Faded photographs,
Covered now with lines and creases
-Dennis Yost and the Classics IV
Former ESPN announcer and basketball coach Jim (Jimmy V) Valvano set up a foundation for cancer research after he was diagnosed with terminal cancer in June of 1992.
June, 1992 was when my father found out he, too, had terminal cancer. He and Jimmy V were of similar age, personality and outlook on life.
From the time they were diagnosed, dad and Jimmy V both fought against cancer like they were an entry at the race track. They never met, but when dad was doing better, it seemed like Jimmy V was improving, too.
Dad took strength from Valvano's motivational presence. I'm convinced that Valvano's emotional February 21, 1993 speech at North Carolina State inspired dad to live for another week. That speech fired dad up from his deathbed.
We buried my dad on March 4, 1993. I came home that night to watch the ESPY awards where Valvano gave one of the most extraordinary, inspiring and heart-touching speeches ever given.
Recently, ESPN devoted a week to raise money for cancer research. ESPN called it the "Jimmy V" week and they kicked it off by replaying Valvano's 1993 ESPY speech.
I was watching the speech and suddenly tears started running from my eyes.
I'm one of those guys who cries about once a decade. Yet I can't stop crying as I watch a 15 year old replay of Jim Valvano.
He was still raising money for cancer, a disease that directly impacted my family. It brings back every emotion of connecting with my father. I reached for my wallet.
Then I stopped.
Like a lot of people, I've cut back significantly this year. I've been generous in the past, but now a tougher nut to crack.
I don't know what the future is going to be like. Even though I am better off than most people, I want to be careful. Just like many other people.
I realized that if I hesitated on a cause so personal, it must be hell for the other charities raising money.
I'm not the only person thinking twice about giving money to charity. Or about spending money.
Most people have the same kind of hesitation that I have. And this compounds the financial crisis problem.
People are afraid to spend money, so retailers sell less and lay people off. Retailers are selling less, so factories and manufacturers quit making goods and lay people off. People quit buying houses and cars, and those sectors lay people off.
Fearful people stop giving money to charity, so those charitable organizations cut services and lay people off. With fewer people paying taxes, government starts cutting services and laying people off.
Then people get more scared because they see all their neighbors getting laid off. They tighten their belts even further and the cycle goes into another round. Then they get laid off.
It all comes down to confidence. A year ago, Jimmy V's foundation would have had my money before they cut to commercial. A year from now, it might be the same story.
Right now, there is little chance. I want to see if we have hit bottom.
It often takes something monumental to shift the spiral. The Great Depression really didn't end until World War II. In previous recessions, gimmicks like wage and price controls, tax cuts and stimulus plans were used to try to halt economic slowdowns. They rarely worked.
We need for the markets to run their natural course. Things will bottom out and people will get their confidence back.
We stalled the bottoming out by throwing billions of tax dollars at Wall Street.
The public is smarter than Washington gives them credit for. They saw through the $700 billion bailout as a gift from Washington insiders to Wall Street insiders. People on Main Street realized that none of the $700 billion would be helping them.
Thus, we have a crisis in confidence. I'm hoping that new presidential leadership helps. But people have to get this recent crisis behind us. We need to find out what mistakes were made and make sure they don't happen again.
To paraphrase Jim Valvano, we must never, ever, ever give up until we fix the problems that got us in this mess.
Someday, we will get our confidence back. When that happens, the Jimmy V foundation will be getting my donation.
Don McNay, CLU, ChFC, MSFS, CSSC, is the Founder of the McNay Settlement Group in Richmond, Kentucky. He is the author of Son of a Son of a Gambler. You can write to him at don@donmcnay.com or read his award winning, syndicated financial column at www.donmcnay.com
Saturday, December 13, 2008
Thursday, November 27, 2008
Son of a Gambler's Guide to Holiday Books
Son of a Gambler’s Guide to Holiday Books
It’s a lesson to me, the ablers and the beggars and the thieves
-The Grateful Dead
If you read my book, Son of a Son of a Gambler, you’ll know that my childhood was filled with beggars, thieves and other unusual characters.
But not nearly as unusual as the characters Ed McClanahan has encountered in his life.
Ed was one of the “Merry Pranksters,” a group typified by author Ken Kesey and other legends of the 1960’s counter-culture. Ed novel, The Natural Man, is a literary classic and, like Son of a Son of a Gambler, based in my old stomping ground of Northern Kentucky.
Ed recently released O The Clear Moment, and it is a great read. It is nine autobiographical short stories from a guy who has led a really interesting life. It is funny, insightful and one you won’t put down.
Another book that I didn’t put down was Sniper Bid, Rick Robinson’s follow-up to his hit novel, The Maximum Contribution. Both of the novels are based on Rick’s insights as a former Congressional aide and Congressional candidate. If you have someone who likes political thrillers, this is one to put in his stocking.
There are good guys and bad guys in the world of business, and Joe Nocera writes about both. I wrote about Good Guys and Bad Guys when the book was released earlier, but the book has received wide notice lately as Joe, a business columnist for the New York Times, has been the voice of reason and common sense during the financial crisis.
Joe’s been on highbrow shows like Bill Moyers Journal, and less than highbrow shows, like The Colbert Report. No matter the venue, Joe has interesting things to say.
I mentioned recently on Facebook that I wished Joe had been Treasury Secretary instead of our current Secretary, Hank Paulsen. Someone noted that would make him, “Joe the Treasurer.”
“Joe the Writer” is as good as they come.
Although I read hundreds of books a year (I really do), business books are at the top of my charts.
I previously reviewed the hardback version of The Success Effect by John Eckberg. The paperback edition is updated and is out in time for the holidays. John interviewed a number of business leaders, such as Donald Trump. He asked the people he interviewed what books they had on their nightstand and what music they listen to.
I once used John’s idea in one of my columns. I asked the question to a number of well-known Kentuckians. It told me a lot about each of them.
I’ve been catching a lot of new business book releases recently and one I really like is The Snowball: Warren Buffett and the Business of Life. There are about 50 biographies of Buffett and I have read almost all of them. This is the best. It gives a lot of detail about Warren Buffett the man, not just Warren the money-making machine. It’s 976 pages, but they go by quickly.
Ted Turner is another hero of mine. But I don’t recommend his recently released autobiography. Ted has lived a fascinating life, but he is not an introspective guy. A better book about him is Ted Turner: It Ain't As Easy as It Looks, which came out in 1997.
I did a chapter in Son of a Son of A Gambler about my father’s friendship with Larry Flynt. And Dad also knew Hugh Heffner.
Mr. Playboy: Hugh Hefner and the American Dream, by Steven Watts, is a stunningly great biography of Hefner. Watts is a history professor at the University of Missouri. He has written excellent biographies of Henry Ford and Walt Disney. As in his previous books, Watts views Hefner from a biographical perspective but also notes Hefner’s impact on popular culture and history.
It is only proper that the son of a gambler and daughter of a gambler be on the same wavelength. I read Martha Frankel’s highly acclaimed, Hats & Eyeglasses: A Family Love Affair with Gambling, when it was released earlier this year. This riveting story is about her childhood as the daughter of a gambler and her addiction to poker playing.
About a month ago I connected with Frankel via Facebook. She had just purchased a copy of Son of a Son of a Gambler and, to answer the John Eckberg question, she had it on her nightstand.
The hardback copy of Hats and Eyeglasses is available for the holidays and paperback is coming soon. You might want to get both. Martha has known a few ablers, beggars and thieves in her lifetime, too.
Don McNay, CLU, ChFC, MSFS, CSSC is the founder of McNay Settlement Group in Richmond, Kentucky. He is the author of Son of a Son of a Gambler: Winners, Losers and What to Do When You Win The Lottery. You can read other things he has written at www.donmcnay.com or write to him at don@mcnay.com
Monday, November 10, 2008
John Daly, Wall Street Bailout and Bottoming Out
John Daly, Wall Street Bailout and Bottoming Out
One little problem that confronts you,
got a monkey on your back.
Just one more fix, Lord, might do the trick.
-Lynyrd Skynyrd
I saw a pathetic story about golfer John Daly and how he continues to screw up his life. He has blown through millions of dollars, drinking problems, multiple wives and a potentially great golfing career. He is signing autographs at Hooters to make a few bucks.
People in the addiction world say that before an addict can get help, they have to “bottom out.” They have to reach their lowest point. Then they can get help and turn their lives around
John was never able to hit bottom. There has always been another corporate sponsor or another fan to buy him a drink. Hooters is his latest enabler.
It’s hard to come up with a more inappropriate sponsor for John Daly than Hooters. They need to cut John loose and let him bottom out. Or be ready for when he drops over dead in one of their bars. He needs help, but Hooters is not the place to get it.
When I think about John, I also think about the Wall Street Bailout.
We made a mistake in not letting Wall Street hit bottom, too.
I was a fervent opponent of the bailout. Someone called into a radio show I was on and asked me what would happen if we didn’t do the bailout. I said some companies would fail and the S&P 500 would drop by about 50%.
Once we hit that bottom, we could start the process of repairing and climbing back up the ladder.
Just like addicts do. They hit the bottom and reassess their lives. Many go on to productive and wonderful lives.
They just needed to hit the bottom first.
The quicker Wall Street bottomed out, the quicker we could have started the recovery. Instead, we enabled it to the tune of $700 billion.
There was no particular strategy to the enabling. We propped up some companies and let others fail. Instead of letting the stock market drop hugely overnight, it has been dropping over time, with no signs of hitting a bottom. Bad companies with bad management are allowed to make the same mistakes that got them into trouble in the first place.
No one on Wall Street is getting it. Instead of taking the $700 billion and making sure that it trickles down to Main Street, they are using it to buy other banks. They spend a lot of time talking about bonuses for their bigwigs.
A company getting taxpayer bailout money should not be handing out bonuses. A company getting taxpayer bailout money shouldn’t be buying other companies or paying dividends to stockholders.
There is a word for companies that need a government handout: Broke. Why should people get bonuses for managing a broke company? Or for managing a company broke?
If my business in Richmond, Kentucky goes broke, no one gives me a bonus. They tell me to find another job. Creditors take my house, car and cash. It’s the small business version of bottoming out. Very painful, but sobering.
Most of us in smaller businesses have bottomed out several times. Once we hit bottom, we figure out what we did wrong. We don’t make the same mistakes, and we often come back stronger than ever.
Both Wall Street and John Daly need to go through that period of bottoming out and self-examination. Neither one has. If we keep enabling them, neither one will.
At least Daly recognizes that he screwed up. Wall Street doesn’t seem to get it. Many businesses remind me of addicts who think one last fix can cure their problems. More companies, from many industries, are trying to get a piece of the bailout money or get a bailout of their own.
We have to let some companies bottom out. We need to let them truly examine how they got in trouble in the first place. We need for them to shed their bad habits and replace them with good ones.
The alternative is to have the economic equivalent of John Daly - Years of resources being wasted while we hope for a turn around that never happens.
We’ve learned lessons by watching addicts. We’ve learned lessons by watching countries, like Japan, prop up their economies. We know what to do. We just need leaders with the guts to do it.
Its time to let Wall Street bottom out. It is the only way it will truly bounce and rebound.
Don McNay, CLU, ChFC, MSFS, CSSC, is the founder of McNay Settlement Group in Richmond, Ky and an award winning, syndicated, financial columnist. You can write to him at don@donmcnay.com or read what he has written at www.donmcnay.com. McNay is Treasurer of the National Society of Newspaper Columnists and the author of Son of Son of a Gamblers: Winners, Losers and What to Do When You Win The Lottery.
One little problem that confronts you,
got a monkey on your back.
Just one more fix, Lord, might do the trick.
-Lynyrd Skynyrd
I saw a pathetic story about golfer John Daly and how he continues to screw up his life. He has blown through millions of dollars, drinking problems, multiple wives and a potentially great golfing career. He is signing autographs at Hooters to make a few bucks.
People in the addiction world say that before an addict can get help, they have to “bottom out.” They have to reach their lowest point. Then they can get help and turn their lives around
John was never able to hit bottom. There has always been another corporate sponsor or another fan to buy him a drink. Hooters is his latest enabler.
It’s hard to come up with a more inappropriate sponsor for John Daly than Hooters. They need to cut John loose and let him bottom out. Or be ready for when he drops over dead in one of their bars. He needs help, but Hooters is not the place to get it.
When I think about John, I also think about the Wall Street Bailout.
We made a mistake in not letting Wall Street hit bottom, too.
I was a fervent opponent of the bailout. Someone called into a radio show I was on and asked me what would happen if we didn’t do the bailout. I said some companies would fail and the S&P 500 would drop by about 50%.
Once we hit that bottom, we could start the process of repairing and climbing back up the ladder.
Just like addicts do. They hit the bottom and reassess their lives. Many go on to productive and wonderful lives.
They just needed to hit the bottom first.
The quicker Wall Street bottomed out, the quicker we could have started the recovery. Instead, we enabled it to the tune of $700 billion.
There was no particular strategy to the enabling. We propped up some companies and let others fail. Instead of letting the stock market drop hugely overnight, it has been dropping over time, with no signs of hitting a bottom. Bad companies with bad management are allowed to make the same mistakes that got them into trouble in the first place.
No one on Wall Street is getting it. Instead of taking the $700 billion and making sure that it trickles down to Main Street, they are using it to buy other banks. They spend a lot of time talking about bonuses for their bigwigs.
A company getting taxpayer bailout money should not be handing out bonuses. A company getting taxpayer bailout money shouldn’t be buying other companies or paying dividends to stockholders.
There is a word for companies that need a government handout: Broke. Why should people get bonuses for managing a broke company? Or for managing a company broke?
If my business in Richmond, Kentucky goes broke, no one gives me a bonus. They tell me to find another job. Creditors take my house, car and cash. It’s the small business version of bottoming out. Very painful, but sobering.
Most of us in smaller businesses have bottomed out several times. Once we hit bottom, we figure out what we did wrong. We don’t make the same mistakes, and we often come back stronger than ever.
Both Wall Street and John Daly need to go through that period of bottoming out and self-examination. Neither one has. If we keep enabling them, neither one will.
At least Daly recognizes that he screwed up. Wall Street doesn’t seem to get it. Many businesses remind me of addicts who think one last fix can cure their problems. More companies, from many industries, are trying to get a piece of the bailout money or get a bailout of their own.
We have to let some companies bottom out. We need to let them truly examine how they got in trouble in the first place. We need for them to shed their bad habits and replace them with good ones.
The alternative is to have the economic equivalent of John Daly - Years of resources being wasted while we hope for a turn around that never happens.
We’ve learned lessons by watching addicts. We’ve learned lessons by watching countries, like Japan, prop up their economies. We know what to do. We just need leaders with the guts to do it.
Its time to let Wall Street bottom out. It is the only way it will truly bounce and rebound.
Don McNay, CLU, ChFC, MSFS, CSSC, is the founder of McNay Settlement Group in Richmond, Ky and an award winning, syndicated, financial columnist. You can write to him at don@donmcnay.com or read what he has written at www.donmcnay.com. McNay is Treasurer of the National Society of Newspaper Columnists and the author of Son of Son of a Gamblers: Winners, Losers and What to Do When You Win The Lottery.
Saturday, November 8, 2008
Max Cleland's Chance for Revenge
Max Cleland’s Chance for Revenge
“Maybe next time he'll think before he cheats”
-Carrie Underwood
It’s certain now. Georgia Senator Saxby Chambliss did not get a majority for re-election.
If he wants to hold on to his Senate seat, he will have to defeat challenger Jim Martin in a run off election on December 2.
It will be a day for patriotic Americans to even the score. Chambliss does not deserve to sit in the United States Senate.
The Senate seat previously belonged to Max Cleland. Six years ago, Chambliss got in the gutter to steal it from him.
I’m stunned to see that John McCain is planning to campaign for Chambliss. Cleland ,
(ironically, like John McCain) is a bona fide American hero. His valor during the Vietnam war resulted in his becoming a triple amputee. After a life in public service, he was elected a United States Senator from Georgia.
In the Senate, Cleland served honorably and well. And in 2002, Max was the victim one of the most disgusting smear campaigns in American history.
When the country was recovering from the 2001 attack on the World Trade Center,
Saxby Chambliss ran a campaign that claimed that Max Cleland was somehow helping Osama Bin Laden. He based his convoluted “evidence” on some Senate procedural vote that wasn’t the slightest bit relevant.
In the 2002 climate of fear, Chambliss’s lies and distortion worked. Now it is 2008, it is time for Chambliss to face the music.
I want to hear Chambliss’s explanation now. What he did in 2002 doesn’t work six years later.
It is time for Chambliss to atone for his sins.
One of the biblical 10 commandants is not to bear false witness. Chambliss will have to answer to God someday but on December 2nd, he needs to answer to the people of Georgia.
I’m hoping the rest of the country pitches in to defeat Chambliss. I also hope that John McCain starts to act like the John McCain of 2000 instead of the one we saw this year and puts patriotism over party.
Having a Vietnam War hero like McCain campaign against the man who smeared Max Cleland is an outrage.
I don’t know much about the challenger Martin. I really don’t need to. I would vote for Larry the Cable Guy or Homer Simpson if they were running against Saxby Chambliss.
Chambliss got in the Senate with a dirty trick and he needs to go home.
Cleland’s loss was a low point in American politics. How you can question the patriotism of a man who left several body parts in Southeast Asia? Why did voters go for it?
It inspired candidates in other states to pick out phony charges and run negative ads. If you can get away with smearing Max Cleland’s patriotism, you could get away with anything.
2008 is the time to make it stop. Once and for all.
Cleland is a real hero, with real accomplishments, who dedicated his life to serving his country. He was brought down by a guy who smudged the truth.
Actually he wasn’t brought down, he just had to leave the Senate. It takes more than Saxby Chambliss to bring Max Cleland down. I met Cleland after his Senate career, when he was traveling the country, helping like minded candidates. It can't be easy for a triple amputee to be barnstorming the country. It would be simple for Max Cleland to sit home and let others lead the charge.
That is not Max Cleland’s style.
Chambliss cheated to get his Senate seat.
I want Chambliss, and every other politician, to think before the next time they cheat.
Don McNay is the founder of McNay Settlement Group in Richmond, Ky. He is the author of the Unbridled World of Ernie Fletcher. You can read his award winning column at www.donmcnay.com or write to him at don@mcnay.com. He is Treasurer of the National Society of Newspaper Columnists.
“Maybe next time he'll think before he cheats”
-Carrie Underwood
It’s certain now. Georgia Senator Saxby Chambliss did not get a majority for re-election.
If he wants to hold on to his Senate seat, he will have to defeat challenger Jim Martin in a run off election on December 2.
It will be a day for patriotic Americans to even the score. Chambliss does not deserve to sit in the United States Senate.
The Senate seat previously belonged to Max Cleland. Six years ago, Chambliss got in the gutter to steal it from him.
I’m stunned to see that John McCain is planning to campaign for Chambliss. Cleland ,
(ironically, like John McCain) is a bona fide American hero. His valor during the Vietnam war resulted in his becoming a triple amputee. After a life in public service, he was elected a United States Senator from Georgia.
In the Senate, Cleland served honorably and well. And in 2002, Max was the victim one of the most disgusting smear campaigns in American history.
When the country was recovering from the 2001 attack on the World Trade Center,
Saxby Chambliss ran a campaign that claimed that Max Cleland was somehow helping Osama Bin Laden. He based his convoluted “evidence” on some Senate procedural vote that wasn’t the slightest bit relevant.
In the 2002 climate of fear, Chambliss’s lies and distortion worked. Now it is 2008, it is time for Chambliss to face the music.
I want to hear Chambliss’s explanation now. What he did in 2002 doesn’t work six years later.
It is time for Chambliss to atone for his sins.
One of the biblical 10 commandants is not to bear false witness. Chambliss will have to answer to God someday but on December 2nd, he needs to answer to the people of Georgia.
I’m hoping the rest of the country pitches in to defeat Chambliss. I also hope that John McCain starts to act like the John McCain of 2000 instead of the one we saw this year and puts patriotism over party.
Having a Vietnam War hero like McCain campaign against the man who smeared Max Cleland is an outrage.
I don’t know much about the challenger Martin. I really don’t need to. I would vote for Larry the Cable Guy or Homer Simpson if they were running against Saxby Chambliss.
Chambliss got in the Senate with a dirty trick and he needs to go home.
Cleland’s loss was a low point in American politics. How you can question the patriotism of a man who left several body parts in Southeast Asia? Why did voters go for it?
It inspired candidates in other states to pick out phony charges and run negative ads. If you can get away with smearing Max Cleland’s patriotism, you could get away with anything.
2008 is the time to make it stop. Once and for all.
Cleland is a real hero, with real accomplishments, who dedicated his life to serving his country. He was brought down by a guy who smudged the truth.
Actually he wasn’t brought down, he just had to leave the Senate. It takes more than Saxby Chambliss to bring Max Cleland down. I met Cleland after his Senate career, when he was traveling the country, helping like minded candidates. It can't be easy for a triple amputee to be barnstorming the country. It would be simple for Max Cleland to sit home and let others lead the charge.
That is not Max Cleland’s style.
Chambliss cheated to get his Senate seat.
I want Chambliss, and every other politician, to think before the next time they cheat.
Don McNay is the founder of McNay Settlement Group in Richmond, Ky. He is the author of the Unbridled World of Ernie Fletcher. You can read his award winning column at www.donmcnay.com or write to him at don@mcnay.com. He is Treasurer of the National Society of Newspaper Columnists.
Sunday, November 2, 2008
Credit Cards in the world of taxpayer-owned banks
“meet the new boss. Same as the old boss.
-The Who
The American people ponied up $700 billion to supposedly bail out some big banks on Wall Street. So far, we have not seen the banks what banks are supposed to do, lend people money. Instead they are doing the thing that Wall Street raiders do, take over other companies.
Bush and Paulsen encouraged bad behavior in their bailout bill. They gave big banks money and tax incentives to gobble up small banks. They made sure that their buddies on Wall Street were taken care of.
Most big banks didn’t need bad behavior encouragement. They’ve been able to do harmful things long before the government started subsiding them.
Some of the biggest abuses come in the way that banks have handed out credit cards. Now that I, like every other American taxpayer, indirectly owns part of the Wall Street banks, I want to talk to them about how they have been acting.
I want to do is to throw credit card companies off every college campus. Is it any wonder that the banks needed a $700 billion bailout? What kind of business gives huge lines of credit to students who don’t have jobs?
I always thought that you had to have a job to get credit. Not anymore. I have a college student in my household. He has minimal income, no assets and big student loans. However, the credit card companies love him. He gets ten times more mail than I do. All of them “pre approved” credit cards. All go straight in the trash.
Its bad for the college students to run up debt before they have jobs. Its bad for the nation to have a generation of college graduates paying off high interest credit cards instead of saving money to buy houses and cars.
Giving cards to college students couldn’t have been that great of a business or the banks wouldn’t have needed a bailout.
I saw an article in the New York Times that said that credit cards were the next problem area for the banks.
DUH!
We’ve had years of students, people coming out of bankruptcy and people with no income getting tons of credit cards. Usually with interest rates and fees that would make a loan shark blush.
Since they are getting multi million dollars bonuses, executives at Wall Street banks should have figured out what most of us know. Broke people don’t pay loans back.
You can charge them all the interest and fees that you want. If they don’t have any money, they are not going to give any to you. Especially if you are an unsecured debtor like a credit card.
People will make an extra effort to hang on to secured debts, like their houses and cars. The credit cards will be last in line.
We are now in an economy where a lot of people who were barely hanging on will get closer to the edge. You see people losing their jobs or going from high paying jobs to minimum wages. You see people who counted on the value of their house or 401k plan being suddenly disappointed.
We see a lot of people worried about feeding their families and keeping a roof over their heads.
When it comes to feeding your family or paying your credit card, the family is going to win every time.
I hope the banks factored that reality in before the came up with the $700 billion figure. They might want to hang on to some of that taxpayer cash instead of using it to buy other banks.
As bad as people are projecting, it will get worse. Recent events will change how people feel about debt.
People who got stuck with high interest credit cards aren’t going to be in a hurry to pay them off. Even if they can.
Banks had two things going for them in collecting credit card debts. They could shame people by embarrassing them in front of their neighbors and they could threaten to hurt their credit scores.
Its going to be hard for a bank that was bailed out by taxpayers to shame anyone into anything. Since people with good credit can’t get loans, there is no incentive for someone with bad credit to even bother. They can default on their debt and make the banks come after them.
I’ve tried to collect from someone who was determined not to pay me. It was expensive, time consuming and I never did get all my money. Try multiplying that by a few million people. That is what the big banks are going to be dealing with.
From a moral standpoint, I want banks to clean up their act in the credit card department. Since many of the bankers work for me, and the rest of the American taxpayers, I’d like to protect my investment by making sure the credit card issuers get out of the stupidity game.
I can’t afford to give them another $700 billion.
Don McNay is the founder of McNay Settlement Group and the author of the book Son of a Son of A Gambler: Winners, Losers and What to Do When You Win the Lottery. You can write to him at don@donmcnay.com or read other things he has written at www.donmcnay.com . McNay is a cotributor to the Huffington Post and Treasurer of the National Society of Newspaper Columnists.
.
“meet the new boss. Same as the old boss.
-The Who
The American people ponied up $700 billion to supposedly bail out some big banks on Wall Street. So far, we have not seen the banks what banks are supposed to do, lend people money. Instead they are doing the thing that Wall Street raiders do, take over other companies.
Bush and Paulsen encouraged bad behavior in their bailout bill. They gave big banks money and tax incentives to gobble up small banks. They made sure that their buddies on Wall Street were taken care of.
Most big banks didn’t need bad behavior encouragement. They’ve been able to do harmful things long before the government started subsiding them.
Some of the biggest abuses come in the way that banks have handed out credit cards. Now that I, like every other American taxpayer, indirectly owns part of the Wall Street banks, I want to talk to them about how they have been acting.
I want to do is to throw credit card companies off every college campus. Is it any wonder that the banks needed a $700 billion bailout? What kind of business gives huge lines of credit to students who don’t have jobs?
I always thought that you had to have a job to get credit. Not anymore. I have a college student in my household. He has minimal income, no assets and big student loans. However, the credit card companies love him. He gets ten times more mail than I do. All of them “pre approved” credit cards. All go straight in the trash.
Its bad for the college students to run up debt before they have jobs. Its bad for the nation to have a generation of college graduates paying off high interest credit cards instead of saving money to buy houses and cars.
Giving cards to college students couldn’t have been that great of a business or the banks wouldn’t have needed a bailout.
I saw an article in the New York Times that said that credit cards were the next problem area for the banks.
DUH!
We’ve had years of students, people coming out of bankruptcy and people with no income getting tons of credit cards. Usually with interest rates and fees that would make a loan shark blush.
Since they are getting multi million dollars bonuses, executives at Wall Street banks should have figured out what most of us know. Broke people don’t pay loans back.
You can charge them all the interest and fees that you want. If they don’t have any money, they are not going to give any to you. Especially if you are an unsecured debtor like a credit card.
People will make an extra effort to hang on to secured debts, like their houses and cars. The credit cards will be last in line.
We are now in an economy where a lot of people who were barely hanging on will get closer to the edge. You see people losing their jobs or going from high paying jobs to minimum wages. You see people who counted on the value of their house or 401k plan being suddenly disappointed.
We see a lot of people worried about feeding their families and keeping a roof over their heads.
When it comes to feeding your family or paying your credit card, the family is going to win every time.
I hope the banks factored that reality in before the came up with the $700 billion figure. They might want to hang on to some of that taxpayer cash instead of using it to buy other banks.
As bad as people are projecting, it will get worse. Recent events will change how people feel about debt.
People who got stuck with high interest credit cards aren’t going to be in a hurry to pay them off. Even if they can.
Banks had two things going for them in collecting credit card debts. They could shame people by embarrassing them in front of their neighbors and they could threaten to hurt their credit scores.
Its going to be hard for a bank that was bailed out by taxpayers to shame anyone into anything. Since people with good credit can’t get loans, there is no incentive for someone with bad credit to even bother. They can default on their debt and make the banks come after them.
I’ve tried to collect from someone who was determined not to pay me. It was expensive, time consuming and I never did get all my money. Try multiplying that by a few million people. That is what the big banks are going to be dealing with.
From a moral standpoint, I want banks to clean up their act in the credit card department. Since many of the bankers work for me, and the rest of the American taxpayers, I’d like to protect my investment by making sure the credit card issuers get out of the stupidity game.
I can’t afford to give them another $700 billion.
Don McNay is the founder of McNay Settlement Group and the author of the book Son of a Son of A Gambler: Winners, Losers and What to Do When You Win the Lottery. You can write to him at don@donmcnay.com or read other things he has written at www.donmcnay.com . McNay is a cotributor to the Huffington Post and Treasurer of the National Society of Newspaper Columnists.
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Monday, October 27, 2008
$700 billion in taxpayer dollars to kill small banks
$700 billion in taxpayer dollars to kill small banks
“Like a thief in the night, it cuts like a knife”
-Marty Brown
I was opposed to the Wall Street bailout from day one.
We were asked to trust the Bush administration, with no track record for truthfulness, to send $700 billion to Wall Street, not Main Street.
Bush, Paulsen and Wall Street want to stick it to Main Street even further.
It appears that the $700 billion will be used for Wall Street banks to take over small banks, in small towns.
Like the one I live in.
The bailout supporters made two arguments. The $700 billion was supposed to stop a financial meltdown. After we bailed out Wall Street, it was supposed to open a floodgate of credit for Main Street.
It didn’t come down that way.
The meltdown continued, even after the bailout.
I’m waiting for that cash flow to come roaring into small towns. Like mine. It hasn’t happened and, according to a stunning New York Times column by Joe Nocera, the money is not coming soon.
The $700 billion may never see Main Street. Unless you count Wall Street banks gobbling up Main Street banks.
Unlike other countries, such as England, the United States did not REQUIRE that banks taking government bailout money lend it out! Lending is not required, just “encouraged.” The banks can do what they want with it.
If I was a running a bank, my primary “encouragement” is to make money for my shareholders. If I can take government money and use it for something more profitable, I am going to do it.
Like any businessperson would.
The most profitable thing banks can do is take government money and buy up another bank. We saw it happen last week and will see it happen many more times.
It’s what Bush and Paulsen wanted all along. They snuck a provision in the bailout bill that gave BILLIONS in tax breaks for big banks to buy other banks.
Bush and Paulsen want to reshape the banking industry to allow only big Wall Street banks to survive. A tax expert, quoted by Nocera, said “It couldn’t be clearer if they had taken out an ad.”
Nocera, who supported the bailout bill, said that the rationale that the bailout would make banks start lending again, is “Treasury’s version of the weapons of mass destruction.”
I feel duped. I feel deceived. I want to vote against a congressman who supported the bailout, but my congressman saw the bailout’s flaws and voted “no.”
I like small banks. They are an important part of my business and my life.
Starting in high school, I’ve always had a personal relationship with my banker. A small town bank put me in business and another kept me in business. I want to know that the person I’m talking to is a final decision maker. I don’t want a committee or a computer in New York to decide for them.
The gang on Wall Street has lost trillions and put the nation in economic peril. I don’t want to do my banking with them.
I’ll take my chances with a banker who knows me, knows my business and knows my family. It’s worked so far. I suspect if you surveyed other Main Street business people (I am actually three doors from Main Street, but close enough), most would feel the same way.
Small town banks have not been hurt as badly as Wall Street banks. Most were not playing the sub-prime game. None of their officers get million dollars bonuses. And I am sure the officers don’t get tens of millions to leave when they lose their stockholders’ money.
In other words, they are personally responsible for the lending decisions they make. Unlike the people on Wall Street, they can’t screw up and expect a golden parachute at the end.
I trust the small bank business model more than I trust what they are doing on Wall Street. I don’t want Wall Street taking over small town banks. I don’t want them to use taxpayer money to take the bank and I especially don’t want the Wall Street banks to get billions in tax credits to do it.
I want them to lend money to people on Main Street. Someone told me that was what the $700 billion was all about.
People say we can fix it when we get a new President and new Treasury Secretary. That is three months. By then dozens of mergers and takeovers will have taken place.
We need to act now.
Once you allow a bank to be gobble up other banks, just like when you invade a country, it is almost impossible to undo the damage.
Especially when that damage was based on misleading information.
Don McNay is the Chairman of McNay Settlement Group and the author of Son of a Son of a Gambler: Winners, Losers and What to Do When you Win the Lottery. You can write to him at don@donmcnay.com or read other things he has written at www.donmcnay.com
“Like a thief in the night, it cuts like a knife”
-Marty Brown
I was opposed to the Wall Street bailout from day one.
We were asked to trust the Bush administration, with no track record for truthfulness, to send $700 billion to Wall Street, not Main Street.
Bush, Paulsen and Wall Street want to stick it to Main Street even further.
It appears that the $700 billion will be used for Wall Street banks to take over small banks, in small towns.
Like the one I live in.
The bailout supporters made two arguments. The $700 billion was supposed to stop a financial meltdown. After we bailed out Wall Street, it was supposed to open a floodgate of credit for Main Street.
It didn’t come down that way.
The meltdown continued, even after the bailout.
I’m waiting for that cash flow to come roaring into small towns. Like mine. It hasn’t happened and, according to a stunning New York Times column by Joe Nocera, the money is not coming soon.
The $700 billion may never see Main Street. Unless you count Wall Street banks gobbling up Main Street banks.
Unlike other countries, such as England, the United States did not REQUIRE that banks taking government bailout money lend it out! Lending is not required, just “encouraged.” The banks can do what they want with it.
If I was a running a bank, my primary “encouragement” is to make money for my shareholders. If I can take government money and use it for something more profitable, I am going to do it.
Like any businessperson would.
The most profitable thing banks can do is take government money and buy up another bank. We saw it happen last week and will see it happen many more times.
It’s what Bush and Paulsen wanted all along. They snuck a provision in the bailout bill that gave BILLIONS in tax breaks for big banks to buy other banks.
Bush and Paulsen want to reshape the banking industry to allow only big Wall Street banks to survive. A tax expert, quoted by Nocera, said “It couldn’t be clearer if they had taken out an ad.”
Nocera, who supported the bailout bill, said that the rationale that the bailout would make banks start lending again, is “Treasury’s version of the weapons of mass destruction.”
I feel duped. I feel deceived. I want to vote against a congressman who supported the bailout, but my congressman saw the bailout’s flaws and voted “no.”
I like small banks. They are an important part of my business and my life.
Starting in high school, I’ve always had a personal relationship with my banker. A small town bank put me in business and another kept me in business. I want to know that the person I’m talking to is a final decision maker. I don’t want a committee or a computer in New York to decide for them.
The gang on Wall Street has lost trillions and put the nation in economic peril. I don’t want to do my banking with them.
I’ll take my chances with a banker who knows me, knows my business and knows my family. It’s worked so far. I suspect if you surveyed other Main Street business people (I am actually three doors from Main Street, but close enough), most would feel the same way.
Small town banks have not been hurt as badly as Wall Street banks. Most were not playing the sub-prime game. None of their officers get million dollars bonuses. And I am sure the officers don’t get tens of millions to leave when they lose their stockholders’ money.
In other words, they are personally responsible for the lending decisions they make. Unlike the people on Wall Street, they can’t screw up and expect a golden parachute at the end.
I trust the small bank business model more than I trust what they are doing on Wall Street. I don’t want Wall Street taking over small town banks. I don’t want them to use taxpayer money to take the bank and I especially don’t want the Wall Street banks to get billions in tax credits to do it.
I want them to lend money to people on Main Street. Someone told me that was what the $700 billion was all about.
People say we can fix it when we get a new President and new Treasury Secretary. That is three months. By then dozens of mergers and takeovers will have taken place.
We need to act now.
Once you allow a bank to be gobble up other banks, just like when you invade a country, it is almost impossible to undo the damage.
Especially when that damage was based on misleading information.
Don McNay is the Chairman of McNay Settlement Group and the author of Son of a Son of a Gambler: Winners, Losers and What to Do When you Win the Lottery. You can write to him at don@donmcnay.com or read other things he has written at www.donmcnay.com
Sunday, October 26, 2008
2008 - The Year of the Outsider
2008 - The Year of the Outsider
“I come from down in the valley, where mister when you’re young, they bring you up to do, what your daddy done”
-Bruce Springsteen
Just like 1932, 2008 is a year when we will realign “Insiders” and “Outsiders.”
Insiders tend to be white, well-educated males from high income backgrounds. Religion, personality and regionalism narrow Insider ranks even further.
2008 will change things. We will either have an African-American President or a female Vice President. Being a Wall Street hotshot doesn’t carry the weight that it did a few months ago. Lobbyists are losing their clout with politicians who can raise money on the Internet.
Outsiders who eventually become Insiders learned to play the game of Life by different rules. They buck conventional wisdom and knock down the doors that are closed to them.
Obama is a good example. He was encouraged to stay in Congress and wait his turn. Instead, he took the risk of running for President after only three years in the Senate.
It was a risk that paid off.
One of the fascinations of Obama’s campaign is that he got the nomination without a lot of Insiders involved.
Win or lose, his campaign changed how modern campaigns are run.
It reminds me of William Jennings Bryan’s presidential campaign in 1896. Bryan ran a campaign that was different from any presidential candidate before him. But every candidate after him copied his style.
Under the new system, there will be a lot of political bosses looking for someone to boss. Candidates can ignore them and still win.
Some people spend their lives trying to be Insiders. They suck up, toe the line and hope that Insiders will tap them to join the ranks.
It’s uncommon for that ‘tap’ to happen. Once earned, power and privilege are rarely given away. Insider status is often handed down from generation to generation.
Unless you want to stay in the same career that your daddy did, you are going to have to buck the system.
Many of my friends are trial lawyers, journalists, and entrepreneurs. Those are natural professions for people who want to change the status quo.
Almost all great musicians are Outsiders. Rock and roll, country and rap have their roots in rebellion.
Outsiders are the driving forces in almost every profession. It took an Outsider like Bill Gates to go against the establishment at IBM. Then Google came after Gates when Microsoft became the Insider.
There is one group that I have never understood -- people who are Outsiders but think they are Insiders.
I know a young, disabled couple who identify deeply with the establishment. The couple has no money and no hope of getting any. They get every kind of government benefit available.
One of their hobbies is to call into talk radio programs. They rail for lower taxes, despite the fact that they don’t pay any. They get incited about estate taxes, although no one in their family has a taxable estate. They vote for political candidates who want to take away their benefits and their right to the jury system.
There are thousands like them, but I suspect that number is diminishing.
Most people do not like to rock the boat. It is easier to act the same way as everyone around you. It takes a crisis to get people to switch.
1932 was our last great economic crisis. It also broke some long standing political habits.
Up until 1932, African-Americans overwhelming supported the Republican Party. The Republican Party has always been seen as the party closer to Big Money, but that really was the case in the 1920’s.
Although few African-Americans in 1932 had wealth, the Republicans were the party of Lincoln. It took the Great Depression to put a dent in that voting pattern.
Bringing in Outsiders does not always make things better. Insiders have experience and knowledge that is difficult to replace. There is also the chance, like in George Orwell’s Animal Farm, that the Outsiders take on so many of the Insiders’ characteristics that it is impossible to tell them apart.
We will soon learn how it plays out.
Don McNay is the Chairman of the Board for McNay Settlement Group and the author of Son of a Son of a Gambler. Winners, Losers and What to Do When You Win the Lottery. You can write to him at don@donmcnay.com or read other things he has written at www.donmcnay.com
“I come from down in the valley, where mister when you’re young, they bring you up to do, what your daddy done”
-Bruce Springsteen
Just like 1932, 2008 is a year when we will realign “Insiders” and “Outsiders.”
Insiders tend to be white, well-educated males from high income backgrounds. Religion, personality and regionalism narrow Insider ranks even further.
2008 will change things. We will either have an African-American President or a female Vice President. Being a Wall Street hotshot doesn’t carry the weight that it did a few months ago. Lobbyists are losing their clout with politicians who can raise money on the Internet.
Outsiders who eventually become Insiders learned to play the game of Life by different rules. They buck conventional wisdom and knock down the doors that are closed to them.
Obama is a good example. He was encouraged to stay in Congress and wait his turn. Instead, he took the risk of running for President after only three years in the Senate.
It was a risk that paid off.
One of the fascinations of Obama’s campaign is that he got the nomination without a lot of Insiders involved.
Win or lose, his campaign changed how modern campaigns are run.
It reminds me of William Jennings Bryan’s presidential campaign in 1896. Bryan ran a campaign that was different from any presidential candidate before him. But every candidate after him copied his style.
Under the new system, there will be a lot of political bosses looking for someone to boss. Candidates can ignore them and still win.
Some people spend their lives trying to be Insiders. They suck up, toe the line and hope that Insiders will tap them to join the ranks.
It’s uncommon for that ‘tap’ to happen. Once earned, power and privilege are rarely given away. Insider status is often handed down from generation to generation.
Unless you want to stay in the same career that your daddy did, you are going to have to buck the system.
Many of my friends are trial lawyers, journalists, and entrepreneurs. Those are natural professions for people who want to change the status quo.
Almost all great musicians are Outsiders. Rock and roll, country and rap have their roots in rebellion.
Outsiders are the driving forces in almost every profession. It took an Outsider like Bill Gates to go against the establishment at IBM. Then Google came after Gates when Microsoft became the Insider.
There is one group that I have never understood -- people who are Outsiders but think they are Insiders.
I know a young, disabled couple who identify deeply with the establishment. The couple has no money and no hope of getting any. They get every kind of government benefit available.
One of their hobbies is to call into talk radio programs. They rail for lower taxes, despite the fact that they don’t pay any. They get incited about estate taxes, although no one in their family has a taxable estate. They vote for political candidates who want to take away their benefits and their right to the jury system.
There are thousands like them, but I suspect that number is diminishing.
Most people do not like to rock the boat. It is easier to act the same way as everyone around you. It takes a crisis to get people to switch.
1932 was our last great economic crisis. It also broke some long standing political habits.
Up until 1932, African-Americans overwhelming supported the Republican Party. The Republican Party has always been seen as the party closer to Big Money, but that really was the case in the 1920’s.
Although few African-Americans in 1932 had wealth, the Republicans were the party of Lincoln. It took the Great Depression to put a dent in that voting pattern.
Bringing in Outsiders does not always make things better. Insiders have experience and knowledge that is difficult to replace. There is also the chance, like in George Orwell’s Animal Farm, that the Outsiders take on so many of the Insiders’ characteristics that it is impossible to tell them apart.
We will soon learn how it plays out.
Don McNay is the Chairman of the Board for McNay Settlement Group and the author of Son of a Son of a Gambler. Winners, Losers and What to Do When You Win the Lottery. You can write to him at don@donmcnay.com or read other things he has written at www.donmcnay.com
Wednesday, October 22, 2008
Don McNay on POTUS 08 on XM Radio
I am taping a segment with Tim Farley on XM radio on Thursday morning. It is on POTUS 08, Channel 130. I am not sure what time(s) the interview will air but you can listen on their web site or download the podcast on ITunes.
I'm on to talk about the only political column I have written in the past couple of months, Mitch McConnell and the 24 year itch
I wrote it on October 5, but it went unnoticed with the economic crisis going on. It was based on research I did while I was in graduate school at Vanderbilt. A producer at XM radio is a fellow Vanderbilt graduate (although she noted it was LONG after I graduated) and spotted it.
As Brian Wilson once said, "be true to your school." I am fornutate that so many Eastern Kentucky University and Vanderbilt graduates have wound up in the media.
I'm on to talk about the only political column I have written in the past couple of months, Mitch McConnell and the 24 year itch
I wrote it on October 5, but it went unnoticed with the economic crisis going on. It was based on research I did while I was in graduate school at Vanderbilt. A producer at XM radio is a fellow Vanderbilt graduate (although she noted it was LONG after I graduated) and spotted it.
As Brian Wilson once said, "be true to your school." I am fornutate that so many Eastern Kentucky University and Vanderbilt graduates have wound up in the media.
Sunday, October 19, 2008
When 401k came into our lives
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When 401(k) came into our lives
“Running on Empty. Running into the sun but I’m running behind.”
-Jackson Browne
Internal Revenue Code section 401(k) is the only section of the US tax code that the average people can cite. They know it has something, and often everything, to do with whether or not they can retire with dignity.
The adoption of section 401(k) in 1982 turned out to be one of those big moments that changed everything.
401(k) plan investments are a primary driver of the investment markets. It is the employee retirement benefit that most companies offer.
These plan investments are also the reason that many people are pacing the floors at night, watching their retirement get delayed or destroyed.
Until 401(k) came along, pension plans were usually defined benefit plans.
A defined benefit pension is one that gives you a set number of dollars for set period of time. It usually pays out over the course of your lifetime after retirement.
With a defined benefit plan, the employer takes responsibility for making sure pension money is safe and properly invested.
With the advent of the 401(k), employees with little or no investment experience were required to pick among investment options offered by an employer.
Employees were put in the position to fail. Many have.
It is up to the employer to pick what investment company handles the employee’s money. If the employer picks a dog, with few options, the employee is out of luck.
Even worse, many companies push their employees to use 401(k) money to buy stock in the company they work for.
If the company goes broke, people lose their jobs and their retirement savings, too.
There are a lot of people hurting. It is sad to watch retired people, or people close to retirement, lose 40 or 50% of their 401(k) plan’s asset value in one year. They will never be able to make that back up.
There is a second major problem -- Not putting enough money in the 401(k) to begin with.
401(k) plans give people too much freedom.
I’ve always encouraged people to put the maximum amount into a 401(k) plan. Few do. Many put in little or nothing at all.
Now they are looking at a bleak retirement.
Defined benefit plans encouraged people to stay at the same company. 401(k) plans do not.
I’ve watched tons of people change jobs and then blow the 401(k) money before they started their new job.
90% of people with a lump sum of money will run through it in five years or less. The same statistic holds true for 401(k) rollovers as it does for lottery winners.
I am appalled that both presidential candidates have proposals that will make it easier for people to blow their 401(k) money.
There are a variety of ideas the presidential candidates are completely ignoring.
One would be to make it easy, and cost efficient, for employers to go to defined benefit plan and guaranteed income plans. That would make sure that our retirees have money for the rest of their lives.
Second would be to change the way 401(k) plans are administered. Take them out of the employer’s hands and let employees invest in whatever, and with whomever, they like. Just like they do with their IRA accounts.
When historians study the cause of the economic meltdown, they will see that the change from defined benefit plans to 401(k) plans in 1982 was a factor. It was one of many shifts where dramatic changes were made in people’s lives and liberties. People didn’t realize just how dramatic until years later.
If we are going to keep from running behind, 401(k) is one of those things that we need to fix.
Don McNay is the Chairman of the Board for McNay Settlement Group and author of the book, Son of a Son of a Gambler: Winners, Losers and What to Do When You Win The Lottery. You can write to him at don@donmcnay.com or read other things he has written at www.donmcnay.com
When 401(k) came into our lives
“Running on Empty. Running into the sun but I’m running behind.”
-Jackson Browne
Internal Revenue Code section 401(k) is the only section of the US tax code that the average people can cite. They know it has something, and often everything, to do with whether or not they can retire with dignity.
The adoption of section 401(k) in 1982 turned out to be one of those big moments that changed everything.
401(k) plan investments are a primary driver of the investment markets. It is the employee retirement benefit that most companies offer.
These plan investments are also the reason that many people are pacing the floors at night, watching their retirement get delayed or destroyed.
Until 401(k) came along, pension plans were usually defined benefit plans.
A defined benefit pension is one that gives you a set number of dollars for set period of time. It usually pays out over the course of your lifetime after retirement.
With a defined benefit plan, the employer takes responsibility for making sure pension money is safe and properly invested.
With the advent of the 401(k), employees with little or no investment experience were required to pick among investment options offered by an employer.
Employees were put in the position to fail. Many have.
It is up to the employer to pick what investment company handles the employee’s money. If the employer picks a dog, with few options, the employee is out of luck.
Even worse, many companies push their employees to use 401(k) money to buy stock in the company they work for.
If the company goes broke, people lose their jobs and their retirement savings, too.
There are a lot of people hurting. It is sad to watch retired people, or people close to retirement, lose 40 or 50% of their 401(k) plan’s asset value in one year. They will never be able to make that back up.
There is a second major problem -- Not putting enough money in the 401(k) to begin with.
401(k) plans give people too much freedom.
I’ve always encouraged people to put the maximum amount into a 401(k) plan. Few do. Many put in little or nothing at all.
Now they are looking at a bleak retirement.
Defined benefit plans encouraged people to stay at the same company. 401(k) plans do not.
I’ve watched tons of people change jobs and then blow the 401(k) money before they started their new job.
90% of people with a lump sum of money will run through it in five years or less. The same statistic holds true for 401(k) rollovers as it does for lottery winners.
I am appalled that both presidential candidates have proposals that will make it easier for people to blow their 401(k) money.
There are a variety of ideas the presidential candidates are completely ignoring.
One would be to make it easy, and cost efficient, for employers to go to defined benefit plan and guaranteed income plans. That would make sure that our retirees have money for the rest of their lives.
Second would be to change the way 401(k) plans are administered. Take them out of the employer’s hands and let employees invest in whatever, and with whomever, they like. Just like they do with their IRA accounts.
When historians study the cause of the economic meltdown, they will see that the change from defined benefit plans to 401(k) plans in 1982 was a factor. It was one of many shifts where dramatic changes were made in people’s lives and liberties. People didn’t realize just how dramatic until years later.
If we are going to keep from running behind, 401(k) is one of those things that we need to fix.
Don McNay is the Chairman of the Board for McNay Settlement Group and author of the book, Son of a Son of a Gambler: Winners, Losers and What to Do When You Win The Lottery. You can write to him at don@donmcnay.com or read other things he has written at www.donmcnay.com
Saturday, October 11, 2008
Expect a Manic Monday
Expect a Manic Monday
“Just another manic Monday”
-Prince (The Bangles)
In A Piece of the Action, Joe Nocera’s classic history of personal finance, Joe cited a mutual fund manager who noted an interesting fact.
If you added up all the Monday’s between 1955 and 1985, the stock market dropped 1500 points. It did fine the other four days of the week.
That makes sense. People have the weekend to read the papers, talk to their neighbors and get negative and fearful. They walk in on Monday morning and sell.
It is the classic example of how emotion trumps reason.
I was in the financial business on “Black Monday” in 1987. The Dow Jones average lost 22% of its value in one day. It took people the weekend to digest the news from the week before.
Bad news kept coming in but people were slow to process it.
Like they have been in 2008.
As the first days of the economic crisis broke, I was stunned at how the average person was disconnected. The local news devoted its airtime to bank robberies and car crashes. People on the street wanted to talk about football or the weather. The problems of Wall Street had not made their way to Main Street.
Then came President Bush and Secretary Paulson’s first effort to sail a $700 billion Wall Street bailout through Congress. As the bill was debated, defeated, revised, laden with goodies and finally adopted, anger and pessimism spilled into the streets. Suddenly Wall Street was the only topic that people wanted to talk about.
The markets have dropped further and each day, and Americans have gotten more anxious.
Now they have an entire weekend to process the news. Negative thinking will turn to panicked selling.
Expect a very “manic Monday”. It would not surprise me if Monday broke records for market declines.
It also would not surprise me if Monday was the day of a great turnaround.
The market needs to hit a bottom so it can rebound.
I’m hoping that a “manic Monday” will get stocks to prices where people start buying again.
I have been deluged by calls and emails, many from people I don’t know.
Most want reassurance or guidance. But many are sitting on the sidelines, itching to buy.
They look at companies like Ford, GM or Apple (none of which I have ever owned) and wonder if there will some be bargains.
I don’t know. But it is a good time to do some research and find out.
If you have done your homework and know your investment, you know when it is at a good price or a bad price.
I’m in the structured settlement business, so my knowledge is focused on annuities and insurance companies. Although I did it earlier in my life, I have not sold stock or mutual funds in a decade. I only track stocks that I own.
People can do well when they take their time to do research. In the era of the Internet, there is a ton of information about anything you might be interested in owning.
After careful research, you may see opportunities that the panicked and pessimistic are missing. You might go in slowly (as I recommend) or go “all in”, like professional poker players do.
Investing is like playing poker. Winners and losers are decided by understanding the psychology of the people involved.
The current psychology ranges from negative to mindless panic. If you are positive and calm, you might be a big winner.
I always start my columns with a song and I was torn between Manic Monday and Rainy Days Always Get Me Down by the Carpenters.
A way to keep this Monday from getting you down is to rationally plot out your financial future Then do the research to understand your investments.
Don’t count on Wall Street to do your research for you. Its track record is pretty weak.
If you have a plan, keep your wits and don’t buy into panic, the expected downturn on “Manic Monday” might be a good day for you.
Don McNay is the author of Son of a Son of A Gambler: Winners, Losers and What to Do When You Win the Lottery. You can write to him at don@mcnay.com or read other things he has written at www.donmcnay.com McNay is the founder of McNay Settlement Group in Richmond, Ky.
“Just another manic Monday”
-Prince (The Bangles)
In A Piece of the Action, Joe Nocera’s classic history of personal finance, Joe cited a mutual fund manager who noted an interesting fact.
If you added up all the Monday’s between 1955 and 1985, the stock market dropped 1500 points. It did fine the other four days of the week.
That makes sense. People have the weekend to read the papers, talk to their neighbors and get negative and fearful. They walk in on Monday morning and sell.
It is the classic example of how emotion trumps reason.
I was in the financial business on “Black Monday” in 1987. The Dow Jones average lost 22% of its value in one day. It took people the weekend to digest the news from the week before.
Bad news kept coming in but people were slow to process it.
Like they have been in 2008.
As the first days of the economic crisis broke, I was stunned at how the average person was disconnected. The local news devoted its airtime to bank robberies and car crashes. People on the street wanted to talk about football or the weather. The problems of Wall Street had not made their way to Main Street.
Then came President Bush and Secretary Paulson’s first effort to sail a $700 billion Wall Street bailout through Congress. As the bill was debated, defeated, revised, laden with goodies and finally adopted, anger and pessimism spilled into the streets. Suddenly Wall Street was the only topic that people wanted to talk about.
The markets have dropped further and each day, and Americans have gotten more anxious.
Now they have an entire weekend to process the news. Negative thinking will turn to panicked selling.
Expect a very “manic Monday”. It would not surprise me if Monday broke records for market declines.
It also would not surprise me if Monday was the day of a great turnaround.
The market needs to hit a bottom so it can rebound.
I’m hoping that a “manic Monday” will get stocks to prices where people start buying again.
I have been deluged by calls and emails, many from people I don’t know.
Most want reassurance or guidance. But many are sitting on the sidelines, itching to buy.
They look at companies like Ford, GM or Apple (none of which I have ever owned) and wonder if there will some be bargains.
I don’t know. But it is a good time to do some research and find out.
If you have done your homework and know your investment, you know when it is at a good price or a bad price.
I’m in the structured settlement business, so my knowledge is focused on annuities and insurance companies. Although I did it earlier in my life, I have not sold stock or mutual funds in a decade. I only track stocks that I own.
People can do well when they take their time to do research. In the era of the Internet, there is a ton of information about anything you might be interested in owning.
After careful research, you may see opportunities that the panicked and pessimistic are missing. You might go in slowly (as I recommend) or go “all in”, like professional poker players do.
Investing is like playing poker. Winners and losers are decided by understanding the psychology of the people involved.
The current psychology ranges from negative to mindless panic. If you are positive and calm, you might be a big winner.
I always start my columns with a song and I was torn between Manic Monday and Rainy Days Always Get Me Down by the Carpenters.
A way to keep this Monday from getting you down is to rationally plot out your financial future Then do the research to understand your investments.
Don’t count on Wall Street to do your research for you. Its track record is pretty weak.
If you have a plan, keep your wits and don’t buy into panic, the expected downturn on “Manic Monday” might be a good day for you.
Don McNay is the author of Son of a Son of A Gambler: Winners, Losers and What to Do When You Win the Lottery. You can write to him at don@mcnay.com or read other things he has written at www.donmcnay.com McNay is the founder of McNay Settlement Group in Richmond, Ky.
Thursday, October 9, 2008
Machiavelli and the Economic Crisis (second draft of column)
Machiavelli and the Economic Crisis
Come on baby, don’t fear the reaper.
-Blue Oyster Cult
I wish one of our economic leaders had been a political science major.
George Bush has an MBA from Harvard. Henry Paulson has an MBA from Harvard. Ben Bernanke graduated from Harvard before he became a Princeton professor.
The crisis is not boding well for the Ivy League.
I used to wish the economic leaders had gone to state schools and owned a corner grocery store. I felt they were out of touch with average Americans.
The problem is simpler than that. None of them understand political philosophy or crowd psychology.
Every aspiring political science student has read, The Prince by Machiavelli. One lesson from the book has stuck with me.
Always give bad news in one dose.
The worst thing a leader can do is dribble out bad news a little at a time. Like the crew in Washington is doing now.
When the $700 billion Wall Street bailout plan was proposed, someone called into a radio talk show and asked me what would happen to the Dow Jones average if the bill did not pass.
I said it would drop 50% in one day. Then we would start over again
If the Washington crew had read Machiavelli, maybe it would have happened that way. .
Instead, Congress passed the bailout bill. The markets continue to decline day by day.
Now people are really scared. I can’t blame them. Each day, there is bad news followed by bad news. No one knows when it will stop.
People need certainty. Even if the news is terrible. It is easier to come back from one big disaster than a series of little ones.
We spent $700 billion and it didn’t give us certainty. I’m not really sure what it gave us.
I’d love to have the money back.
I wish Bush, Paulson and Bernanke had spent less time reading about market theory and more time on philosophy and psychology.
We are past the point where market theory has anything to do with the economic crisis. Decisions are driven by fear and human behaviors.
The kind of behaviors that Machiavelli figured out 500 years ago.
I wish more of our business leaders understood history and philosophy. Too few do.
When you see the current economic crisis, you need to look at world history to get some answers.
Once you do that, you come to the same conclusion as Harry Truman, “the only thing new in the world is the history you don’t know.”
This is not the first, or the last, economic crisis that the world will face. There have been worse. No one is starving or rioting. At least not yet.
We need to draw upon the knowledge of the ages
Machiavelli gave us the first answer. Let bad news happen in one swoop.
The gang in Washington screwed that up. So now what do we do?
Listen to Machiavelli again. Stop trying the “fix of the day.” Let some companies that are “too big to fail,” go ahead and fail.
Get the garbage out of the system at once rather than let things keep sliding.
The government should completely protect savers, home owners and insurance policyholders. No one else.
Wall Street CEO’s, with their million dollar bonuses, would be out of luck.
People were horrified when I first suggested that we let things bottom out. People said, “the Dow Jones will drop 5000 points in a day.”
I would have rather have had it drop 5000 in a day than 5000, in gradual steps, like it did.
Once the markets hit bottom, smart investors, like the Warren Buffett’s of the world, will come back and start buying. We will be back on the way up.
If we had done it my way, we would have still had $700 billion in the till when that happened.
Not learning the lesson of Machiavelli has been a root cause of the crisis. Politicians never want to give bad news.
People can handle bad news. Especially when it comes at one time.
I learned early in my business career that people want you to lead with the worst news first.
If I have to fire someone, I always start the conversation with that fact. I don’t dribble it out over an hour.
I’ve remained friends with most of the people I have fired. Once the shock wore off, the former employees appreciated my candor.
History tells us that we can survive any kind of disaster. The key is to get the disaster completely on the table so we can deal with it.
Which is the lesson Machiavelli taught us 500 years ago.
Don McNay is the Chairman of the Board for McNay Settlement Group in Richmond Kentucky. You can read his award winning, syndicated column at www.donmcnay.com or write to him at don@donmcnay.com. McNay is Treasurer of the National Society of Newspaper Columnists.
Come on baby, don’t fear the reaper.
-Blue Oyster Cult
I wish one of our economic leaders had been a political science major.
George Bush has an MBA from Harvard. Henry Paulson has an MBA from Harvard. Ben Bernanke graduated from Harvard before he became a Princeton professor.
The crisis is not boding well for the Ivy League.
I used to wish the economic leaders had gone to state schools and owned a corner grocery store. I felt they were out of touch with average Americans.
The problem is simpler than that. None of them understand political philosophy or crowd psychology.
Every aspiring political science student has read, The Prince by Machiavelli. One lesson from the book has stuck with me.
Always give bad news in one dose.
The worst thing a leader can do is dribble out bad news a little at a time. Like the crew in Washington is doing now.
When the $700 billion Wall Street bailout plan was proposed, someone called into a radio talk show and asked me what would happen to the Dow Jones average if the bill did not pass.
I said it would drop 50% in one day. Then we would start over again
If the Washington crew had read Machiavelli, maybe it would have happened that way. .
Instead, Congress passed the bailout bill. The markets continue to decline day by day.
Now people are really scared. I can’t blame them. Each day, there is bad news followed by bad news. No one knows when it will stop.
People need certainty. Even if the news is terrible. It is easier to come back from one big disaster than a series of little ones.
We spent $700 billion and it didn’t give us certainty. I’m not really sure what it gave us.
I’d love to have the money back.
I wish Bush, Paulson and Bernanke had spent less time reading about market theory and more time on philosophy and psychology.
We are past the point where market theory has anything to do with the economic crisis. Decisions are driven by fear and human behaviors.
The kind of behaviors that Machiavelli figured out 500 years ago.
I wish more of our business leaders understood history and philosophy. Too few do.
When you see the current economic crisis, you need to look at world history to get some answers.
Once you do that, you come to the same conclusion as Harry Truman, “the only thing new in the world is the history you don’t know.”
This is not the first, or the last, economic crisis that the world will face. There have been worse. No one is starving or rioting. At least not yet.
We need to draw upon the knowledge of the ages
Machiavelli gave us the first answer. Let bad news happen in one swoop.
The gang in Washington screwed that up. So now what do we do?
Listen to Machiavelli again. Stop trying the “fix of the day.” Let some companies that are “too big to fail,” go ahead and fail.
Get the garbage out of the system at once rather than let things keep sliding.
The government should completely protect savers, home owners and insurance policyholders. No one else.
Wall Street CEO’s, with their million dollar bonuses, would be out of luck.
People were horrified when I first suggested that we let things bottom out. People said, “the Dow Jones will drop 5000 points in a day.”
I would have rather have had it drop 5000 in a day than 5000, in gradual steps, like it did.
Once the markets hit bottom, smart investors, like the Warren Buffett’s of the world, will come back and start buying. We will be back on the way up.
If we had done it my way, we would have still had $700 billion in the till when that happened.
Not learning the lesson of Machiavelli has been a root cause of the crisis. Politicians never want to give bad news.
People can handle bad news. Especially when it comes at one time.
I learned early in my business career that people want you to lead with the worst news first.
If I have to fire someone, I always start the conversation with that fact. I don’t dribble it out over an hour.
I’ve remained friends with most of the people I have fired. Once the shock wore off, the former employees appreciated my candor.
History tells us that we can survive any kind of disaster. The key is to get the disaster completely on the table so we can deal with it.
Which is the lesson Machiavelli taught us 500 years ago.
Don McNay is the Chairman of the Board for McNay Settlement Group in Richmond Kentucky. You can read his award winning, syndicated column at www.donmcnay.com or write to him at don@donmcnay.com. McNay is Treasurer of the National Society of Newspaper Columnists.
Draft fo Machiavelli & The Economic Crisis. Column for Friday
Machiavelli and the Economic Crisis
Come on baby, don’t fear the reaper.
-Blue Oyster Cult
I wish one of our economic leaders had been a political science major.
George Bush has an MBA from Harvard. Henry Paulson has an MBA from Harvard. Ben Bernanke graduated from Harvard before became he became a Princeton professor.
The crisis is not boding well for the Ivy League.
I used to wish the economic leaders had gone to state schools and owned a corner grocery store. I felt they were out of touch with average Americans.
The problem is simpler than that. None of them understand political philosophy or crowd psychology.
Every aspiring political science student has read, The Prince by Machiavelli. One lesson from the book has stuck with me.
Always give bad news in one doze.
The worst thing a leader can do is dribble out bad news, a little at a time. Like the crew in Washington is doing now..
When the $700 billion Wall Street bailout plan was proposed, someone called into a radio talk show and asked me what would happen to the Dow Jones average if the bill did not pass.
I said it would drop 50% in one day. Then we would start over again
If the Washington crew had read Machiavelli, maybe it would have happened that way. .
Instead, Congress passed the bailout bill. The markets continue to decline day by day.
Now people are really scared. I really can’t blame them. Each day, there is bad news followed by bad news. No one knows when it will stop.
People need certainty. Even if the news is terrible. It is easier to come back from one big disaster than a series of little ones.
We spent $700 billion and it didn’t give us certainty. I’m not really sure what it gave us.
I’d love to have the money back.
I wish Bush, Paulson and Bernanke had spent less time reading about market theory and more time on philosophy and psychology.
We are past the point where market theory has anything to do with the economic crisis. Decisions are driven by fear and human behaviors.
The kind of behaviors that Machiavelli figured out 500 years ago.
I wish more of our business leaders understood history and philosophy. Too few do.
When you see the current economic crisis, you need to look at world history to get some answers.
Once you do that, you come to the same conclusion as Harry Truman, “the only thing new in the world is the history you don’t know.”
This is not the first, or the last, economic crisis that the world has ever faced. There have been worse. No one is starving or rioting. At least not yet.
We need to draw upon the knowledge of the ages
Machiavelli gave us the first answer. Let bad news happen in one swoop.
The gang in Washington screwed that up. So now what do we do?
Listen to Machiavelli again. Stop trying the “fix of the day.” Let some companies that are “too big to fail,” go ahead and fail.
Get the garbage out of the system at once rather than let things keep sliding.
The government should completely protect savers, home owners and insurance policyholders. No one else.
Wall Street CEO’s, with their million dollar bonuses, would be out of luck.
People were horrified when I first suggested that we let things bottom out. People said, “the Dow Jones will drop 5000 points in a day.”
I would have rather have had it drop 5000 in a day than 5000, in gradual steps, like it did.
Once the markets hits a bottom, smart investors, like the Warren Buffett’s of the world, will come back and start buying. We will be back on the way up.
If we had done it my way, we would have still had $700 billion in the till when that happened.
Not learning the lesson of Machiavelli has been a root cause of the crisis. Politicians never want to give bad news.
People can handle bad news. Especially when it comes at one time.
I learned early in my business career that people want you to lead with the worst news first.
If I have to fire someone, I always start the conversation with that fact. I don’t dribble it out over an hour.
I’ve remained friends with most of the people I have fired. Once the shock wore off, the former employees appreciated my candor.
History tells us that we can survive any kind of disaster. The key is to get the disaster completely on the table so we can deal with it.
Which is the lesson Machiavelli taught us 500 years ago.
Don McNay is the Chairman of the Board for McNay Settlement Group in Richmond Kentucky. You can read his award winning, syndicated column at www.donmcnay.com or write to him at don@donmcnay.com. McNay is Treasurer of the National Society of Newspaper Columnists.
Come on baby, don’t fear the reaper.
-Blue Oyster Cult
I wish one of our economic leaders had been a political science major.
George Bush has an MBA from Harvard. Henry Paulson has an MBA from Harvard. Ben Bernanke graduated from Harvard before became he became a Princeton professor.
The crisis is not boding well for the Ivy League.
I used to wish the economic leaders had gone to state schools and owned a corner grocery store. I felt they were out of touch with average Americans.
The problem is simpler than that. None of them understand political philosophy or crowd psychology.
Every aspiring political science student has read, The Prince by Machiavelli. One lesson from the book has stuck with me.
Always give bad news in one doze.
The worst thing a leader can do is dribble out bad news, a little at a time. Like the crew in Washington is doing now..
When the $700 billion Wall Street bailout plan was proposed, someone called into a radio talk show and asked me what would happen to the Dow Jones average if the bill did not pass.
I said it would drop 50% in one day. Then we would start over again
If the Washington crew had read Machiavelli, maybe it would have happened that way. .
Instead, Congress passed the bailout bill. The markets continue to decline day by day.
Now people are really scared. I really can’t blame them. Each day, there is bad news followed by bad news. No one knows when it will stop.
People need certainty. Even if the news is terrible. It is easier to come back from one big disaster than a series of little ones.
We spent $700 billion and it didn’t give us certainty. I’m not really sure what it gave us.
I’d love to have the money back.
I wish Bush, Paulson and Bernanke had spent less time reading about market theory and more time on philosophy and psychology.
We are past the point where market theory has anything to do with the economic crisis. Decisions are driven by fear and human behaviors.
The kind of behaviors that Machiavelli figured out 500 years ago.
I wish more of our business leaders understood history and philosophy. Too few do.
When you see the current economic crisis, you need to look at world history to get some answers.
Once you do that, you come to the same conclusion as Harry Truman, “the only thing new in the world is the history you don’t know.”
This is not the first, or the last, economic crisis that the world has ever faced. There have been worse. No one is starving or rioting. At least not yet.
We need to draw upon the knowledge of the ages
Machiavelli gave us the first answer. Let bad news happen in one swoop.
The gang in Washington screwed that up. So now what do we do?
Listen to Machiavelli again. Stop trying the “fix of the day.” Let some companies that are “too big to fail,” go ahead and fail.
Get the garbage out of the system at once rather than let things keep sliding.
The government should completely protect savers, home owners and insurance policyholders. No one else.
Wall Street CEO’s, with their million dollar bonuses, would be out of luck.
People were horrified when I first suggested that we let things bottom out. People said, “the Dow Jones will drop 5000 points in a day.”
I would have rather have had it drop 5000 in a day than 5000, in gradual steps, like it did.
Once the markets hits a bottom, smart investors, like the Warren Buffett’s of the world, will come back and start buying. We will be back on the way up.
If we had done it my way, we would have still had $700 billion in the till when that happened.
Not learning the lesson of Machiavelli has been a root cause of the crisis. Politicians never want to give bad news.
People can handle bad news. Especially when it comes at one time.
I learned early in my business career that people want you to lead with the worst news first.
If I have to fire someone, I always start the conversation with that fact. I don’t dribble it out over an hour.
I’ve remained friends with most of the people I have fired. Once the shock wore off, the former employees appreciated my candor.
History tells us that we can survive any kind of disaster. The key is to get the disaster completely on the table so we can deal with it.
Which is the lesson Machiavelli taught us 500 years ago.
Don McNay is the Chairman of the Board for McNay Settlement Group in Richmond Kentucky. You can read his award winning, syndicated column at www.donmcnay.com or write to him at don@donmcnay.com. McNay is Treasurer of the National Society of Newspaper Columnists.
Wednesday, October 8, 2008
Don McNay on WLVK with Kruser at 1.05 pm October 8, 2008
Author and syndicated financial columnist Don McNay will be on WLVK-AM (590 AM) with Kruser at 1.05 p.m, Wednesday October 8, 2008 at 1.05 pm to discuss the financial crisis.
Monday, October 6, 2008
Reasons to Remain Calm
Reasons to Remain Calm
“You know you make me want to shout”
-Otis Day and the Knights
I am starting to feel like Kevin Bacon's character in the movie Animal House. In the last scene of the movie, Bacon keeps yelling, “remain calm.”
Instead, the crowd tramples him into the ground.
I was opposed to the Wall Street bailout plan, but it happened anyway.
I've been telling people to spend less than they make, diversify their investments, and to avoid risk. Some took my advice, others didn’t.
If Wall Street had followed the rules, the crisis would not have happened
Many bailout supporters were expecting an immediate cure. Even if it works, the bailout will take a long period of time. Someone should have explained that to the American people.
No one did. When the worldwide crisis continued, people were spooked.
It is time to remain calm.
Go back to my simple rules. If you are spending less than you make, diversified your investments and avoided risk, you are going to be ok.
Don’t get caught up in the panic.
I know you want to do something. We all do. We have this feeling of total helplessness, like watching a loved one die of cancer. The game is being played on a larger stage.
Remaining calm is the only true solution.
I’ve watched the President and Secretary of the Treasury panic last week. That didn’t make me feel good but I stayed calm anyway.
This is a time when we need to rise above our leadership. The quicker we all settle down, the quicker we can start working towards solutions.
The worst decisions are those made hastily and under stress. Financial decisions have to be separated from emotional reactions.
If you have money in a 401(k) plan, it's probably gone down in the last month. It may go down in the next month. It may go up.
If I knew the exact answer, I would be a multi billionaire. Not having all my eggs in one basket gives me a chance to be right either way.
Some segments of the market do extremely well in times of panic. Others do worse. The key is to have your money in everything.
I didn’t think the $700 billion would help everyone. Some segments of the economy have been hammered, some not at all.
If you work in healthcare, government, or a business not dependent on the financial markets, you may in good shape. The odds of the losing your job is possible, but remote.
No matter how bad the economy gets, we are still going to be hiring nurses, firefighters and dentists.
If you're retired and get a fixed, defined-benefit pension check, your money should be safe.
If your own your house completely, and not planning on selling it right away, you don’t have a problem.. If you have a fixed mortgage, and you're making payments on time, you shouldn't have a problem either.
There is another extreme of the economy . People who are maxed out on their credit cards, and behind on their sub prime mortgages. The economic crisis, may not hurt them as badly as the status quo.
Those people were already in trouble. There is now going to be huge political pressure to make banks and mortgage companies work out compromises.
There are a number of sectors really hurting. I happen to be affiliated with two industries, financial services and media, having a difficult time.
When it's all over, those fields are going to have a couple big players and a lot of tiny ones. The mid level companies won’t survive.
The crisis is a good time to gauge if you're going to be one of the survivors. If not, its time to look at alternatives.
Changing careers is a life changing event. Its not a decision that you should make during times of panic.
This is the fourth time in my professional life where I’ve seen an economic boom and bust.
I saw it happen in the stock market crash of 1987. I saw it happen when technology stocks crashed in 1999. Worst was when “the world stopping turning” on September 11, 2001. Along with the human loss, it damaged the economy. Some industries, like airlines, have never come back.
Each time, I watched people buy high and sell low. They would get caught up making irrational economic decisions and then sell in the middle of a panic.
I would see people make bad, life altering decisions because they didn’t think them through carefully.
Kevin Bacon may have gotten trampled, but he had the right idea. Right now is the time when people should be heeding the advice to stay calm.
Don McNay is the Chairman of the Board for McNay Settlement Group in Richmond, Kentucky. You can write to him at don@donmcnay.com or read his award winning column at www.donmcnay.com
“You know you make me want to shout”
-Otis Day and the Knights
I am starting to feel like Kevin Bacon's character in the movie Animal House. In the last scene of the movie, Bacon keeps yelling, “remain calm.”
Instead, the crowd tramples him into the ground.
I was opposed to the Wall Street bailout plan, but it happened anyway.
I've been telling people to spend less than they make, diversify their investments, and to avoid risk. Some took my advice, others didn’t.
If Wall Street had followed the rules, the crisis would not have happened
Many bailout supporters were expecting an immediate cure. Even if it works, the bailout will take a long period of time. Someone should have explained that to the American people.
No one did. When the worldwide crisis continued, people were spooked.
It is time to remain calm.
Go back to my simple rules. If you are spending less than you make, diversified your investments and avoided risk, you are going to be ok.
Don’t get caught up in the panic.
I know you want to do something. We all do. We have this feeling of total helplessness, like watching a loved one die of cancer. The game is being played on a larger stage.
Remaining calm is the only true solution.
I’ve watched the President and Secretary of the Treasury panic last week. That didn’t make me feel good but I stayed calm anyway.
This is a time when we need to rise above our leadership. The quicker we all settle down, the quicker we can start working towards solutions.
The worst decisions are those made hastily and under stress. Financial decisions have to be separated from emotional reactions.
If you have money in a 401(k) plan, it's probably gone down in the last month. It may go down in the next month. It may go up.
If I knew the exact answer, I would be a multi billionaire. Not having all my eggs in one basket gives me a chance to be right either way.
Some segments of the market do extremely well in times of panic. Others do worse. The key is to have your money in everything.
I didn’t think the $700 billion would help everyone. Some segments of the economy have been hammered, some not at all.
If you work in healthcare, government, or a business not dependent on the financial markets, you may in good shape. The odds of the losing your job is possible, but remote.
No matter how bad the economy gets, we are still going to be hiring nurses, firefighters and dentists.
If you're retired and get a fixed, defined-benefit pension check, your money should be safe.
If your own your house completely, and not planning on selling it right away, you don’t have a problem.. If you have a fixed mortgage, and you're making payments on time, you shouldn't have a problem either.
There is another extreme of the economy . People who are maxed out on their credit cards, and behind on their sub prime mortgages. The economic crisis, may not hurt them as badly as the status quo.
Those people were already in trouble. There is now going to be huge political pressure to make banks and mortgage companies work out compromises.
There are a number of sectors really hurting. I happen to be affiliated with two industries, financial services and media, having a difficult time.
When it's all over, those fields are going to have a couple big players and a lot of tiny ones. The mid level companies won’t survive.
The crisis is a good time to gauge if you're going to be one of the survivors. If not, its time to look at alternatives.
Changing careers is a life changing event. Its not a decision that you should make during times of panic.
This is the fourth time in my professional life where I’ve seen an economic boom and bust.
I saw it happen in the stock market crash of 1987. I saw it happen when technology stocks crashed in 1999. Worst was when “the world stopping turning” on September 11, 2001. Along with the human loss, it damaged the economy. Some industries, like airlines, have never come back.
Each time, I watched people buy high and sell low. They would get caught up making irrational economic decisions and then sell in the middle of a panic.
I would see people make bad, life altering decisions because they didn’t think them through carefully.
Kevin Bacon may have gotten trampled, but he had the right idea. Right now is the time when people should be heeding the advice to stay calm.
Don McNay is the Chairman of the Board for McNay Settlement Group in Richmond, Kentucky. You can write to him at don@donmcnay.com or read his award winning column at www.donmcnay.com
Saturday, October 4, 2008
Mitch McConnell and the 24 year itch
Mitch McConnell and the 24 year itch
“Tell me you're trying to cure a seven-year ache
See what else your old heart can take.”
-Rosanne Cash
Kentucky Senator (and Republican Minority Leader) Mitch McConnell is in a tight race for re-election with challenger Bruce Lunsford.
If you look at history, that is not surprising.
McConnell was first elected to the Senate in 1984. He has been re-elected four times since then.
According to the classic political science book, U.S Senators and Their World, by Donald Matthews, it is harder for a Senator to get re-elected for a fourth or fifth term, than to be re-elected after one.
Matthews showed that 80% of all Senators got re-elected after one term, and that number increased to 84% for a second term and 88% for a third. The re-election odds drop to 57% for those seeking four or more terms.
Matthews wrote his book in 1960 but I doubt that the theory has changed.
I did a study of Matthew’s book when I was in graduate school at Vanderbilt. The logic is surprisingly simple. When someone has been in the Senate for 24 years or more, the group of supporters that first got them elected have died or lost interest in politics. Along the way, the Senator is building up enemies.
Enemies have longer memories. People might forget a favor but never forget something done to them.
Thus, human behavior favors a challenger.
The revenge factor is a problem for a candidate like McConnell. McConnell ran aggressive and polarizing campaigns in his four bids for Senate and in his earlier races for Jefferson County (Louisville) Judge Executive.
His elections were hotly contested, including a 1996 defeat of current Governor Steve Beshear. Thus, he has a sitting Governor waiting in line to take him down.
Unlike many other senators, McConnell has played an active role in Kentucky politics at every level. He was instrumental in electing former Governor Ernie Fletcher that cooled after Fletcher’s election.
The internal participation could benefit McConnell as he developed a strong group of allies but, going back to Matthew’s theory, McConnell’s involvement developed another group of enemies that could spring out if a challenger has a chance to defeat McConnell.
Matthews noted the blessing of seniority could also be a curse. Senators with increased seniority take on more responsibility and important assignments within the Senate.
Matthews said “in the vocabulary of social psychology, his ‘reference groups’ change, he becomes more concerned with Senate, national and international problems and devotes less time and attention to the ‘folks back home”.
McConnell is the Senate’s highest ranking Republican and a staple on the Washington Sunday morning talk shows. He has had to promote the political agenda of an unpopular president.
President Bush was an asset when McConnell ran for his fourth term in 2002. Bush was at his peak of popularity after September 11, 2001. McConnell was running against a relatively unknown challenger.
In 2008, the situation is different. John McCain, the Republican nominee, goes out of his way to differentiate himself from the President.
McConnell can’t “untie” his association with President Bush.
His role as Minority Leader does not give him personal political flexibility. A good example was Bush’s proposal for a $700 bailout for Wall Street.
McConnell’s fellow Kentucky Republican, Senator, Jim Bunning, took the politically popular position of opposing a bailout. Bunning had previously opposed President Bush’s selection of Alan Greenspan and later Ben Bernanke as Chairmen of the Federal Reserve Board. His opposition was consistent with his stated philosophy.
As Minority Leader, McConnell does not have the luxury of choosing philosophy over party.
The other reasons that Matthews cites, age and not spending time at home, don’t apply to McConnell. Only 66, McConnell works hard at staying in touch.
The next month will show whether McConnell can break the “four term curse.” Lunsford is not the strongest candidate the Democrats could have fielded. He has never held office and lost two consecutive bids for Governor.
Some of officeholders mentioned were Auditor Crit Luellan, former Attorney General Greg Stumbo, former Treasurer Jonathan Miller, current Attorney General Jack Conway and Lt. Governor Daniel Mongardo. All would have been strong candidates but only Lunsford answered the call.
According to the research of Professor Matthews, that call might result in Lunsford changing his name from Citizen Lunsford to Senator Lunsford.
Don McNay is the author of Son of a Son of a Gambler. You can read his award winning, syndicated column at www.donmcnay.com or write to him at www.donmcnay.com McNay is the Treasurer for the National Society of Newspaper Columnists.
“Tell me you're trying to cure a seven-year ache
See what else your old heart can take.”
-Rosanne Cash
Kentucky Senator (and Republican Minority Leader) Mitch McConnell is in a tight race for re-election with challenger Bruce Lunsford.
If you look at history, that is not surprising.
McConnell was first elected to the Senate in 1984. He has been re-elected four times since then.
According to the classic political science book, U.S Senators and Their World, by Donald Matthews, it is harder for a Senator to get re-elected for a fourth or fifth term, than to be re-elected after one.
Matthews showed that 80% of all Senators got re-elected after one term, and that number increased to 84% for a second term and 88% for a third. The re-election odds drop to 57% for those seeking four or more terms.
Matthews wrote his book in 1960 but I doubt that the theory has changed.
I did a study of Matthew’s book when I was in graduate school at Vanderbilt. The logic is surprisingly simple. When someone has been in the Senate for 24 years or more, the group of supporters that first got them elected have died or lost interest in politics. Along the way, the Senator is building up enemies.
Enemies have longer memories. People might forget a favor but never forget something done to them.
Thus, human behavior favors a challenger.
The revenge factor is a problem for a candidate like McConnell. McConnell ran aggressive and polarizing campaigns in his four bids for Senate and in his earlier races for Jefferson County (Louisville) Judge Executive.
His elections were hotly contested, including a 1996 defeat of current Governor Steve Beshear. Thus, he has a sitting Governor waiting in line to take him down.
Unlike many other senators, McConnell has played an active role in Kentucky politics at every level. He was instrumental in electing former Governor Ernie Fletcher that cooled after Fletcher’s election.
The internal participation could benefit McConnell as he developed a strong group of allies but, going back to Matthew’s theory, McConnell’s involvement developed another group of enemies that could spring out if a challenger has a chance to defeat McConnell.
Matthews noted the blessing of seniority could also be a curse. Senators with increased seniority take on more responsibility and important assignments within the Senate.
Matthews said “in the vocabulary of social psychology, his ‘reference groups’ change, he becomes more concerned with Senate, national and international problems and devotes less time and attention to the ‘folks back home”.
McConnell is the Senate’s highest ranking Republican and a staple on the Washington Sunday morning talk shows. He has had to promote the political agenda of an unpopular president.
President Bush was an asset when McConnell ran for his fourth term in 2002. Bush was at his peak of popularity after September 11, 2001. McConnell was running against a relatively unknown challenger.
In 2008, the situation is different. John McCain, the Republican nominee, goes out of his way to differentiate himself from the President.
McConnell can’t “untie” his association with President Bush.
His role as Minority Leader does not give him personal political flexibility. A good example was Bush’s proposal for a $700 bailout for Wall Street.
McConnell’s fellow Kentucky Republican, Senator, Jim Bunning, took the politically popular position of opposing a bailout. Bunning had previously opposed President Bush’s selection of Alan Greenspan and later Ben Bernanke as Chairmen of the Federal Reserve Board. His opposition was consistent with his stated philosophy.
As Minority Leader, McConnell does not have the luxury of choosing philosophy over party.
The other reasons that Matthews cites, age and not spending time at home, don’t apply to McConnell. Only 66, McConnell works hard at staying in touch.
The next month will show whether McConnell can break the “four term curse.” Lunsford is not the strongest candidate the Democrats could have fielded. He has never held office and lost two consecutive bids for Governor.
Some of officeholders mentioned were Auditor Crit Luellan, former Attorney General Greg Stumbo, former Treasurer Jonathan Miller, current Attorney General Jack Conway and Lt. Governor Daniel Mongardo. All would have been strong candidates but only Lunsford answered the call.
According to the research of Professor Matthews, that call might result in Lunsford changing his name from Citizen Lunsford to Senator Lunsford.
Don McNay is the author of Son of a Son of a Gambler. You can read his award winning, syndicated column at www.donmcnay.com or write to him at www.donmcnay.com McNay is the Treasurer for the National Society of Newspaper Columnists.
Friday, October 3, 2008
If Dave Ramsey were President
http://www.middlesborodailynews.com/articles/2008/10/02/opinion/editorials/994mcnay.txt
Wednesday, October 1, 2008
From Editor & Publisher: McNay is on the Air and in Print With Financial-Crisis Commentary
http://www.editorandpublisher.com/eandp/departments/syndicates/article_display.jsp?vnu_content_id=1003856887
McNay is on the Air and in Print With Financial-Crisis Commentary
By E&P Staff
Published: October 01, 2008 11:15 PM ET
NEW YORK Syndicated financial columnist Don McNay is continuing to write and comment about America's financial crisis.
Yesterday, for instance, he taped a segment with WTVQ-TV in Lexington, Ky. And this morning, McNay was scheduled to appear on 1190 KEX News Radio in Portland, Ore.
In his most recent column on the financial crisis, McNay wrote: "The leadership styles of President Bush and Secretary of the Treasury Hank Paulson have contributed to the problem. Great presidents reassure the country in times of crisis. Look at Teddy Roosevelt, Franklin Roosevelt, Abraham Lincoln, and George Washington.
"I've never seen a great president scold or scare the American people into going along with a program. Both Paulson and Bush showed neither confidence, nor optimism. They seemed nervous and distracted. They didn't appear to have a handle on the situation."
McNay is treasurer of the National Society of Newspaper Columnists
McNay is on the Air and in Print With Financial-Crisis Commentary
By E&P Staff
Published: October 01, 2008 11:15 PM ET
NEW YORK Syndicated financial columnist Don McNay is continuing to write and comment about America's financial crisis.
Yesterday, for instance, he taped a segment with WTVQ-TV in Lexington, Ky. And this morning, McNay was scheduled to appear on 1190 KEX News Radio in Portland, Ore.
In his most recent column on the financial crisis, McNay wrote: "The leadership styles of President Bush and Secretary of the Treasury Hank Paulson have contributed to the problem. Great presidents reassure the country in times of crisis. Look at Teddy Roosevelt, Franklin Roosevelt, Abraham Lincoln, and George Washington.
"I've never seen a great president scold or scare the American people into going along with a program. Both Paulson and Bush showed neither confidence, nor optimism. They seemed nervous and distracted. They didn't appear to have a handle on the situation."
McNay is treasurer of the National Society of Newspaper Columnists
Tuesday, September 30, 2008
Don McNay on WTVQ in Lexington and 11190.KEX in Portland Oregon
I taped a segment with Greg Stotelmyer at WTVQ-TV in Lexington today (Tuesday,. September 30) that wlll run on their evening news.
Tomorrow (October 1) I am doing a live segment with Paul Linnman on news radio 1190.KEX in Portland Oregon. I should be on at 8.15 am (EDT). You can pick up. the show via podcast and live streaming.
I also was quoted in the Richmond Register news story and will include a link to that.
Morning Show on 1190.KEX in Portland Oregon
WTVQ-TV News
Richmond Register, page 1, September 30 2008
I'm going to keep doing special columns while the economic crisis goes on. I've also been doing non stop media appearances, including two with Joe Elliott (4 pm and again at 5.30 pm.) on WHAS-84 yesterday.
As noted last week:
Dave Astor at Editor and Publisher Magazine did a terrific story about my column concerning the economic crisis and Senator Bunning. I've gotten response to Dave's column from all over the United States.
Here is the link.
Dave Astor's story about Don McNay column in Editor and Publisher
Editor & Publisher story
Tomorrow (October 1) I am doing a live segment with Paul Linnman on news radio 1190.KEX in Portland Oregon. I should be on at 8.15 am (EDT). You can pick up. the show via podcast and live streaming.
I also was quoted in the Richmond Register news story and will include a link to that.
Morning Show on 1190.KEX in Portland Oregon
WTVQ-TV News
Richmond Register, page 1, September 30 2008
I'm going to keep doing special columns while the economic crisis goes on. I've also been doing non stop media appearances, including two with Joe Elliott (4 pm and again at 5.30 pm.) on WHAS-84 yesterday.
As noted last week:
Dave Astor at Editor and Publisher Magazine did a terrific story about my column concerning the economic crisis and Senator Bunning. I've gotten response to Dave's column from all over the United States.
Here is the link.
Dave Astor's story about Don McNay column in Editor and Publisher
Editor & Publisher story
Monday, September 29, 2008
Dave Ramsey for President
Dave Ramsey for President.
Just one more year and then you’d be happy
But you’re crying, you’re crying now.
-Gerry Rafferty
As the financial crisis has played out, the leadership styles of President Bush and Secretary of the Treasury Hank Paulson have contributed to the problem.
Great presidents reassure the country in times of crisis. Look at Teddy Roosevelt, Franklin Roosevelt Abraham Lincoln, and George Washington.
I've never seen a great president scold or scare the American people into going along with a program.
Both Paulson and Bush showed neither confidence, nor optimism. They seemed nervous and distracted. They didn’t appear to have a handle on the situation.
President Bush was unable to get his fellow Republican in Congress to go along with the program that he proposed.
The President claimed dire consequences if the Wall Street bailout failed, but his party voted against him anyway.
Paulson's friends on Wall Street didn't like the rebuke. They struck back. The Dow Jones average dropped 777 points and one day. It was the 17th largest percentage drop in history.
Bush and Paulson don’t have a great track record. We are still looking for Bush’s “weapons of mass destruction” and Paulson has mistakes that has turned a recession into a possible depression.
I’ve been hoping that a presidential candidate would take charge and lead us.
Barack Obama has been very cool and calm. Maybe a little too cool. He has not offered specific and concrete ideas. He often talks in techno jargon and legalese.
Obama may not be ideal but he belongs on Mount Rushmore compared to the antics of John McCain.
McCain first declared that the economic fundamentals of the nation were strong. Then he changed his mind, and decided he was going to suspend his campaign, cancel the first presidential debate, and come back to Washington to assist the bailout.
He interjected himself into the negotiations. He decided on Friday that things look good and went back to campaigning. They weren’t but he left anyway. He tried to take credit for getting fellow Republicans to back the President.
Thus, he has egg on his face when the Republicans torpedoed the President’ bill.
I was running out of hope for an American showing true leadership, when I happened to flip on the Fox Business Network to catch the Dave Ramsey Show.
Personal finance is Dave’s thing. One look at him and you saw a guy who knew what he was doing. He was calm and in charge. He didn’t act nervous like Paulson and Bush.
Ramsey framed the issues in a way that Americans could understand.
He told people to ignore the “sky is falling” histrionics that some news channels were touting.
Ramsey looked at the bailout from the perspective someone on Main Street. Just like Ramsey’s opposition to Bush’s ill fated ‘tax rebate” giveaway, Dave reminded us that a $700 billion bailout would destroy the futures of our children.
Ramsey said the world wasn’t ending and he wasn’t cashing in his 401k or taking his money out of the bank.
Like many Americans, he didn’t see the need for the bailout. He noted that 90% of his radio listeners and 74% of the people who participated in his online poll were against it.
Dave said that we needed to ignore the horror stories being pushed by the Wall Street gang, that people wouldn’t be able to ‘buy their dishwashers.” He said he talked to car dealers making loans and realtors selling homes.
He said the tightening of credit meant that “broke people couldn’t get a loan” and that wasn’t all bad.
He was calm and optimistic. Like good leaders are in times of crisis.
He was more like Winston Churchill than Chicken Little.
Ramsey spent an hour taking questions from average citizens. Like President Bush should have.
If President Bush had Dave Ramsey’s communications skills, he might have explained the bailout in a way that the average American could grasp. He might have passed his package.
On the other hand, Dave Ramsey doesn’t believe in debt. Of any kind. If Dave had been president for the past 8 years, we wouldn’t need a bailout to begin with.
Vote for Dave.
Don McNay is Chairman of the Board for McNay Settlement Group in Richmond Kentucky. You can read his award winning, syndicated column at www.donmcnay.com or write to him at don@donmcnay.com. McNay is the Treasurer for the National Society of Newspaper Columnists.
Just one more year and then you’d be happy
But you’re crying, you’re crying now.
-Gerry Rafferty
As the financial crisis has played out, the leadership styles of President Bush and Secretary of the Treasury Hank Paulson have contributed to the problem.
Great presidents reassure the country in times of crisis. Look at Teddy Roosevelt, Franklin Roosevelt Abraham Lincoln, and George Washington.
I've never seen a great president scold or scare the American people into going along with a program.
Both Paulson and Bush showed neither confidence, nor optimism. They seemed nervous and distracted. They didn’t appear to have a handle on the situation.
President Bush was unable to get his fellow Republican in Congress to go along with the program that he proposed.
The President claimed dire consequences if the Wall Street bailout failed, but his party voted against him anyway.
Paulson's friends on Wall Street didn't like the rebuke. They struck back. The Dow Jones average dropped 777 points and one day. It was the 17th largest percentage drop in history.
Bush and Paulson don’t have a great track record. We are still looking for Bush’s “weapons of mass destruction” and Paulson has mistakes that has turned a recession into a possible depression.
I’ve been hoping that a presidential candidate would take charge and lead us.
Barack Obama has been very cool and calm. Maybe a little too cool. He has not offered specific and concrete ideas. He often talks in techno jargon and legalese.
Obama may not be ideal but he belongs on Mount Rushmore compared to the antics of John McCain.
McCain first declared that the economic fundamentals of the nation were strong. Then he changed his mind, and decided he was going to suspend his campaign, cancel the first presidential debate, and come back to Washington to assist the bailout.
He interjected himself into the negotiations. He decided on Friday that things look good and went back to campaigning. They weren’t but he left anyway. He tried to take credit for getting fellow Republicans to back the President.
Thus, he has egg on his face when the Republicans torpedoed the President’ bill.
I was running out of hope for an American showing true leadership, when I happened to flip on the Fox Business Network to catch the Dave Ramsey Show.
Personal finance is Dave’s thing. One look at him and you saw a guy who knew what he was doing. He was calm and in charge. He didn’t act nervous like Paulson and Bush.
Ramsey framed the issues in a way that Americans could understand.
He told people to ignore the “sky is falling” histrionics that some news channels were touting.
Ramsey looked at the bailout from the perspective someone on Main Street. Just like Ramsey’s opposition to Bush’s ill fated ‘tax rebate” giveaway, Dave reminded us that a $700 billion bailout would destroy the futures of our children.
Ramsey said the world wasn’t ending and he wasn’t cashing in his 401k or taking his money out of the bank.
Like many Americans, he didn’t see the need for the bailout. He noted that 90% of his radio listeners and 74% of the people who participated in his online poll were against it.
Dave said that we needed to ignore the horror stories being pushed by the Wall Street gang, that people wouldn’t be able to ‘buy their dishwashers.” He said he talked to car dealers making loans and realtors selling homes.
He said the tightening of credit meant that “broke people couldn’t get a loan” and that wasn’t all bad.
He was calm and optimistic. Like good leaders are in times of crisis.
He was more like Winston Churchill than Chicken Little.
Ramsey spent an hour taking questions from average citizens. Like President Bush should have.
If President Bush had Dave Ramsey’s communications skills, he might have explained the bailout in a way that the average American could grasp. He might have passed his package.
On the other hand, Dave Ramsey doesn’t believe in debt. Of any kind. If Dave had been president for the past 8 years, we wouldn’t need a bailout to begin with.
Vote for Dave.
Don McNay is Chairman of the Board for McNay Settlement Group in Richmond Kentucky. You can read his award winning, syndicated column at www.donmcnay.com or write to him at don@donmcnay.com. McNay is the Treasurer for the National Society of Newspaper Columnists.
Sunday, September 28, 2008
Wall Street’s Disconnect with Main Street
Wall Street’s Disconnect with Main Street
“Nobody has ever taught you how to live out on the street
and now you're gonna have to get used to it.”
-Bob Dylan
I didn’t know if I agreed or disagreed with the initial $700 billion Wall Street bailout until Treasury Secretary Hank Paulson confirmed that he opposed capping pay for corporate executives.
Paulson said that it was “punitive” and would “discourage institutions from participating in the program.”
According to Hank, a corporate president would let a company go broke, its employees get fired and its investors lose all their money before the executive would give up their limousines, yachts and stock options.
The scary thing is that Paulson sincerely believed it. It was based on his knowledge of his fellow Wall Streeters.
Paulson is the Treasury Secretary. If his original proposal passed, Paulson would have been more powerful than the President of the United States.
And totally clueless.
If Paulson is so out of touch on executive pay, the rest of his program might be based on faulty data too. We went to war in Iraq based on faculty data. Just once, I would like for the government to do its homework first
Outside of Hank and his buddies on Wall Street, no one is in favor of perks for executives. It is an issue that might cause people to march in the streets.
Paulson seems disconnected from that fury. He is also disconnected from those who make their living on Main Street.
I’ve run a business all of my adult life, just like my dad did. My children run one now.
We all understand one principle. If we go broke, we go broke. I’ve never had a loan that I did not personally guarantee. If my businesses go down, they take everything.
My father lived to avoid the “take everything” moment. Just like I have. No matter how much money you have, a business owner never gets that “take everything” moment out of their minds. It is part of their psyche.
It’s obviously not part of the Wall Street psyche.
I’m not a typical Wall Street basher. I love capitalism. I’ve been involved in the financial business for 26 years and believe in the markets. I have many friends on “the street” and I feel for those losing their jobs.
I don’t feel for the top dogs leaving with millions.
The attitude that Paulson stated, that executive compensation is more important than the overall health of a company, is pervasive on Wall Street. It is a primary reason for the crisis.
Somewhere along the way, those companies forgot two things:
1. They are investing other people’s money.
2. Their stockholders trusted the company to make them money.
The people who run the Wall Street companies aren’t owners like those on Main Street. They work for thousands of stockholders.
The executive’s first responsibility should be their customers, stockholders and employees. The limo and yacht shouldn’t make the list.
If the big dogs on Wall Street had been owners, like us on Main Street, they would have watched their bottom lines a little harder. They might have kept an eye on investments and been more cautious.
They might have avoided the crisis.
Wall Street executives never feared the “take everything” moment. It wasn’t their money they were risking. The people at the top knew they could retire with millions.
They acted like they were at a casino where someone else was supplying the chips.
Now they want a new player in the game, the taxpayer.
The recently defunct companies had common bond, I never invested in them. I knew some top management and they came across as arrogant jerks. They treated me like a yokel from a small town.
Management arrogance the surest way to ruin a business. No matter how big or small. My dad used to say “for those who think they are smarter than the game, the game has a way of catching them”.
If the Wall Street leaders have any shot of turning their businesses around, someone needs to teach them how to live out on the street.
The way we on Main Street do.
You can read Don McNay’s award winning column at www.donmcnay.com or write to him at don@donmcnay.com McNay is the Treasurer for the National Society of Newspaper Columnists.
“Nobody has ever taught you how to live out on the street
and now you're gonna have to get used to it.”
-Bob Dylan
I didn’t know if I agreed or disagreed with the initial $700 billion Wall Street bailout until Treasury Secretary Hank Paulson confirmed that he opposed capping pay for corporate executives.
Paulson said that it was “punitive” and would “discourage institutions from participating in the program.”
According to Hank, a corporate president would let a company go broke, its employees get fired and its investors lose all their money before the executive would give up their limousines, yachts and stock options.
The scary thing is that Paulson sincerely believed it. It was based on his knowledge of his fellow Wall Streeters.
Paulson is the Treasury Secretary. If his original proposal passed, Paulson would have been more powerful than the President of the United States.
And totally clueless.
If Paulson is so out of touch on executive pay, the rest of his program might be based on faulty data too. We went to war in Iraq based on faculty data. Just once, I would like for the government to do its homework first
Outside of Hank and his buddies on Wall Street, no one is in favor of perks for executives. It is an issue that might cause people to march in the streets.
Paulson seems disconnected from that fury. He is also disconnected from those who make their living on Main Street.
I’ve run a business all of my adult life, just like my dad did. My children run one now.
We all understand one principle. If we go broke, we go broke. I’ve never had a loan that I did not personally guarantee. If my businesses go down, they take everything.
My father lived to avoid the “take everything” moment. Just like I have. No matter how much money you have, a business owner never gets that “take everything” moment out of their minds. It is part of their psyche.
It’s obviously not part of the Wall Street psyche.
I’m not a typical Wall Street basher. I love capitalism. I’ve been involved in the financial business for 26 years and believe in the markets. I have many friends on “the street” and I feel for those losing their jobs.
I don’t feel for the top dogs leaving with millions.
The attitude that Paulson stated, that executive compensation is more important than the overall health of a company, is pervasive on Wall Street. It is a primary reason for the crisis.
Somewhere along the way, those companies forgot two things:
1. They are investing other people’s money.
2. Their stockholders trusted the company to make them money.
The people who run the Wall Street companies aren’t owners like those on Main Street. They work for thousands of stockholders.
The executive’s first responsibility should be their customers, stockholders and employees. The limo and yacht shouldn’t make the list.
If the big dogs on Wall Street had been owners, like us on Main Street, they would have watched their bottom lines a little harder. They might have kept an eye on investments and been more cautious.
They might have avoided the crisis.
Wall Street executives never feared the “take everything” moment. It wasn’t their money they were risking. The people at the top knew they could retire with millions.
They acted like they were at a casino where someone else was supplying the chips.
Now they want a new player in the game, the taxpayer.
The recently defunct companies had common bond, I never invested in them. I knew some top management and they came across as arrogant jerks. They treated me like a yokel from a small town.
Management arrogance the surest way to ruin a business. No matter how big or small. My dad used to say “for those who think they are smarter than the game, the game has a way of catching them”.
If the Wall Street leaders have any shot of turning their businesses around, someone needs to teach them how to live out on the street.
The way we on Main Street do.
You can read Don McNay’s award winning column at www.donmcnay.com or write to him at don@donmcnay.com McNay is the Treasurer for the National Society of Newspaper Columnists.
Thursday, September 25, 2008
Johnny Hayes, Editor and Publisher, Tom Loftus
Dave Astor at Editor and Publisher Magazine did a terrific story about my column concerning the economic crisis that ran yesterday. I've gotten response to Dave's column from all over the United States.
Here is the link.
Editor and PublisherDave Astor's story about Don McNay column in Editor and Publisher
Editor & Publisher story
Tom Loftus
On a happy note, I want to congratulate Tom Loftus at the Courier Journal on winning the 2008 James Madison Award for Service to the First Amendment. A huge honor for a guy who deserves it. Tom is a "journalist's journalist." He has an incredible work ethic. A good man and great journalist. Loftus Wins Madison Award
On a sad note, I want to report two deaths.
Johnny Hayes
The first is my old friend Johnny Hayes. The enclosed obit calls him "a political giant" and that was an understatement. He was one of Al Gore's chief fundraisers and closest friends. We worked together (Johnny was the big boss and I was down the ladder) in Gore's 1988 campaign. Along with a long resume of accomplishments (you can read about them in the link) Johnny was a man you could trust and a great guy to be around. Devoted to his family. He called me once at midnight to find a dentist for his daughter. I found one.
Johnny was instrumental in launching the political careers of rising stars like George Phillips in Nashville and former Kentucky State Treasurer Jonathan Miller. One of his greatest protege's was Alex Haught, who was killed by a drunk driver.
I mention Johnny in a column I wrote about Alex. The column was rewritten and part of both of my books.
A drunk driver might have kept Al Gore from being President
Newspapers around the world have carried the news of Johnny's death. Although Johnny would have enjoyed that a French newspaper carried his obit, the one in the Nashville Post is the most comprehensive.
Nashville Post story about the death of Johnny Hayes
Freda Mings Baird
Another death that hit home was the death of Freda Baird this week. She is the mother of Richmond trial attorney David Baird, who has been my friend for over 30 years. David and his brother Randy, and their late father C.R., were fixtures at Eastern Kentucky University football games for 20 years. David's wife Connie and daughter Sarah are like an extended part of my family.
Sarah, who works for Lt. Governor Dan Mongardo while she attends Centre, has the honor of being my first Facebook friend.
A great family and a great loss. Mrs. Baird was an incredibly nice woman.
You can read more about Mrs. Baird in the Richmond Register obit. Freda Mings Baird
Don
Here is the link.
Editor and PublisherDave Astor's story about Don McNay column in Editor and Publisher
Editor & Publisher story
Tom Loftus
On a happy note, I want to congratulate Tom Loftus at the Courier Journal on winning the 2008 James Madison Award for Service to the First Amendment. A huge honor for a guy who deserves it. Tom is a "journalist's journalist." He has an incredible work ethic. A good man and great journalist. Loftus Wins Madison Award
On a sad note, I want to report two deaths.
Johnny Hayes
The first is my old friend Johnny Hayes. The enclosed obit calls him "a political giant" and that was an understatement. He was one of Al Gore's chief fundraisers and closest friends. We worked together (Johnny was the big boss and I was down the ladder) in Gore's 1988 campaign. Along with a long resume of accomplishments (you can read about them in the link) Johnny was a man you could trust and a great guy to be around. Devoted to his family. He called me once at midnight to find a dentist for his daughter. I found one.
Johnny was instrumental in launching the political careers of rising stars like George Phillips in Nashville and former Kentucky State Treasurer Jonathan Miller. One of his greatest protege's was Alex Haught, who was killed by a drunk driver.
I mention Johnny in a column I wrote about Alex. The column was rewritten and part of both of my books.
A drunk driver might have kept Al Gore from being President
Newspapers around the world have carried the news of Johnny's death. Although Johnny would have enjoyed that a French newspaper carried his obit, the one in the Nashville Post is the most comprehensive.
Nashville Post story about the death of Johnny Hayes
Freda Mings Baird
Another death that hit home was the death of Freda Baird this week. She is the mother of Richmond trial attorney David Baird, who has been my friend for over 30 years. David and his brother Randy, and their late father C.R., were fixtures at Eastern Kentucky University football games for 20 years. David's wife Connie and daughter Sarah are like an extended part of my family.
Sarah, who works for Lt. Governor Dan Mongardo while she attends Centre, has the honor of being my first Facebook friend.
A great family and a great loss. Mrs. Baird was an incredibly nice woman.
You can read more about Mrs. Baird in the Richmond Register obit. Freda Mings Baird
Don
Tuesday, September 23, 2008
History of Jim Bunning and Economic Crisis
I will be writing non stop as the crisis goes on. I've spent my life studying the issues being debated and want to have an impact on the outcome.
I'm available to any group that wants to have me speak or any media outlet looking for information, an interview or a soundbite.
You can call me at (859) 353-4598 (1-888 Mr. McNay) or email at don@donmcnay.com
I've did two interviews (Thursday and Sunday) with Joe Elliott on WHAS, an appearance on Comment on Kentucky with Ferrell Wellman and an excellent interview with Neil Middleton on Issues and Answers on WYMT in Hazard.
I'm including links to the video of Comment on Kentucky and Issues and Answers. The Issues interview was one of the best ones I have ever done. Neil was well prepared and asked great questions.
If you are not on Facebook, it is time to join my page and my fan page. I'm updating both with breaking news. I go there before I go to my web site or blog.
Don McNay on Issues and Answers with Neil Middleton
Don McNay, on Comment on Kentucky, with host Ferrell Wellman,Stephenie Steitzer, Frankfort reporter for The Courier-Journal; and Adam Walser from WHAS
Don
don@donmcnay.com
I was Bunning when Bunning wasn't cool
THIS IS THE ONLY TIME YOU WILL EVER SEE A BARBARA MANDRELL SONG IN ONE OF MY COLUMNS. I SUFFERED THROUGH HER CONCERT IN 1983 AND STILL HAVE NIGHTMARES.
This week, I saw an article in a large publication that noted Bunning's opposition to Bernanke. If you had been reading this column for the past couple years, you would have been way ahead of the curve. I've taken some heat from my fellow Democrats but I call the economic issues as I see them. Bunning has been the guy seeing them the best.
Read from oldest to newest and you can see how this crisis should never have happened.
All are on www.donmcnay.com. Search for Bunning's name on the page.
Bunning, The Lone Voice Against Bernanke, Feb 2008
Nice Guys Make Lousy Senators, August 2007
Birdbrain Bernanke September 2007
Save us from Ben Bernanke, June 2007
The People Really Calling The Shots, May 2006
Big Shot Bernanke, May 2006
Three Sure Bets to Save Employees Pensions, June 2005
Join My Facebook Fan Page.
Most of you know that I am an avid user of Facebook.
Now I have a Facebook fan page. It showcases my work and also allows me to post interesting things that don't show up in my column.
I can see where the Facebook page will eventually be a staple of my writing. If you want to be ahead of the curve, sign up now.
I'd love to have you join my page. Please go to to link below to sign up. If you are on Facebook, you can also search by typing in my name.
Don McNay's Facebook Fan Page
I'm available to any group that wants to have me speak or any media outlet looking for information, an interview or a soundbite.
You can call me at (859) 353-4598 (1-888 Mr. McNay) or email at don@donmcnay.com
I've did two interviews (Thursday and Sunday) with Joe Elliott on WHAS, an appearance on Comment on Kentucky with Ferrell Wellman and an excellent interview with Neil Middleton on Issues and Answers on WYMT in Hazard.
I'm including links to the video of Comment on Kentucky and Issues and Answers. The Issues interview was one of the best ones I have ever done. Neil was well prepared and asked great questions.
If you are not on Facebook, it is time to join my page and my fan page. I'm updating both with breaking news. I go there before I go to my web site or blog.
Don McNay on Issues and Answers with Neil Middleton
Don McNay, on Comment on Kentucky, with host Ferrell Wellman,Stephenie Steitzer, Frankfort reporter for The Courier-Journal; and Adam Walser from WHAS
Don
don@donmcnay.com
I was Bunning when Bunning wasn't cool
THIS IS THE ONLY TIME YOU WILL EVER SEE A BARBARA MANDRELL SONG IN ONE OF MY COLUMNS. I SUFFERED THROUGH HER CONCERT IN 1983 AND STILL HAVE NIGHTMARES.
This week, I saw an article in a large publication that noted Bunning's opposition to Bernanke. If you had been reading this column for the past couple years, you would have been way ahead of the curve. I've taken some heat from my fellow Democrats but I call the economic issues as I see them. Bunning has been the guy seeing them the best.
Read from oldest to newest and you can see how this crisis should never have happened.
All are on www.donmcnay.com. Search for Bunning's name on the page.
Bunning, The Lone Voice Against Bernanke, Feb 2008
Nice Guys Make Lousy Senators, August 2007
Birdbrain Bernanke September 2007
Save us from Ben Bernanke, June 2007
The People Really Calling The Shots, May 2006
Big Shot Bernanke, May 2006
Three Sure Bets to Save Employees Pensions, June 2005
Join My Facebook Fan Page.
Most of you know that I am an avid user of Facebook.
Now I have a Facebook fan page. It showcases my work and also allows me to post interesting things that don't show up in my column.
I can see where the Facebook page will eventually be a staple of my writing. If you want to be ahead of the curve, sign up now.
I'd love to have you join my page. Please go to to link below to sign up. If you are on Facebook, you can also search by typing in my name.
Don McNay's Facebook Fan Page
Monday, September 22, 2008
Video of Don McNay on Issues and Answers
http://www.wkyt.com/issuesandanswers
Don McNay and Neil Middleton talk about the economy in general and Kentucky economics in particular.
Don McNay and Neil Middleton talk about the economy in general and Kentucky economics in particular.
Don McNay on WYMT's Issues & Answers
Author and syndicated columnist Don McNay will be on Issues and Answers on WYMT television in Hazard at 7.pm on Monday, September 22.
Issues and Answers is one of Kentucky's most popular public affairs programs.
McNay is the Chairman of the Board for McNay Settlement Group. He is an award winning columnist and author of two books. www.donmcnay.com
Issues and Answers is one of Kentucky's most popular public affairs programs.
McNay is the Chairman of the Board for McNay Settlement Group. He is an award winning columnist and author of two books. www.donmcnay.com
Saturday, September 20, 2008
Economic Upheaval Predicts an Obama Victory
THIS IS MY COLUMN THAT WILL RUN ON SUNDAY SEPTEMBER 21
Economic Upheaval Predicts an Obama Victory
By Don McNay
Richmond Register
Then you better start swimming
Or you'll sink like a stone
For the times they are a-changin
-Bob Dylan
Until last week, I thought John McCain had a chance to be President. I don’t now.
I’ve been watching political futures trading on www.intrade.com. I could see a situation where McCain could unite the coalition of states that George Bush carried in 2000 and 2004.
Then the financial markets went on another wild ride. The latest drama was the tipping point. People will want striking change.
There are two ways that crisis effects presidential politics. In times of war, voters stay with the incumbent party. In times of economic upheaval, people elect challengers.
Abraham Lincoln, Woodrow Wilson and Franklin Roosevelt won war time re-elections. Herbert Hoover and Jimmy Carter were thrown-out during hard economic times. George H.W. Bush went out in an economy less painful than now.
McCain is not responsible for the nation’s economic woes. He’s a member of the current president’s party and has been in Washington for a long time.
Normally, experience and incumbency are assets. Not this year. Every time the markets get out of whack, people start looking for someone to make them calm again.
The people in charge are not getting the job done. It’s time to try someone new.
After the latest financial tsunami, the economy will be the only issue. War, social issues and “lipstick on a pig” are going to be distant side shows.
It will take a few weeks for the effect to ripple down to Main Street. Like a near death collision, shock sets in the days after the accident.
The tremors are going to hit Main Street about the time Election Day rolls around. That is very bad for McCain.
People are paying more for gasoline than they ever dreamed they would. Food is more expensive, people are losing their houses and jobs are lost and outsourced.
Financial institutions that were supposed to give us guidance have given us garbage. Some historic giants have been destroyed by greed, hubris and big time arrogance.
What is going on can’t keep going. People are dying for change. Until the markets went crazy, I thought McCain might symbolize enough change to make people happy. I don’t think so now.
When Ronald Reagan defeated Jimmy Carter, he asked the question: Are you better off today than you were four years ago?
Obama can ask voters: are you better off today than you were four MONTHS ago?
Even four weeks ago look sunnier than now.
Although I always planned to vote for him, (I’ve only voted for one Republican presidential candidate in my life) I’ve been slow to warm up to Obama. I was for John Edwards, before I found out Edwards was a reckless liar. Edwards’s social agenda, with a touch of Mike Huckabee’s economic populism, was the candidate I was looking for.
The upheaval has increased my Obama enthusiasm.
There have been a lot of bad economic decisions. The War in Iraq diverted billions that we needed at home. Lobbyists pushed through legislation that hurts consumers. Warren Buffett, the richest man in America, thinks he should pay more in taxes and estate taxes than his personal secretary pays. He’s right.
President Bush appointed a Federal Reserve Chairman, Ben Bernanke, who doesn’t have the slightest idea what he is doing. Bernanke has turned a bad economy into a terrible one.
Government regulation of financial institutions is a joke. They only time regulators step up is to throw money at companies that are “too big to fail.” They should learn to stop disasters before they start.
Billions are wasted, bailing out companies who made stupid decisions. CEO’s are rewarded for their screw ups with million dollar bonuses.
If I make bad business decisions, I go to the poor house. If a Wall Street hot shot loses billions, we buy them a yacht on the way out.
I’d love for the government to throw me a few billion. Unlike the Wall Street types, my company has never failed.
Large companies, with long histories, have been brought to their knees by stupid decisions. I am not sure why it happened, but it happened.
The country will vote for the candidate that keeps it from happening again.
Which means the times will be a changing.
Don McNay is the Chairman of the Board for McNay Settlement Group. You can write to him at don@donmcnay.com or read his award winning column at www.donmcnay.com
Economic Upheaval Predicts an Obama Victory
By Don McNay
Richmond Register
Then you better start swimming
Or you'll sink like a stone
For the times they are a-changin
-Bob Dylan
Until last week, I thought John McCain had a chance to be President. I don’t now.
I’ve been watching political futures trading on www.intrade.com. I could see a situation where McCain could unite the coalition of states that George Bush carried in 2000 and 2004.
Then the financial markets went on another wild ride. The latest drama was the tipping point. People will want striking change.
There are two ways that crisis effects presidential politics. In times of war, voters stay with the incumbent party. In times of economic upheaval, people elect challengers.
Abraham Lincoln, Woodrow Wilson and Franklin Roosevelt won war time re-elections. Herbert Hoover and Jimmy Carter were thrown-out during hard economic times. George H.W. Bush went out in an economy less painful than now.
McCain is not responsible for the nation’s economic woes. He’s a member of the current president’s party and has been in Washington for a long time.
Normally, experience and incumbency are assets. Not this year. Every time the markets get out of whack, people start looking for someone to make them calm again.
The people in charge are not getting the job done. It’s time to try someone new.
After the latest financial tsunami, the economy will be the only issue. War, social issues and “lipstick on a pig” are going to be distant side shows.
It will take a few weeks for the effect to ripple down to Main Street. Like a near death collision, shock sets in the days after the accident.
The tremors are going to hit Main Street about the time Election Day rolls around. That is very bad for McCain.
People are paying more for gasoline than they ever dreamed they would. Food is more expensive, people are losing their houses and jobs are lost and outsourced.
Financial institutions that were supposed to give us guidance have given us garbage. Some historic giants have been destroyed by greed, hubris and big time arrogance.
What is going on can’t keep going. People are dying for change. Until the markets went crazy, I thought McCain might symbolize enough change to make people happy. I don’t think so now.
When Ronald Reagan defeated Jimmy Carter, he asked the question: Are you better off today than you were four years ago?
Obama can ask voters: are you better off today than you were four MONTHS ago?
Even four weeks ago look sunnier than now.
Although I always planned to vote for him, (I’ve only voted for one Republican presidential candidate in my life) I’ve been slow to warm up to Obama. I was for John Edwards, before I found out Edwards was a reckless liar. Edwards’s social agenda, with a touch of Mike Huckabee’s economic populism, was the candidate I was looking for.
The upheaval has increased my Obama enthusiasm.
There have been a lot of bad economic decisions. The War in Iraq diverted billions that we needed at home. Lobbyists pushed through legislation that hurts consumers. Warren Buffett, the richest man in America, thinks he should pay more in taxes and estate taxes than his personal secretary pays. He’s right.
President Bush appointed a Federal Reserve Chairman, Ben Bernanke, who doesn’t have the slightest idea what he is doing. Bernanke has turned a bad economy into a terrible one.
Government regulation of financial institutions is a joke. They only time regulators step up is to throw money at companies that are “too big to fail.” They should learn to stop disasters before they start.
Billions are wasted, bailing out companies who made stupid decisions. CEO’s are rewarded for their screw ups with million dollar bonuses.
If I make bad business decisions, I go to the poor house. If a Wall Street hot shot loses billions, we buy them a yacht on the way out.
I’d love for the government to throw me a few billion. Unlike the Wall Street types, my company has never failed.
Large companies, with long histories, have been brought to their knees by stupid decisions. I am not sure why it happened, but it happened.
The country will vote for the candidate that keeps it from happening again.
Which means the times will be a changing.
Don McNay is the Chairman of the Board for McNay Settlement Group. You can write to him at don@donmcnay.com or read his award winning column at www.donmcnay.com
Saturday, September 13, 2008
Gambler's Guide to Presidential Elections
Gambler’s Guide to Presidential Elections.
“I got it. I got it. I got your number on the wall.”
-Tommy Tutone
2008 is a turning point in my life. I quit watching pundits and rarely look at political polls. I have the answers, long before political “experts” do.
I track who is betting on political races.
A futures trading website called www.intrade.com allows you to “buy” futures contracts on the outcome of the presidential race.
There is supposedly a difference between betting and buying futures contracts. I have no idea what it is. It looks like gambling to me.
I grew up around bookmakers and the people at www.intrade.com figured out how to make it legal.
I’ve followed www.intrade.com for the past year and found it to be amazingly accurate. Look at it and see.
By going to www.intrade.com you eliminate the television blowhards and avoid polls like the one that picked Obama to win the New Hampshire primary.
I have not sent www.intrade.com any money. I have no idea who is behind it or where they are. I don’t like to bet but want to know how other people are betting.
The political futures market is a great example of an economic theory called “the wisdom of crowds.” Following money movement is a great way to predict outcomes.
When many people put their money up, sentiment and emotion are minimized as factors.
The www.intrade.com numbers are an interesting mix. The bettors favor Brack Obama to win over John McCain, but if you look at the betting on a state by state basis, McCain has a slight lead in the electoral votes.
Al Gore will tell you that winning the popular vote doesn’t mean anything unless you get the electoral votes.
Looking at the state by state breakout, I’m stunned at how many states has already been “decided” one way or another.
If the odds are 90% in one candidate’s favor, 60 days out, they are normally going to win an individual state.
Barring something extremely weird, a vetted candidate is not going to screw it up.
According to the trading, most of us are sitting the 2008 election out. If you are an Obama supporter in Kentucky, the odds are 98% to 5% (there is a margin of error) against your candidate. If you are a McCain supporter in Maryland, you are also out of luck. Obama has 93% there.
Most of the states that were for Bush in 2004 have a 90% or better rating for McCain. The Kerry states are generally going for Obama.
Virginia, Nevada, Ohio, New Hampshire and Colorado are where the battle will be fought. Virginia, Nevada and Ohio have small leads for McCain and the other two slightly favor Obama.
All five states went for Bush against Gore and all but New Hampshire went for Bush against Kerry. If Obama is going to win, he needs to get all the states that Gore won in 2000 and add one.
Any one will do.
The good news is that we won’t care about Florida. The betting favors McCain by about 65%.
Every now and then, I fall into the trap of political gossip and I wonder where some people get their information. I read that some Democrats were worried about California. 93% of the bettors disagree with that concern.
I thought that Obama would have a hard time winning Pennsylvania because he struggled against Hillary Clinton. 74% of the futures traders think otherwise. Just last week, I argued that Pennsylvania was in play. The futures traders have smacked down that notion.
A prediction does not mean that results are locked in stone. Someone can screw up or have a scandal break.
I doubt that McCain or Obama have a girlfriend (or boyfriend) on the side. On the other hand, I never dreamed that John Edwards had a mistress.
If Edwards had still been a viable candidate, his bettors would have lost big time.
For every person that wins a bet, there is another person that loses. Just like an election.
With tools like www.intrade.com, we have a better idea as to will be victorious.
As the late Mayor Daley of Chicago would say, “don’t make no waves, don’t back no losers.”
Don McNay is the author of Son of a Son of a Gambler: Winners, Losers & What to Do When You Win the Lottery. You can write to him at don@donmcnay.com or read what he has written at www.donmcnay.com
“I got it. I got it. I got your number on the wall.”
-Tommy Tutone
2008 is a turning point in my life. I quit watching pundits and rarely look at political polls. I have the answers, long before political “experts” do.
I track who is betting on political races.
A futures trading website called www.intrade.com allows you to “buy” futures contracts on the outcome of the presidential race.
There is supposedly a difference between betting and buying futures contracts. I have no idea what it is. It looks like gambling to me.
I grew up around bookmakers and the people at www.intrade.com figured out how to make it legal.
I’ve followed www.intrade.com for the past year and found it to be amazingly accurate. Look at it and see.
By going to www.intrade.com you eliminate the television blowhards and avoid polls like the one that picked Obama to win the New Hampshire primary.
I have not sent www.intrade.com any money. I have no idea who is behind it or where they are. I don’t like to bet but want to know how other people are betting.
The political futures market is a great example of an economic theory called “the wisdom of crowds.” Following money movement is a great way to predict outcomes.
When many people put their money up, sentiment and emotion are minimized as factors.
The www.intrade.com numbers are an interesting mix. The bettors favor Brack Obama to win over John McCain, but if you look at the betting on a state by state basis, McCain has a slight lead in the electoral votes.
Al Gore will tell you that winning the popular vote doesn’t mean anything unless you get the electoral votes.
Looking at the state by state breakout, I’m stunned at how many states has already been “decided” one way or another.
If the odds are 90% in one candidate’s favor, 60 days out, they are normally going to win an individual state.
Barring something extremely weird, a vetted candidate is not going to screw it up.
According to the trading, most of us are sitting the 2008 election out. If you are an Obama supporter in Kentucky, the odds are 98% to 5% (there is a margin of error) against your candidate. If you are a McCain supporter in Maryland, you are also out of luck. Obama has 93% there.
Most of the states that were for Bush in 2004 have a 90% or better rating for McCain. The Kerry states are generally going for Obama.
Virginia, Nevada, Ohio, New Hampshire and Colorado are where the battle will be fought. Virginia, Nevada and Ohio have small leads for McCain and the other two slightly favor Obama.
All five states went for Bush against Gore and all but New Hampshire went for Bush against Kerry. If Obama is going to win, he needs to get all the states that Gore won in 2000 and add one.
Any one will do.
The good news is that we won’t care about Florida. The betting favors McCain by about 65%.
Every now and then, I fall into the trap of political gossip and I wonder where some people get their information. I read that some Democrats were worried about California. 93% of the bettors disagree with that concern.
I thought that Obama would have a hard time winning Pennsylvania because he struggled against Hillary Clinton. 74% of the futures traders think otherwise. Just last week, I argued that Pennsylvania was in play. The futures traders have smacked down that notion.
A prediction does not mean that results are locked in stone. Someone can screw up or have a scandal break.
I doubt that McCain or Obama have a girlfriend (or boyfriend) on the side. On the other hand, I never dreamed that John Edwards had a mistress.
If Edwards had still been a viable candidate, his bettors would have lost big time.
For every person that wins a bet, there is another person that loses. Just like an election.
With tools like www.intrade.com, we have a better idea as to will be victorious.
As the late Mayor Daley of Chicago would say, “don’t make no waves, don’t back no losers.”
Don McNay is the author of Son of a Son of a Gambler: Winners, Losers & What to Do When You Win the Lottery. You can write to him at don@donmcnay.com or read what he has written at www.donmcnay.com
Saturday, September 6, 2008
Stopping the Economic Bloodsuckers
Stopping The Economic Bloodsuckers
Go ahead and hate your neighbor,
Go ahead and cheat a friend.
-Coven (theme from the movie Billy Jack)
Last week, I received a direct mail piece telling me how I could make “big dollars” screwing over my neighbors. The writers want to show me how to “take advantage” of hard economic times.
Apparently, there are “great opportunities” sticking it to people who are hurting. The more they hurt, the more you can stick it to them.
Business must be great right now.
The writers said those down on their luck were “business prospects.” For a fee, the authors can show me how to push them further down the economic ladder and make a few bucks myself.
I think I’ll pass.
My temptation is to re-print the letter. I won’t. How do I separate the authors from an economy filled with payday lenders, companies that buy structured settlements and a host of other “great opportunities” for people to stick it to their neighbors?
The letter is a symptom of a larger economic problem. We have made economic exploitation fashionable and profitable.
There may have been a time when companies and people worried about their reputations. That time is long gone.
Many huge, supposedly respectable, companies back payday lenders, offer high interest credit cards and hire abusive collectors.
Read the back pages of the Wall Street Journal and you will see big name companies getting rapped on the knuckles for doing stuff they know is wrong. They do it anyway.
I never see a company’s stock price fall after those disclosures. There is no shame in getting caught.
I don’t know how to change the nation’s culture to rise up against exploitation. It would require a change in attitude and focus.
I am not crying out for more government regulation. We have a ton of “consumer protection” agencies supposedly in place. I can’t figure-out what some of them do. We have set up a system of toothless watchdogs.
Adding more bureaucrats won’t solve problems. I’m not that impressed by the current crew.
The most worthless is the Federal Trade Commission. It sounds like an impressive place, with an impressive title, that is supposed to enforce laws against collectors and credit card companies.
Drop the Federal Trade Commission a letter sometime. See what happens. You will get a form letter back saying that they are going to look at the problem. They won’t.
I guess the FTC doesn’t think there are any abusive collectors out there.
Listen to Dave Ramsey’s radio show. You will hear caller after caller tell horror stories about abusive collectors. Many collectors don’t bother to follow the law. They know they will never get caught.
I never hear Dave telling callers to write the FTC. He knows it is a waste of time.
Thus, collections have become a great “business opportunity”. The harder times get, the more opportunities there are.
I want to create another “business opportunity”. A bounty system against exploiters.
You don’t see a lot of poor people suing exploiters. First of all, the people being exploited are poor. Groceries and gas money get in front of legal fees.
The laws are written to favor the exploiters. If you take an abusive collector or credit card company to court, you don’t get much in return.
Few lawyers take the creditor cases and few people bother to protect their rights. It is as futile as writing the FTC.
If a person got an automatic $100,000 every time they could prove a collector violated the law, you would have lots of whistle blowers interested in turning them in.
When they are losing $100,000 a pop, the wrong-doer population would reform or be quickly gone.
My solution wouldn’t require any new government agencies or tax dollars. Just tweak the laws and allow the legal system to take advantage of the “big opportunity.”
If a person is intent on cheating their neighbors, they would find their neighbor had a “big dollar, business opportunity” in getting them to do the right thing,
It would be alternative way to take advantage of hard times.
Don McNay is Chairman of the Board for McNay Settlement Group. You can write to him at don@donmcnay.com or read his award winning column at www.donmcnay.com McNay is Treasurer of the National Society of Newspaper Columnists.
Go ahead and hate your neighbor,
Go ahead and cheat a friend.
-Coven (theme from the movie Billy Jack)
Last week, I received a direct mail piece telling me how I could make “big dollars” screwing over my neighbors. The writers want to show me how to “take advantage” of hard economic times.
Apparently, there are “great opportunities” sticking it to people who are hurting. The more they hurt, the more you can stick it to them.
Business must be great right now.
The writers said those down on their luck were “business prospects.” For a fee, the authors can show me how to push them further down the economic ladder and make a few bucks myself.
I think I’ll pass.
My temptation is to re-print the letter. I won’t. How do I separate the authors from an economy filled with payday lenders, companies that buy structured settlements and a host of other “great opportunities” for people to stick it to their neighbors?
The letter is a symptom of a larger economic problem. We have made economic exploitation fashionable and profitable.
There may have been a time when companies and people worried about their reputations. That time is long gone.
Many huge, supposedly respectable, companies back payday lenders, offer high interest credit cards and hire abusive collectors.
Read the back pages of the Wall Street Journal and you will see big name companies getting rapped on the knuckles for doing stuff they know is wrong. They do it anyway.
I never see a company’s stock price fall after those disclosures. There is no shame in getting caught.
I don’t know how to change the nation’s culture to rise up against exploitation. It would require a change in attitude and focus.
I am not crying out for more government regulation. We have a ton of “consumer protection” agencies supposedly in place. I can’t figure-out what some of them do. We have set up a system of toothless watchdogs.
Adding more bureaucrats won’t solve problems. I’m not that impressed by the current crew.
The most worthless is the Federal Trade Commission. It sounds like an impressive place, with an impressive title, that is supposed to enforce laws against collectors and credit card companies.
Drop the Federal Trade Commission a letter sometime. See what happens. You will get a form letter back saying that they are going to look at the problem. They won’t.
I guess the FTC doesn’t think there are any abusive collectors out there.
Listen to Dave Ramsey’s radio show. You will hear caller after caller tell horror stories about abusive collectors. Many collectors don’t bother to follow the law. They know they will never get caught.
I never hear Dave telling callers to write the FTC. He knows it is a waste of time.
Thus, collections have become a great “business opportunity”. The harder times get, the more opportunities there are.
I want to create another “business opportunity”. A bounty system against exploiters.
You don’t see a lot of poor people suing exploiters. First of all, the people being exploited are poor. Groceries and gas money get in front of legal fees.
The laws are written to favor the exploiters. If you take an abusive collector or credit card company to court, you don’t get much in return.
Few lawyers take the creditor cases and few people bother to protect their rights. It is as futile as writing the FTC.
If a person got an automatic $100,000 every time they could prove a collector violated the law, you would have lots of whistle blowers interested in turning them in.
When they are losing $100,000 a pop, the wrong-doer population would reform or be quickly gone.
My solution wouldn’t require any new government agencies or tax dollars. Just tweak the laws and allow the legal system to take advantage of the “big opportunity.”
If a person is intent on cheating their neighbors, they would find their neighbor had a “big dollar, business opportunity” in getting them to do the right thing,
It would be alternative way to take advantage of hard times.
Don McNay is Chairman of the Board for McNay Settlement Group. You can write to him at don@donmcnay.com or read his award winning column at www.donmcnay.com McNay is Treasurer of the National Society of Newspaper Columnists.
Wednesday, September 3, 2008
Al Smith winning SPJ award
Tom Eblen at the Lexington Herald Leader did a terrific column this week about Al Smith. Al, along with Tim Russert and two others, will receive a huge award from the Society of Professional Journalists at their Atlanta convention this week.
I planned to be there before I banged up my knee. I am better now. I went to Dr. Phil Hoffman yesterday, who is best known as the father of "Babydaddy" in the Scissor Sisters. Dr. Phil had me jump around the office for a few minutes. He could have been auditioning me as a dancer for the group. Never know. I feel pretty good but it is too late to reschedule my trip.
I had dinner with Al & Martha Helen last week. They also invited Elizabeth Page, and her parents. Elizabeth is a fascinating MIT student from Lexington who I plan to feature in a future column. Elizabeth gives me hope for the future of America and the kind of talented student that Kentucky schools can produce.
Tom Eblen Column about Al Smith
Don McNay Column: Al Smith & War Against Addiction
I planned to be there before I banged up my knee. I am better now. I went to Dr. Phil Hoffman yesterday, who is best known as the father of "Babydaddy" in the Scissor Sisters. Dr. Phil had me jump around the office for a few minutes. He could have been auditioning me as a dancer for the group. Never know. I feel pretty good but it is too late to reschedule my trip.
I had dinner with Al & Martha Helen last week. They also invited Elizabeth Page, and her parents. Elizabeth is a fascinating MIT student from Lexington who I plan to feature in a future column. Elizabeth gives me hope for the future of America and the kind of talented student that Kentucky schools can produce.
Tom Eblen Column about Al Smith
Don McNay Column: Al Smith & War Against Addiction
Sunday, August 31, 2008
Business Books To Learn From
Business Books To Learn From
And feed them on your dreams
The one they pick
The one you'll know by.
-Crosby, Stills, Nash and Young
Charles Martin, entrepreneur and owner of Apollo’s Pizza in Richmond, has been quizzing me in his search for books about business and investments.
He made me aware that the average person doesn’t have a “ business reading list” they can get their hands on.
Many bookstores gear the business section to books promising quick riches or books by celebrities. You see a lot of easy money schemes sitting next to by Donald Trump.
If you ask 1000 business leaders about books that influenced their lives, none ever mention Donald Trump.
For my next column, I’m going to ask some great business leaders about the books that influence and inspire them.
This week, you're going to have to rely on me.
Top on my list is The Millionaire Next Door by Dr. Thomas Stanley. It’s easy to read and gives common sense advice. All of Stanley’s books, especially his early academic work, are good picks. Millionaire is an excellent read for small business owners like Charles.
Stanley’s research showed that people who own businesses are most likely to be millionaires.
The best way to learn is to watch somebody who’s doing it well. Since Warren Buffett is the richest man in the world, you can't go wrong by watching him.
There are over 60 books written about Buffett, with another highly anticipated biography being released later this month. I’ve read most of the Buffett biographies and the best is Buffett: Making of an American Capitalist by Roger Lowenstein.
My favorite personal finance books have been around for a long time. No matter how hard people try, there's are not new things to say about personal finance.
Thousands of personal finance books come to the same conclusion: spend less than you make, follow a budget, and invest for long periods of time.
It doesn’t get more complicated than that.
Three books I like are: The Challenges of Wealth by Amy Domini, Financial Peace by Dave Ramsey and The Only Investment Guide You Will Ever Need by Andrew Tobias.
I like Amy because she has a lot of deep research. I like Dave because he hates credit cards and learned from the school of hard knocks. I like Andy because he is insightful and funny.
Andy once said that I was insightful and funny. I want to return the favor. He the only finance writer I know of that makes you laugh out loud.
All the books are easy to read. None give you any magic bullets or get rich quick schemes.
If you feel like you have mastered the basics, it’s time to move up to Benjamin Graham. Dr. Graham is the academic who influenced on Warren Buffett and countless other investors.
Graham’ stuff is complex, but well worth the time. The classic Graham book is Security Analysis, and his best known book is The Intelligent Investor.
Another oldie but goodie is A Random Walk Down Wall Street. I would also grudgingly admit that Peter Lynch’s One Up On Wall Street has value.
I’ve written at 20 columns bashing Lynch but he wrote his book before his company started peddling crummy mutual funds to soldiers fighting in Iraq.
One of the reasons I remain mad at Lynch is that, from his book, I knew he knew better.
In business, like anything else, people need to know about history. I reviewed Joe Nocera’s, A Piece of the Action for the Lexington Herald in 1994 and said it was one of the greatest business books ever written. Nothing has caused me to change my mind.
A Piece of Action gives Joe’s perspective on the history of personal finance in America on how it enabled the average consumer.
People often fall off their investment plans or have their businesses fail because they don’t have a long term vision or goal.
The classic book on vision is The Magic of Thinking Big by Dr. David Schwartz. I re-read it every year.
I also like Mastering the Game, an obscure book by Dr. Kerry Johnson. Lately, I’ve been reading The Four Hour Work Week by Timothy Ferriss. I expected to hate the book but it has some great insights into using technology and outsourcing to balance life.
Don McNay is Chairman of the Board for McNay Settlement Group in Richmond. You can read his award winning column at www.donmcnay.com or write to him at don@donmcnay.com
And feed them on your dreams
The one they pick
The one you'll know by.
-Crosby, Stills, Nash and Young
Charles Martin, entrepreneur and owner of Apollo’s Pizza in Richmond, has been quizzing me in his search for books about business and investments.
He made me aware that the average person doesn’t have a “ business reading list” they can get their hands on.
Many bookstores gear the business section to books promising quick riches or books by celebrities. You see a lot of easy money schemes sitting next to by Donald Trump.
If you ask 1000 business leaders about books that influenced their lives, none ever mention Donald Trump.
For my next column, I’m going to ask some great business leaders about the books that influence and inspire them.
This week, you're going to have to rely on me.
Top on my list is The Millionaire Next Door by Dr. Thomas Stanley. It’s easy to read and gives common sense advice. All of Stanley’s books, especially his early academic work, are good picks. Millionaire is an excellent read for small business owners like Charles.
Stanley’s research showed that people who own businesses are most likely to be millionaires.
The best way to learn is to watch somebody who’s doing it well. Since Warren Buffett is the richest man in the world, you can't go wrong by watching him.
There are over 60 books written about Buffett, with another highly anticipated biography being released later this month. I’ve read most of the Buffett biographies and the best is Buffett: Making of an American Capitalist by Roger Lowenstein.
My favorite personal finance books have been around for a long time. No matter how hard people try, there's are not new things to say about personal finance.
Thousands of personal finance books come to the same conclusion: spend less than you make, follow a budget, and invest for long periods of time.
It doesn’t get more complicated than that.
Three books I like are: The Challenges of Wealth by Amy Domini, Financial Peace by Dave Ramsey and The Only Investment Guide You Will Ever Need by Andrew Tobias.
I like Amy because she has a lot of deep research. I like Dave because he hates credit cards and learned from the school of hard knocks. I like Andy because he is insightful and funny.
Andy once said that I was insightful and funny. I want to return the favor. He the only finance writer I know of that makes you laugh out loud.
All the books are easy to read. None give you any magic bullets or get rich quick schemes.
If you feel like you have mastered the basics, it’s time to move up to Benjamin Graham. Dr. Graham is the academic who influenced on Warren Buffett and countless other investors.
Graham’ stuff is complex, but well worth the time. The classic Graham book is Security Analysis, and his best known book is The Intelligent Investor.
Another oldie but goodie is A Random Walk Down Wall Street. I would also grudgingly admit that Peter Lynch’s One Up On Wall Street has value.
I’ve written at 20 columns bashing Lynch but he wrote his book before his company started peddling crummy mutual funds to soldiers fighting in Iraq.
One of the reasons I remain mad at Lynch is that, from his book, I knew he knew better.
In business, like anything else, people need to know about history. I reviewed Joe Nocera’s, A Piece of the Action for the Lexington Herald in 1994 and said it was one of the greatest business books ever written. Nothing has caused me to change my mind.
A Piece of Action gives Joe’s perspective on the history of personal finance in America on how it enabled the average consumer.
People often fall off their investment plans or have their businesses fail because they don’t have a long term vision or goal.
The classic book on vision is The Magic of Thinking Big by Dr. David Schwartz. I re-read it every year.
I also like Mastering the Game, an obscure book by Dr. Kerry Johnson. Lately, I’ve been reading The Four Hour Work Week by Timothy Ferriss. I expected to hate the book but it has some great insights into using technology and outsourcing to balance life.
Don McNay is Chairman of the Board for McNay Settlement Group in Richmond. You can read his award winning column at www.donmcnay.com or write to him at don@donmcnay.com
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