Leadership Mojo

I Had to Fire Someone Today

    It's not much fun knowing all weekend that, odds on, you are going to have to let someone go first thing Monday morning. Especially in this economy. Still, there are times when it is absolutely necessary. And I've never been as certain that it was necessary as I was today.

     Here's the sad thing. It wasn't because of downsizing. In fact, business is so good, we are in the midst of hiring. The reason was because

Rodney Johnson's Future and Mad Men's Past

             When Rodney Johnson, President of HS Dent, a company that provides economic research, spoke in Dallas last Friday, I was there. I'd not seen Rodney, a long-time client of mine, present since several years ago when I was invited to speak at the annual HS Dent conference myself. It's always provocative to hear his economic insights.

            At one point, Rodney referenced famed economist John Maynard Keynes, an advocate of government stimulus during recessions. Keynes often spoke of stimulating man's "animal spirits." A woman near me smirked, thinking Rodney was making fun of Keynes. He did have a point, but it was not so much about Keynes as referencing our current government.... When people who run companies and those who lend money are paralyzed with fear, they don't take appropriate risk to grow the economy.... That's what Keynes was talking about.  But what Rodney then said was the reason why he brought it up in the first place: 

The Nose Knows Wine and Wine Glasses

    I guess being the 11th generation of exceptional wine glass makers, one's nose is simply bred to distinguish the flavors in a wine bouquets. Viennese bred Maximilian Reidel of the legendary Reidel crystal glassware did not disappoint when I recently attended a wine and fine chocolate tasting hosted by Noka Chocolates.
   Looking around guiltily, since I'd gobbled my two thumbnail-sized chocolates long before I was told

The Blog Ghost Shakes Hands

Okay, I admit it. I don't always "get" it when it comes to technology. Here's what I'd like to know: How is it that after months and months of writing this blog, all of a sudden, my monthly newsletter, all about handshakes this month, and which is completely independent of this blog and uses a completely different platform..... how is it that my entire newsletter appeared in my blog?.... How the hell did that happen?

It's ok, I guess. It just that my LodeStar Universal newsletter included a bunch of disclaimer junk and code junk that doesn't fit in blogs. And well, it was just spooky as all get out.

Was it the Blog Ghost reaching out to shake my hand?

Everybody knows my mom died a few months ago. Mother, was that you?

Wow.

Interpretations

    There's an old saying that goes something like this: No matter what your point of view, you can prove it in the Bible. It's true in the Bible, and it is true in the US Constitution. For instance, my son who is a young lawyer was president of the Second Amendment Society at his law school. Damn the chicken in every pot ideal for American households, he believes a gun for every householder.
    As for me, I have mixed feelings. The statistics indicate that countries such as Germany and France, where guns are outlawed, have extremely low murder rates. On the other hand, there is the remote possibility that our leaders could go bollywonkers and send some super troopers to storm our sacred homesteads, forcing unspeakable horrors upon us.
    As for me, when I read the US Constitution, the words I read include an important paragraph. It says, in its archaic language filled with interesting commas,

The Ghost Map

    A peculiar phenomenon follows me when I walk into a book store: Books speak to me. I'm not schizo. I don't literally hear words such as, "You hoo, here I am." On the other hand, I might as well, since the end result is the same: I buy them. Could you resist a book that spoke to you?
     I am magnetically drawn to certain volumes and can't explain why. When this happens, I simply know to buy. Such was the case recently at one of my favorite independent bookstores, Warwick's while I was in La Jolla, California. For synergistic reasons that became clear to me later, The Ghost Map, a book I'd never heard of nor expected to have any interest in, was the one that yelped at me. The choice was oddly prescient considering current events as well as an unexpected encounter on the plane to Southern California.
     You see, The Ghost Map is all about the great cholera epidemic of London in 1854, and the day I bought it was the day Swine Flu jumped across the border into the United States and declared a pandemic - only when I handed my credit card to the clerk, I didn't know any of that news.
      

Meg Whitman: California's Next Governor?

    Speaking to the Women Presidents Organization last Thursday near San Diego, eBay's former CEO discussed her past, present, and future to a crowd of about 600.  As interesting as her past is, Meg Whitman's future is bound to be a wild roller coaster ride. She hopes to be California's next Governor, a state whose economy, at about $2 trillion, is roughly the size of China or Italy's and whose diverse population is about 37 million people.
    Long before his iconic trajectory from star to statesman, I had the pleasure of interviewing California's current governor Arnold Schwarzenegger .  Having met him in person, I was not the least bit surprised by his success. He was, without a doubt, one of the sharpest, most personable leaders I ever met.

     Based on what I heard from Ms. Whitman last week, it's entirely possible she, too, has what it

Susan Boyle Gobsmacks the World

        Worry lines telegraphed the internal concerns about the economy at a round table meeting of women company presidents today.  Heated discussion ricocheted from one side of the table to another around intense topics such as Goldman Sachs, TARP money, and the bailout. Then one executive mentioned Susan Boyle, the unlikely sensation from last weekend's Britian's Got Talent, the British version of American Idol. Ms. Boyle rocked the world. Thirteen million people have viewed the on-line video of her performance.
        If you have been under a rock the last few days and have not seen this remarkable you tube, go now and watch.  No matter how you feel this moment, you will feel even better, more hopeful, more excited about the possibilities of the human spirit. The cynical audience initially sneered at her,  jadedly judgmental of an older person devoid of glamor who dared to dream of singing! And as she gobsmacked the judges, the audience lept to its feet when her powerful voice soared.
    My opinion? She's one of the most beautiful women I've seen in a long, long while, kind, refreshing, and authentic.
    Susan Boyle is a wake up call.  Isn't it time we all stop complaining, stop blaming, and tap into our own inimitable spirits? 

Rodney Johnson, President of HS Dent, Answers Your Questions

   

Hello to everyone who participated in the You Can't Afford the Luxury of a Negative Thought  teleconference call in March with the President of HS Dent,  Rodney Johnson. Took me a while to post 'cause I came down with a big case of the flu. Just now getting back in the swing and catching up. Thank goodness! Below is the first set of economic questions that you asked me to ask Rodney after the call. I have a few more than came in later which I'll post in a couple of days.There is a motherlode of powerful information here. Let me know what you think, and keep your eyes open for the next You Can't Afford the Luxury of a Negative Thought teleconference call. 

1. What kind of return do essential service bonds tend to pay?

The returns used to be 4-5%, but with the recent turmoil, the interest rates are a little higher, 5-7% depending on location, rating etc.  Remember, these are tax-free, so you divide this interest rate by 1-tax rate, (in the 35% bracket it would be 1-0.35, or .65), to arrive at your taxable equivalent rate. 

2. Why have you adjusted your Dow high forecast down? What was driving your thinking before than now? 

In terms of the recent market action, we adjusted down our expected Dow high for this summer because the market fell further than we had anticipated on this first move down.  As the markets fell last fall and early this year, we thought that the Dow would hold the 1998 lows of approximately 7,400-7,600. When we went lower to the 1996 lows of approximately 6,500, then we adjusted down our rebound forecast accordingly.  We use Elliot Wave analysis to forecast short term moves, which is not 100% accurate for sure, it is just a technical tool.

3. I retired at 65 two years ago. I was rewarded with a loss of over $250K from my retirement portfolio. Is there any hope for seniors like myself to get a decent recovery in the near future?

Yes there is, but don’t put yourself in harm’s way too soon.  At 65, you’ve got another 20 years to go on average.  Remember, we are talking about this down turn lasting for several years, but not two decades!  We would advise keeping yourself as liquid and flexible as possible through the next several years (2012-2013) more focused on streams of income and capital preservation, and then be more aggressive!

4. Talk about current account deficits. Do you see the current level as being a problem? If so, what would you suggest as being the solution?

The US Current Account (what we export minus what we import) has been running at a deficit for many years because of our propensity to consume low-cost imported goods, but it also includes imported oil, which showed an incredible spike in ’07 and ’08.  With the fall of oil and the slowing in spending, the deficit is contracting.  While that sounds good, the current account normally does contract with economic slowdowns.  I believe you will see it continue to fall for the next several years, so it won’t necessitate a “solution” per se.  However, as we work more concertedly on alternative energy, this is one of those areas that could see a very dramatic turnaround, changing the playing field of international capital flows.

5. How are we going to fund social security and how big a problem do you see it as being? When you see this impacting us and how?
   

It’s not as big of a problem as it might seem.  Not because the numbers “work out”, but because Congress will never leave it in its present form.  There will be means testing and a change in the age of eligibility.  The much, MUCH bigger problems are Medicare, for which there is no fix, and state and local pensions.  On Medicare, we will ration availability of treatments, much like other systems (Canada, UK, etc.), which will lead to bigger supplemental insurance for those that can afford it.  On state and local pensions, they will have to deal with greatly increased pension contributions to make up for all of the recent losses and previous underfunding.  Where will they get the money?  From you of course, in taxes.

 

Shakespeare on Risk: Anything New Under the Sun?

            "There is a tide in the affairs of men, which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat. And we must take the current when it serves, or lose our ventures. "
                                                                    William Shakespeare From Julius Caesar

           And you thought this economic crises was personal? Since Shakespeare spoke about similar challenges as those we face today 500 years ago, no less grand and world changing than today's financial crises, the eternal nature of difficult times gives us some perspective.
            The greatest challenge we face is in recognizing the signs and then is being flexible enough to adapt and react without creating tragedies. (By the way, Julius Caesar is a tragedy. That's something we want to avoid, right?....) When working with clients at LodeStar Universal, my role is to make sure that people things clearly, choosing courses of action that prevent tragedy.
            Shakespeare, through his plays, presents timeless issues. Here he tells  us that timing, free