

Looking back a couple decades, we’ve been through several cycles of boom and bust of course. Yet the “Dot Com Bust” still offered many opportunities to do very well even with the carnage of companies that ceased to exist a few years later. We hear the news of the crash and the fortunes lost. We don’t often hear about the fortunes made, but some people tapped into the right companies and trends and have done very well.

Now it’s real estate and credit derivatives that have crashed, and we’re unraveling the lessons of years of financial excess. A long-term view could see this growth, expansion, bust and consolidation as a natural progression and evolution for economic cycles and human interest. Can it be any other way?

Certainly the technological changes coming in the future will surpass anything we know of today, and I wonder where that may lead us. Bill Gates sees enormous technological advances that will revolutionize our lives:

In a speech to the Northern Virginia Technology Council, Gates speculated that some of the most important advances will come in the ways people interact with computers: speech-recognition technology, tablets that will recognize handwriting and touch-screen surfaces that will integrate a wide variety of information.

“I don’t see anything that will stop the rapid advance,” Gates said, noting that technological change driven by academia and corporate researchers continued even after the Internet stock bubble burst in 2000.” “…The coming years will bring rapid changes in media as television increasingly becomes a targeted medium, where viewers can select niche content for news, sports and entertainment. “…TV will be based on the Internet; it will be an utterly different thing,” he said.

My interest and curiosity is for how people become excited and accept or adopt certain products, and then figuring out what those trends or products might be. How do some companies (e.g. Apple) capitalize on what is “trendy” while other companies don’t?

When I try to understand how we become excited about things, it strikes me that these products or “things” must be developed by visionaries and market leaders. These are people with the imagination and the abililty to create something from an idea, and then shepard it through to adoption. Naturally this creation must not only be useful, it must be also be something that sparks the “Aha!” moment within a consumer for the enjoyment or usefulness it brings.

Not everyone accepts change so easily however. Little more than a decade ago as computer use became mainstream, I remember a stalwart, old associate that walked around the office with a big yellow legal pad and refused to use a computer. He waived that legal pad in everyone’s face, proud of how he still did it the old way. And then he finally realized the old way was gone, and he was becoming increasingly irrelevent and clueless. He finally adapted and adopted, painful as it was.

I know a lot of people who still use letters, stamps and paper checks everyday to pay bills. Not a thing wrong with that- and in fact, it brings a sense of solidity and permanence to things. But I know a lot more people that have given up the checkbook and stamps to pay bills online. It is fast becoming the exception to use stamps and checks for many people, myself included. But if you really want to make an impression, or send a caring note to someone, there is no substitute for writing it by hand.

Of course we’re still reeling from the last “big excess” and the after-effects of the “Housing Bust” and out-of-control mortgage lending. But think about it- not everyone has struggled with real estate. For everyone that bought a home, someone sold that home. Lots of folks made a bundle during the real estate boom, and if they were smart, saved enough of that money to keep it working for them over time.

The housing boom and bust is a story of money made and lost. For some families, financial gain (or loss) changed their lives forever. In a free market economy it can be no other way. Some people win big, some people lose big… most of us muddle along in the middle, looking for ways improve our lives as we adapt to changing conditions.

So there’s always excess… and most of the situations that involved speculative excess were caused by investors and even genuine buyers plunging in head-first to “stake their claim” and make money. The dot-com boom and housing boom were both the modern day version of the gold rush. We’re all trying to make life better for our future. For some it was always a “get rich quick” scheme whether they admitted it or not. “Slow and steady wins the race” is the old rabbit versus tortoise axiom. There’s a lot of truth in those words in terms of focus and comittment. But it’s hard to remember that axiom when the pace of technological change outstrips our ability to adapt and grow with it.

And that’s the crux of the problem for many people… how to adapt to change. Technology evolution challenges our ability to learn and adapt, which opens up a whole new focus for business services and education. That is precisely the reason why education is so important, and why job re-training is booming across the nation.  Where do you fit in?  Is it hard to keep pace with that change?   In the next segment I’ll look at 10 themes of change we’ll face in the years ahead.

Can Sprint reinvent itself and reverse the loss of their customers?  It would seem millions are flocking to other carriers and Sprint is challenged to stem the tide.  Business Week writes about Sprint Nextel’s Last-Ditch Weapon- a new phone, plan and corporate image.  Which may be a bit melodramatic, but it paints a challenging picture for a once high-flying cell phone company.

Is Business Week right and is Sprint really on the ropes?  Their CEO Dan Hesse is making the case that Sprint finally ”gets it” and will give subscribers what they want:

“People want the whole package,” Hesse said during a keynote address at an annual conference held by CTIA-The Wireless Association. “They’re saying, who’s going to give me what I want, when I want, and make it easy to use. They’re all the building blocks of the wireless company of the future.” 

 Sprint now offers an all-in-one plan for $99 that gives you as many minutes, internet, picture and video stuff that you could ever want.  They’ve got a new phone line-up and soon will offer the Instinct, a sheik touch-screen cell phone that has the iphone look to it and all the bells and whistles.

But the biggest problem for Sprint is their customer base, and former customers.  This was the cell-phone company whose customer service execs must have gone to the Trump School of Business… last year they told some customers You’re Fired! presumably because they called customer service too much.

 You know what?  Every time a customer calls for help or assistance, that’s the time to sell the company (and your products) once again. In fact, you have to do that. If you don’t- they’re going to leave.  In Sprint’s case, they’ve been leaving by the millions.    What did You’re Fired! say to all the other Sprint customers?  It told them “Don’t call us because we don’t want to hear it… look what we did to the other guys.”

Realistically that wasn’t really the problem.  The greater problem in the past was Sprint’s customer service was simply not up-to-par compared to other companies.  It was difficult to get a rep on the phone, and they often didn’t know how to help.

Yet personally I think they’re getting a bad rap these days.  I’ve been a Sprint customer for over 5 years, and have been very pleased with the phones, coverage and even customer service.  They even have the best cell tower coverage in the area where we live.  I love the phone and plan I have.  But I’m wary based on other people’s experiences.  And as much as I might consider a new phone, I dread going in and haggling with the customer service rep because the plans were historically so complicated and expensive.  It shouldn’t be that way, and maybe now Sprint “gets it” enough that I’ll choose a new phone and plan.

But I started wondering:  How many companies realize that a bad customer service experience can lose a customer- not only for the short term, but sometimes for life?!  It’s true… make the experience bad enough, or hard enough, and they’ll never come back.  

My own example:  Do you know why I’ll never have a Discover card?  Because when I was younger they sent me this wonderful invitation to get a credit card with them.  I had used credit very little in the past, and was careful with my money and credit history.  So I called to apply because it sounded good. I was a college graduate with steady employment with a government agency and that would have been my first credit card.  Then the customer service rep gave me such a hard time over my lack of credit experience, and then denied my application, that it was humiliating.   I hung up, applied with American Express and received a card the next week.  I’ve appreciated the Amex customer service ever since.  That was two decades ago.   I tear up invitations from Discover almost weekly now.  From what I’ve read, people are not that happy with Discover card these days either.

A corporate reputation takes a long time to build, but like any reputation, it can be destroyed in very short order.   I recently read where Sprint lost an enormous business contract because a rep at the store didn’t give the time of day to an innocent request to fix or replace a phone.  A phone that had insurance on it, you know- the monthly $4 fee?  The individual was accused of dropping the phone in the water and they refused the request.  Good grief… the last thing you need when you need help is for the company you pay to give you a hard time.   That individual had been a subscriber for over 10 years, and left the same day.  All because of one clueless service rep.

It’s like the police officer I was talking with the other day (professionally!).  He said he hardly ever wrote tickets, but when he did- those folks were asking to receive a ticket because they just made things worse for themselves, argued, and gave him a hard time.  Sprint is finding out that poor customer service is like asking your customers to leave. 

Now Sprint is asking customers to come back, or give them another shot.  Given enough time and quality service, they may have enough credibility to rebuild the company.  I’ll stick with them for now based on my overall positive experience, and to their credit they offer a lot more choice and flexibility these days.  They’ve even made contracts simpler and you can try out a plan risk-free for 30 days.   My instincts are telling me to take another look… and when the new Instinct comes out I may do just that.

For budget entertainment, American Idol is pretty good. What makes it better is when the competition heats up… How about that David Cook? I’ve enjoyed him each week, but his Billie Jean remake was incredible. I think he’s going all the way… Here’s a YouTube version, enjoy!