Me 2009

Well, we made it to 2009, almost two months ago. It is true what they say, time flies when you are having fun! And I suppose the more fun the faster it flies. Maybe you could view this as the low end of Einstein's theory of general relativity.

I am still amazed and thankful at the number of folks who continue to follow this blog. Thank you for hanging in there with me and coming back here from time to time. I'd like to think I have something accurate and interesting to offer from time to time.

It has been a while since I did a health-o-me update so here it comes. Basically, everything remains pretty much the same which is good but could hope my m-spike would go from about .3 gm/dl which is where it has been for about the last three months, to zero. That would be great. I suppose I will have to continue taking this HUGELY expensive drug until I run out of insurance money, the drug stops working, something better comes along, I go into complete remission, or who knows what.

Dave Ramsey. Dave has been around for quite a while but only recently become widely available via TV and XM. I started listening to him on XM recently. I don't agree with everything he says but 98 percent of it is good. Basically, Dave is a finance professor who specializes in personal finance. If you took a finance class, basically you would get someone like Dave spouting financial theory similar to what he "broadcasts out on the radio," to steal a line from O'Brother. Actually, college finance classes are about 100 times more, "steeped in it." At any rate, his advice often makes a lot of sense and he can come up immediately with the most amazing solutions impromptu.

Here is something I came up with listening to Dave and the national news. As I am sure you are aware, we are in this latest economic demise being incessantly referred to as the "financial crisis." I'm sure we need to be reminded numerous times daily or we would simply forget it, and wouldn't that be nice!

If you wanted to see bankers in a real financial crisis, imagine ('cause it ain't ever going to really happen) EVERYONE following Dave's advice and paying off their mortgages and credit cards and becoming debt free. Stop reading for a few seconds and just imagine the ramifications of that. No, don't stop, keep going. Bankers would freak! Imagine them not making three times the price of your house on a 30 year mortgage. Now, that would be a crisis! Almost the same as if someone found a universal, affordable cure to cancer. The medical and insurance industries would be crushed!

Enough about that, back to Dave, Dave promotes savings. Specifically, an emergency fund large enough to pay six or eight months (or more) of expenses in case the paycheck to paycheck syndrome were to come to an abrubpt halt. He said something the other day that made me start thinking, and that is becoming increasingly more difficult with the mind numbing cancer drugs I am taking, another reason to wish for remission. He said this is sort of the same as a company or business maintaining a retained earnings account.

They do seem to be related. However, at least one difference that comes to mind is that corporations don't like to leave any more liquid assets laying around than they have to. Some corporations have a reputation for maintaining large cash reserves and that sometimes qualifies them in the eyes of stock market analysts to be investment worthy.

Generally, corporations like to "invest" liquid assets in internal projects, thus internal rate of return (IRR), and/or external investments, equal to or better than IRR which can compete for internal projects and vice verse, fun stuff huh. One corporation I am very familiar with went as far as to base the decision to retain or divest individual business units on whether they earned at or above the IRR. I think Dave recommends we store up our "retained earnings" in a money market fund or some instrument like that in order to maintain their liquidity and make one, or two, or three percent return (as he likes to point out every now and then).

Now, here is where my thought process takes a sharp left turn out into left field. Consider what is going on with corporate layoffs. Essentially, corporations are ultimately and largely responsible for a reduction in consumer spending via layoffs both directly through unemployment and indirectly through the news media incessantly hawking this stuff to us non-stop on national TV (so don't watch TV, right).

Next, consider this, what about the corporate emergency fund, retained earnings? I began to wonder why corporations don't draw on their emergency fund like Dave suggests we consumers do. Then, it began to dawn on me, why spend your hard earned cash when you can go down and draw unemployment, both them and us! If corporate earnings aren't keeping pace with expenses, there is a federal shock absorber available to them and us, unemployment compensation. I don't think this explains every instance but I think it explains a good many instances of massive layoffs. It's sort of a sideways government bailout.

And that's the way it is February 19, 2009.